Russia is officially moving away from The West they are pivoting to Asia and This is a game changer now since the 1980s when the Soviet Union built a Pipeline connecting Siberia to the West Europe became dependent on Russian gas And even after the Soviet collapse in 91 The West was still hooked on Russian Energy for decades and over the last 10 Years the eu's trade with Russia has Always centered around oil and gas in Fact Europe's Imports of oil and gas Were more than their exports to Russia In 2021 the EU imported nearly 100 Billion dollars of Russian energy versus Their total exports of owning 89 billion They actually had a trade deficit with Russia but this helped both economies to Grow Russia sold cheap energy and got Rich Europe used this cheap energy and Became even richer and let's remember How 20 billion dollars of Russian gas Effectively powered 2 trillion dollars Worth of German manufacturing value this Analysis from Credit Suisse tells us Just how Leverage Europe is when it Comes to energy but things have changed Forever Russia just announced that they Are breaking away and no longer believe In trading with the West at a G20 Foreign Minister's meeting in Delhi Russia confirmed this their energy Policy no longer includes Europe or the United States according to Russia's
Lavrov we would not anymore rely on any Partners In The West the energy policy Of Russia will be oriented towards Reliable and credible Partners India and China are certainly among them now such A declaration is confirmation that Russia's trading relationship with the West Europe and the United States is now Completely fractured it is forever Destroyed thanks to the sanctions and The conflict and here are two pieces of Evidence that show Russia has given up On the west as trading partners they're Taking steps to slowly dismantle and put On Ice any trading relationships left Not the first is mothballing the Sabotage not stream pipelines right we Know the pipelines have been destroyed They are unusable and Russia can't be Bothered to repair them they are going To seal up the rupture pipelines which Is a clear sign that they aren't going To be needed anytime soon and this shows That the north stream project has been a Failure and Europe will be cutter from Cheap Russian guests directly from the Source now the second example is cutting Away Europe's remaining supply of oil Yes Europe has still been buying Russian Oil because EU sanctions did not Target A Pacific pipeline now Poland has been Buying 10 of their crude oil supplies From Russia to the juice bar pipeline However Russia has stopped oil flowing
Into Poland and this comes the day after Warsaw delivered their first leopard Thanks to Ukraine I think we must Understand how connected the land battle Is to the economic front now the West is Using its incredible resources their Money printing power to sending weapons While Russia is using Dr Commodities as Leverage as well yes this move will Increase inflation in Poland which is Already at a terrible 17.2 percent and What Putin is doing is sending a message We won't Supply oil and gas to the West Your inflation crisis isn't over and Where's all this energy gonna flow to Well it's heading towards Asia and this Move is going to shift the world order Eastwards right specifically towards China and India now let's understand That this over dependence on European Energy sales has also affected Russia And according to Russia's finance Ministry there are gas revenues declined By 42 percent due to lower exports to Europe there's been a significant drop In both oil and gas revenues after the Sanctions Salvo the G7 has hit Russia Price caps on both crude oil and refined Products they have banned the Imports of Russian energy to Europe and this has Hit their revenues and in order to Combat foreign revenues Russia is Selling off Dr Forex reserves to plunk The deficit they sold over 1.7 billion
Dollars worth of Yuan and gold from Their National wealth fund to cover February's deficit alone now that is the Short-term solution but a long term move Is much more important and that is Russia's historic pivot to Asia away From the west and we know Russia has Been selling their oil to China and India at huge discounts and this state Of affairs is going to continue well Even after the war ends we can see just Before the war Russia's all exports to Europe were well above Asia hitting Almost 3 million barrels a day but fast Forward to January this year Europe is Barely clocking a million barrels the Slack has been taken up by Asia Asia's Volume has skyrocketed above 2.8 million Barrels a day showing Russia still has Friends in this world now what we are Seeing is the oil markets effectively Splitting the two we'll talk about this For many times thanks to Russia right Now India and China now have access to a Never-ending tab of Russian oil at a Discount cheap oil for Asia full price For the west and for Russia this kind of Makes sense because the price caps and Sanctions from the West aren't going to Stop remember the positions both Rush And Collective West has in this economic Battle right by defining the 60 price Cap on crude Russia's keeping inflation High in the west and this affects
