Thursday, 22 May 2014

Reuters praises Putin's disastrous China deal

Reuters is doing a great job as Vladimir Putin's PR agency:

China and Russia signed a $400-billion gas supply deal on Wednesday, securing the world's top energy user a major source of cleaner fuel and opening up a new market for Moscow as it risks losing European customers over the Ukraine crisis.
The long-awaited agreement is a political triumph for Russian President Vladimir Putin, who is courting partners in Asia as those in Europe and the United States seek to isolate him over Moscow's annexation of Ukraine's Crimea peninsula.

The China deal is in reality a result of Chinese extortion in a situation where the Russian dictator was forced to make a deal which in the end will be highly unprofitable for the Russians. Gazprom - the pipe laying company - will have to invest a huge amount of money in new pipelines, which most likely never will be profitable. And the Chinese will be able to demand even lower prices, whenever the situation in the world gas markets change.

This deal is far from the "triumph" described by Reuters. It is a political deal, which in the end will lead to an even more weakened Russia.

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