Ukraine War - Economic Consequences thread - February 24+

[Emily]

Do they think Putin will cry over shivering Germans?

https://www.msn.com/en-us/money/mar...the-russia-energy-crisis-escalates/ar-AAZb1zU
Germany's second-largest city is preparing to ration hot water as the Russia energy crisis escalates
gdean@insider.com (Grace Dean) - Monday

Hamburg, the largest non-capital city in the European Union, has warned that it could ration be forced to hot water as the Russian energy crisis causes chaos.

Jens Kerstan, environment senator for Germany's second biggest city, told German newspaper Welt am Sonntag on Saturday that Hamburg could restrict availability of hot water to certain times of days "in an acute gas shortage."

"We are in a much worse crisis than most people realize," Kerstan said in a separate interview with the Hamburger Abendblatt on Sunday. He urged people to take shorter showers, avoid full baths, and install modern thermostats and water-saving shower heads.

"The more we save now, the better the situation will be in winter because the stores will fill up," he told the Hamburger Abendblatt, speaking about reducing demand for natural gas...

 

[Pathfinder]

Oil from U.S. reserves sent overseas as gasoline prices stay high

Arathy Somasekhar
Tue, July 5, 2022 at 6:04 AM·2 min read

By Arathy Somasekhar

HOUSTON (Reuters) -More than 5 million barrels of oil that were part of a historic U.S. emergency reserves release to lower domestic fuel prices were exported to Europe and Asia last month, according to data and sources, even as U.S. gasoline and diesel prices hit record highs.
...
About 1 million barrels per day is being released from the Strategic Petroleum Reserve (SPR) through October. The flow is draining the SPR, which last month fell to the lowest since 1986.
...
The fourth-largest U.S. oil refiner, Phillips 66, shipped about 470,000 barrels of sour crude from the Big Hill SPR storage site in Texas to Trieste, Italy, according to U.S. Customs data. Trieste is home to a pipeline that sends oil to refineries in central Europe.

Atlantic Trading & Marketing (ATMI), an arm of French oil major TotalEnergies, exported 2 cargoes of 560,000 barrels each, the data showed.
...
Cargoes of SPR crude were also headed to the Netherlands and to a Reliance refinery in India, an industry source said. A third cargo headed to China, another source said.
...
U.S. crude inventories are the lowest since 2004 as refineries run near peak levels. Refineries in the U.S. Gulf coast were at 97.9% utilization, the most in three and a half years.

(Reporting by Arathy Somasekhar in Houston; Editing by Chizu Nomiyama and Sam Holmes)

https://news.yahoo.com/oil-u-reserves-head-overseas-110438513.html

 

[Emily]

Are we filling up China's reserves with our own? They won't refine what they have for export, and are still buying from Russia.
Something is very, very wrong with US policy right now.

https://markets.businessinsider.com...lobal-energy-crunch-beijing-russia-oil-2022-7
China isn't interested in ramping up fuel exports amid global energy crunch as Beijing calls for 40% lower quotas for refiners

Phil Rosen
Jul 6, 2022, 9:58 AM

https://www.nasdaq.com/articles/chi...russian-oil-into-june-cuts-saudi-supply-trade
By Chen Aizhu and Muyu Xu

SINGAPORE, July 6 (Reuters) - China extended record imports of low-priced Russian crude oil into June despite a lockdown-induced slackening in its total crude oil imports, squeezing out supplies from the Middle East and West Africa, according to tanker trackers and traders.

Russia remained China's top supplier for the second month in a row, surpassing Saudi Arabia, according to tanker tracking specialists Vortexa, Kpler and Refinitiv...

 

[Emily]

Ports are blocked by mines Ukraine used to deter Russia.

https://www.newsy.com/stories/inflation-pushed-71-million-into-poverty-since-ukraine-war/
Inflation Pushed 71 Million People Into Poverty Since Ukraine War
July 7, 2022

The U.N. Development Program called for an extension of debt payments that had been in place during the pandemic among the world's richest nations.

A staggering 71 million more people around the world are experiencing poverty as a result of soaring food and energy prices that climbed in the weeks following Russia's invasion of Ukraine, the United Nations Development Program said in a report Thursday.

The UNDP estimates that 51.6 million more people fell into poverty in the first three months after the war, living off $1.90 a day or less. This pushed the total number globally at this threshold to 9% of the world's population. An additional 20 million people slipped to the poverty line of $3.20 a day.

