Europe Goes "All In": Will Sanction Rosneft, Gazprom Neft And Transneft

Tyler Durden's picture

Until this moment, the main reason why everyone mostly dismissed Europe's sanctions against Russia is that despite all its pompous rhetoric, Europe consistently refused to hit Russia where it would hurt: its energy titans Gazprom, Rosneft And Transfneft. The reason is simple: by imposing sanctions on these core energy exporters, Europe would directly threaten the stability of its own energy imports (Russia accounts for up to 30% of German gas imports), and as winter approaches with every passing day, playing with the energy status quo would seem like economic suicide. This all appears to have changed last Friday, when as the FT reports from a leaked copy, Europe's latest sanctions round will boldly go where Europe has never dared to go before, and impose sanctions on the big three: Rosneft, Gazprom Neft and Transneft.


This is what is known in game theory terms as a major defection round.

It also means that suddenly the stakes for Russia, and thus Europe, just got all too real, as Putin will now have no choice but to really ramp up the retaliatory escalation, which following the food ban can only mean one thing: a staggered reduction in gas flow to Europe.


It also means something else: recall that it was just ten days ago when we reported that Gazprom would begins accepting payment for oil in Ruble and Yuan.

If today's news is confirmed, Europe's dramatic shift in sanctions strategy means that Europe's embargo of both the US Dollar and the Euro will accelerate as Russia further intensifies its shift away from both the west and the petrodollar. The only and clear winner here: China, which will almost certainly step in to provide the funding Russia needs however on Beijing's terms in effect making the symbiotic link between Russia and China even stronger, forcing Moscow to rely almost exclusively on China for trade and funding relations, and suddenly give Xi Jinping all the trump cards.

What China's president will do, now that he has all the leverage in the world to call shots both to the West, the East, and of course, Africa, remains unknown, although those thousands of tons of gold imports that mysteriously enter the country and are never heard from again, may provide a hint.

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Escrava Isaura's picture


Pretty accurate post. Wish you had left the foodstuff out.

Anyway, not using US dollar, bi-lateral trade agreements that not use US banks, intellectual property rights such as Microsoft and Apple no longer respected or used will be considered a hostile act by the US government.


Prepared for WW-3!



Mitzibitzi's picture

Patents are mostly bullshit under any economic system.

Anyone ever noticed that the companies that take out the most patents - and defend them most aggressively - are the ones that generally just made a minor modification to an existing idea, claimed it was something peachy-keen and new, then got right on with having the products made in whichever 3rd world sweatshop country could do it cheapest?

The innovative companies don't do as much in the way of trying to patent every nut and bolt they can think of. If you've had a string of good ideas and are pretty sure you can keep coming up with them in the future, patents can actually be counterproductive. It's often better to see what others do with your last idea; can give you future ideas.

PT's picture

The Chinese may have copied everyone else but everyone else kept coming back for more. 

"Oh, I'm sooooo shocked!  They did it AGAIN!"
"So why do you keep going back?"
"Because they are so CHEAP!!!  Plus you should have seen how much they paid me for this useless old piece of rope!"

TheReplacement's picture

Ukraine produces food.  Ukraine is not NATO.  Ukraine would fall in weeks or less if Russia did invade.  If Russia does not invade it will be a chilly winter and Assad falling won't help in time.  Putin still has the winning hand here. 

sun tzu's picture

They are also 100% dependent on Russia for oil and gas. 

BlindMonkey's picture


They can import 28% of their required gas from reverse flow pipes.

Oh wait....where do those countries get their gas?

Never mind. You are right. Carry on.

TheFourthStooge-ing's picture

Speaking of reverse flow, isn't there a certain eastern European Yatzi Junta regime that is kind of counting on its supply of gas this winter being delivered via reverse flow from the vast stored reserves of the rest of Europe?

Captain Obvious.'s picture

Reverse flow means blowback. Comprehende?

conscious being's picture

Russia just bought the German company that  controls the backflow of gas into Ukraine.

HardlyZero's picture

Hmm.  Who pays for the reverse gas flow ?  EU pays Ukraine ?  or its FREE gas ?  keeping it real.

