Big Windfall
Bloomberg reports Putin May Collect $321 Billion Windfall If Oil and Gas Keep Flowing
For all the hardships visited on consumers at home and the financial chokehold put on the government from abroad, Bloomberg Economics expects Russia will earn nearly $321 billion from energy exports this year, an increase of more than a third from 2021. It’s also on track for a record current-account surplus that the Institute of International Finance says may reach as high as $240 billion.
“The single biggest driver of Russia’s current account surplus continues to look solid,” IIF economists led by Robin Brooks said in a report. “With current sanctions in place, substantial inflows of hard currency into Russia look set to continue.”
The calculus may change completely, however, in case of an embargo on energy sales. And even without it, Russia’s oil exports and output are already falling, with the International Energy Agency predicting it may lose nearly a quarter of its crude production this month.
U.S, EU to Hit Russian Investments With New Round of Sanctions
Despite the fact that sanctions don’t work, the US and EU keep trying.
In a New Round of Sanctions U.S. will ban Russia investments and the EU proposes a ban on ships, trucks, and coal.
European Commission President Ursula von der Leyen said the EU is proposing to ban most Russian ships and trucks from entering the bloc, as well as Russian coal imports. The EU will also push ahead with a debate on targeting Russian oil, she said — a sensitive issue in Europe, where many countries are dependent on Russian fuel imports.
Calculus Will Not Change
The calculus will not change because the proposal is headed nowhere.
All 27 nations in the EU would have to agree to cut the energy flow from Russia.
And that’s not going to happen for obvious reasons.
EU Energy Costs Soar
Peanuts
Note that there is no proposal to sanction Gazprom or Gazprombank, the Russian energy supplier and its bank.
Stop Imports Now
Yep go ahead. Drive the EU into an instant economic depression.
Germany would not agree to halt energy imports. Now would Hungary. I am unsure is any EU nation would in practice.
Blowhard Politicians
Politicians like Guy Verhofstadt are nothing but hot air blowhards.
None of this condones what Putin did. He is a war criminal. There are plenty in the US as well if you look at illegal and unjustified actions by the US in Iraq, Libya, Vietnam, etc.
Biden Supports More Oil From Canada, But No Realistic Option to Get It Here
In the US, Biden Supports More Oil From Canada, But No Realistic Option to Get It Here
Everyone wants an easy solution to Ukraine, energy prices, and inflation. There is none, and sanctions certainly have not helped.
Meanwhile, De-Globalization an New Supply Chains Are Inefficient and Will Drive Up Inflation.
This post originated on MishTalk.Com.
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Mish
An example of how US real estate gas been driven by Russian money :
I think you
are mistaking the role of sanctions. They are not to change Putin’s behavior
because he has made it clear that he wants war. There is no mistake about that.
The sanctions are put in place to handicap Russia’s ability to pursue the war
that he has decided to make and they are biting. The material and financial supports
for Russia’s economy are being knocked out one by one. Most Western companies
are out of the country now and those who stay are coming under more pressure to
leave and for the first time we see that pressure coming from stockholders,
employees and the general public. It is becoming harder for any executive to
justify doing any business with Russia. Another factor that is surprising is
the risk of secondary sanctions is being taken very seriously by companies in
countries outside of the US-EU tandem. They look at their sales in Russia and
compare that to the sales in the US and the EU and the decision is relatively easy
to make. They say they are against the sanctions in principle but will adhere
to them anyway. There are serious potential reputational and legal damages to
taking into account.
The big one
is the oil and gas problem. Russia insisted to be paid in rubles or they will
cut off the gas and the EU said go pound sand. The oil and gas still flows and
the EU pays in the currency in the contract. When the reserves are filled the
EU will close the tap and will never open it again. In the meantime Russia gets
Dollars and Euros that it can’t use. The Russian banks can convert to rubles or
magic beans if it wants but the fact is that the EU is planning and has the
will to do without Russia. Some EU members want it right away and other like
Germany want it to the end of the year but all members except Hungary are for
it.
You keep
saying that the EU will not reach agreement for the “obvious reasons” which you
do not spell out. The actions of the EU since Putin started his war has
radically changed the EU and the actions it has taken since then shows that the
“obvious reasons” whatever they were before no longer exist today. A major war
on your doorstep has a way of focusing the mind and makes you decide what is
important and what is not.
Biden will surely become a lame duck in Nov this year. And after that, anything that he does that goes wrong will be held up by the Republicans as a miserable failure of the DONORcrat approach to the war. Of course, the DONORcrat Party would richly deserve all that blame, after foisting the Russiagate on the country all these years.