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Gas and electricity bills in Europe could jump to 4.5 percent of household disposable income in 2023.
Rising utility bills raise pressure on politicians to implement windfall tax.
Rising energy commodity prices weigh most on Eastern European countries.

The higher the energy bills in Europe become, the higher the chances are for a windfall tax on energy companies and utilities, as governments will be forced to ease the growing pressure on household finances, Citigroup says.

Europe as a whole could see a utility bill rise of over 3 percent of gross domestic product (GDP) through 2024, Citigroup Global Markets analysts Piotr Dzieciolowski, Jenny Ping, and Antonella Bianchessi wrote in a note on Monday carried by Bloomberg.

Gas and electricity bills in Europe could jump to 4.5 percent of household disposable income in 2023, up from 3.5 percent in 2021. The utility bills could further rise to 4.8 percent of household disposable income in 2024, according to Citi analysts.

In countries in Eastern Europe, where the prices of commodities account for a larger share of bills, the disposable income is likely to shrink the most, the investment bank says.

Per a Citi survey, one-quarter of respondents across Europe aged 18 to 29 say they would not be able to pay their bills on time if bills rose by one-tenth.

Bills have been surging in Europe since the autumn of 2021 when the natural gas shortage led to higher gas and electricity prices. The Russian invasion of Ukraine further strained household income as utility bills surged with the skyrocketing commodity prices.

Spain and Portugal set a cap on the price of gas used for generating electricity, after the EU allowed them to do so, acknowledging their exceptional energy requirements.

…click on the above link to read the rest of the article…

Putin: Oil Sanctions Will Be Europe’s “Economic Suicide” On Orders From “American Overlords”

May 18, 2022

Putin: Oil Sanctions Will Be Europe’s “Economic Suicide” On Orders From “American Overlords”

Russian President Vladimir Putin announced that EU countries are committing “economic suicide” by refusing Russian energy resources amid a push to impose an oil embargo, but which has been thus far blocked by Russian energy-dependent Hungary and a handful of others.

As quoted in RIA Novosti, Putin described that the oil sector is busy undergoing a “tectonic shift” which will only be made worse by “ill-thought-out” sanctions by the West. The address was given virtually to an energy conference of the country’s industry heads.

“Changes in the oil market are tectonic in nature and doing business as usual, according to the old model, seems unlikely,” he said. “In the new conditions, it is important not only to extract oil, but also to build the entire vertical chain leading to the final consumer.”

*Putin signs a pipeline in 2011. AFP via Getty*

He called out the current EU-US trajectory of seeking to inflict maximum punishment on Moscow as a strategy ensuring higher energy prices and higher inflation. That’s when he observed:

“Of course, such an economic suicide is a domestic affair of the European countries,” based on the AFP translation.

At the same time, Putin additionally pointed out, Europe’s “chaotic actions” would eventually serve to boost oil and gas revenues for Moscow, also as Russia diverts energy supplies to “friendly” countries. He urged Russian industry authorities to be more proactive in leveraging the situation for the nation’s benefit.

Putin described a scenario of Europe feeling the brunt of the crisis worst, according to state media:

…click on the above link to read the rest of the article…

Cutting Off Russian Gas Would Be “Catastrophic”, German Industry President Warns

May 17, 2022

Cutting Off Russian Gas Would Be “Catastrophic”, German Industry President Warns

As we detailed yesterday, almost two months after Europe rushed to declare it would impose unprecedented sanctions on Russia in response to Putin’s invasion of Ukraine with no regard for how such sanctions would boomerang and cripple its own economies, the old continent which was and still remains hostage to Russian energy exports, is finally grasping the underlying math which was all too clear to Vladimir Putin long ago.

The European Union’s executive arm said yesterday that the currency bloc’s economy would expand about 0.2% this year, with inflation topping 9%, as governments struggled to replace the imports.

This severe stagflationary scenario is highlighted by Siegfried Russwurm, president of the Germany’s biggest industry association BDI, warning that the cessation of Russian gas deliveries would have a dire effect on the German economy.