Terminus C's picture

I am not saying Russia will starve, they have grain, but it will be mighty sparse in the fruits and vegetables department.  Also, to invade Ukraine for food would be a significant escalation. Holodomor part deux.

disabledvet's picture

"Holdodmor in reverse" only it won't happen. Russia doesn't have food security issues like the 1930's.

Nor does Ukraine.

HardlyZero's picture

Without Oil or natGas resources and inability to pay Russia, Ukraine may get frozen this winter and not be able to farm their land...

Unless they return to dark-age technology...but then there will be very very low crop yield and not enough to feed the entire Ukrane population.

2014/15 Ukraine winter will be very cold in Kiev.

Volkodav's picture

Kyiv had money to pay, but spend it to kill....

and beligerent about it.

"We threw out Oligarch thieves and elected Oligarch killers" -female member of Ukr Rada-



disabledvet's picture

I don't know how to respond that other than to say..."I hope
they know what they're doing" and "I hope their friends don't disappoint them."

They would be the folks on both sides. And the folks in Minsk too.

And of course "these 1500 British Challenger Tanks are for your protection" too.

jeff montanye's picture

they know what they are doing.  they sent their gold reserves to the u.s. for "safe-keeping".

Captain Obvious.'s picture

Except that Brains Trust in the Ukraine has pulled all his farm boys into the military.

Rip van Wrinkle's picture

The Russians are a tough breed. They'll survive an awful lot of hardship.


Western Europeans are pussies.

zen0's picture

They are pussies now, but in WW2 if the Germans were not used to eating potatoes and cabbage and bread every day forever, they would not have survived past 1940.

Z_End's picture

Russia has other nations that will export food to them. They will get through this ok.

zen0's picture

The Chinese, for instance, have a glut of snake guts and fried chicken feet. Russia will be more than ok.

HardlyZero's picture

Ukraine may have difficult time farming their land without Oil or natGas, and no ability to pay for supplies.

I'd expect Russia to survive the winter with all the resources.

EU will be cold and proud this winter.

Finland at 100% reliance on Russia and far to the North may freeze over this winter.

Calmyourself's picture

Finland is not a Nato member and is not going to be...

Dugald's picture

Finland at 100% reliance on Russia and far to the North may freeze over this winter.

Not while they are knee deep in firewood....

Calmyourself's picture

Finland is not a Nato member and is not going to be...

HardlyZero's picture

Yes, all is well and remain Calm...if the problems in EU and Baltics does not impact Finland, and depending where they fall-in, it might get interesting.

Finland is like Bulgaria...100% reliant on Russia, but Finland has a direct connection to Russia from Siberia without going through other countries.

Belarus, Bulgaria, Finland...are in similar situations.  But Bulgaria has thrown their central banks open to the EU as a play for early EU admission ?  or South Stream approval by EU ?

Oucomes, and Cold approaches.

ebear's picture

"EU will be cold and proud this winter."

They can turn the thermostat down to 68 and wear sweaters!

SHRAGS's picture

The bulk of the Russian's survived the collapse in 1991, seen "Reinventing Collapse" by Dmitry Orlov.  Market gardens on less than 100 square metres of land provided a family with enough calories.  They can do it again.

conscious being's picture

Re. They can do it again ... They won't have to. Right now and for at least another month it is harvest time in N. Europe where Russia resides. Locally produced apples, vegetables and grains are in surplus. In the meantime, places like S. America and S.E.Asia, enjoying the new opportunity,  have shipments on the way.

As the AngloZino world dies back, expect adjustments to global trade routes.

Zwelgje's picture

Western Europe will revert back to its 1000 AD status: backwards shithole.

Mitzibitzi's picture

Not as much as you might think, actually. I have a friend that currently works in southern Russia (somewhere near Sochi, I think) building pretty high tech glasshouses for growing stuff. He actually works for Pilkington Glass, in the special projects department. The ones they're building are double or triple glazed, with all sorts of coatings on the glass to let light in but stop heat getting out and heated with biogas from onsite digesters, plus some mains gas and electric. There are big government tax incentives in place over the past few years and investment in new greenhouse/glasshouse projects is now in the $10s of billions. Food security is apparently a BIG issue for the Russians. Understandable, given their history and less than ideal agricultural climate. And the fact that they are pissed off with being bullied by the West.

