ALEX BRUMMER: Sanctions lose their bite as Russian gas keeps flowing

Glee over the comeuppance of Russia’s oligarchs is palpable. The vicarious pleasure in seeing the world’s biggest yachts seized and luxury villas expropriated cannot be understated.

The decision of the normally recalcitrant Royal Court of Jersey to freeze £5.4billion of assets connected to Chelsea owner Roman Abramovich is particularly significant because it may signal to other, less toxic, tax exiles that the game is up.

Yet as the former Chelsea chairman Ken Bates told me this week, it is ridiculous to suppose that preventing supporters buying £3 programmes at Stamford Bridge is going to have Russia’s brutal autocrat Vladimir Putin quaking at the knees.

Dependent: The Nord Stream 2 Pipeline receiving station in Lubmin, Germany. In 2021 Germany imported €80billion of fossil fuels, mainly from Russia

Oligarchs may be as rich as Croesus but punishing them is not going to tame the Kremlin’s cruelty or bring Putin to the Hague. 

Deploring super-rich Russia tycoons is easy. But it shouldn’t be forgotten that they have also been benefactors paradoxically supporting the Imperial War Museum, among other projects.

The real economic battle to be fought against Putin is in the global market for oil and gas. Britain’s BP and Shell were among the first to pull out of Russia, at considerable cost. Shell has written off £4billion of assets. 

BP is abandoning up to £20billion of investment mainly held in Russian oil group Rosneft. 

As critically, the loss of the geological, drilling and logistics skills of big oil could eventually stymie future Russian production.

In all of this, the true villain of the piece (or in this case, the peace) is Germany. A promise to wean the country off Russian oil by the end of the year gives Moscow another eight months of hard currency. 

As for displacing Russia’s natural gas supplies, some 60 per cent of German requirements, that isn’t going to happen any time soon.

In 2021 Germany imported €80billion of fossil fuels, mainly from Russia.

That means that the Kremlin’s cash flows will be continuously replenished irrespective of how many oligarchs are punished. 

German chancellor Olaf Scholz talks a great game and there have been shipments of helmets to Ukraine and pledges to catch-up on Nato contributions.

But an unwillingness to place supplies of energy to the industrial Ruhr on the line means the country continues to provide succour to an alleged war criminal. 

It is fascinating that commercial operators are willing to make larger sacrifices than a sovereign government. 

Reuters reports that the major oil trading houses, such as Trafigura and Vitol, are exiting crude and fuel purchases from Russian suppliers.

Trafigura says it already has curtailed purchases from Rosneft, Gazprom Neft and others and more contracts will terminate on May 15. 

The can-do attitude contrasts with what is going on in Germany where suppliers of nuclear energy have declined to reverse planned plant closures. 

As long as the main Nord Stream gas pipeline continues to function, financial sanctions will be frustrated.

Free spirit

For all his eccentricities, Elon Musk must be regarded as a visionary. He takes free speech enormously seriously and is contemptuous of those, such as the Wall Street enforcers, who seek to corral his free-wheeling financial pronouncements. 

It is questionable whether it is a good idea to take Twitter private through a $41billion deal.

Even though Musk’s intentions may be honourable, allowing a platform universally used by media and communicators worldwide to fall under the control of one person could undermine the absolutist approach to free speech.

Musk may never find himself in the position of John D Rockefeller, founder of Standard Oil, who controlled 90 per cent of the world’s oil supply. 

But allowing so much influence over road transport, space and social media to fall into the hands of an individual must have anti-trust implications. Will any politician have the courage to stop him?

Price to pay

Over three decades, St James’s Place has been transformed from the upmarket insurance and investment group founded by Mark Weinberg, Lord Rothschild et al into something different. 

It filled a vacuum in the financial advice market made all the wider by regulators who made it a no-go space for banks and insurers.

The result is that SJP has grown exponentially through a mixture of luxury add-ons for clients and over-ripe fees.

Investors cannot be anything but appalled at trusted executives taking out ‘fat cat’ salaries at a time when savings are imperilled by the old enemy of inflation.