“The consequences of cutting off Russian gas supplies would be catastrophic,” he told tabloid Bild am Sonntag in an interview published at the weekend.

Russwurm added that cutting off Russian gas would deprive businesses of fuel in Germany, forcing businesses to close production lines.

“In this situation many companies will be completely cut off gas supplies. In many cases, affected businesses will be forced to stop production, some businesses may never be able to start again,” he warned.

Europe’s “sudden realization” of just how destructive pushing through with full-blown sanctions will be, somewhat similar to that of Elon Musk who “learned” about the millions in Twitter spam accounts only after bidding $44 billion – is why over the weekend, Bloomberg reported that the European Union is set to fully water down its so-called sanctions and to offer gas importers a solution to avoid a breach of sanctions when buying fuel from Russia while satisfying President Vladimir Putin’s demands over payment in rubles.

…click on the above link to read the rest of the article…

European Natural Gas Prices To Triple In “Perfect Storm”

May 16, 2022

European Natural Gas Prices To Triple In “Perfect Storm”

A top commodity research firm in Norway warns a “perfect storm” is brewing as European energy security worsens following Russia’s invasion of Ukraine, which could result in the tripling of natural gas prices.

“There simply is not enough LNG around to meet demand. In the short term, this will make for a hard winter in Europe.

“For producers, it suggests the next LNG boom is here, but it will arrive too late to meet the sharp spike in demand. The stage is set for a sustained supply deficit, high prices, extreme volatility, bullish markets, and heightened LNG geopolitics,” Kaushal Ramesh, a senior analyst for Gas and LNG at Rystad Energy, wrote.

Rystad Energy said the EU has an “ambitious target to reduce dependence on Russian gas by 66% within this year – an aim that will clash with the EU’s goal of replenishing gas storage to 80% of capacity by 1 November.”

The firm said shunning Russian natgas from the continent destabilizes the entire global natgas market, which had a turbulent 2021 year-end with prices skyrocketing across Europe because of the lack of supplies. EU is currently reducing reliance on Russian natgas and has unveiled the possibility of banning Russian fossil fuels. This will only lead to more trouble for the EU, where prices could rise even higher.

Learn more with Rystad Energy’s GasMarketCube.

According to the report, 155 billion cubic meters of Russian natgas flowed into Europe in 2021, representing about 31% of the continent’s natgas supply.

“Replacing a significant portion of this will be exceedingly difficult, with far-reaching consequences for Europe’s population, economy, and for the role of gas in the region’s energy transition,” Rystad Energy noted.

…click on the above link to read the rest of the article…

Europe May Face LNG Crisis This Winter

May 11, 2022

Europe May Face LNG Crisis This Winter

Rush to wean off Russian gas has made European consumers highly vulnerable to LNG price shocks.
Global LNG demand outstrips supply in 2022.
New LNG projects are unlikely to provide relief until 2024.

A liquified natural gas (LNG) crisis is brewing for European countries dealing with energy insecurity in the wake of Russia’s invasion of Ukraine, as demand will outstrip supply by the end of this year, Rystad Energy research shows. Although soaring demand has spurred the greatest rush of new LNG projects worldwide in more than a decade, construction timelines mean material relief is unlikely only after 2024. Global LNG demand is expected to hit 436 million tonnes in 2022, outpacing the available supply of just 410 million tonnes. A perfect winter storm may be forming for Europe as the continent seeks to limit Russian gas flows. The supply imbalance and high prices will set the scene for the most bullish environment for LNG projects in more than a decade, although supply from these projects will only arrive and provide relief from after 2024

The European Union’s REPowerEU plan has set an ambitious target to reduce dependence on Russian gas by 66% within this year – an aim that will clash with the EU’s goal of replenishing gas storage to 80% of capacity by 1 November. By shunning Russian gas, Europe has destabilized the entire global LNG market that began the year with a precarious balance after a tumultuous 2021. The decision to sharply reduce reliance on Russian gas and LNG from current levels of between 30-40% will transform the global LNG market, resulting in a steep increase in energy-security based European LNG demand that current and under-development projects will not be able to supply.

