Bloomberg’s Javier Blas reports that Vladimir Putin has secured a major win for Moscow by leveraging the country’s energy leverage to fund a prolonged conflict, according to an Agency monitor. The piece portrays how Russia continues to profit from oil and gas revenues as a key pillar of the state, supporting its actions in Ukraine and maintaining internal control amid sanctions. It notes that European restrictions on Russian oil come into effect in November, creating a difficult choice for governments in the region as the energy crunch tightens for households and businesses.
The analysis suggests that electricity costs for homes and enterprises could rise sharply beginning in October, as increased oil revenues enable Moscow to prioritize gas revenue reductions and curb European supplies. It estimates that UK electricity prices might jump as much as 75%, and some German utilities have already warned of more than 100% increases, according to the publication (Bloomberg). The author contends that Russia has effectively weaponized its energy resources, and Western nations may need to deploy billions to subsidize bills or take control of energy companies, mirroring arrangements seen in France (Bloomberg).
The energy crisis…
The report cites data showing Germany’s base electricity contract for the coming year at a record high, nearly tenfold above pre-crisis levels. It also points to oil production as the first signal of Putin’s shift in the oil market. In the last month, Russia’s output rebounded to pre-war levels, averaging about 10.8 million barrels per day, close to January’s 11 million, with forecasts suggesting a slight uptick this month (Bloomberg).
…and the EU’s “self-sanctions”
The piece adds that Moscow has found new buyers for about one million barrels per day, while European refineries reduced purchases due to what is described as self-sanctions. Much of this oil is redirected to Asia, notably India, Turkey, and other Middle Eastern markets, with some shipments still moving toward Europe before the official sanctions take full effect in early November, according to the report (Bloomberg). The author concedes that those who predicted a continued decline in Russian oil production were mistaken (Bloomberg).
The piece notes that Russia is regaining pricing power as market tightness persists, selling crude grades at smaller discounts to attract buyers. Moscow has also engaged commodity traders from the Middle East and Asia who are willing to source Russian oil for hungry markets, potentially funded with Russian capital. While Brent hovers near $100 a barrel, the flow of money to the Kremlin remains robust, casting doubt on the effectiveness of energy sanctions at that moment (Bloomberg).
A market victory for Putin would allow Moscow to curtail gas supplies to Europe and apply pressure on Berlin, Paris, and London, which are preparing for sharper household energy bills and potential shortages that could affect winter energy allocations (Bloomberg). The analysis observes that Moscow’s substantial oil profits enable selective supply limits to Eastern Europe, a move seen earlier in the week (Bloomberg).
The author argues that cold weather, heightened electricity demand, and soaring prices could erode Western support for Kyiv, as politicians face domestic pressures to shield their constituencies from energy poverty. European governments publicly vow to end dependence on Russian energy, yet the article highlights the economic risks that such a stance poses to their economies and questions whether the leverage will compel a more restrained approach to Kyiv (Bloomberg).
On the public front, European governments remain committed to reducing Russian energy ties, but the piece emphasizes the challenge this stance poses for national economies. The takeaway is that Putin appears to be gaining influence in the energy arena; the question raised is whether Western policymakers will maintain a hardline stance in a broader geopolitical struggle (Bloomberg).
Oil and gas revenues fall
In contrast, oil traders are wary of the pace of the global economic rebound, which directly affects energy demand. An analyst suggests that Southern European nations are trying to stockpile materials in anticipation of the EU’s oil embargo against Russia. The report also notes that the redirection of Russian oil exports toward the East has started to impact Russia’s budget. The Ministry of Finance reports that oil and gas revenues for the federal budget fell by about 22.5% year-on-year in July (Bloomberg; elittrader.com). The analysis also highlights that the gas export tax, tied to reduced gas deliveries to Europe, faces continued pressure amid a strong ruble, a persistent “gas war,” and a weakening world oil market, with these dynamics likely to persist (Bloomberg).