It looks as if Germany and the rest of Europe may have received the last Russian gas from the Nord Stream 1 pipeline until further notice.
Per Reuters:
Russia’s Gazprom has told customers in Europe it cannot guarantee gas supplies because of ‘extraordinary’ circumstances, according to a letter seen by Reuters, upping the ante in an economic t*t-for-tat with the West over Moscow’s invasion of Ukraine.
The July 14 letter from the Russian state gas monopoly said it was retroactively declaring force majeure on supplies dating from June 14. The news comes as Nord Stream 1, the key pipeline delivering Russian gas to Germany and beyond, is undergoing annual maintenance meant to conclude on Thursday.
The news comes as Nord Stream 1, the key pipeline delivering Russian gas to Germany and beyond, is undergoing annual maintenance meant to conclude on Thursday.
Hmmm, suppose they can’t get the parts for the maintenance? …
Hmmm, suppose they can’t get the parts for the maintenance? …
No, I suppose Putin is showing how big his club is. As the OPEC nations found out when they quadrupled prices overnight, sending the rest of the world into chaos and destroys economies, in the long run it is bad for them too.
But since Putin has no economy to speak of anyway, it bothers him less - and he doesn’t care - when Europe starts bidding up the price of energy and it hits all of the West. Meanwhile he will back door his exports to China and India, and at better prices, and be none the worse off.
Russian oil is, by far, the biggest import in the EU, which gets 40% of its gas from the motherland. The EC had already announced they would try to cut Russian oil by 2/3 by the end of the year (but good luck), so Putin is just bringing them to their milk a little early.
This is Episode 4 in “War Without Bullets” vis a vis the US and EU. Stay tuned for more developments on this same channel.
China is a massive oil importer. With more of the supply coming from Russia that frees up other sources to export to the EU.
The G7 will set the price. They were on the fence some of them yesterday. The fence just got taken away by Putin. China and India will gladly pay less for any oil they are buying.
How would China’s government ever explain, “well the price on Russian oil was set lower by 25% but we opted for the crazy high prices”? Wont happen.
As Russia goes so goes Iran.
Then OPEC.
The scales are tipping. Putin is bouncing on them.
The building global recessions wont help oil.
In the US the dollar appreciating is bring down all input costs. Something the supply side guys promised and never delivered on. Meaning we can have very high GDP growth and low inflation…rather soon in terms of the decade going forward…
China is about to crash Russia’s idiot party anyway. The Lehman Brothers moment is due at any time.
Europe is heavily dependent on Russia for its oil and gas. In 2021, two-fifths of the gas Europeans burned came from Russia. And over a quarter of the EU’s imported crude oil comes from Russia.
In 2021, the EU imported $108 billion (€99bn) worth of energy from Russia, by far its biggest import from the country.
But the volume the EU has been importing has fallen significantly in the past decade. In 2012, the EU imported $173 billion (€157bn) worth of energy from Russia.
An energy crisis in the EU would be one more nail in the euro’s coffin according to Alasdair Macleod:
Russia is a far more serious issue than Brexit ever was. The EU has, to varying degrees, disposed of its fossil fuel capacity to placate environmentalists, exporting their production to nations not so squeamish about fashionable climate change strictures. Consequently, the EU has become highly dependent on Russian natural gas and oil, which in cavalier fashion it has decided to do without to punish Russia over its invasion of Ukraine.
Perhaps a technical point, but how can you declare force majeure when it’s your guy causing the crisis?
Well, let’s say Airbus was scheduled to deliver a dozen airliners to China. If the EU put a ban on exports to China then Airbus could declare force majeure.