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

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

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…

The Real Reason Behind the EU’s Drive to Embargo Russian Oil

The Real Reason Behind the EU’s Drive to Embargo Russian Oil

This week the European Union is expected to announce a complete import ban on Russian oil. Hungary, in its first real act of defiance, is threatening to veto this; Germany, after some hemming and hawing, has finally decided it can survive such a ban.

Assuming Hungary’s objections are eventually overcome, at first blush this looks like yet another energy “own goal” by the people obsessed with soccer. The U.S. has already issued this ban.

Because European industry is heavily dependent on Russian oil and gas, the conventional wisdom is that the EU Commission is just petulant and incompetent.

Are they petulant? Yes. Incompetent? Possibly? But only if you think in conventional terms of doing the right thing for their people. What is clear to any serious observer of EU politics is that they are not interested in what their people have to say or want.

Theirs is an agenda which will brook no opposition, even if it means destroying its own economy to bring a rival to its knees.

That said, I sincerely doubt there will be a “buyers embargo” on natural gas because there is no viable substitute for it.

Hungary is using the need for unanimous consent within the European Council to block any ‘gas ban’ in any new economic sanctions package. There are at least three other countries which are happy Hungary is willing to suffer Brussels’ wrath.

But banning Russian oil, on the other hand, is different.

So, it is interesting that Hungary would do this, given they import no oil from Russia. {Ed. this is wrong, Hungary imports 65% of its oil through the Druzhba pipeline} This veto was predicted by me the morning after the Hungarians overwhelmingly rejected George Soros’s anti-Viktor Orban coalition and handed it an ignominious defeat.

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

Europe May Face LNG Crisis This Winter

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…

An Economic ‘Atomic Bomb’: Hungary Threatens EU’s Latest Sanctions Against Russia, Including Oil Embargo

An Economic ‘Atomic Bomb’: Hungary Threatens EU’s Latest Sanctions Against Russia, Including Oil Embargo

KEY FACTS

Orban, an ally to Putin who was reelected for a fourth term as prime minister in April, told Hungarian state radio on Friday that Hungary could not support proposed EU sanctions against Russia in their current form, according to multiple news reports.

Plans to ban Russian oil are far too costly and would amount to an “atomic bomb” being dropped on the Hungarian economy, he said.

Hungary would need at least five years and massive investment on infrastructure in order to manage without Russian oil, Orban said.

He said he is willing to negotiate a sanctions proposal that meets Hungary’s interests and is waiting on a new proposal from the European Commission.

While Orban’s objections are not surprising—Hungary is heavily dependent on Russian oil and has consistently shot down proposed energy sanctions against Moscow since it invaded Ukraine in February—they are a major obstacle for finalizing the bloc’s latest round of sanctions, which require unanimity from all 27 member states.

KEY BACKGROUND

Current plans would see most of the EU phase out Russian oil imports within six months, alongside disconnecting some of Russia’s largest banks from the SWIFT international finance system and banning Russian broadcasters from the region. When outlining the sanctions package on Wednesday, European Commission President Ursula Von der Leyen said ending the bloc’s “dependency on Russian oil…

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

EU To Impose Full Embargo On Russian Oil Next Week, Will Send Price Above $185 According To JPMorgan

EU To Impose Full Embargo On Russian Oil Next Week, Will Send Price Above $185 According To JPMorgan

Despite the clear intentions of western government to cripple Russian energy production, loadings of Russian oil have so far been surprisingly resilient, so much so that Russia’s current account balance is at all time highs.

According to JPMorgan, shipments in the seven days to April 16 hit 7.3 mbd, only 330 kbd below the 7.58 mbd averaged in
February before the start of the war. 
Remarkably, JPM calculates that Russian crude exports are averaging 360 kbd above pre-invasion volumes, while exports of oil products like fuel oil, naphtha, and VGO have declined by 700 kbd (full report available to pro subscribers in the usual place).

