At the St. Petersburg Economic Forum, Kirill Dmitriev, head of the Russian Direct Investment Fund, delivered a speech analyzing the significant economic losses Europe has incurred by attempting to reduce its dependence on Russian natural gas and switching to high-cost U.S. liquefied natural gas (LNG) imports.
According to statistics, Europe has lost up to 700 billion euros, with this figure expected to reach a staggering 1 trillion euros by the end of the year.
Dmitriev emphasized the reliability of these figures, stating they were derived from detailed analyses of several key sectors, including electricity, household heating, chemical production, and the construction of new natural gas facilities.
Following the Russia-Ukraine crisis, European natural gas prices soared, with growth rates exceeding tenfold at times.
Subsequently, large quantities of LNG from the United States, Norway, Qatar, Azerbaijan, and Algeria entered the European market, somewhat alleviating supply shortages.
However, the prices remained higher than those of traditionally piped natural gas, posing a challenge for European businesses and consumers.
In the chemical industry, particularly in fertilizer production, many European fertilizer plants ceased operations due to skyrocketing costs.
For instance, a fertilizer plant in Bulgaria became entirely reliant on imported Russian fertilizers.
According to reports, Russian fertilizer export revenues increased by 70% in 2022, and by June 2023, the volume of Russian fertilizer exports to the EU had doubled compared to the same period last year.
By the end of June, one-third of the urea imported by the EU came from Russia.
The increase in natural gas prices not only led to higher electricity costs but also forced many companies to consider relocating or even shutting down and declaring bankruptcy.
For example, the head of the Harrachov glass factory in the Czech Republic revealed that before 2022, the plant's natural gas costs accounted for only 10% of total costs.
However, following the Russia-Ukraine crisis, this proportion surged to 50%.
This situation is not unique to the glass manufacturing industry but affects many other large European enterprises similarly.
These rising costs have not only significantly impacted businesses but also directly affected the cost of living for ordinary people.
As a result, many small business owners and farmers have taken to the streets, staging protests to express their dissatisfaction and concern over the government's handling of the gas crisis.
Currently, despite the economic pressure, European countries such as Hungary, Slovakia, France, Spain, and Belgium have not ceased importing natural gas from Russia.
This decision may have profound implications for the industrial development and long-term economic stability of these nations.
Therefore, Kirill Dmitriev's speech at the forum has drawn widespread attention and contemplation, particularly challenging European governments and businesses to rethink their energy policies and international energy supply chain strategies.
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