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23.02.2022, 06:53
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| | Re: World War 3 or just a local spat in Ukraine?
Just heard on the news that in case of sanctions that the EU can get ready for retaliation by way of very high gas prices.
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23.02.2022, 07:07
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| | Re: World War 3 or just a local spat in Ukraine? | Quote: | |  | | | So, was there a time where you could heat up your single unit home for several months, even probably the whole winter, for 200€? I get there's a difference between 200 and 2'000. However, the context is that 200 is close to nothing while 2'000 will not cause the bankruptcy of single unit home owners. Is it a problem? Yes. But, considering people is fighting, dying and borders being moved...a few hundred € is not the worst for homeowners.
The industry is a whole other issue. Energy price variations can make local industry competitive or not. But, industrial customers hedged for this, or at least should have hedged for this. | | | | | Sounds like you’re saying let them eat cake. A few hundred euros for someone who may already be at the limit can be bankruptcy. 1800 for someone with some reserves can also mean bankruptcy.
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23.02.2022, 07:14
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| | Re: World War 3 or just a local spat in Ukraine? | Quote: | |  | | | What do you mean "correct" price? The prices have been increasing due to economic post-covid recovery (over 400% last year) and the Ukraine invasion just adds more volatility to an already tight market. The spot price is what it is, long term contracts are a different matter, but according to analysts Gazprom has roughly between a quarter and half of it's volume sold on the spot market (this is not public info, Gazprom doesn't share this). | | | | | I meant that those preferential long term contracts that some European leaders brag about in their native countries, come with strings attached.
Russia has gas (and other resources), fair enough, but it shouldn't be more than a commercial partner. That alone doesn't give anyone the right to mingle in other countries' political affairs. Old EU (and some of the new EU too) had treated Russia as if they owe her more than that.
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23.02.2022, 07:20
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| | Re: World War 3 or just a local spat in Ukraine? | Quote: | |  | | | Sounds like you’re saying let them eat cake. A few hundred euros for someone who may already be at the limit can be bankruptcy. 1800 for someone with some reserves can also mean bankruptcy. | | | | | Yeah, but...a bit of context, wholesale prices right now are lower than around end last year. There was no Ukraine crisis then, it was driven by high demand. A scenario in which Gazprom stops supplying Europe is certainly possible, but very unlikely, they would be losing billions and Russia doesn't have many sources of income apart from oil and gas right now. Moreover, even if prices remain so high and possibly even higher next winter, Europe has tools to offset this for the end consumer. The Russian propaganda that somehow people will be cold and hungry in Europe is simply this: propaganda. | Quote: | |  | | | That alone doesn't give anyone the right to mingle in other countries' political affairs. Old EU (and some of the new EU too) had treated Russia as if they owe her more than that. | | | | | This is precisely where you and Putin disagree  He was clear in his speech that not only is this his right, it is his obligation to fix a mistake from the past  . The difference is that he has a few hundred thousands soldiers to back his challenge.
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23.02.2022, 07:41
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| | Re: World War 3 or just a local spat in Ukraine? | Quote: | |  | | | Yeah, but...a bit of context, wholesale prices right now are lower than around end last year. There was no Ukraine crisis then, it was driven by high demand. A scenario in which Gazprom stops supplying Europe is certainly possible, but very unlikely, they would be losing billions and Russia doesn't have many sources of income apart from oil and gas right now. Moreover, even if prices remain so high and possibly even higher next winter, Europe has tools to offset this for the end consumer. The Russian propaganda that somehow people will be cold and hungry in Europe is simply this: propaganda.
| | | | | It just seems very shortsighted to say that people who will be heavily impacted will think....well I'm homeless, but it could be worse, I could be in Ukraine.
It's also ignoring the possible inflationary pressure as energy prices are want to do
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23.02.2022, 07:56
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| | Re: World War 3 or just a local spat in Ukraine? | Quote: | |  | | |
It's also ignoring the possible inflationary pressure as energy prices are want to do
| | | | | Inflation has been creeping up in Europe since last year driven by economies picking up post covid combined with shortage of raw material and logistical challenges. In that context, we're now at around 5% in Europe, how much do you think does Russian gas contribute to that 5%?
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23.02.2022, 08:14
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| | Re: World War 3 or just a local spat in Ukraine? | Quote: | |  | | | Inflation has been creeping up in Europe since last year driven by economies picking up post covid combined with shortage of raw material and logistical challenges. In that context, we're now at around 5% in Europe, how much do you think does Russian gas contribute to that 5%? | | | | | So inflation excl. energy was 2.6% in Jan22 vs 5.1% including.