…click on the above link to read the rest of the article…

Megalopolis x Russia: Total War

May 8, 2022

Megalopolis x Russia: Total War

After careful evaluation, the Kremlin is rearranging the geopolitical chessboard to end the unipolar hegemony of the “indispensable nation”.

But it’s our fate / To have no place to rest, / As suffering mortals / Blindly fall and vanish / From one hour / To the next, / Like water falling / From cliff to cliff, downward / For years to uncertainty.

Holderlin, Hyperion’s Fate Song

Operation Z is the first salvo of a titanic struggle: three decades after the fall of the USSR, and 77 years after the end of WWII, after careful evaluation, the Kremlin is rearranging the geopolitical chessboard to end the unipolar hegemony of the “indispensable nation”. No wonder the Empire of Lies has gone completely berserk, obsessed in completely expelling Russia from the West-centric system.

The U.S. and its NATO puppies cannot possibly come to grips with their perplexity when faced with a staggering loss: no more entitlement allowing exclusive geopolitical use of force to perpetuate “our values”. No more Full Spectrum Dominance.

The micro-picture is also clear. The U.S. Deep State is milking to Kingdom Come its planned Ukraine gambit to cloak a strategic attack on Russia. The “secret” was to force Moscow into an intra-Slav war in Ukraine to break Nord Stream 2 – and thus German reliance on Russian natural resources. That ends – at least for the foreseeable future – the prospect of a Bismarckian Russo-German connection that would ultimately cause the U.S. to lose control of the Eurasian landmass from the English Channel to the Pacific to an emerging China-Russia-Germany pact.

The American strategic gambit, so far, has worked wonders. But the battle is far from over. Psycho neo-con/neoliberalcon silos inside the Deep State consider Russia such a serious threat to the “rules-based international order” that they are ready to risk if not incur a “limited” nuclear war out of their gambit…

…click on the above link to read the rest of the article…

Empire of Lies Eager to Receive Mr. Sarmat’s Business Card

May 1, 2022

Empire of Lies Eager to Receive Mr. Sarmat’s Business Card

The only antidote to propaganda dementia is served by sparse voices of reason, which happen to be Russian, thus silenced and/or dismissed.

Especially since the onset of GWOT (Global War on Terror) at the start of the millennium, no one ever lost money betting against the toxic combo of hubris, arrogance and ignorance serially deployed by the Empire of Chaos and Lies.

What passes for “analysis” in the vast intellectual no-fly zone known as U.S. Think Tankland includes wishful thinking babble such as Beijing “believing” that Moscow would play a supporting role in the Chinese century just to see Russia, now, in the geopolitical driver’s seat.

This is a fitting example not only of outright Russophobic/Sinophobic paranoia about the emergence of peer competitors in Eurasia – the primeval Anglo-American nightmare – but also crass ignorance about the finer points of the complex Russia-China comprehensive strategic partnership.

As Operation Z methodically hits Phase 2, the Americans – with a vengeance – have also embarked on their symmetrical Phase 2, which de facto translates as an outright escalation towards Totalen Krieg, from shades of hybrid to incandescent, everything of course by proxy. Notorious Raytheon weapons peddler reconverted into Pentagon head, Lloyd Austin, gave away the game in Kiev:

“We want to see Russia weakened to the degree that it can’t do the kinds of things that it has done in invading Ukraine.”

So this is it: the Empire wants to annihilate Russia. Cue to War Inc.’s frenzy of limitless weapon cargos descending on Ukraine, the overwhelming majority on the road to be duly eviscerated by Russian precision strikes. The Americans are sharing intel 24/7 with Kiev not only on Donbass and Crimea but also Russian territory…

…click on the above link to read the rest of the article…

You Are Not Real

April 25, 2022

You Are Not Real

Shakespeare’s famously gory “Titus Andronicus” is replete with violence, including fourteen deaths. Yet it continues to be performed, and audiences continue to sign up for a frisson of fear and pity, because this is not real.

After the play, the actors get up, wash off the fake blood, and join the playwrights and directors for drinks or dinner.

