Russian attempts to 'weaponise' energy likely to fast-track European efforts to go green By energy reporter Daniel Mercer Posted 18m ago18 minutes ago https://www.abc.net.au/news/2022-02-25/russia-invasion-of-ukraine-europe-renewable-energy/100858538 Russia has launched a full-scale invasion of Ukraine, threatening Europe's energy security.(AP: Russian Defense Ministry) Energy experts say any attempts by Moscow to cut off European gas supplies are likely to backfire by fast-tracking the continent's shift away from fossil fuels towards renewable power. Key points: There are mounting concerns Russia could cut off energy supplies to Europe as its conflict with Ukraine intensifies Russia provides almost half of Europe's gas needs via a network of pipelines, along with a third of its oil Europe has become more dependent on Russian gas amid efforts to close coal power and go green But industry analysts have also warned that Europe faces potentially crippling economic pain in the short-term if Russia chooses to use energy as leverage in its war on Ukraine. As Russia launched a full-scale invasion of Ukraine yesterday, there were mounting concerns that Russian President Vladimir Putin could strangle the country's huge exports of oil and gas to Europe to further his aims. Russia supplies about 40 per cent of Europe's gas demand through a network of pipelines that cross countries including Ukraine, while it also provides about a third of the bloc's oil. After Germany scrapped approvals for a controversial Russian gas pipeline known as Nord Stream 2 in the wake of Moscow's aggression, former Russian president Dmitri Medvedev taunted Europe by warning of sky-high gas prices. Emma Aisbett, a fellow at the Australian National University, said there was little doubt Europe was economically vulnerable to Russia because of its dependence on energy imports. Short-term pain all but inevitable Dr Aisbett said that reliance had only grown in recent years as European countries closed down their coal-fired power plants in a bid to reduce carbon emissions. Russian President Vladimir Putin has long held ambitions of regaining control of Ukraine.(Reuters/pool: Yuri Kochetkov) She said there was also likely to be "regret" about Germany's decision to phase out its nuclear reactors in the wake of the Fukushima disaster in 2011. "Short-term, this will cause a great deal of pain particularly coming into the following winter if the effects last that long," Dr Aisbett said. "Already they're facing record global high gas prices and this is only going to make it worse. "In Germany, for example, they have the most expensive electricity in the world. "Add to that very high gas prices and there will be real issues of energy poverty, particularly in those colder climates." Saul Kavonic, an energy analyst at investment bank Credit Suisse, said the price pain awaiting Europe would depend on the events unfolding in Ukraine. In a more "benign" scenario, Mr Kavonic said gas would continue to flow into Europe even if supplies through Ukraine were disrupted. He said Europe would be able to manage such a situation by tapping stored gas and buying liquefied natural gas from overseas suppliers such as Qatar and the US. Germany has scuppered plans to open a critical new gas pipeline linking Russia with Europe.(Reuters: Maxim Shemetov) However, Mr Kavonic said a worst-case scenario in which Russia severed all gas supplies to Europe could have catastrophic consequences for business and households. "In that scenario, you are looking at severe levels of demand destruction occurring across Europe," Mr Kavonic said. "It would eat across industry use, but also potentially power generation and heating for people across Western Europe. "That could also put a strain on the free flow of gas within countries in the European Union. "You would start to see Western European countries scrambling for gas globally and competing with Asian LNG buyers to keep the lights on for their citizens." According to Mr Kavonic, international gas prices could reach "unprecedented" highs in the event of major disruption. He said prices could potentially reach $100 per metric million British thermal unit, noting that prices of between $20 and $40/mmbtu had until recently been considered "unfathomable". Perth USAsia Centre policy fellow James Bowen said the temptation to use oil and gas exports as an economic weapon would likely be irresistible to Russia. Mr Bowen said Moscow had repeatedly shown a willingness in the past to step on the export hose to push its geopolitical agenda regardless of what "market fundamentals would entail". He also questioned the extent to which Europe could turn to the US to provide so-called freedom gas exports, saying America simply did not have the capacity to replace Russian supplies and that it would be more expensive in any case. Risks weighed against Russia Russia is a global energy powerhouse, with its economy highly dependent on oil and gas.