It is quite clear that energy prices are the main inflation driver. What is less clear is how much of it is due to the Ukraine crisis and related Russian behaviour of selling less gas. It is correct that energy prices would also be high without this, but how high? I recently saw an analysis that concluded that gas prices should be around 50 EUR/MWh based on pure fundamentals. There are close to 80 EUR/MWh now. | 
23.02.2022, 08:17
| | Re: World War 3 or just a local spat in Ukraine? | Quote: | |  | | | Can we just stop with all the myths please? The US does not sell gas to us at high prices. Almost all the LNG from the US is contracted by international majors (Shell, BP, Asian utilities etc) which buy from US producers at US prices and sell at market prices in Asia and Europe. "The US" does not gain from high prices in Europe, it will be these companies who committed to 20 year firm contracts. | | | | | OK, „the US“ doesn’t gain from the high prices in Europe. The corresponding companies are gaining, including the US companies.
But higher prices are only part of the picture. At the moment the US is the world leading exporter of LNG. The ability to bring the replacement gas to Europe would be a huge political win for the US. Russia is being pushed out of the European gas market. The US was in recent talks with Japan and Qatar for their LNG to be increased for Europe. Also NS2 was announced indefinitely shut the moment Putin recognized the LDNR, even before any other sanctions were decided.
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23.02.2022, 08:24
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| | Re: World War 3 or just a local spat in Ukraine? | Quote: | |  | | | OK, „the US“ doesn’t gain from the high prices in Europe. The corresponding companies are gaining, including the US companies.
But higher prices are only part of the picture. At the moment the US is the world leading exporter of LNG. The ability to bring the replacement gas to Europe is a huge political win for the US. Russia is being pushed out of the European gas market. The US was in recent talks with Japan and Qatar for their LNG to be increased for Europe. Also NS2 was announced indefinitely shut the moment Putin recognized the LDNR, even before any other sanctions were decided. | | | | | I agree. If Russia loses market share in Europe because Europe wants to diversify - that is great. Europe - whoever that is exactly - just needs to ensure that we have firm supplies, not again act as the sink for gas if the world is in oversupply but ending up short if it is not.
Shell published their annual LNG Outlook some days ago. A very good and easy to read overview of the global market. https://www.shell.com/promos/energy-...tlook-2022.pdf | The following 2 users would like to thank komsomolez for this useful post: | | 
23.02.2022, 08:38
| | Re: World War 3 or just a local spat in Ukraine? | Quote: | |  | | | I agree. If Russia loses market share in Europe because Europe wants to diversify - that is great. Europe - whoever that is exactly - just needs to ensure that we have firm supplies, not again act as the sink for gas if the world is in oversupply but ending up short if it is not.
Shell published their annual LNG Outlook some days ago. A very good and easy to read overview of the global market. https://www.shell.com/promos/energy-...tlook-2022.pdf | | | | | I am not sure though if it will be great for every European country if Russia is losing market share in Europe. I mean the consequences for Europe, not Russia — some power shifts might happen in Europe and in EU because of this. This might be not so great in the end, at least for some. It would be interesting to know who will benefit and who will lose.
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23.02.2022, 09:34
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| | Re: World War 3 or just a local spat in Ukraine? | Quote: | |  | | | It is quite clear that energy prices are the main inflation driver. What is less clear is how much of it is due to the Ukraine crisis and related Russian behaviour of selling less gas. It is correct that energy prices would also be high without this, but how high? | | | | | That's exactly my point, I was trying to explain that at 5% inflation out of which half is energy, the Russian impact would be what? A quarter of that half? Half of the half? Just for the sake of the argument let's assume it would contribute 0.5% to the overall inflation. Sure, no small thing, but hardly an apocalypse scenario for European economies. Posters here were implying that this would lead to people going homeless in Europe, which is hardly a realistic scenario. | Quote: | |  | | | I am not sure though if it will be great for every European country if Russia is losing market share in Europe. I mean the consequences for Europe, not Russia — some power shifts might happen in Europe and in EU because of this. This might be not so great in the end, at least for some. It would be interesting to know who will benefit and who will lose. | | | | | On the contrary. Eastern Europe is heavily dependent on Russian gas and even Romania which has reserves is importing. This is to a great extent driven by the hard-play tactics of Gazprom in countries such as Romania and Bulgaria which would only benefit if forced to diversify. The contracts in those countries are very political and with significant corruption attached to them. A crisis is a terrible thing to waste and I hope forced diversification will wean them off Russia which has been using gas as a political tool for decades.
