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This video is sponsored by noa, an audio app i use for listening to articles from the world’s out using the link in the description below. exporting countries instituted an oil embargo on the united states, sending prices soaring. this came at a difficult time for the united states rising more than 10 per cent per year
At the time in addition, the u.s. oil industry had very little excess production capacity, which meant that it was difficult for us energy producers to bring more oil to market when it was needed. in the aftermath of that oil shock, the united states began seeking energy independence to europe became increasingly
Reliant on russia for its energy needs. could the west place an embargo on russian oil and gas? would such an embargo make a difference to russia? and to what extent would the western nations be harming themselves by doing this? so first up, the european union is the world’s largest energy importer. they import 60%
Of their energy needs, at a cost of more than €350 billion a year. right now, europe imports in the 1960s and 1970s, europe was producing roughly the same amount of natural gas that it as the north sea gas fields depleted, and the netherlands began shutting down their gas fields – these are the largest source of
Natural gas over the last twenty years or so, the eu has been reducing its dependence on coal in order to reach its climate goals and germany even passed a law to phase out nuclear power altogether. their final three nuclear power stations are scheduled belgium, switzerland and the uk have been reducing
So, european nations turned to russian natural gas to fill the gap between the phase out of their existing energy supplies, and their transition to zero emissions renewables and storage which they plan to eventually use as a full replacement. about 25% of the eu’s energy consumption comes from natural gas and that dependence
On natural gas means a dependence on russia. some of the biggest european economies are among the most exposed, with germany importing 90% of its energy needs. the problem is that these renewables russia has the largest reserves of been an exporter since the 1940’s. even natural gas deliveries could be relied on.
Europe has been dealing with severe energy problems over the last year. after an unusually cold winter the year before, europe went into this winter season with low stocks of natural gas. then a wind drought where wind speeds were at some of the lowest levels for the past 60 years, meant that there was a shortage of wind
Energy. booming asian demand, and maintenance trouble at french nuclear plants combined to squeeze to europe to put pressure on them to approve the new nord stream two gas pipeline. benchmark gas prices more than tripled in europe in 2021, when western leaders began threatening putin with sanctions over the invasion of
Ukraine, to avoid directly hitting russia’s energy now, before i dig into the global effects of a russian energy embargo, let me quickly tell you over audio, an audio app that allows you to listen to some of the best financial journalism when you don’t have time to read. it’s perfect for when you’re
At the gym, commuting or doing household chores. there are articles available from bloomberg, the economist, harvard business review and many more. the articles are read out by a team of celebrated narrators. because the news comes from a variety of top publications, it is one app, but multiple perspectives.
Noa focuses on in-depth analysis and opinion, rather than breaking news. the editors pick the best articles and put together topic-specific series to help you understand the story behind the news. there is a great series on the effects of the swift sanctions right now. get a 7-day free trial plus 37% off annual membership
By signing up using the link in the description below washington announced last week that it would ban russia’s largest banks, from processing payments, serves the russian energy company gazprom. the russian banks that process energy payments are also absent from the list that brussels agreed there have
Been calls though, for western has called on governments to impose a now, a large amount of russia’s foreign i covered that in my last piece. but as long as commodity exports keep flowing, moscow will be receiving hard currency, and this time they won’t make the mistake of leaving that to be frozen. with
Today’s energy prices, billion dollars per day in oil and gas revenues. while driving inflation even higher happening. they don’t however, expect the russian economy to entirely stop functioning exists to soften the impact of the measures. cutting off american purchases of russian oil would not be a big deal for
The united states, oil imports from russia. the united states had reached energy independence right before the covid 19 pandemic and could easily enough return to energy independence as production in texas and north dakota come back online. high oil prices do tend to encourage us private sector investment
The biggest problem for the united it’s the desire not to isolate their european allies. germany’s minister of economics last week needs these supplies for price stability and security of energy. diplomats in brussels have said that there have only been informal in reality, right now, many western banks,
Oil refineries and shipowners are effectively “self-sanctioning” or behaving as if russian oil is already unavailable. business dealings with russia have become toxic for many large as shipping companies, banks and insurers according to the financial times, roughly 70 per cent of russian crude is “struggling
In the pricing where, russian urals crude is quoted at a discount of more than $18 a barrel so, right now, there’s nothing legally stopping anyone from buying or selling russian crude, but oil and shipping markets are pricing in the risk that this could change at a moment’s notice. will be reluctant to transport the
Barrels, this means that oil traders are being careful too. on wednesday, a large russian oil producer failed to award tenders – after three attempts — to sell about 6 1/2 million barrels of urals crude. this basically means that if you are a russian oil company trying to sell oil, there is an embargo in all
But name. russian crude oil, in theory, their bets for now, and behaving as if it is. of gas to europe per day at current prices. unlike oil, european buyers have continued to buy russian natural gas and have even contracts with gazprom as right now, that is kadri simson – the european union’s energy
Commissioner announced on monday that europe’s energy supply is sufficient to get through the she said that next week, the commission will present a proposal on strengthening energy independence, especially from russia. but that the recent increase of energy prices, along with europe has already boosted imports of
Liquefied but there is no quick russia replacement that can be brought online in the short term. a european embargo is something that could happen, commodity prices are on track for the biggest weekly price spike in more than fifty years. the events of the last week have caused sharp gains futures, for
Example, closed yesterday almost energy is a critical part of the russian close to half of russia’s export revenue. even if trade continued with china and other countries that did not join in the sanctions. putin announced $118bn of new oil and gas deals with china after the winter olympics last month.
While this might be good for putin, a situation where russia’s only trade partner is china, would put putin firmly in xi pocket, which would probably not be an attractive position for him. could force them to close off some oil wells, which can be difficult to turn back on – oil another option for western countries would
Be to ratchet down oil imports rather than halting where 20 per cent cuts were imposed every six months. as the warmer weather approaches, this becomes easier for europe. twenty e.u. countries agency, and they are required to hold at least 90 days of oil reserves. if oil supplies were severely disrupted, they
Could decide to if the west were to embargo russian oil and gas, policymakers would expect these measures to have a similar impact to the sanctions imposed on iran in 2018. those measures were focused on reducing iran’s revenue from oil exports to zero. while with massive inflation which peaked at 48%
In 2018 and is expected to remain above 25% in the foreseeable future, the country is still able to export oil to friendly countries like china and wealthier iranians who have political ties, still manage to mostly maintain their luxurious lifestyles. while the economy is not doing well, surviving and winning “the
Economic war”. as you can see all of this is complicated, if you found this interesting, you should watch the description below or use the discount code patrickboyle for a free trial of noa and a 37% great day and talk to you soon. bye.