Reuters: Vladimir Putin’s Most Effective Weapon Is Gas – But Not the Poison Kind

At face value, Russia’s $400 billion deal to supply natural gas to China National Petroleum Corporation, via the state-controlled energy behemoth Gazprom, sounds like a coup for Moscow. But according to recent analysis, the deal is strongly tilted in China’s favor. Gazprom will be lucky to break even on the contract and may even lose substantial amounts of money.

While the deal may not make economic sense for Gazprom, it does fit with Vladimir Putin’s broader geopolitical “tilt to Asia” strategy, and represents “a desperate geopolitical gambit trumping all economic rationale,” according to analysis by the Chatham House, a UK policy institute. In fact, the CNPC deal is just one example of how Gazprom operates more as an instrument of Putin’s political ambitions and Russian state power than as a rational profit-maximizing corporation. 

Read the full article HERE.