Interest rates in the west now if Inflation continues to stay sticky Thanks to Energy prices the Federal Reserve and the ECB could hike their Economies into a recession Jerome Powell Just told Congress that the committee is Strongly committed to returning Inflation to his two percent objective More rate hikes are needed because the Inflation is still rate hot it is still An inflation crisis so if Russia keeps Denying the West cheap energy this could Continue to prompt central banks to keep Hiking towards a Colette but let's Understand why China and India will Continue buying Russian oil and both Countries are doing it for very Different reasons now India's primary Reason is to grow their economy and Russian oil is the key to growth we can See in 2021 India's GDP was only 3.2 Trillion dollars lagging behind both China and the United States and to grow Your economy fast you need cheap inputs Such as energy and with cheap barrels of Oil India can power their growing Economy and catch up with the west and In just under a year India has saved an Estimated 4 billion dollars by importing Russian crude and that is a lot of money That can be channeled to Public Works And other domestic projects we can see India's import of Russian oil has Skyrocketed within a matter of months it
Was less than 70 000 barrels a day in March of 2022 but it has grown over 18 Times to 1.3 million Barrels in January India knows the tremendous advantage of Cheap energy and told the world back in November they will keep buying Russian Oil the Indian foreign minister sit time And time again is to their advantage to Deal with Russia they also slept back on Europe calling out their double Standards saying it isn't right for European countries to prioritize their Energy needs but ask India to do Something else so India will continue to Buy Russian oil and Russia is happy to Sell India their energy and the reason Is how Indian importers are buying their Oil now in their buys they are oil Mainly on a delivered basis it's like Ordering food delivery straight to your Door this means Russia has to arrange The shipping and insurance this allows Them to capture more value across the Supply chain because now they can charge India for all these services and Actually earn more than a price cap of 60 dollars as oil analysts point out the Discounted price might be 38 dollars but Russia could be pulling in up to 65 After you account for the shipping and Insurance and the relationship between China and Russia goes beyond simple Economics yes China's enjoying the Awesome discounts of cheap oil yes they
Are reopening their economy so Discounted energy goes a long way that's For sure but what we are seeing is a Geopolitical shift from the West against China and there are just so many Incidents we can point to right we have Local 4-star General calling for Conflict by 2025 we have that shooting Down the Chinese balloon and now we have Germany and the U.S warning China not to Send arms to Russia or else so China's Economic support of Russia goes beyond Just simple economics they need to keep Russia afloat because if it falls the West will shift its full attention to Beijing and China obviously doesn't want That but will Russia ever trade with Europe again that's the trillion dollar Question will they sell their oil and Gas to the West 10 or 20 years down the Road now this might shock you guys but I Believe they eventually will but only in A way that benefits Russia and secures Their own interests and to better Understand how the future of Russia Western trade will evolve we just need To take a look at how Russia is Allocating Dr reserves we know that Russia has removed their dollar Holdings In their wealth fund and is moving to Eliminate Euros as well and it makes Total sense if you're blocked from the Swift system and your assets has been Frozen in the west you see no point
Holding dollars or Euros anymore and What have they replaced it with the Chinese Yuan and gold so there's a good Chance that Russia will trade with the West in the future but outside of the Dollar or Euro system and after the war Ends Russia could tell Europe if you Want my oil fine you have to pay either In Rubles the Chinese Yuan or gold and All of these three options are entirely Possible but let's talk about gold first Now in its physical form trying to Exchange physical gold for oil it's Going to be a logistical nightmare right You have to pay for the shipping cost to Transport the gold then comes the Insurance cost in case the goal goes Missing plus you have to assay the goal To make sure it's the real deal but Russia and Iran they're taking steps to Trial stable coin back by goal so in Five to ten years transactions in Gold Could become a reality and the second Option is to accept the Russian Ruble as A means of payment for oil and gas now This is nothing new and Europe has Kissed the ring back in 2022 and if you Flashback to nine months ago Putin Demanded the EU open Ruble accounts in Guest prompt Bank in order to buy Russian gas basically the EU had to Deposit euros into account which will be Converted into rubles which are then Used to purchase the cash and guess what
