The world was already struggling to combat a global energy supply squeeze well before the Russian invasion of Ukraine. Now, as world powers seek to condemn the Kremlin’s actions in Ukraine by crippling the Russian economy, it’s becoming increasingly clear that energy sanctions will be a necessary part of any meaningful global response. In order to hit Russia where it hurts, however, those doing the sanctioning are also going to feel an economic backlash as the exit of Russian oil, coal, and gas from the global energy supply leaves many European and Asian countries scrambling for new sources of fuel. In fact, the threat posed to Europe’s energy security by sanctions on Russia have left European leaders gridlocked and struggling to agree on how, what, and how much to boycott. Unable to come to an accord around Russian oil and gas, which provide nearly half of Europe’s energy imports, the European Union has agreed to start with a Russian coal ban, slated to begin in August. While this may seem like a weak and belated effort when compared with the magnitude and urgency of the atrocities unfolding in Ukraine, this relatively small step will leave the continent scrambling to find 40 million tons of replacement coal. Thanks to the lingering effects of the novel coronavirus pandemic, a global energy supply squeeze has led many of the world’s countries back to coal as oil and gas prices skyrocket. This means that weaning the world off of Russian coal imports will be an even bigger challenge for European and Asian countries that have ratcheted up their coal consumption in recent months. In 2021 alone, European imports of Russian coal increased by 22.4%. Coal prices are already near a record high, and the instatement of the European boycott in August will drive them even higher. Even so, the coal ban will have a much greater impact on Russia than it will on the European Union. “It’s bad news for Putin, but won’t devastate the EU,” Fortune recently reported. For one thing, European buyers have already begun their shift away from Russian coal, and the August deadline, which Germany pushed for, will ease the burden of finding new sources of coal in a hurry. The European Union is far from the only economic bloc that will be scrambling to find new sources of coal. Many Asian nations, too, will be looking for non-Russian imports. Notably, Japan recently announced that it, too, will ban Russian coal imports in a “surprise policy shift” that was a reversal of the nation’s previous refusal to extend its embargo to the Russian energy imports that Japan heavily relies upon. “Russia’s cruel and inhumane actions are coming to light one after another all over Ukraine,” Japanese Prime Minister Fumio Kishida told reporters on Friday. “We will ban imports of Russian coal.” This means that some of the world’s biggest coal consumers will be competing in an already tight market for new coal supplies. Top global coal exporters Australia and Indonesia have already hit their production limits, and South Africa, another major coal producer, is facing logistical problems in their own coal supply chains. According to Fortune, the European Union will likely be looking to the United States and Colombia for coal imports come August, and Germany, Poland, and the Czech Republic will be ramping up their domestic production levels. China, too, will be massively increasing its production levels. While Beijing will not be exporting domestically produced coal, the production increase will lessen demand for international imports, thereby freeing up some supply on the global marketplace for other nations scrambling to keep the lights on without cutting a check to the Kremlin. NN: Their are several factors that effect thermal coal utilization rates. its competes against natural gas and oil for the generation of electricity. Price, availability and location are all import factors. Their is so much shit being blown.. In fact its a blizzard of bullshit. Europe has a no shit out of control energy crises. It was a world changing event before Ukraine. Europe bought into the greeniewinnie lie. It shut down its nukes, closed coal fired generators, prohibited drilling for oil on the continent. This occurred over the last 4 years. Rather then tell the people the renewable wet dream was failing…. They quietly doubled reliance on Russia oil, gas and coal. So their solution since they cannot not quit their Opioid addiction is to stop smoking. Hence the coal embargo. The problem is their are no readily available alternative coal supplies. Thermal coal has gone up in price 400% from $50 a ton in September 2020 to $200 a metric ton in March. As a direct result of the incredible stupid decision by Europe to bar Russian coal. The now price surged to $314 a metric ton on Thursday. A 600% increase in price. Who is punishing who. Russia coal sales are not affected… their are plenty of buyers. These stupid ass sanctions are doing nothing but bringing Russia record amounts of money. Instead of discouraging they only serve to encourage and reward him. And the insane part of all this is it makes Europe even more reliant on Russian gas. See the trick? They are not about to ban Russian gas and oil…….. they can’t. The Russian coal ban makes it look like to the ignorant masses l they are doing something.