If, like me, you’ve been wondering about why things are the way they are in today’s world, and how this relates, this is my explanation: For the actors, writers and directors who create real world narratives, the play is you. And you are not real.

Actors and Reality

Much has been made of the jarring dissonance between the heroic stand of the president and the people of Ukraine and the facile signaling of the Social Justice crowd. Feel free to pick your favorite exemplar, from the merely stupid banning of Russian cats and renaming of White Russian cocktails to the more sinister cancelling of Russian performers, or the horrific threats and vandalism to places serving Russian food. There’s no shortage of content here. And, as we’ll get to shortly, that’s the point.

Ukraine’s policy goals do not map fully to those of the United States (think Azov Battalion, for starters), and we can and should carefully consider our response with that awareness. But this does not change Ukrainian heroism. Zelensky wants planes, a no-fly zone, and he would no doubt love NATO boots on the ground. Prudence may dictate we provide him none of these, but it is worth noting that any of us in his circumstances would likely be asking for the same things. Any of us who stayed during the onslaught, that is.

…click on the above link to read the rest of the article…

Ukraine war: World Bank warns of ‘human catastrophe’ food crisis

April 22, 2022

Ukraine war: World Bank warns of ‘human catastrophe’ food crisis

The world faces a “human catastrophe” from a food crisis arising from Russia’s invasion of Ukraine, World Bank president David Malpass has said.

He told the BBC that record rises in food prices would push hundreds of millions people into poverty and lower nutrition, if the crisis continues.

The World Bank calculates there could be a “huge” 37% jump in food prices.

This would hit the poor hardest, who will “eat less and have less money for anything else such as schooling”.

In an interview with BBC economics editor Faisal Islam, Mr Malpass, who leads the institution charged with global alleviation of poverty, said the impact on the poor made it “an unfair kind of crisis… that was true also of Covid”.

“It’s a human catastrophe, meaning nutrition goes down. But then it also becomes a political challenge for governments who can’t do anything about it, they didn’t cause it and they see the prices going up,” he said on the sidelines of the IMF-World Bank meetings in Washington.

The price rises are broad and deep, he said: “It’s affecting food of all different kinds oils, grains, and then it gets into other crops, corn crops, because they go up when wheat goes up”.

There was enough food in the world to feed everybody, he said, and global stockpiles are large by historical standards, but there will have to be a sharing or sales process to get the food to where it is needed.

Mr Malpass also discouraged countries from subsidising production or capping prices.

Instead, he said, the focus needed to be on increasing supplies across the world of fertilisers and food, alongside targeted assistance for the very poorest people.

…click on the above link to read the rest of the article…

3 Factors Which Are About To Make The Coming Food Shortages Even Worse

April 19, 2022

3 Factors Which Are About To Make The Coming Food Shortages Even Worse

A confluence of circumstances has come together to create a “perfect storm” for global food production, and now that “perfect storm” is about to get even worse. For months I warned that this crisis was coming, and in recent weeks I have been documenting how dire conditions have already become all over the globe. The head of the UN World Food Program is warning that this is going to be the worst worldwide food crisis since World War II, and even Joe Biden is admitting that the approaching food shortages “are going to be real”. Unfortunately, there have been some new developments which threaten to significantly escalate things.

In recent days, the number of newly confirmed COVID cases in China has soared to record highs, and Chinese authorities have responded to this with unprecedented lockdowns.

As a result, almost 400 million Chinese are now “under full or partial lockdown”…

Nearly 400 million people across 45 cities in China are under full or partial lockdown as part of China’s strict zero-Covid policy. Together they represent 40%, or $7.2 trillion, of annual gross domestic product for the world’s second-largest economy, according to data from Nomura Holdings.

Analysts are ringing warning bells, but say investors aren’t properly assessing how serious the global economic fallout might be from these prolonged isolation orders.

Chinese lockdowns are a lot more brutal than lockdowns in the western world.

By now, you have probably seen video footage of Shanghai residents literally screaming from their apartment windows.

I have never seen anything like that before, and these lockdowns will continue as long as COVID keeps spreading.