(Reuters: Gleb Garanich) Mr Bowen said there were arguably bigger risks involved in the crisis for Russia, which would suffer short-term and profound longer-term costs. "You have to look at the other side of the ledger as well," Mr Bowen said. "Russia is so dependent on revenues from the sale of oil and gas. "They would take a very significant hit from [cutting Europe's gas supplies]. "Europe is going to have to suffer a little bit under this scenario, unfortunately. "But to some extent it's well-timed. "They're reaching the end of the winter heating period in Europe, they've got a bit of time on their hands if things do happen. "Europe has been moving away from Russian gas, or looking to, for a long time … so if Russia does weaponise gas in this sense, it may be even further impetus for Europe to accelerate some of those changes that were already in place." Mr Bowen said its belligerence against Ukraine would almost certainly accelerate efforts by Europe to wean itself off Russian hydrocarbons. And unlike Europe, he said Russia would be left economically bereft because it had been "doubling down" on oil and gas investment. "Energy, because it's so critical to the operations of economies, can be easily weaponised by authoritarian countries," he said. "But in the long-term, Russia's dependence on energy as a form of economic development has been counterproductive to its broader development." Transition 'to be accelerated' Dr Aisbett agreed, saying Russia had more to lose than Europe despite its apparent position of strength. She suggested Moscow may even have been motivated to make a "land grab" in Ukraine by Europe's inevitable shift towards green energy sources independent of Russia. There are plans to develop a hydrogen export industry as a substitute for gas.(Supplied: HESC project ) She said while it would take years before Europe could gain its energy independence, that time frame was likely to have become significantly shorter because of Russia's actions. Furthermore, she predicted the shift could have potential upsides for Australia, which could become a major energy supplier to Europe as it substituted gas with renewable sources such as batteries and hydrogen. "Both coal and nuclear power are not actually very good at ramping up or down, so they're not really the ideal complement to high proportions of renewable energy," she said. "Currently, it has been gas … which has led to, if anything, an increased dependence on Russia. "There are two alternatives as we move towards a net-zero future. "For the seconds- to hours-gaps, that's where batteries are the best way to firm up your grid supply. "That is not going to help you get through a European winter though. For that you'll need seasonal storage. And that's where hydrogen comes in."
BP to offload stake in Rosneft amid Ukraine conflict https://www.bbc.com/news/business-60548382 Image source, Getty Images BP is to offload its 19.75% stake in Russian state-owned oil firm Rosneft after Russia's "act of aggression in Ukraine". The oil giant had come under pressure from the UK government to make the move since Thursday's invasion. It has held the shareholding in the Russian company since 2013. BP chief executive Bernard Looney has resigned "with immediate effect" from the Rosneft board, as has fellow BP-nominated director Bob Dudley. Rosneft said thirty years of successful cooperation had been ruined and blamed BP's decision on "unprecedented political pressure", according to reports from Russian news agencies. Mr Looney had been on the Rosneft board since 2020, alongside its chairman Igor Sechin, who is a close friend and ally of Russian President Vladimir Putin. The PA News agency reported Mr Looney was in Russia as recently as October, when he appeared on a panel with Mr Putin, which he later described as a "privilege". Business Secretary Kwasi Kwarteng spoke to the BP boss on Friday and left him in "no doubt about the seriousness of government concerns about BP's overexposure to Russian interests" according to an official. BP chairman Helge Lund said that, while BP had operated in Russia for more than 30 