Oil rises on Russia output concerns
“The oil market is still vulnerable to a major shock if Russian energy is sanctioned, and that risk remains on the table,” wrote Edward Moya, a senior market analyst with OANDA.
OPEC on Tuesday lowered its Russian liquids production forecast by 530,000 barrels per day (bpd) for 2022, but also cut its forecast for growth in world oil demand, citing the impact of Russia’s invasion of Ukraine, rising inflation as crude prices soar and the resurgence of the Omicron coronavirus variant in China. Indian Oil Corp (IOC), which bought Russian Urals in previous tenders, has removed the grade from its latest crude tender. US President Joe Biden told Indian Prime Minister Narendra Modi late on Monday that buying more oil from Russia was not in India’s interest. IEA member nations are planning to release 240 million barrels over the next six months from May in an effort to calm the market.
While the release will ease immediate tightness, analysts suggested it will not solve the structural deficit caused by underinvestment and stocks will need to be replenished.
A preliminary Reuters poll showed U.S. crude oil inventories are likely to have risen by 1.4 million barrels in the week to April 8 after declining for three consecutive weeks. NN: Reality is temporary release of shit stockpiled crude are distorting the numbers. Reality is after the dust settles the world will come up short. And the Ukrainian “freedom fighters” are a nice cozy story. Reality is Putin is slicing and dicing them back to the dark ages…… This will end up badly for the Ukrainians unless NTAO engages. We both know that will not happen. And Sweden and Norway joining NATO will only expatriate the situation.
Russia warns of nuclear deployment if Sweden and Finland join NATO
https://youtu.be/VrTLiziqQ3A
Medvedev also explicitly raised the nuclear threat by saying that there could be no more talk of a “nuclear free” Baltic – where Russia has its Kaliningrad exclave sandwiched between Poland and Lithuania.
“There can be no more talk of any nuclear–free status for the Baltic – the balance must be restored,” said Medvedev, who was president from 2008 to 2012. “Until today, Russia has not taken such measures and was not going to,” Medvedev said. “If our hand is forced well… take note it wasn’t us who proposed this,” he added. Lithuania said Russia’s threats were nothing new and that Moscow had deployed nuclear weapons to Kaliningrad long before the war in Ukraine. The possible accession of Finland and Sweden into NATO – founded in 1949 to provide collective Western security against the Soviet Union – would be one of the biggest European strategic consequences of the war in Ukraine. Finland gained independence from Russia in 1917 and fought two wars against it during World War Two during which it lost some territory to Moscow. On Thursday, Finland announced a military exercise in Western Finland with the participation of forces from Britain, the United States, Latvia and Estonia. Sweden has not fought a war for 200 years and post-war foreign policy has focused on supporting democracy internationally, multilateral dialogue and nuclear disarmament. Kaliningrad is of particular importance in the northern European theatre. Formerly the Prussian port of Koenigsberg, capital of East Prussia, it lies less than 1400 km from London and Paris and 500 km from Berlin. Russia said in 2018 it had deployed Iskander missiles to Kaliningrad, which was captured by the Red Army in April 1945 and ceded to the Soviet Union at the Potsdam conference. The Iskander, known as SS-26 Stone by NATO, is a short-range tactical ballistic missile system that can carry both conventional and nuclear warheads. Its official range is 500 km but some Western military sources suspect its range may be much greater. “No sane person wants higher prices and higher taxes, increased tensions along borders, Iskanders, hypersonics and ships with nuclear weapons literally at arm’s length from their own home,” Medvedev said. “Let’s hope that the common sense of our northern neighbors will win,” said Medvedev. Lithuanian Defence Minister Arvydas Anusauskas said Russia had deployed nuclear weapons to Kaliningrad even before the war.