Europe's energy companies comply this Included companies in Germany France Hungary and Italy so this could very Well become a reality once again and the Last option which is the most painful For the web to swallow is to buy Russian Oil using the Chinese Yuan now Russia Could actually weaponize the Yuan by Making it a currency they asset for Energy sales basically the oil for Yuan Trade now I believe the West will resist This truth and nail because if they pay For Russian energy using the Yuan it Will further promote the Yuan as an International Reserve currency and this Could further encourage the Saudis to Accept the Chinese Yuan because hey if Europe if the West is paying in Yuan I Could also price my oil in Yuan as well To further diversify it away from the Dollar and then would be a disaster but You're probably wondering why would West Still want to buy a Russian gas after All they have been replacing Putin's Guest throughout last year with Russian Supplies reaching under 13 in November We can also see Zero floors of gas from The Nordstrom and Yamaha pipeline so it Appears they have wind themselves away From Russian energy and does this mean That Europe has become fully Self-sufficient without Russia well yes And no not really the EU can always buy Gas from the United States the Middle
East or Norway but the big problem is The cost of energy is it considered a Win if you're paying 30 or 40 percent More today compared to 24 months back Now the price of gas in Europe today is Around 43 Euros much lower than the big Spike in August that's for sure but Still significantly higher than the Pre-war levels of 20 to 30 Euros and if You don't have cheap energy you can't Grow your economy to its full potential Especially when a recession is around The corner we just need to look at imf's GDP projections for 2023 we can see the EU having the worst GDP growth estimates Of all the advanced economies at only 0.7 percent plus Germany is on the brink Of a recession but look at China and India's GDP estimates China comes in at 5.2 percent and India is expected to Grow by 6.1 percent higher than the rest Of the world and why is that so let me Hazard against guys maybe it's because They are getting cheap energy at 30 to 40 percent discount from Russia and this Growth Gap is just going to continue to Grow every year that Asia gets cheap Energy from Russia they are going to be More competitive than Europe this is Going to hollow out Europe's Manufacturing base and they know it Germany is facing a one trillion dollar Challenge to transition the green energy And where is that going to come from
Where's those money going to be conjured Up from likely from deficit spending German Industries are also in trouble Because of the energy crisis we have German Manufacturing producer BASF Planning to cut 2600 jobs thanks to Higher energy costs and these are local Jobs lost on German soil sdrco puts it High energy prices are now putting an Additional burden on profits and Competitiveness in Europe and that's why We saw Olaf shorts running to China last November and then flying to India last Month he is heading to the countries That have access to cheap energy from Russia it's not a coincidence he knows That the modern economy today still runs On oil and gas and without access to Cheap energy you can't be competitive in Today's market and if Germany is paying 30 percent more while India and China They are paying 30 percent less this Gap Is unsustainable for German Industries They will be hollowed out eventually so Let's realize the impact of Russia's Pivot away from the West towards Asia And the longer Europe is cut off from Cheap Russian energy you have to pay Lots more to ship LNG from Qatar or the United States for their energy Supply And it's not just Russia whose energy is Flowing to China India Saudi Arabia's Oil is also flowing there with China Being their biggest customers and this
Is what happens when you declare war of Fossil fuels and keep telling the world That the future is green right the Saudis know the West won't be good Long-term customers so they are pivoting Towards issue as well this means the West is now left with a smaller amount Of Supply in the international markets This means higher energy prices for Importers in the United States and Europe versus Asia and that's why sooner Or later the West will have to trade With Russia once again for oil and gas But this time it could be fully on Russia's terms so let me know what you Think in the comments below will Russia Ever trade with Europe again will China And India grow faster than West let me Know in the comments below stay safe be Sure to smash the like button and Subscribe as we navigate through these Crazy times