years and had "brilliant Russian colleagues", Russia's attack on Ukraine was "having tragic consequences across the region" and represented a fundamental change. "It has led the BP board to conclude, after a thorough process, that our involvement with Rosneft, a state-owned enterprise, simply cannot continue." BP's share in Russian state oil giant Rosneft has long felt uncomfortable; this week under heavy political pressure it became untenable. The chairman of Rosneft, Igor Sechin, is a close ally of President Putin. Rosneft supplies fuel to the Russian army. Immediately offloading the stake to a potentially inappropriate buyer was not an option. The company has decided to "divest" - meaning it will sever its financial ties with Rosneft, stop taking a dividend and step back from its two seats on the board. Company officials say it is too soon to say exactly how this stake will be disposed of. It could potentially be seized, or sold. It will mean a significant financial hit, but a price BP had little choice but to pay. Mr Looney said that he had been "deeply shocked and saddened" by the situation in Ukraine and it had caused BP to fundamentally rethink its position with Rosneft. "I am convinced that the decisions we have taken as a board are not only the right thing to do, but are also in the long-term interests of BP," he said. Mr Kwarteng welcomed the move, saying: "Russia's unprovoked invasion of Ukraine must be a wake-up call for British businesses with commercial interests in Putin's Russia." Image source, Getty Images Image caption, A Rosneft oil rig drilling the first exploration well in the Khatanga Bay, Russia BP's latest annual results, published two weeks ago, revealed Rosneft accounted for $2.7bn (£2bn) of its profits, about a fifth of its total. The multinational, which has its headquarters in London, admitted last year that sanctions on Russia could be problematic for its business and the relinquishing of the Rosneft stake comes after western countries imposed a series of economic sanctions on Russia - including several banks being excluded from the Swift international payment system. BP said it is too early to say how or to whom its stake in Rosneft will be offloaded. The firm will pay a $11bn charge when it writes off foreign exchange losses that have accumulated over the last few years and another charge relating to the value of its stake. Rosneft has been under sanctions from the US and EU since Russia annexed Crimea in 2014. Norway's $1.3 trillion (£970bn) sovereign wealth fund, which is the world's largest, also announced it would freeze and divest its Russian assets on Sunday. "We have decided to freeze the fund's investments and have begun a process of selling out," Norwegian Prime Minister Jonas Gahr Stoere said. The fund's Russian assets were worth $2.83bn (£2.11bn) at the end of 2021. It is the fourth largest shareholder in Russian bank Sberbank and has stakes in Russian energy firms Gazprom and Lukoil. Oil prices surged past $100 (£74) a barrel to hit their highest level for more than seven years after Russia launched its invasion of Ukraine. The shipping firms FedEx and UPS have also suspended all their services in and out of Russia. United Parcel Service Inc. (UPS) said that packages in transit to Ukraine and Russia will be returned to their senders for no additional cost where possible.
https://www.bloomberg.com/news/arti...from-putin-s-war-on-ukraine?srnd=premium-asia Politics A New World Energy Order Is Emerging From Putin’s War on Ukraine Geopolitical shifts are underway as fresh alliances are forged and old grievances inflamed. UBS: Would Stay Long Oil as Hedge Against Uncertainty By Alan Crawford and Grant Smith 12 March 2022 President Vladimir Putin’s invasion of Ukraine is forcing governments worldwide to digest the geopolitical consequences of war pursued by an energy superpower. The 27-nation European Union has responded by speeding up its disconnection from Russian gas, while the U.S. has barred Russian oil imports and is scouring the world for alternative supplies. Saudi Arabia is reveling in a renewed strategic importance as crude prices that collapsed two years ago hit new highs. And Russia, by threatening to withhold energy exports to Europe, is being thrust closer to China. With the war in its third week, the shifts underway are inflaming old grievances but also creating the opportunity for fresh alliances as blocs start to align in what looks like a new world energy order. Vladimir Putin chairs a Security Council meeting on March 