To put this in perspective, the number of people that are currently locked down in China is greater than the total population of the United States.

…click on the above link to read the rest of the article…

Europe To Cap Potash Imports As Planting Season Begins

April 6, 2022

Europe To Cap Potash Imports As Planting Season Begins

The EU is expected to deliver another shock to its agricultural sector by capping Russian imports of potash, a crucial ingredient for growing food, according to Bloomberg, citing a Dow Jones report.

The European Commission is expected to imminently unveil broad new sanctions on Russia. Much of the fertilizer is purchased from Belarus; the landlocked country in Eastern Europe could also be slapped with new sanctions for its involvement in Russia’s invasion of Ukraine.

Potash is a key ingredient for agricultural fertilizers. Europe produces only a negligible amount of the fertilizer, and to potentially cap imports from Russia and or Belarus (top producers) seems idiotic for Europe as the spring planting season is only beginning.

Even if Europe were to rework its supply chains to import potash elsewhere, only a few other countries would export it. The impact of capping imports will send prices even higher and create fertilizer shortages for crops. This can dramatically affect crop harvests at the end of the growing season.

A handful of North American fertilizer stocks jumped on the report, including CF Industries +3% and Intrepid Potash 2%.

About 90% of potash is used as fertilizer in Europe; the rest is used to produce table salt, help slow the aging of wine, preserve canned food, and give chocolate its aroma.

Global spot prices for potash show prices continue to accelerate to the upside. This may discourage farmers from purchasing or even spread less of it during the planting season.

Even before the invasion of Ukraine, all fertilizer production in the West was declining (read: here) due to high natural gas prices. The shortage of fertilizers, not just potash, but also nitrogen and phosphates, on global markets, is inevitable. What Europe is doing to potentially cap potash imports from Russia and Belarus is idiotic and can spark a food crisis.

…click on the above link to read the rest of the article…

Why Renewables Can’t Solve Europe’s Energy Crisis

April 6, 2022

Why Renewables Can’t Solve Europe’s Energy Crisis

Europe has been aggressively pursuing a clean energy future and the end of fossil fuels, but Russia’s invasion of Ukraine has highlighted the shortcomings of renewables.
The soaring prices of key metals and the length of time it takes to implement renewable energy projects have meant Europe is turning to fossil fuels to solve its energy crisis.
The EU is planning to replace Russian gas with LNG imports, coal, and even fuel oil, with a relatively small amount of the gas to be replaced by wind and solar.

Germany is preparing for gas rationing. France’s power grid operator is asking consumers to use less electricity. In the UK, protests are breaking out over the latest electricity price hike that plunged millions of households into what one local think tank called fuel stress. Europe has a serious energy problem.

The problem dates back years and points to a persistent complacency on the part of European governments that whatever happens, there will always be gas from Russia. After all, even during the Cold War Russia pumped billions of cubic meters of gas to European countries. Now, things are different, and it’s not just because of the war in Ukraine.

Europe has been enthusiastically trying to reduce its dependence on all fossil fuels, not just Russian gas, for a few years now. The EU recently boasted that in 2022 renewable energy sources accounted for 37.5 percent of gross electricity consumption, with wind and hydro constituting two-thirds of the total renewable energy output. Why, then, one wonders, would Germany have to brace for gas rationing and France ask its citizens to consume less electricity? Now that has a bit to do with the war in Ukraine…

…click on the above link to read the rest of the article…

EU Pushes To Break “Energy Taboo” With Proposed Ban On Russian Coal Imports

April 5, 2022

EU Pushes To Break “Energy Taboo” With Proposed Ban On Russian Coal Imports

Update (0825ET): As EU ambassadors meet on Tuesday to discuss another proposal on Russian sanctions, German Foreign Minister Annalena Baerbock insisted that the EU would “completely end” its fossil fuel dependence on Russia, starting with coal.

Of course, as we noted below, Germany is among the most dependent EU economies on Russian energy. Weaning its economy off Russian energy without triggering a major domestic crisis and “total collapse.”