“Nuclear weapons have always been kept in Kaliningrad … the international community, the countries in the region, are perfectly aware of this,” Anusauskas was quoted as saying by BNS. “They use it as a threat.” Russia’s Feb. 24 invasion of Ukraine has killed thousands of people, displaced millions and raised fears of a wider confrontation between Russia and the United States – by far the world’s two biggest nuclear powers. Putin says the “special military operation” in Ukraine is necessary because the United States was using Ukraine to threaten Russia and Moscow had to defend against the persecution of Russian-speaking people by Ukraine. Ukraine says it is fighting against an imperial-style land grab and that Putin’s claims of genocide are nonsense. U.S. President Joe Biden says Putin is a war criminal and a dictator. Putin says the conflict in Ukraine as part of a much broader confrontation with the United States which he says is trying to enforce its hegemony even as its dominance over the international order declines. NN: Its bears watching. Things are escalating and we could get to the point where they spin out of control….
Oil traders to cut Russian oil purchases from May 15
Major global trading houses are planning to reduce crude and fuel purchases from Russia’s state-controlled oil companies as early as May 15, sources said, to avoid falling foul of European Union sanctions on Russia. The EU has not imposed a ban on imports of Russian oil in response to Russia’s invasion of Ukraine, because some countries such as Germany are heavily dependent on Russian oil and do not have the infrastructure in place to swap to alternatives. Trading companies are, however, winding down purchases from Russian energy group Rosneft as they seek to comply with language in existing EU sanctions that were intended to limit Russia’s access to the international financial system, the sources said.
The wording of EU sanctions exempts oil purchases from Rosneft or Gazpromneft, which are listed in the legislation, deemed as “necessary for ensuring critical energy supply” for Europe.
Traders are wrestling with what “necessary” means, the sources said. It may cover an oil refinery receiving Russian oil through a captive pipeline, but it may not cover the buying and selling of Russian oil by intermediaries. They are cutting purchases to ensure they comply by May 15, when EU restrictions take effect. Trafigura, a major Russian oil buyer, told Reuters it “will comply in full with all applicable sanctions. We anticipate our traded volumes will be further reduced from 15 May.” Vitol, another big buyer, declined to comment on the May 15 deadline. Vitol has previously said traded volumes of Russian oil “will diminish significantly in the second quarter as current term contractual obligations decline,” and it will cease trading Russian oil by the end of 2022. The war and sanctions on Russia have already led some buyers of Russian crude such as Shell to stop buying its oil. Refiners in Europe are becoming increasingly reluctant to process Russian crude. That has already disrupted Russian exports, although purchases by India and Turkey have made up for some of the slack. Sales to China also continue unabated. Rosneft and Gazpromneft volumes accounted for 29 million barrels, or nearly 1 million barrels per day (bpd) in April, which is over 40% of overall Urals crude oil exports from Russia’s western ports in April, according to the loading plan.
The International Energy Agency said on Wednesday Russian oil supply could be down 3 million bpd from May.
Rosneft declined to comment. Gazpromneft did not immediately respond to Reuters’ requests for comment. Other Russian oil buyers, Gunvor and Glencore, declined to comment on the impact of the deadline. Energy trading firms face compliance and reputational risks from the current raft of Western sanctions. They have to examine closely which entities they can pay as well as their employees’ nationalities. Also, the lack of an outright ban complicates ending existing contracts. “All companies are sitting down with their lawyers to figure out what they can and cannot do,” a senior trading source said. “It’s unclear what this means for the whole supply chain, for shippers, insurers,” adding that his firm was looking at implications for non-state owned oil sales. “Lawyers are having a feast on this. Where there is uncertainty, companies will step back. Russian oil flows will be greatly reduced going forward.” NN: The Ukraine war is ratcheting up. More and bigger weapons are being thrown into the start of World War III. Things could easily spin out of control. The more sanctions the higher oil and gas and key metals and commodities and foo go in price. And the less Putin has to produce to net the same DOLLARS, EUROS, GOLD and China goods… Look the equation is not as you are being told. Russia with a economy smaller then Italy is a world military super power. And the cornering of key commodities, the weapons development, aggression and brutality are the reason why. Putin is not about to change Putin’s play book. He is achieving his objectives. Sky high prices for his exports. And he is creating a buffer zone around his European border.. And he is striking fear and terror in his enemies……. All paid for by increased prices for his exports, driven by mindless sanctions. You wanna beat Putin. You need to have NATO defeat him militarily. And Europe lacks the hairy set of balls necessary to do this. And for the cherry on top he drives the Democratic market based economies into a devastating inflation, that ends up in skyrocketing interest rates and a full blown depression……..