11. Photographer: Mikhail Klimentyev/AFP/Getty Images “This represents the biggest re-drawing of the energy and geopolitical map in Europe — and possibly the world — since the collapse of the Soviet Union, if not the end of World War II,” said Bob McNally, president of Washington-based consultant Rapidan Energy Group and a former White House official. The outcome, he said, could be “a sequel to the Cold War.” Germany, at the nexus of the original Cold War standoff, is again at the forefront of the changes now being witnessed. Days after Russia sent its forces into Ukraine, Chancellor Olaf Scholz announced a massive increase in Germany’s defense budget along with plans to pursue greater energy security. Putin’s unprovoked attack was a watershed moment, and “this new reality requires a clear response,” he told an emergency session of parliament. For Berlin, loosening its energy dependence on Russia is not simply about hitting Moscow’s main revenue stream. It’s a threat to roll back “Ostpolitik,” a totemic post-World War II policy of rapprochement with the Soviet Union, and by extension later Russia, that involved economic and political engagement, notably through oil and gas links. The demise of Ostpolitik — symbolized by the halt to the $11 billion Nord Stream 2 gas pipeline — is just one of the most visible signs of the rapid realignment underway as a result of Putin’s aggression. The Nord Stream 2 landfall facilities in Russia. Source: Nord Stream 2 AG Although initial sanctions deliberately spared Russian energy to avoid the knock-on effects for the world, government actions and near-universal condemnation since are rendering its supplies almost untouchable for buyers. Diesel prices in northwest Europe have hit the highest since the 1980s as a result. Yet as customers desert Russia, its partnership with the oil titans of the Middle East, with which it jointly leads the OPEC+ coalition, has so far stayed intact. Russia and Saudi Arabia are the world’s top oil exporters, accounting for 29% of the global total. Saudi Arabia has rebuffed U.S. pressure to replace Russian oil by tapping its spare production capacity, instead letting prices surge to a 13-year high of almost $140 a barrel. Riyadh refused to even brook discussion of Moscow’s difficulties when it was raised at an OPEC+ meeting on March 2. Saudi Crown Prince Mohammed Bin Salman spoke with Putin the previous day. “The U.S. can try to make Saudi Arabia increase production, but why would they accept a break in the alliance, which is key for them?” said Paolo Scaroni, former chief executive officer of Italian oil company Eni SpA. There’s a political dynamic at play to explain the kingdom’s fidelity to Moscow beyond the gusher of oil revenue. Where Donald Trump cultivated a particularly friendly relationship with Saudi Arabia — making his first foreign trip as U.S. president to Riyadh — ties have turned colder under President Joe Biden. On the campaign trail, Biden pledged to make the kingdom a “pariah,” in part because of the killing of columnist Jamal Khashoggi. He will only deal with the elderly King Salman, relegating Mohammed bin Salman to interact with more lowly officials despite being the kingdom’s defacto ruler. Mohammed bin Salman shakes hands with Donald Trump in the Oval Office in 2018. Photographer: Kevin Dietsch/UPI By contrast, Riyadh’s OPEC+ partnership with Moscow calmed years of distrust between the two oil rivals, and saved the kingdom from relying exclusively on Washington. “Saudi Arabia doesn’t want to switch horses mid-race when they do not know if the other horse is actually going to show up,” said Helima Croft, chief commodities strategist at RBC Capital Markets. Gulf Arab nations accused the U.S. of a lack of support in the face of repeated attacks by Iranian-backed militia on Saudi oil facilities and Gulf tanker traffic, and on Abu Dhabi this year. In a measure of the discord, the United Arab Emirates abstained in a U.S.-led United Nations Security Council vote to condemn Russia’s invasion. “Now that we are in a crisis moment, we’re reaping the effect of that lack of trust that’s been building over the years,” said Karen Young, senior fellow at the Middle East Institute in Washington. Another source of friction lies in U.S. efforts to reinstate the nuclear agreement with Iran, Saudi Arabia’s regional rival. A deal could see Iran revive production by 1.3 million barrels a day to pre-sanctions levels by the end of the year, according to the International Energy Agency. It was Trump who unilaterally pulled the U.S. out of the Iran accord in the face of opposition from world powers including Moscow. Now it’s Russia that’s undermining U.S.