US equity futures tumbled on the news as investors braced for more international fallout from increasing tensions between Europe and the Russians, which could lead to even higher energy prices.

* * *

Not to be outdone by tiny Lithuania (which claims to have officially weaned itself off Russian gas imports by building an LNG terminal), the European Commission has devised a controversial proposal to ban imports of Russian coal, along with a host of other measures comprising a new sanctions package to be introduced on Tuesday, according to reports from WSJ, Reuters and a host of other media outlets.

Along with banning imports of Russian coal, the package also calls for an import ban on rubber, chemicals and other products from Russia worth up to €9 billion a year.

If passed, the proposal would mark the first energy sanctions on Russia since the start of the conflict in Ukraine. Although it wouldn’t touch oil and gas, such a ban would break the so-called “energy taboo”, according to Bloomberg’s Javier Blas.

While thermal coal isn’t nearly as critical as oil and gas, it’s still a “big deal,” Blas pointed out.

Coal-fired power plants are still being used across the EU, though most member states expect to completely phase them out by 2030. Russia has the second-largest coal reserves in the world. In 2020, it mined 328 million metric tons, making it the sixth-largest producer globally…

…click on the above link to read the rest of the article…

Gazprom Halts Gas Shipments To Europe Via Critical Pipeline

April 2, 2022

Gazprom Halts Gas Shipments To Europe Via Critical Pipeline

After European nations imported the most gas from Russian sources yesterday in months, scrambling to stock up on supplies as Russian President Vladimir Putin’s deadline to either pay for gas in rubles (or be cut off) came and went, Russian gas giant Gazprom has officially halted all deliveries to Europe via the Yamal-Europe pipeline, a critical artery for European energy supplies.

Instead of flowing toward Germany and the EU, gas supplies on Friday and Saturday started flowing in the opposite direction, according to Gascade, the network operator.

In recent months, the EU has already boosted imports of LNG from the US…

…and despite President Biden’s promise to bolster to exports to the EU (although he stipulated that not all of this additional capacity would come from the US), researchers at Goldman Sachs have already shown that US exports of LNG are already at capacity.

Another problem for pipeline-dependent Europe: the continent presently doesn’t have the infrastructure to allow it to rapidly ramp up imports of LNG, which must be carefully processed and “regassified” before it can be distributed to utilities and other distributors of energy.

A map below illustrates the level of dependence that various European economies have on Russia.

“London wants to be the leader of everything anti-Russian. It even wants to be ahead of Washington! That’s the cost!” Peskov outlined.

Desperation And Austerity Hit Global Energy Markets

April 2, 2022

Desperation And Austerity Hit Global Energy Markets

We are starting to see the makings of energy curtailments in Europe – an exceedingly unpopular step that governments would be unlikely to take if there were any other choice, highlighting the acute desperation that exists over oil and gas supplies.

Another signal of this desperation is Biden’s plan to release a massive 180 million barrels of crude oil into the market from the SPR at a rate of more than a million barrels per day. This is a huge figure that will shrink the SPR to lows not seen since the ‘80s (~388 million barrels) when U.S. oil consumption was substantially lower than it is today. This decades-low emergency inventory would come at a time when U.S. production has stagnated with oil companies resisting calls to invest/pump more, and at a time when demand continues to rise.

The UK said on Friday that it would also release more oil from its reserves.

The drastic actions will be interpreted in the medium term as a cause for concern. OPEC+, on the other hand, appears content to stay the course, agreeing on Thursday to stick the agreed-upon production hikes for May. At the same time, Canada continues to raise the price of carbon, thereby raising the price of gas.

Germany’s economy minister has triggered its early warning system for low levels of gas, and has appealed to companies and private consumers to conserve energy. France’s gas distributor is also expected to issue a decree in the next couple of days detailing a plan for possible gas rationing. The Netherlands’ economic ministry said it, too, would soon ask its citizens to use less gas.

Europe and the United States have expended much time and effort trying to scrape together additional fuel supplies and trying to subsidize energy and gasoline for their people…

…click on the above link to read the rest of the article…

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