Producer Prices Rose at a Record Rate. Inflation Remains ‘Very Strong.’
Businesses felt the bite from inflation in March as prices for goods and services surged more than expected. The producer price index, or PPI, rose 11.2% year over year in March on a non-seasonally adjusted basis, the Labor Department said Wednesday. This is the largest increase since 12-month data were first calculated in November 2010, and follows a 10% increase in February. Economists’ had forecast PPI to rise 10.5%. PPI increased 1.4% last month on a seasonally adjusted basis, higher than expectations for a 1.1% uptick. “The severe imbalance between robust demand and handicapped supply will persist throughout Q2, keeping producer price inflation sticky and elevated until price pressures start to decelerate in the latter part of 2022,” wrote Mahir Rasheed, U.S. economist at Oxford Economics. “With a new wave of lockdowns in China and the war in Ukraine raging on, however, risks to the inflation outlook remain firmly to the upside, reaffirming our view that the Fed must proceed with a faster pace of policy normalization in the months ahead.” The surge hardly comes as a surprise given the inflationary environment, but the rate of its acceleration was faster than expected. The PPI measures the change in prices for goods as they leave the factory, and is considered by many the business version of the consumer price index, or CPI. March’s CPI data pointed to a breakneck 8.5% annual increase in consumer prices, or 1.2% in March alone. The silver lining of Tuesday’s CPI data was that core CPI, which excludes food and energy indexes, accelerated less than predicted, up 0.3% month over month. That figure led some economists to speculate that headline inflation may have reached a peak and would start to fall, but the PPI results highlighted that “the underlying pace of inflation remains very strong,” wrote Citi economist Veronica Clark.“We would caution that while core inflation might not climb substantially higher, the ‘peak’ could end up looking more like a ‘plateau’ in coming months,” she added. Excluding food and energy, the indexes for final demand goods increased 1.1% in March, higher than February’s 0.7% rise. Prices for final demand minus food, energy, and services rose 0.9% over the month, while the annual index rose 7%. Core goods rose at their strongest pace in the last two years, Clark said, and could reflect further increases in consumer prices. Diesel fuel prices jumped 20.4% in March, leading the increase for final demand goods. The indexes for gasoline, fresh and dry vegetables, iron and steel scrap, electric power, and jet fuel also moved higher. NN: it gets worse by the day. Inflation is embedded up and down the manufacturing chain. Which means it will be hard to beat out of the system.
Russia’s Q1 Trade Surplus Hits Record As Oil And Gas Prices Soar
Russia’s current account surplus, the broadest measure of trade, more than doubled in the first quarter of 2022 from the same period last year amid soaring oil and gas prices, according to data from the Russian central bank cited by Bloomberg. Russia—which continued its oil and gas sales in Q1 at the highest prices in years—saw its current account surplus jump by more than 2.5 times from last year’s first quarter to $58.2 billion from $22.5 billion. Russian revenues from oil and gas sales soared in the first quarter, while imports plunged amid companies withdrawing from Russia over Vladimir Putin’s invasion of Ukraine. This resulted in a major surplus in the Russian trade of goods and services.