As previously observed, the decline in product exports combined with a 200 kbd drop in Russian domestic oil demand has resulted in Russian refineries cutting runs. The volume of refining cuts in April has risen to 1.3 mbd, almost 0.6 mbd above usual April maintenance. By late March, a sharp reduction in domestic refining throughput triggered production shut-ins.

With that in mind, JPM now estimates that Russian production shut-ins will amount to 1.5 mbd in April, vs its initial forecast of 2 mbd (the forecast of a 1 mbd loss of Russian exports for the rest of the year remains unchanged for now).

Underlying JPM’s projection is the assumption that European buyers will cut their purchases of Russian oil by about 2.0-2.5 mbd by the end of the year and that Russia will be able to re-route only about 1 mbd out of that.

The three ways JPM gets to its 2.0-2.5 mbd estimate are:

  1. Russian crude spot contracts account for about 1.8 mbd of total exports, while about 0.3 mbd of products are sold on spot terms, giving us a likely disruption of 2.1 mbd,

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

Europe To Cap Potash Imports As Planting Season Begins

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…

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

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…

EU Considers Massive 100 Billion Euro Energy Relief Fund For Companies

EU Considers Massive 100 Billion Euro Energy Relief Fund For Companies

Europe faces an unprecedented energy crisis that requires extraordinary policy action, such as a possible 100 billion in relief funds to businesses hit the hardest by soaring energy prices.

Bloomberg cites MF daily that said the European Union on Wednesday is considering a massive 100 billion euro bond issuance for a new relief program that would provide relief funds to businesses hit hardest by rising gas and electricity prices, as criticism soars about out of control commodity inflation and the bloc’s inability to tame prices.

MF didn’t cite sources, though it said the issuance could be approved within the next 15 days.

The news comes as the European Commission has proposed a plan to make Europe independent from Russian fossil fuels following the invasion of Ukraine. Even before the invasion, many European countries were facing extraordinarily high natural gas, electricity, and fuel costs. There’s even risks of a diesel shortage emerging. The latest developments from Ukraine have exacerbated the situation.

On Tuesday, a working group of Germany’s coalition parties agreed on a relief package to strengthen Germany’s energy independence and help alleviate the burden of high energy costs sources, told Reuters. This comes as Europe’s biggest economy is attempting to decouple from Russian gas and oil due to the invasion of Ukraine.

Italian Premier Mario Draghi recently said the invasion of Ukraine had sparked high volatility for the markets for commodity markets, which were already at elevated prices before the conflict. He said, “We must intervene right away.”

Spanish Prime Minister Pedro Sanchez said, “committing ourselves to diversify energy sources as fast as possible” is necessary. He said “small businesses and citizens can’t bear” soaring gas and electricity costs.

European politicians are awakening to the fact that high energy costs could “re-awakening the nightmare of populism” on the European continent, Greek Prime Minister Kyriakos Mitsotakis warned.

That’s why the European Union is likely to pass some kind of energy relief package for businesses and households in the near term.

All the World is a Stage: How the Global Drama is Being Played Out

All the World is a Stage: How the Global Drama is Being Played Out

The “Commedia dell’Arte” was a form of popular theatre, often played without a script. The masked actors would improvise according to the characteristics of their “persona”, their mask.

There are many ways of predicting the future, and my remote ancestors, the Etruscan Haruspices, would do it by examining the liver of a freshly killed goat. I may have inherited from them my interest in the future, although I don’t usually go around killing goats.