The Russkies used to have many thousands of acres under glass at one time but they've closed a lot of that down in the last 10 years, due to it being old technology that couldn't produce food at prices competitive with importing the stuff instead. If what Dave says is true, the new ones are about 5-6 times better than the old 70s technology ones they're replacing. It's expensive to build, sure, but, if you're a silly rich Russian energy baron, you have to do something with all that revenue. And you can't eat a solid gold toilet.

dirtyfiles's picture

Putins waiting and extending is the worst for Ukraine.It will get to this point that Ukrainians ask Putin to attack as this fix all of the problems.

globozart's picture

One idea i heard was to prevent the German-Russian marriage.


the phantom's picture

Well that's just it, isn't it?  If Germany goes to the Russian side, it's over. Merkel is on thin ice here if this is true... German business will suffer greatly with energy sanctions. 

BlindMonkey's picture

Will Ebola propagate better with everyone in Europe sharing rooms to keep warm?

HardlyZero's picture

It is possible Ebola virus does not survive cold weather...and requires tropical climate to spread.

Viruses are generally very sensitive to temperature outside.

Maybe it will spread only in the central cities.

James_Cole's picture

One idea i heard was to prevent the German-Russian marriage.


The american neocons have been obsessed with having a major nato base right at russia's border for a long time. Seems they're very close to making that a reality - a goal the americans said they'd never pursue..

Glasnost's picture

Think it's time Europe responded to Nuland's comments by saying "Fuck NATO".  Create its own European Military Alliance.  And instead of doing silly things to prop up toxic banks with the ECB, use the fiat to significantly increase all member states militaries.  It can still be neutral towards NATO.  

And then it can stop participating in retarded things like sanctions for no reason.

Jesus Christ, even if Russia IS responsible for Rebel uprising in Ukraine, why the hell isn't the U.S. sanctioning itself for all the uprising it caused in say...Libya? 

robobbob's picture

ZBig wrote about that in Grand Chessboard

major western strategy imperative-never ever let there be a russian german alliance.

Loup Kib's picture


The Grand Chessboard, Zbigniew Brzezinski, 1997 :

traduction française, Le Grand Échiquier

One can scan the book for " Ukraine " , what's happening today is all there.  As for Ukraine, it's being prepared since at least 1994.

And the maps :

Escrava Isaura's picture

Loup Kib,

Thanks for the book in PDF and your post. Great stuff.

Some of the people here, not all, are so caught up on the moment that, they failed to realize these issues and decisions were made way back.

They are being act now because the moment they have been waiting for has arrived.

Watch Poland and Germany, as you pointed it out in the map.

RaceToTheBottom's picture

"German-Russian marriage."

With Germany many others would go, at least the Czech and Slovakia would go.  Czech because of th ehistory and Slovakia because of the auto industry....


Mountainview's picture

Don't forget UEFA's Champions League (soccer event... for US readers). Gazprom is one of the main sponsers. If they retreat it might bring down some footballers salaries. A not too bad thing in principle but it could disturb the event...not even talking about the World Cup 2018...

Lore's picture

Strange how often people associate organized sporting entertainment industry with geopolitics. Hitler sure did.

Silver Sativa's picture

You're overlooking the fact that climate change global warming will enable Russia to open up lands for farming. Besides, Russia could simply buy food from South America... and North America.

Lore's picture

There's also those vast fields of rouge on Mars.  Of course, the Martians saw through Al Gore a long time ago...

detached.amusement's picture

pass that reefer around, you've smoked yourself retarded

GreedKillz's picture

Europe does produce some food

Russia had the biggest wheat crop harvest in 2014 in the world.

IronForge's picture

Not that interesting.

South America's ramping up to cover the European Suppliers.  THEY are entering SUMMER.

Falkor's picture

You can import food, actually happens all the time. But importing gas across Atlantic, is plain ridiculous.