In low-income countries, families spend 42% of their household incomes on food but as Western nations moved to sanction Russia, the price of fuel and staple food items like wheat, sugar and cooking oil soared. Ukraine's blocked ports and its inability to export grains to low-income countries further drove up prices, pushing tens of millions quickly into poverty...

 

[Emily]

I don't get the winning strategy of destroying the industrial base of Europe and the US.

https://www.bloomberg.com/news/arti...-costs-force-us-industrials-factories-to-shut
The US Industrial Complex Is Starting to Buckle From High Power Costs
Surging bills are forcing companies to scale back industrial operations, threatening a greater drag on the economy.
By Joe Deaux and Naureen S Malik

July 7, 2022, 10:00 AM UTC

It was only a matter of time, really.
Europe’s fertilizer plants, steel mills, and chemical manufacturers were the first to succumb. Massive paper mills, soybean processors, and electronics factories in Asia went dark.

Now soaring natural gas and electricity prices are starting to hit the US industrial complex.
On June 22, 600 workers at the second-largest aluminum mill in America, accounting for 20% of US supply, learned they were losing their jobs because the plant can’t afford an electricity tab that’s tripled in a matter of months. Century Aluminum Co. says it’ll idle the Hawesville, Kentucky, mill for as long as a year, taking out the biggest of its three US sites. A shutdown like this can take a month as workers carefully swirl the molten metal into storage so it doesn’t solidify in pipes and vessels and turn the entire facility into a useless brick. Restarting takes another six to nine months. For this reason, owners don’t halt operations unless they’ve exhausted all other options.
It’s the most poignant signal yet of what’s to come—but not the only one.
At least two steel mills have begun suspending some operations to cut energy costs, according to one industry executive, who asked not to be identified because the information isn’t public. In May, a group of factories across the US Midwest warned federal energy regulators that some were on the verge of closing for the summer or longer because of what they described as “unjust and unreasonable” electricity costs. They asked to be wholly absolved of some power fees—a request that, if granted, would be unprecedented...

 

[Emily]

https://thefederalist.com/2022/07/0...se-gas-giant-tied-to-his-scandal-plagued-son/

 

[Emily]

https://jamestown.org/program/russia-pushes-for-economic-mobilization-amid-war-and-sanctions/
Russia Pushes for Economic Mobilization Amid War and Sanctions

Publication: Eurasia Daily Monitor Volume: 19 Issue: 104
By: Sergey Sukhankin

July 12, 2022 05:32 PM Age: 11 hours
While Western economic sanctions are aggravating Russia`s business climate and leading toward its largest economic crisis since 1991, Russia is hoping to cope with the impending crisis by replacing vestiges of its market economy with command-style administrative regulations and a planned economy (Vedomosti.ru, July 3). While rumors about the inevitability of economic mobilization started to circulate in late spring, the first solid step in this direction was made in early July 2022, when a corresponding proposal was supported by both the chambers of the Russian Duma (Russia’s parliament) and the Federation Council (Svpressa.ru, May 22; Sozd.duma.gov.ru, accessed July 12). Now, Russian President Vladimir Putin has to sign the decree (which is set to be drawn up shortly) to convert it into law...

 

[Emily]

https://tfiglobalnews.com/2022/07/2...th-billions-of-dollars-that-didnt-even-exist/
Zelensky sells gold worth billions of dollars that didn’t even exist
by Vikrant Thardak
July 21, 2022

Reuters reported on Sunday that Ukraine has sold gold worth $12.4 billion since the start of the war in February. The deputy head of Ukraine’s central bank announced that selling gold was necessary to keep the country up and running. He said, “We are selling (this gold) so that our importers are able to buy necessary goods for the country.”
The data doesn’t add up!

So far so good! However, the devil lies in the details! The question is, how come Ukraine sold this much gold? As per Schiffgold.com website, the National Bank of Ukraine (UNB) held about 27 tons of gold in its reserves valued at about $1.6 billion when the war started. This data can be verified at Gold.org website....

 

[etudiant]

https://tfiglobalnews.com/2022/07/2...th-billions-of-dollars-that-didnt-even-exist/
Zelensky sells gold worth billions of dollars that didn’t even exist
by Vikrant Thardak
July 21, 2022

Reuters reported on Sunday that Ukraine has sold gold worth $12.4 billion since the start of the war in February. The deputy head of Ukraine’s central bank announced that selling gold was necessary to keep the country up and running. He said, “We are selling (this gold) so that our importers are able to buy necessary goods for the country.”
The data doesn’t add up!

So far so good! However, the devil lies in the details! The question is, how come Ukraine sold this much gold? As per Schiffgold.com website, the National Bank of Ukraine (UNB) held about 27 tons of gold in its reserves valued at about $1.6 billion when the war started. This data can be verified at Gold.org website....