-led efforts to refloat the deal by seeking to link its own treatment for starting the war in Ukraine to any agreement with Tehran. Indeed the efforts to revive the accord were suspended again on Friday. President Joe Biden arrives to speak during a State of the Union address at the U.S. Capitol on March 1. Photographer: Saul Loeb/AFP/Getty Images Biden needs more oil to keep down the price of gasoline at the pump for American voters and help his Democratic party’s chances of retaining Congress in November’s midterm elections. Defeat could further damage his ratings and usher in a Republican — conceivably, even a Trump — comeback in 2024. On Tuesday, as he announced a ban on all imports of Russian oil and gas, Biden acknowledged the domestic impact. “I’m going to do everything I can to minimize Putin’s price hike here at home,” he said. Energy Secretary Jennifer Granholm went further as she reached out to domestic producers to boost supply. “We are on a war footing,” she told oil executives. Demonstrating just how exceptional the times are, a U.S. delegation traveled to Russian ally Venezuela last weekend in an overture to a country that holds the largest known crude reserves in the world. Venezuela has been subject to international sanctions since the Trump era that have crippled its ability to sell oil. While there is not yet talk of allowing exports to resume, President Nicolas Maduro responded by offering to turn on the taps anyway, saying that state oil company PDVSA is prepared to raise output to as many three million barrels a day “for the world.” For Felix Arellano, a professor of International Relations at the Universidad Central de Venezuela in Caracas, the U.S. visit was “unexpected, surprising, a complete change in policy orientation,” with energy as the strategic catalyst. “But I think there is a more important geopolitical move that is redefining the West,” he added. The U.S. is looking to confine the spheres of influence enjoyed by Russia and especially China, and for Venezuela that means a gradual process “to reincorporate with the West, through energy.” China has been ambiguous toward Russia’s aggression, expressing concern about civilian casualties and saying it supports Ukraine’s sovereignty, without condemning the Kremlin’s actions or joining other countries in imposing sanctions. China will continue to carry on “normal trade cooperation” with Russia, including in oil and gas, said Zhao Lijian, a foreign ministry spokesperson. China is considering buying or increasing stakes in Russian companies such as Gazprom PJSC, Bloomberg reported this week. But as pressure grows to ditch Russian energy imports, Putin can’t just assume that Beijing will take up the slack. For one, President Xi Jinping is keen to avoid instability as he seeks an unprecedented third term later this year. There are also business reasons. Even assuming a discount on the price per barrel, state-owned importers would weigh very carefully the impact on their global business of large purchases from a country that’s subject to so many sanctions, according to Qin Yan, an analyst with research house Refinitiv. Neither would buying energy from Moscow be an easy solution, even if it meant less pollution, said Li Shuo, a climate analyst at Greenpeace East Asia. “To change China’s current energy structure, to replace a lot of coal it uses now with Russia’s oil and gas, would be a huge project for China, and it would take time,” he said. In Europe, the EU is refusing to budge on its climate commitments as it seeks to slash imports from its biggest supplier this year and replace flows from Russia completely by 2027. Those efforts were given a jolt by a suggestion that Moscow might shut off gas supplies through the Nord Stream 1 pipeline to Europe. “We simply cannot rely on a supplier who explicitly threatens us,” EU Commission President Ursula von der Leyen said as she unveiled the bloc’s plans this week. A day later, Kremlin spokesman Dmitry Peskov said Russia “values its reputation as a reliable energy supplier,” but added that sanctions may cause a rethink. Any immediate disruption would hit Germany particularly hard. Europe’s biggest economy is reliant on Russia for more than half of its natural gas supplies, and doing all it can to cut that dependence presents “extreme challenges,” Economy Minister Robert Habeck said Thursday. Yet as Scholz told the Bundestag, Russia’s attack on Ukraine means “we are in a new era.” The world today “is no longer the same world that it was before.” — With assistance by Jing Li, Karoline Kan, Lin Noueihed, Andreina Itriago Acosta, Zainab Fattah, and Vivian Nereim
