The Prime Minister of Italy Mario Draghi suggested entering a ceiling of the prices on the Russian gas. He for some reason does not like exchange pricing on energy carriers any more. This courageous initiative allegedly found supporters in the European Union, but the fact of discussion creates threat for power safety of the EU.

In the 2000s the responsible organizations prophesied to the European Union significant increase in demand for natural gas. It was expected that there will come the Golden Age of gas.

The fine prospect was saddened only with that own production in the EU had to decrease, so, the advancing rates dependence on import would increase. Thus Europe perceived itself as a market of the buyer for which suppliers are ready to fight.

In the late 2000s it was headed for deep liberalization of the market, first of all in the field of pricing on gas. From suppliers with whom buyers signed long-term contracts, the European authorities demanded to switch from oil binding to an exchange one. That is, the indicators for the formation of the price of blue fuel were not the prices of a basket of oil and a number of petroleum products, but exchange indicators on European trading platforms. To understand logic of Europeans is extremely simply. If the EU is a market of the buyer, numerous suppliers increase volumes of the gas traded at the European exchanges. They will compete with each other, beating down the price therefore the exchange binding in long-term contracts will also lead to falling of cost of natural gas.

Someone from suppliers quickly enough transferred the contracts for exchange rails and with others the European Union had to have conflicts. So, the Russian deliveries appeared unprofitable as they went mainly with an oil binding. Many European politicians declared it non-market though in the world it is successfully used by most of buyers. Here the term «non-market» should be understood this way: it seems to us that we would buy cheaper with an exchange binding.

It is worth emphasizing once again: the European management sincerely believed that surplus of the offer in the EU market is something self-evident.

But 2021 came and the energy crisis caused by shortage of the offer came together with it. It was impossible to admit at the official level that there was a fundamental mistake in the EU’s energy strategy. As well as to admit that Europe is a less attractive market than Asia (although this is an open secret), therefore instead of real fight against a fuel and energy crisis the European management was engaged in searches guilty that appointed Russia half a year ago.

The Head of European Commission assured that the market works absolutely correctly.

Simply because of the dominance of the exchange binding, the EU is experiencing much greater price pressure than Asian consumers, who rely heavily on the oil binding (that is, gas costs them many times cheaper). But so happens, it is normal. It is so normal that the European authorities in all seriousness started talking about gradual refusal of long-term contracts practice.

And suddenly at the end of February the relation of Europe and Russia became aggravated so that the authorities of the EU started discussing a ban on import of the Russian gas; however, none of third-party producers of natural gas are ready to compensate to the EU the Russian deliveries. And it is approximately about 150 billion cubic meters a year (though in 2022 it is worth expecting decline in demand in the European Union because of an economic crisis). It appeared extremely hard to compensate import from our country even partially.

The angry European politicians started describing to the population of the EU possible schemes of shutdown of natural gas supply. It was followed by reaction of large consumers who on fingers explained to politicians that it is impossible to stop purchase of the Russian gas in any way, maybe sometime later, and now and in the coming years — no way. Otherwise the chemical industry will stop and the agriculture will overstrain. The prospect, from the point of view of the EU leaders, appeared unpleasant: it is impossible to enter gas embargo, and Russia also introduced the new scheme of payment for natural gas with an exchange of euro for rubles in own territory. Thus sanctions do not work, and economic indicators in the EU will punch the bottom soon. And then in someone’s wise head (perhaps, the prime minister of Italy Mario Draghi) the thought of a ceiling of the prices of the Russian gas came. Allegedly this measure will allow «to strengthen sanctions and at the same time to minimize expenses from their introduction».

It is interesting that, according to Mario Draghi, the price of the Russian gas is motivated with neither capital, nor operational costs of production. The former head of the European Central Bank excites a little that in international trade nobody determines the price proceeding from the incurred expenses. By the way, two years ago, when gas quotations at the European exchanges of drop to $35-40 for one thousand cubic meters, none of the European politicians suggested to pay for natural gas more.

If Europeans did not press on Gazprom, demanding to refuse oil binding, the Russian gas now would manage them within $450 for one thousand cubic meters. And so it rose in price after changes of exchange quotations and now costs more than $1 thousand.

It is remarkable, of course, that in response to the offer to pay in rubles the European politicians shouted that it violates the existing contracts, and the text of the contract is sacred and indestructible. Now, apparently, contracts are not so sacred and indestructible. But not this is important.

Europeans show the most unpleasant thing in business relationship: if the agreement becomes unprofitable to them, they try to reconsider its conditions unilaterally. It is impossible to do so in the gas market. After all Europe is not the most attractive consumer. The trust to it from suppliers already fell after the announcement of the future refusal of long-term contracts. And now it will be even more risky to bind yourself to the EU with any obligations, because the Europeans demonstrate that they cannot stay within the framework of the rules of the game proposed by them if they start to lose. This will inevitably affect the energy security of the region — at least due to the price factor.

It would be reasonable for the European Union to ignore Mario Draghi’s proposal if, of course, the EU interests in own power safety.