Nothing reported about Ukraine is free from spin. The country was just ahead of Russia on the corruption tables, so facts were already hard to come by.
They are now in a war, so every bit of news is militarily significant and presented in the most useful light.,

 

[Emily]

Corrupt countries are eaten alive by the biggest predators. This explains where the missing gold was. At least it looks like the US didn't give Ukraine our gold reserves, the way we gave China our oil reserves. That was my first worry.

https://goldseek.com/article/has-us-just-stripped-ukraine-its-gold-reserves
https://web.archive.org/web/2014111.../news/2014-11-18/ukraine-admits-its-gold-gone

 

[Pathfinder]

US to send Ukraine another $775 million in weapons and military equipment

By Kathleen Bieberly
August 19, 2022 1:18pm Updated

WASHINGTON – The US will send Ukraine another $775 million in weapons and military equipment including rockets, drones and missile systems, a senior US defense official said Friday.

“We have another major security assistance package that we are about to unveil and this continues our tradition of providing the Ukrainians what they need when they need it,” the official said.
...
The announcement comes less than two weeks after President Joe Biden approved a $1 billion Ukraine military aid package – the largest yet.
...
The upcoming aid package will bring the total cost of military aid sent to the country to about $10.5 billion since Russia invaded Ukraine on Feb. 24.

https://nypost.com/2022/08/19/us-to-...rs-six-months/

 

[sharon sanders]

Pro-West news source


Ukraine war: Putin says West's sanctions fever wrecks European lives


By Paul Kirby




snip

In an address that appeared to target Western observers as much as a domestic audience, President Putin said confidence in the dollar, euro and pound was being lost before people's eyes. Russia, meanwhile, was emerging from the war with its sovereignty strengthened: "I am sure that we have not lost anything and we will not lose anything."

Ukrainian Foreign Minister Dmytro Kuleba said Russia was seeking to blackmail Europe with its energy resources: "Putin wants to ruin the stability and well-being of every household in Europe."

Top Chinese legislator Li Zhanshu was attending the forum and the Russian president said that "no matter how much someone would like to isolate Russia, it is impossible to do this". Russian news agencies said President Putin would meet Chinese counterpart Xi Jinping in Uzbekistan next week.

more....

https://www.bbc.com/news/world-europe-62817560

 

[etudiant]

Putin is only stating the obvious, Russia had $300B in dollar reserves that were frozen when Russia invaded Ukraine.
Obviously reserves that can disappear if someone else says so are not good reserves.
Trouble is that Chinese Renminbi have the same weakness, so no fiat currency has any true reserve value.
Gold used to be a good option, but there is far too little of it now.

 

[Emily]

https://www.forbes.com/sites/zengernews/2022/05/02/russias-move-to-gold-may-jolt-your-company/
Russia’s Move To Gold May Jolt Your Company
Zenger NewsContributor
The first digitally native newswire, restoring trust in the news.
May 2, 2022,01:51pm EDT

By Erik Sherman

Suffering from U.S. and EU sanctions, Russia made a surprise move—its central bank fixed the price of 5,000 rubles to a gram of gold. Few Western investors or executives noticed.

Then, Russia sprang its trap. Its finance ministry announced that it would require payment for oil, natural gas and other of its significant exports in rubles.

“What the Russians did was a genius, I hate to say it,” explains Jack Bouroudjian, former president of Commerce Bank in Chicago and now chairman of the Global Smart Commodity Group...

 

[Emily]

https://www.msn.com/en-us/news/worl...to-convert-payments-to-ruble-yuan/ar-AA11wD9N
Russia's Gazprom signs gas deal with China to convert payments to ruble, yuan
Fox Business
Caitlin McFall - Tuesday


Russia’s Gazprom on Tuesday said it had reached an agreement with China to start fulfilling its gas supply contracts with payments made in rubles or yuan instead of euros or dollars.

The announcement on Telegram comes just six months after a 30-year deal was signed between Gazprom and the China National Petroleum Corporation in early February, which said Russian gas supplies would be paid in euros as Russia looked to separate itself from the U.S. just weeks before it invaded Ukraine.

Gazprom CEO Alexei Miller said the payment arrangement would prove "mutually beneficial" for both state owned energy agencies as Russia and China look to bolster their economies amid flagging relations with the West...