A gentler way of studying the future consists in considering the world as a stage. You know what the characters are, what they want, the way they usually behave. Then, when you put them on stage, they may act and create a drama even without following a script. It was the way the ancient Commedia dell’Arte worked. No script, actors would just play their part, according to their “persona.” a term that in Latin means “mask” and that in our times came to be related to “personality,”

It may also work for states. They have a certain persona, a way to behave that may be predictable. About two months ago, I proposed an interpretation of the current drama patterned on an older drama: the European tragedy of World War 2. The actors, the states, were different, but their masks were very similar, and I sketched out what their behavior could have been.
You see how things are going: the world powers are acting on stage as their masks impose them to do. In particular, the EU is playing the role that was of Italy in 1940. The lack of natural resources forces the EU to depend on foreign sources, in particular on importing natural gas from Russia — which plays the role that was of Britain in the 1930s: that of fossil fuel exporter…

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

When normality is exposed as a Ponzi

When normality is exposed as a Ponzi

Putin’s hubris, yes-men for generals, lack of fighting conviction among the men, poor logistics and strong Ukrainian leadership and determination have combined to turn the Russian invasion of Ukraine into a military quagmire.

Meanwhile, the West has upped the stakes in a financial war. The underlying assumption is that the Russian economy is weak and those of the Western allies are stronger. A few key metrics shows this is incorrect. The underlying resilience of the Russian economy and its financial system is not generally understood, and instead EU sanctions could end up undermining the whole euro system and the euro itself.

This article looks at how errors on the battlefield are likely to bring the financial and economic war between the West and Russia out into the open. By suspending access to them, the West has made the mistake of proving to Russia (and all other national central banks) the ultimate uselessness of currency reserves and the benefits of gold. As well as leading to the likely collapse of the entire euro system, this article explains how this financial war could end up with a de facto gold standard for the rouble and call an end for the entire fiat currency Ponzi scheme.

The destruction of the global fiat Ponzi scheme is a step closer

Being increasingly debased, western currencies serve to conceal deteriorating economic conditions, particularly in the US, EU, UK, and Japan. In China, less so perhaps. But China faces an old-fashioned property crisis which is sure to lead to further currency expansion and therefore, debasement of the renminbi. In this article about the state of the financial war between the US, UK and EU on one side, collectively the West, and Russia on the other, we focus on how the invasion of Ukraine is evolving into open financial warfare.
…click on the above link to read the rest of the article…

The Dutch have decided: Burning biomass is not sustainable

The Dutch have decided: Burning biomass is not sustainable

EU member states are increasingly turning their coal plants into biomass plants in an effort to cut carbon emissions. [Mizzou CAFNR / Flickr]

The Netherlands should phase out the use of biomass for generating electricity as soon as possible, the advisory board of the Dutch government said in a report presented earlier this month.

Biomass is an “indispensable” resource for the circular economy, but burning it is wasteful.

That is the main message of the report issued on 8 July by the Socio-Economic Council (SER), an independent advisory board of the Dutch government consisting of entrepreneurs, employees and independent experts.

In the chemical industry, the building sector and agriculture, biological materials are crucial for the transition to a circular economy, the council writes. But sustainably produced biomass is too scarce to keep using it for the production of heat or electricity, for which other low-carbon and renewable alternatives exist, the report states.

Accordingly, the billions worth of subsidies that were intended for biomass combustion plants should be phased out as well, the advisors say, calling however for measures to preserve “investment security” when designing a phase-out plan.

This means compensation should be handed out to companies who stand to lose out from the abrupt end of bioenergy subsidies.

“In case of a faster phase-out than companies and employees could have reasonably foreseen, compensation for investments, labour consequences and social consequences is appropriate,” the document states.

The ball is now in the court of the Dutch government, which will use the advice to construct a national “sustainability framework” for bio-resources due to be presented after the summer.

The new framework will “expand on existing criteria” laid down in the EU’s Renewable Energy Directive to design “widely supported and coherent criteria on the sustainable production and use of biomass” in the Netherlands.

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

US to Help Ukraine Strengthen Border With Russia, Belarus

US to Help Ukraine Strengthen Border With Russia, Belarus

The US will pay about $20 million for video recording systems, drones, and equipment for border guards

Ukraine’s border service said on Tuesday that the US will finance projects to strengthen the country’s borders with Russia and Belarus.

