Posted on 09/08/2014 9:04:06 AM PDT by ConservingFreedom
Prime Minister Dmitry Medvedev has warned Russia may shut its air corridors to Western airlines if the next round of European sanctions hit Russian energy companies.
"If there are sanctions related to the energy sector, or further restrictions on Russia's financial sector, we will have to respond asymmetrically,” Medvedev said in an interview with the Vedomosti newspaper, published on Monday.
EU ministers will gather on Monday to discuss new sanctions against Russia and are rumored to be introduced on Tuesday. The prime minister promised a strong retaliation if the West slaps Russia with more sanctions.
“We could impose transport restrictions,” Medvedev said, adding, "We believe we have friendly relations with our partners, and foreign airlines of friendly countries are permitted to fly over Russia. However, we’ll have to respond to any restrictions imposed on us," the prime minister said.
After sanctions hit Aeroflot’s low-cost subsidiary Dobrolet in late July, Medvedev discussed with ministers the possibility of limiting, of even completely blocking, European flights to Asia that overfly Russia.
“If Western carriers have to bypass our airspace, this could drive many struggling airlines into bankruptcy. This is not the way to go. We just hope our partners realize this at some point,” he told Vedomosti.
Flying over Russian airspace saves Western airlines headed to Asia at least 4 hours of flight time, which adds up to about $30,000 per flight.
Lufthansa said it could potentially lose more than €1 billion in three months if it does not use Russian airspace. Lufthansa, along with British Airways and Air France, are the largest EU airlines. US airlines currently don't operate over Siberian airspace.
Many low-cost airlines have decided not to launch new routes to Russia, with the threat of sanctions possibly a factor. Last week Ryanair ditched plans to establish a Dublin-St. Petersburg route, and easyJet, another European-based airline, dropped its plans to develop a London-St. Petersburg service.
Medvedev didn’t specify whether the blocked airspace would also apply to cargo and delivery companies, such as UPS and FedEx. Oil at stake
EU sanctions, which will reportedly be introduced on Tuesday, will ban Russia’s three main oil companies- Rosneft, Gazprom Neft, and Transneft - from raising long-term (longer than 30 days) debt on European capital markets, according to the Wall Street Journal and the Financial Times.
Rosneft - Russia’s largest oil producer - was added to the US sanctions list on July 16 and was put on the EU list on July 29. Russia’s largest independent natural gas producer, Novatek, also was added to the blacklist in July, along with a ban on the export of hi-tech oil equipment needed in Arctic, deep sea, and shale extraction projects to Russia. Gazprom Neft is the oil subsidiary of Russian gas giant Gazprom.
Transneft is Russia's state-owned oil pipeline company that exports all of Rosneft’s crude oil, and 56 percent of Russia’s crude exports.
Sanctions likely won’t apply to privately-owned Russian oil groups such as Lukoil and Surgutneftegaz.
The EU will also reportedly follow America’s lead on banning goods that can have dual military and civilian use from Russian companies that also supply the Russian military, the WSJ reported Sunday. On July 16, the US blacklisted several defense sector companies include Almaz-Antey Corporation, the Kalashnikov Concern and Instrument Design Bureau, as well as companies such as Izhmash, Basalt, and Uralvagonzavod.
“Sanctions are always a double-edged sword. Ultimately they end up backfiring and end up hurting those who are first to impose restrictions,” Medvedev said.
The EU has agreed on the new sanctions but said they could be delayed or even cancelled if Russia shows willingness to resolve the conflict in Ukraine.
On Friday Kiev introduced a ceasefire to calm fighting between the Ukrainian army and anti-government forces, but fighting and shelling continued in the country’s east.
Way to go, Obamadork/State(less) Department.
Cold War II, thanks to your combined incompetence.
Russia’s economy is highly dependent on its hydrocarbons, and oil and gas revenues account for more than 50% of the federal budget revenues.
http://www.eia.gov/countries/country-data.cfm?fips=RS&trk=m
Do you have a source for status of the LNG facilities? I was surprised by a contract signed by a company for ethane to be exported to Sweden.
If oil or natural gas goes into the mess....there are no more Russian billionaires. One would imagine that they are gathered now and discussing just how close to the edge they are, and what this was all about.
Mad Vlad Putin has revived the Evil Empire
The FERC is responsible for authorizing the siting and construction of onshore and near-shore LNG import or export facilities under Section 3 of the Natural Gas Act.
http://www.ferc.gov/industries/gas/indus-act/lng.asp
Two thoughts...first,this is a good thing in one important way:less chance of a Soviet rocket shooting down a planeload of Europeans and Aussies.Second,the next step would be for Europe to close their airspace to Soviet airlines.And then it goes on and on.When the dust has settled the Soviet petroleum robber barrons won’t have any way to buy their “dachas” in Italy,Spain,etc.
Maybe the Europeans can buy petro products from the new ISIS/ISIL dealers at a discount, but will they take Euros in payment?
~Russia’s economy is highly dependent on its hydrocarbons, and oil and gas revenues account for more than 50% of the federal budget revenues.~
I actually think Russia would only benefit loosing half the government spending and cutting the government to size.
The question is would the sanctions affect the energy price?
I don’t think it would become lower.
“Russia may close airspace”
Well then just flyover Ukraine. Oh wait a minute, nevermind.
Looks like no “IF”
Diplomat: EU Puts Top Russian Oil Companies on Sanctions List
http://www.rigzone.com/news/oil_gas/a/134895/Diplomat_EU_Puts_Top_Russian_Oil_Companies_on_Sanctions_List
The European Union put Russia’s top oil producers and pipeline operators Rosneft, Transneft and Gazprom Neft on its list of Russian state-owned firms that will not be allowed to raise capital or borrow on European markets, an EU diplomat said.
EU sanctions, however, do not encompass the gas sector and in particular state-owned Gazprom, the world’s biggest gas producer which is also the biggest gas supplier to Europe.
excerpted for Reuters content
Goodo we can live without Russia just fine....bye bye Putie!
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