Greetings, dear friends!
Another week has passed, and we are meeting again to talk about the most important events, or at least the events that interested you most this week.
This is the English-language version of my weekly Q&A with followers, presented by the NEST Centre.
How to ask me a question:
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Make sure to start your reply with “Question for Khodorkovsky:”
Each week I pick a few of these questions to answer in the next video.
1. Is the war ending?
On October 21, Steve Witkoff, Trump’s special envoy, met Putin in St Petersburg, bringing an updated plan to end the war. Vladimir Medinsky, whom I mention below, is the Putin aide who headed Russia’s delegation at earlier talks with Ukraine. The US midterm elections are on November 3.
Q: Is the war ending? Why have the negotiations suddenly intensified? Nobody seems to have changed their position: Putin wants Donbas, and Ukraine wants a halt to the fighting and guarantees. These positions could never be reconciled before. Has something changed?
A: Nothing has changed. To my deep regret, after a three-hour meeting with Witkoff, Putin apparently decided to take some ritual steps. We can tell they are ritual because Medinsky has again been appointed as negotiator. They are meant to make sure Donald Trump keeps his position, which is to step away from Ukraine and push it toward the terms that would suit Vladimir Putin.
Ukraine is not ready to agree to this for now. Putin thinks he can force it through with another winter of problems caused by the strikes on Ukraine’s energy system. He also counts on the risks Ukraine faces from changes of political elites in European countries, and on the fact thaft Europe’s money for Ukraine in 2027 is not guaranteed. Add Donald Trump joining this wonderful position, and Ukraine’s situation really is not the simplest. But Ukraine is not ready to capitulate either. So these so-called negotiations will most likely end in nothing again, in another round of stalling.
I think Putin is also making a significant mistake here, because Trump’s position may change. After these midterms, Trump will have many other problems at home, connected with the very likely loss of at least one chamber of Congress. Even if he does not rely on Congress now, Congress holds all the tools of investigation, and the new Congress will very likely harass and press his administration. All of this will make it harder for Trump to support Putin’s position.
Still, Putin seems to have decided to take the risk and keep up the pressure on Ukraine. So for now there is no reason to expect anything serious from this stage of the talks. But the situation changes quickly, and in a week we may see something different.
2. Why did Putin reshuffle his government?
On October 19, Prime Minister Mikhail Mishustin proposed a government reshuffle, and two days later the State Duma approved it. Finance Minister Anton Siluanov also became a deputy prime minister. Dmitry Grigorenko, a deputy prime minister who headed the government’s staff office, left the government and was replaced by First Deputy Finance Minister Irina Okladnikova. Yuri Trutnev, the presidential envoy to the Far East, was replaced by Oleg Kozhemyako, governor of the Primorye region, and Transport Minister Andrei Nikitin became a deputy prime minister. Under Russia’s constitution, the prime minister becomes acting president if the president can no longer perform his duties.
Q: Why did Putin replace several key players in the government? Is he unhappy with their work? But Mishustin stayed, and the government seems to do everything Putin orders. What is behind these changes?
A: On October 19, Mishustin, so to speak, proposed the changes and the Duma, so to speak, approved them, and on October 22 the decrees were signed. Several significant figures in the government, or their positions, have changed. Siluanov keeps his post as finance minister and also becomes deputy prime minister, and a deputy finance minister now heads the government staff office, which is a very important position.
One of Mishustin’s closest people, Mr. Grigorenko, was also removed from the government. This is Putin’s same old personnel policy: he tries to stop people who are, to one degree or another, strong figures from building their own teams. Mishustin is strong not only personally but because of his position under the constitution. If something happens to Putin, it is Mishustin who becomes acting president until early elections. So Putin, as always, is trying to leave him without a team. That is his traditional line.
More telling is that people from the Ministry of Finance are getting more levers. It shows that Putin is worried about the country’s finances and reserves, and about the war gradually sucking the life out of the country. Something has to be done, so the Ministry of Finance gains importance, and people able to carry out a tough financial policy get more posts and more opportunities. We can say with confidence that, at least at this stage, Putin is thinking about financing the continuation of the war, not about what might happen if the war stopped.
The other changes, such as Mr. Trutnev’s, are most likely retirement after all. Kozhemyako as presidential envoy to the Far East, the transport minister: these positions matter less for us.
3. Why does China pay less for Russian gas than for gas from Turkmenistan?
Russia’s budget dosuments show that Gazprom expects to sell gas to China in 2026 at about $248 per 1,000 cubic meters, against about $562 for its other foreign customers. Power of Siberia 2 is a second gas pipeline from Russia to China (planning stage), Turkmenistan is China’s other big supplier of pipeline gas. Serdar Berdimuhamedov is president of Turkmenistan.
Q: The Ministry of Economic Development accidentally revealed the prices of pipeline gas deliveries to China. It turns out that on the Chinese route Gazprom gets $40 to $60 per 1,000 cubic meters less than Turkmenistan does. Does China value and respect Berdimuhamedov more than Putin? Surely Russia is a bigger and more important ally for Xi.
A: These wonderful documents were indeed posted. Part of the material was hidden, but not well enough, and we could finally see the prices at which gas is sold to China. The discount for 2026 is 56%. If the general gas price is around $560 per 1,000 cubic meters, China plans to take it at $248. And for Power of Siberia 2, China is pushing for a price $50, or even $130, below what it pays Turkmenistan.
A country under the leadership of a great leader, and you will laugh, but I mean Russia, not China, has driven itself into a situation where, by and large, China is the only buyer for its pipeline gas. There are not many options for liquefied gas either. The plants and the ships still have to be built, and it is unclear whether sanctions will squeeze all of this in the end. So China sees itself as the absolute monopoly buyer.
In other words: you want to produce gas and sell it to us? Here is how much it will cost: enough to pay for the extraction and put a little money in your pocket. That’s it. You don’t want it? Fine, we will buy from someone else. You are the ones who cannot sell, whose gas-producing regions will grind to a halt.
And why not? In China’s place, probably any sensible statesman of any country would do the same. Guys, if you have driven yourselves into this situation, why shouldn’t I take advantage of it? If I had no gas and only you had it, you would increase prices for me — the way Russia once pushed prices up for Europe. Now I am your only buyer, so I will leverage my position to get a better price. Of course, making sure that producing this gas stays at least minimally profitable for you. Why should I pay you more? Because we’re friends? Haha! Go and look for other friends on the market.
All of this was predictable and absolutely clear. Putin blundered into this, just as he blundered into a growing dependence on China in other areas too: in purchases, in oil supplies, everywhere. It all costs the country enormous money.
We also know Putin’s real attitude toward China. It is far from good, I would even say far from decent. Putin and his circle are, after all, deep latent racists. But right now they have no other options. They have to deal with China, and China takes advantage of it. So yes, the prices are lousy. And yes, it will stay this way as long as power is in Vladimir Putin’s hands.
Unfortunately, nothing this week tells us that the war is ending, or that this winter will be less dramatic for Ukraine than the last one.
I very much hope next week brings better news. All the best, and until next week.
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