Russian Natural Gas:
Who Pays for the Sanctions?

Jul 18, 2022

This article is translated from the July 8 issue #2814 of Lutte Ouvrière (Workers’ Struggle), the newspaper of the revolutionary workers’ group of that name active in France.

One of Germany’s biggest gas suppliers, Uniper, is on the verge of bankruptcy. The Russian natural gas it used to buy cheap is no longer getting to it in sufficient quantities.

To meet its commitments to its customers, Uniper is forced to buy natural gas on the market at a very high price. This costs the company nearly 30 million dollars a day. Uniper’s central role as energy supplier in the German economy means that many companies could be dragged down by its fall. The German government is considering nationalizing the firm.

Since June 14, Russian company Gazprom has reduced its natural gas deliveries to Europe. Gazprom claims there is a technical problem. But in fact, this is a counterattack to the boycott that the United States has been trying to impose since the beginning of the war in Ukraine. Because this reduction in deliveries has led to soaring natural gas prices, Gazprom took advantage of the situation by selling less gas but at a much higher price. But this has panicked European leaders, who fear they will not be able to build up sufficient supplies for winter.

Germany is the country most affected because its economy has long relied on Russian natural gas, both as a source of energy and as a raw material in the chemical industry. At the largest chemical processing site in the world, BASF in Ludwigshafen, Rhineland, natural gas arrives directly from Siberia via a joint subsidiary of BASF and Gazprom. With this natural gas, the site produces many chemical substances for medicines, cosmetics, food products, paints, fertilizers, plastics, and so on.

So, it’s understandable why the big boss at BASF led the protest against the boycott of Russian natural gas. He stated, “Russia covers 55% of our gas supply. If it were reduced to zero overnight, unemployment would rise to a very high level. Many businesses would go bankrupt. To put it plainly: this could plunge the German economy into its worst crisis since World War II.” And natural gas is just one example among many other imports. Economic relations are so intertwined that a total boycott of Russia would have serious consequences for the entire world economy.

The example of the BASF site shows the contradictions of the current capitalist economy. On the one hand, this site needs global partnerships to operate. These let it have a production capacity far beyond the German and even the European market. But on the other hand, this exceptional means of production is the property of a very small number of shareholders. They alone decide how it is used. Rivalries between capitalist powers mean that the border policies of various national states can hold it back.

Only by abolishing private ownership of the means of production and by abolishing the borders between nations can the world economy develop on a new basis.