“Export inflows stayed practically the same, but imports dropped sharply because of logistics limits and restrictions imposed by Western countries,” Russian Finance Minister Anton Siluanov told local newspaper Izvestia in an interview published during the weekend.
Despite the widespread global condemnation of the Russian invasion of Ukraine, Russia continued to sell its oil and gas to its key export markets in the first quarter. Asian buyers China and India continued buying Russian oil at hefty discounts, while Europe continued buying natural gas. Europe also continued buying Russian oil for most of Q1, although many European majors said in early March that they would not trade with spot Russian crude and oil products after the invasion of Ukraine. Russia expects to earn additional oil and gas revenues equivalent to $9.6 billion (798.4 billion Russian rubles) this month, its finance ministry said last week. Despite the self-sanctioning of many European buyers of Russian oil, Moscow continues to export its oil, and Europe continues to pay for and import Russian natural gas. On Friday, the EU said it would be imposing a ban on imports of coal and other solid fossil fuels from Russia as of August 2022 as part of the fifth round of EU sanctions against Russia over its invasion of Ukraine. The EU is currently discussing sanctions on Russian oil, although a consensus seems weeks away as the bloc is split over an oil embargo. NN: Sanctions on Russia are making it harder to get a BigMac in Moscow. But they can sooth their sorry with money because they are making 25% more profits on their oil and gas and and everything they sell.. In fact they are getting more profits then ever! And the US has fucked itself and their citizens with another oil shock coming.
‘Fantasy’ to think modest hike will tame inflation – Fed’s Bullard
Federal Reserve Bank of St. Louis President James Bullard told the Financial Times in an interview he believes it is a “fantasy” to assume that a neutral stance from the central bank will bring inflation down to pre-pandemic levels. He noted the downward pressure on inflation will be achieved only by elevating rates to a stage that would constrain the financial system and that the consumer price data, released yesterday, further proves the Fed should make a move on rates soon. “I reckon a 50 bps move in May is all but certain at this stage. We’ll just have to see if they have the appetite to stick with a more aggressive path in the following months,” Bullard told the media outlet. NN: They need to have the Fed Funds rate at 6% right now… They are hopelessly behind the 8 ball. And they are starting to figure it out. The Doctors at the Fed do not want the patient to know the economy has terminal cancer. Soon they will begin Chemo.
Putin Says Ukraine Talks ‘at Dead End’, Vows to Pursue War
President Vladimir Putin said peace talks with Ukraine are “at a dead end” and vowed to continue Russia’s invasion as Kyiv accused Moscow of sabotaging the negotiations. There’s been no word of progress for days in video-link peace talks after Ukraine accused Russian troops of carrying out war crimes including killing unarmed civilians in Bucha and other towns in the north. Western leaders have called for international investigations of the deaths. In his first public comments on the alleged atrocities, Putin first compared them to U.S. attacks on cities like Raqqa in Syria and then called the Bucha claims “fake.” Russia’s almost seven-week offensive is going “according to plan,” Putin said Tuesday at a joint press conference at the Vostochny Cosmodrome in the Russian Far East with Belarusian President Alexander Lukashenko. Dialog continued between the two sides by video link after the last in-person meeting in Istanbul on Mar. 29. There’s been no public confirmation of talks this week. Putin accused Ukraine of backing off earlier concessions, but Kyiv’s public position has not changed and it blames Russia for the lack of progress. “The talks are extremely difficult,” said the chief Ukrainian negotiator Mykhailo Podolyak, adding that Russia is “sticking to its traditional practice of publicly pressing on the negotiating process.”
Putin said that without a peace deal, “the military operation will continue until its final completion and the tasks that were set at the start of the operation are achieved.”
