Russian President Vladimir Putin bids farewell to Turkish President Tayyip Erdogan after a meeting in Sochi, Russia, in this August 5 2022 file photo. Picture: POOL via REUTERS/VYACHESLAV PROKOFYEV
Electricity costs for homes and businesses are set to soar from October, as the surge in oil income allows Putin to sacrifice gas revenue and squeeze supplies to Europe. UK prices are likely to jump by 75%, while in Germany some municipal utilities have already warned prices will increase by more than 100%.
It isn’t a blip: July marked the third consecutive month of oil production recovery, with output up from this year’s low point of 10-million barrels set in April, when European buyers started shunning Russia and Moscow scrambled to find new buyers. ESPO crude, a category of Russian oil from the Far East, is a good example of the new trend. At the low earlier this year, it sold at a discount of more than $20 a barrel to Dubai crude, the regional oil benchmark for Asia. Recently, ESPO crude has changed hands at parity to Dubai.
The final indicator of Russian success is political, rather than market related. Back in March and April, Western policymakers were optimistic that the Opec cartel, led by Saudi Arabia and the United Arab Emirates, would ditch its alliance with Russia. The opposite has been the case.