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23.02.2022, 10:02
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| | Re: World War 3 or just a local spat in Ukraine? | Quote: | |  | | | That's exactly my point, I was trying to explain that at 5% inflation out of which half is energy, the Russian impact would be what? A quarter of that half? Half of the half? Just for the sake of the argument let's assume it would contribute 0.5% to the overall inflation. Sure, no small thing, but hardly an apocalypse scenario for European economies. Posters here were implying that this would lead to people going homeless in Europe, which is hardly a realistic scenario.
On the contrary. Eastern Europe is heavily dependent on Russian gas and even Romania which has reserves is importing. This is to a great extent driven by the hard-play tactics of Gazprom in countries such as Romania and Bulgaria which would only benefit if forced to diversify. The contracts in those countries are very political and with significant corruption attached to them. A crisis is a terrible thing to waste and I hope forced diversification will wean them off Russia which has been using gas as a political tool for decades. | | | | | As they are in Hungary as Orban is friends with Putin, Austria and probably all the rest. You forgot OMV's (which is Austrian, the irony, a country with no gas and oil reserves) manoeuvres.
Anyways, yes, I totally agree we are dependent on the Russian gas. Who isn't in Europe? Who has made non-political contracts with Russia? What is Nord Stream 2 after all ????
A very explicit study here about Gazprom's ramifications and modus operandi back already in the 2000's https://www.files.ethz.ch/isn/113176/GP_EU_10_09_en.pdf
Last edited by greenmount; 23.02.2022 at 10:24.
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23.02.2022, 10:13
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| | Re: World War 3 or just a local spat in Ukraine? | Quote: | |  | | | It just seems very shortsighted to say that people who will be heavily impacted will think....well I'm homeless, but it could be worse, I could be in Ukraine.
It's also ignoring the possible inflationary pressure as energy prices are want to do | | | | | I am sorry to hear that your homeless (if I am reading correctly) definitely not a nice situation to be in.
Puts life into a new perspective indeed
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23.02.2022, 12:14
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| | Re: World War 3 or just a local spat in Ukraine?
Not suprisingly, Comrade Trump is siding with Vlad... https://edition.cnn.com/2022/02/23/p...den/index.html
Guess a Star of Lenin is in order!
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23.02.2022, 12:24
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| | Re: World War 3 or just a local spat in Ukraine? | Quote: | |  | | | I am sorry to hear that your homeless (if I am reading correctly) definitely not a nice situation to be in.
Puts life into a new perspective indeed | | | | | Funny. I think you should read hist post again. But what do I know, maybe he *is* homeless.
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23.02.2022, 12:27
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| | Re: World War 3 or just a local spat in Ukraine? | Quote: | |  | | | | | | | | Not only Trump. Half the GOP it seems, plus of course FOX. It is time for GWB to call out this bullshit and make a point that the current GOP is a bunch of lunatics and puppets. Not that it will help much, but still.
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23.02.2022, 12:32
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| | Re: World War 3 or just a local spat in Ukraine? | Quote: | |  | | | I am sorry to hear that your homeless (if I am reading correctly) definitely not a nice situation to be in.
Puts life into a new perspective indeed | | | | | I don’t think he is actually homeless, he was using it as a general example not specifically in relation to himself.
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23.02.2022, 13:22
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| | Re: World War 3 or just a local spat in Ukraine? | Quote: | |  | | | Not only Trump. Half the GOP it seems, plus of course FOX. It is time for GWB to call out this bullshit and make a point that the current GOP is a bunch of lunatics and puppets. Not that it will help much, but still. | | | | | It's absolutely sad and scary how the US politics is developing. A GOP with an instinct to support and almost envy dictators with no regard for the rule of law or foreign borders and a Dem party which is unable to formulate a coherent unifying message and which tries to be everything to everybody.
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23.02.2022, 13:28
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| | Re: World War 3 or just a local spat in Ukraine? | Quote: | |  | | | | | | | | Don’t forget Vladimir still has those naughty photos of Donald and Prince Andy
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23.02.2022, 13:33
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| | Re: World War 3 or just a local spat in Ukraine?
So Johnson is giving just enough time for all the dirty Russian money in London to be taken out and moved around.
Where will it go?
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