He told workers at the cosmodrome conflict with Ukraine was “inevitable” because of its close ties with the West. But while the Kremlin originally justified the offensive as needed to “de-militarize” and “de-Nazify” Ukraine by ousting its pro-Western democratically elected government, Putin said Tuesday the main goal is to “help” the people of Donbas. After facing major losses and the failure to Russia is now preparing a new offensive aimed at solidifying control of the eastern Donbas region that is partly controlled by Kremlin-backed separatists and securing a land bridge to the Crimea peninsula Putin annexed in 2014. Russia’s economy has withstood the West’s sanctions “blitzkrieg,” Putin said, citing the recovery of the ruble’s exchange rate. But he conceded that logistics and payment systems remain a weakness and the long-term impact of western limits could be more painful. The government is expecting an economic contraction of as much as 10% this year, the worst in more than two decades. The Russian president said he hoped that “good sense” will ultimately prevail in the West, leading to the easing of sanctions. He also said that while rising inflation related to the crisis “inevitably” will cause political problems for Western leaders, Russian public support for his policy remains strong. Putin is winning. NN: Its all about how you define winning. America defines winning as conquering and holding territory. Putin like is Syria calls winning bombing them into submission. The raping, pillaging and plundering is just for sadistic fun.
US inflation soars to record 8.5% in March
Many Americans have been receiving pay increases, but the pace of inflation has more than wiped out those gains for most people. In February, after accounting for inflation, average hourly wages fell 2.5% from a year earlier. It was the 11th straight monthly drop in inflation-adjusted wages. NN: For two years we warned about embedded inflation. We warned about over stimulation by the Fed and goveremnt programs. And we have seen the results. Now we have a horror of all horrors a oil shock, a metals shock and a food shock. You can kiss the real estate and stock markets goodbye.
OPEC Warns The EU That Replacing Russian Oil Will Be “Nearly Impossible”
- OPEC and the EU met on Monday amid pressure on the EU to impose a ban on Russian oil.
- OPEC’s Secretary-General Mohammad Barkindo said it would be “nearly impossible” to replace Russian oil.
- Barkindo said the highly volatile market is not based on fundamentals and is out of its control.
The Organization of the Petroleum Exporting Countries (OPEC) has told the European Union that it would be “nearly impossible” to replace Russian oil if supplies are cut off due to sanctions or boycotts, according to reports from Reuters and Bloomberg.
“We could potentially see the loss of more than 7 million barrels per day of Russian oil and other liquids exports, resulting from current and future sanctions or other voluntary actions,” said OPEC’s Secretary-General Mohammad Barkindo, Reuters reported, citing a copy of his speech.
“Considering the current demand outlook, it would be nearly impossible to replace a loss in volumes of this magnitude,” Barkindo told the EU, per Reuters. OPEC and the EU met on Monday amid pressure on the EU to impose a ban on Russian oil over Russian atrocities in the Ukraine war. The trade bloc has also called on OPEC to consider increasing supply, a European Commission official told Reuters. The EU relies on Russia for around 25% of its oil imports, but the trade bloc — which has banned Russian coal and is considering an oil embargo — is trying to wean itself off Russian energy. But oil prices are already up 30% year-to-date on the back of the Ukraine war due to disrupted trade flows linked to boycotts and sanctions against Russia. OPEC’s Barkindo said the “highly volatile market” was due to political factors rather than supply and demand fundamentals of the oil market. “These are non-fundamental factors that are totally out of our control at OPEC,” Barkindo said, per Bloomberg. Last month, Saudi Arabia, the world’s top oil exporter, said that OPEC+ — which includes OPEC and other major producers such as Russia — will leave politics out of its decision-making, per CNBC. “That culture is seeped into OPEC+, so when we get into that OPEC meeting room, or OPEC building, everybody leaves his politics at the outside door of that building, and that culture has been with us,” the country’s Energy Minister Prince Abdulaziz bin Salman told the outlet. OPEC+ said last month that it would increase output by about 432,000 barrels per day in May to meet a recovery in demand as the pandemic eases. NN: You have no world without energy. Over investment in Netflix, Uber and twitter and the like is over. If you have no electricity ,no nickel, lithium or aluminum… you have nothing. PC correct investments that shut minerals, fossil fuels and nuclear are doomed.