 

[Emily]

https://todayuknews.com/business/li...an-but-limits-business-support-to-six-months/
Liz Truss unveils £150bn UK energy plan but limits business support to six months

todayuknews 2 days ago
Liz Truss, UK prime minister, has announced an estimated £150bn package to shield Britain from soaring energy prices — but with just six months’ cover for business compared with two years for households.

The dramatic state intervention was accompanied by promises to increase domestic oil and gas production — including fracking for shale gas — and reforms to the energy market.

An “energy price guarantee” will limit average annual household bills to £2,500 over the next two years.

The maximum amount for typical household energy use had previously been due to rise to more than £3,500 in October with some projections showing that bills would have topped £6,000 next year...

 

[Emily]

https://www.msn.com/en-us/news/worl...rmany-deepens-over-war-in-ukraine/ar-AA12x1VX
LA Times
'I've given up on all my dreams': Dread in Germany deepens over war in Ukraine

Erik Kirschbaum - Monday

Kati Pannwitz spends her evenings at home alone in a darkened and unheated apartment, watching old movies while worrying about the new reality of life in a country that is being drawn ever closer to the war in Ukraine.

Surging inflation and fears about an energy crisis are hitting home for Pannwitz, 34, taking a heavy toll on her finances and the futures of both her and her 17-year-old son...

 

[Pathfinder]

-------------------------------

DOE Announces Notice of Sale of Additional Crude Oil From the Strategic Petroleum Reserve

SEPTEMBER 19, 2022

Notice is Part of Biden-Harris Administration’s Continued Action to Protect American Consumers and Address the Global Supply Disruption Caused by Putin’s Energy Price Hike

WASHINGTON, D.C.— The U.S. Department of Energy’s (DOE) Office of Petroleum Reserves today announced a Notice of Sale of up to 10 million barrels of crude oil to be delivered from the Strategic Petroleum Reserve (SPR) in November 2022.

...
https://www.energy.gov/articles/doe...itional-crude-oil-strategic-petroleum-reserve

 

[Mary Wilson]

Russia and Saudi Arabia agree to massive cuts to oil output. Here's why it matters

Updated October 5, 202211:57 AM ET
JACKIE NORTHAM

The OPEC+ alliance announced a 2 million barrels a day cut in oil production Wednesday — an amount that could drive oil and gas prices back up after weeks on a downward trend.

The meeting of the 24 OPEC+ oil-producing countries, including Russia, comes at a time when much of the world is already battling soaring energy costs. A supply cut will also exacerbate tensions between Saudi Arabia and the U.S., where President Biden has been trying to rein in prices at the gas pump ahead of the midterm elections.

The White House called the decision "shortsighted" and said in a statement the administration would "deliver another 10 million barrels from the Strategic Petroleum Reserve to the market next month, continuing the historic releases the President ordered in March."

OPEC+, formed in 2016, includes the 13 Organization of Petroleum Exporting Countries members and 11 other non-OPEC members. In a statement, the group justified today's decision due to "uncertainty that surrounds the global economic and oil market outlook."

It's unclear how much of a price increase the supply cut would cause. The world consumes up to 100 million barrels of oil a day, so taking 2 million off the market would have a noticeable effect.

The move is seen as a bid by Saudi Arabia to prop up prices, which had reached up to $120 a barrel during the spring but began to tail off over concerns about a slowing global economy. They fell to less than $90 a barrel in September.

... "OPEC is trying to shock and awe with a big production cut number that is going to get people's attention," he says. "And they're trying to support prices to keep them from falling further."

... A dramatic cut in oil production could also help Russia, which is co-chair of OPEC+. Its economy is based on energy revenues, now critical to its war effort in Ukraine. Despite sanctions, Russia hasn't experienced a huge decline in production.

https://www.npr.org/2022/10/05/1126754169/opec-oil-production-cut

 

[Emily]

https://www.reuters.com/markets/eur...epen-after-winter-drains-reserves-2022-10-05/
October 5, 202211:56 AM CDTLast Updated 2 days ago
Gas crisis set to worsen after Europe burns through winter stocks

By Essi Lehto
and Kate Abnett

HELSINKI/BRUSSELS, Oct 5 (Reuters) - Europe may face an even more acute energy crunch next year after draining its natural gas tanks to get through the cold of this winter, the head of the International Energy Agency said on Wednesday, as the EU looks for ways to ease the crisis.

European countries have filled storage tanks to around 90% of their capacity after Russia cut gas supplies in response to Western sanctions imposed over its invasion of Ukraine.

Gas prices , which surged in the months after the invasion in February, have retreated. But that could be short-lived as countries compete to buy liquefied natural gas (LNG) and other alternatives to Russian pipeline deliveries...