Natural-Gas Industry Gets Boost as Biden Shifts Stance Shares of large U.S. natural-gas companies rose as Biden softened position against fossil fuels A liquefied natural gas facility in Port Arthur, Texas. President Biden said the U.S. is working to ship 50 billion cubic meters of LNG to Europe annually through at least 2030. Photo: Martha Irvine/Associated Press By Timothy Puko in Washington and Collin Eaton in Houston March 26, 2022 https://www.wsj.com/articles/natura...st-as-biden-shifts-stance-11648296002?mod=mhp President Biden’s pledge to boost U.S. liquefied natural-gas exports to Europe marks a further retreat from his hard-line stance against fossil fuels, sending share prices surging for natural-gas companies. The president, who campaigned on a platform to transition the U.S. to cleaner energy, said Friday the U.S. is working to ship 50 billion cubic meters of LNG to Europe annually through at least 2030 to help the continent wean itself from dependence on Russian supplies. The announcement came a day after Democrats on the Federal Energy Regulatory Commission backtracked on new environmental policies, suspending implementation of heightened requirements on reviews that industry officials and Republicans said would impede gas-pipeline development. Shares of large U.S. natural-gas companies rose 9% on average Friday as major stock indexes were mixed. Shares of EQT Corp. and Southwestern Energy Co. two large producers, shot up to close about 12% and 16% higher. Cheniere Energy Inc. the top U.S. exporter, was up about 5.5%. Tellurian Inc., which is seeking financing for an LNG project, soared 21%. The gas industry’s prospects have been a concern among the sector’s executives because of Mr. Biden’s stance against fossil fuels. But the president has softened some of his positions in the wake of rising energy costs, which have been driven in part by the economic rebound from Covid-19, and more recently by Russia’s invasion of Ukraine. The White House pivot has also put the U.S. and its vast oil and gas reserves in shale rock back at the center of a global scramble for energy resources as a bulwark against petrostates and authoritarian regimes. The U.S. is the world’s largest oil and gas producer. Daniel Yergin, the vice chairman of S&P Global and a noted oil-industry historian, called recent developments “a huge turn.” “There’s a recognition now that shale—and particularly LNG—is a real geopolitical asset,” Mr. Yergin said. Mr. Biden and his advisers have said they are still committed to ending the world’s reliance on fossil fuels, including gas, and will continue to fund renewable energy as part of their work with European allies. But they also acknowledged the need to deal with the reliance that exists today. “While gas is still a substantial part of the energy mix, we want to make sure that the Europeans do not have to source that gas from Russia,” national security adviser Jake Sullivan told reporters on Friday. Toby Rice, chief executive of top U.S. natural-gas producer EQT, said the Biden administration’s shift is an extremely encouraging political signal that natural gas will play a key role in the world’s future energy mix. Mr. Rice said the U.S. could sharply increase LNG exports over time if companies build thousands of miles of new pipelines and billions worth of new LNG facilities. But unleashing that will require broader support for that infrastructure and speeding up the sluggish permitting process, he said. “The problem we face is it takes longer to permit something than it takes us to build it,” Mr. Rice said. “The faster we move, the faster we move toward achieving our climate goals and providing energy security for people around the world.” Shippers of LNG have already sent most U.S. cargoes to European destinations this year, as prices have skyrocketed following Russia’s invasion. American exporters are moving cargoes as fast as physically possible and are on pace to send a record 11.4 billion cubic feet a day of LNG overseas this month, with more than 60% bound for Europe, according to market intelligence firm Kpler. Toby Rice, chief executive of U.S. natural-gas producer EQT, said the Biden administration’s shift is an encouraging political signal. Photo: Aaron M. Sprecher/Bloomberg News FERC has approved 13 LNG facilities