The border service said the US will spend about $20 million to purchase video recording systems, drones, and personal protective equipment for Ukraine’s border guards.

The new project comes as tensions are high between the US and Russia over Ukraine and Western military activity in the region. Moscow views US support for Ukraine as a provocation and is seeking guarantees that Kyiv won’t join NATO.

Since 2014, the US has provided Ukraine with over $2 billion in military aid, including Javelin anti-tank missiles. The 2022 National Defense Authorization Act, which President Biden signed into law Monday, allocates $300 million for more military aid to Ukraine.

The US financing of Ukraine’s border projects also comes after the EU has accused Belarus of weaponizing migrants by luring them in from war-torn countries in the Middle East and trying to push them into Poland and other neighboring countries. Belarus denies the accusation, but the US and some of its allies have hit Minsk with sanctions over the issue.

War Drums Are Beating

War Drums Are Beating

A RISK NOT DISCUSSED

It was around 2017 when I began seeing the ridiculous climate hysteria being pushed not just by dreadlocked physics deniers chaining themselves to trees but at an institutional level.

This, I thought to myself, was something very, very dangerous and which — if taken to any greater level — would ultimately bring about war.

The past two decades have seen Russia sanctioned and repeatedly threatened by Western powers. One of the many threats and arguably the most fierce has been eliminating Russia from the international payments system SWIFT.

Prepare a swift response to Russia invading Ukraine, Latvia tells west

From the article:

A swift reprisal package against Russia – including US troops and Patriot missiles stationed in the Baltics, the cutting off of Russia from the Swift banking payments system and reinstated sanctions on the Nord Stream 2 gas pipeline – must be prepared now in case it invades Ukraine, the Latvian foreign minister has said.

And this:

“If Nato fails to protect its member states or its territories,” he warned, “then it will not just be a military and political failure but a complete mental collapse of the system of values that have been built since the end of world war two. It will mean the whole transatlantic community will be in complete disarray and the glue that keeps us together has failed”.

This horse has already bolted. The “glue” holding this ball of wax together is more like slime and “isht” is falling through the cracks in every direction, while the bureaucrats desperately try to hold it all together. It won’t work.

Now, this isn’t solely an EU-Russia issue. This is a West vs East issue.

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

Russia Puts The Blame On Europe As Energy Crisis Worsens

Russia Puts The Blame On Europe As Energy Crisis Worsens

  • The EU is reconsidering its position on extending long-term natural gas contracts.
  • Russia has maintained that the contracts are beneficial for Europe and moving away from them would be a mistake.
  • Russia even went as far as suggesting that Europe’s current energy crisis is its own fault.

The European Union (EU) is reportedly reconsidering its position on extending long-term natural gas contracts beyond 2049 as part of reforms in its natural gas market to meet the net-zero by 2050 goal.   Should the European Commission’s proposal be endorsed by EU heads of state and government this week, putting a timeline to the end of long-term gas contracts would open another rift with Russia, which provides one-third of Europe’s gas supply via pipelines under long-term deals.

The measure, if approved by the EU, would run against Russia’s position that long-term deals are beneficial for Europe and moving away from them and increasing reliance on liquefied natural gas (LNG) was and will be a mistake.

Some EU member states are wary of what they perceive as Moscow using gas as a political tool to influence geopolitics.

However, as it stands, especially with the low levels of gas in storage and surging gas and energy prices, supply from Russia and Russia’s willingness to provide additional volumes to Europe on top of its contractual commitments has been and will be a key driver of the gas market and prices at European hubs this winter.

Despite the current crisis, the EU’s executive branch, the European Commission, is reportedly drafting plans to quit long-term gas supply contracts by 2049. At the same time, it plans to enhance the security of its gas supply, Bloomberg reported this week, citing a draft document prepared by the Commission.

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

Olduvai IV: Courage
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Olduvai II: Exodus
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