across the U.S. that have remained unbuilt with the combined capacity to export about 25 billion cubic feet each day, according to FERC’s February update. Companies haven’t begun construction on those largely because they haven’t yet gathered enough supply agreements with customers overseas to finance the construction of those facilities. Part of the arrangement between the U.S. and Europe is to ensure that European countries also come through to show they can take more U.S. gas. They are to build out their infrastructure to accept up to 50 billion cubic meters of additional U.S. supply a year between now and 2030, Mr. Sullivan said. Before the Russian invasion, Biden administration officials had been hesitant about putting U.S. development money into fossil-fuel projects abroad. Environmentalists and climate advocates for poor countries had pushed the administration to focus its spending on clean energy to reduce greenhouse-gas emissions at the rapid rate required to avoid the worst outcomes of climate change. “New LNG infrastructure is a death sentence for the planet,” said Collin Rees, the U.S. program manager at Oil Change International, a group that advocates for renewable energy. “It would take years to build and would operate for decades, far beyond a timeline compatible with meeting climate goals.” Next week, Biden officials and U.S. energy executives from ConocoPhillips, Sempra, Tellurian and others will meet in Berlin with German counterparts at the U.S. Embassy to discuss getting more American gas to Germany. More than half of Germany’s gas imports have come from Russia, but following the invasion of Ukraine, German officials nixed the Nord Stream 2 natural-gas pipeline running more than 700 miles from Russia and signaled support for the construction of two LNG import facilities. It currently has no LNG import plants. “If you’re a policy maker around the world today, you’re worried about energy security, you’re worried about carbon footprint and you’re worried about what your constituents are paying to supply energy for themselves,” said Domenic Dell’Osso Jr., chief executive of shale company Chesapeake Energy Corp. Mr. Dell’Osso said it is encouraging to see the Biden administration and European governments recognize that U.S. natural gas is needed. Chesapeake, he added, is increasing natural-gas production 10% this year in the Haynesville Shale of Louisiana, close to export facilities and is open to opportunities to put more gas into international markets. —Catherine Lucey contributed to this article.
Look at the physical commodity market, half of the world is with US camp. And the other half world just does not care or they can't care about the war stuff. If there is a $25 discount on crude oil, most of the countries will buy Russian oil or almost any oil. Many countries just can't afford the $120 oil other than the Western countries. So all the Russian oil will find a market, just a matter of time when they figure out the logistics. All Russian oil tankers have turned off their signals, so they can't be tracked. The oil is sold in Chinese Yuan, or even Russian Ruble. Just not in Euro or USD. Clearly the loss on the Western side. So the world oil supply never changes. The $120 oil price is just not justified. There is no shortage of oil. The lockdown in China will only add to more pressure on oil market. Natural gas is a totally different story. There is only limited LNG supply in the world. Western European countries just can't get the extra LNG even if they want to. Japan and Korea can share some of its LNG cargos, but it is only very short-term. Biden made a promise or signed a contract to supply West Europe with US LNG. That is really BS. US does not even have extra LNG capacity. All the LNG has been contracted. It takes years to build any new LNG terminals, from FERC permit etc. Biden's promise is just empty. US government does not produce a single cubic foot of natural gas. All of that is produced by private energy companies. So the Western European countries will have to continue to purchase Russian natural gas via pipeline. That won't change any time soon. It is a different story they pay Euro, USD or Russian Ruble. It is just very foolish to wage an economic war vs Russia. It is like a suicide on both sides. Now all the oil pipelines in Europe from Russia can be wasted.
This is where it is now..... This is where it's been.... With Europe possibly refusing to pay Russian gas in Rubles, interesting times ahead for gas. A close above 6.50 is one to watch for.