Category Archives: Commodities

Can Germany function without Vladimir Putin’s gas?

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Analysis: Nord Stream 2 was meant to deliver 70% of country’s gas and switch to renewable energy has been slow

The Ukraine crisis has plunged Germany into an intense debate about how it will heat its homes and power its industry in future, summed up in the short question: can Europe’s largest economy function without Vladimir Putin’s gas?

The Green federal economics minister, Robert Habeck, answered with a decisive “yes it can”, a day after the chancellor, Olaf Scholz, announced the suspension of the Nord Stream 2 pipeline, which was meant to deliver from Russia as much as 70% of Germany’s gas requirements. There are considerable doubts as to whether the $11bn project will ever now go ahead.

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Energy prices surge as Russian invasion of Ukraine stokes fears of global shortages

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European stock markets tumble as crisis fuels near-40% rise in gas price and pushes oil to $105 per barrel

Global markets were thrown into turmoil on Thursday as the arrival of war on European soil sent prices of commodities such as oil, gas and wheat surging, while stock market plunged.

The ramifications of a potentially prolonged conflict involving Europe’s primary supplier of gas sent a chill through markets, affecting prices across a phalanx of asset classes and investments.

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Why a swift economic victory against Russia looks unlikely

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Analysis: country has positioned itself to blunt western sanctions and has a few retaliatory ones of its own

Be ready for a long haul. That was the subtext of Boris Johnson’s message to MPs as he committed to toughening up sanctions against Russia.

The warning to prepare for a “protracted struggle” was both timely and appropriate. There will be no quick knockout blow because Vladimir Putin has had time to prepare and is well dug-in.

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Europe could see out winter on gas reserves if Russian imports stop, says German analysis

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Economic institute says current levels of gas enough for six weeks if mild temperatures continue

Europe could heat its citizens’ homes and power its industry on existing gas reserves for the remaining months of a relatively mild winter even if the standoff with Moscow over Ukraine were to escalate to a total stop on Russian gas imports, a leading German economic institute has said.

Unusually low gas reserves have raised alarm among several European governments in recent months, with storage tanks across the continent on average at only 31% capacity at the start of this week – roughly half as full as in 2020.

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Saudi Arabia transfers $80bn in shares to wealth fund for green projects

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Crown Prince Mohammed bin Salman said move was part of efforts to recalibrate the oil-led economy

Saudi Arabia has transferred shares worth $80bn to its sovereign wealth fund as the oil-rich nation hopes to rival Norway and Singapore’s state-managed funds and invest in green projects.

Crown Prince Mohammed bin Salman, Saudi Arabia’s de facto ruler, said 4% of shares in Saudi Aramco, the world’s biggest oil exporter, would be transferred to the kingdom’s sovereign wealth fund as part of efforts to recalibrate the oil-dominated economy.

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Kyiv urges Russia to pull troops back from Ukraine border

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Call comes after Nato stresses need for EU countries to reduce dependence on Russian natural gas

Kyiv has urged Moscow to pull back its troops from Ukraine’s border and continue dialogue with the west if it is “serious” about de-escalating tensions that have soared amid fears of a Russian invasion.

“If Russian officials are serious when they say they don’t want a new war, Russia must continue diplomatic engagement and pull back military forces it amassed along Ukraine’s borders and in the temporarily occupied territories of Ukraine,” Kyiv’s foreign minister, Dmytro Kuleba, tweeted on Sunday.

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US finalizing plans to divert gas to Europe if Russia cuts off supply

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Officials working with global suppliers to avoid European gas crisis if flow from Russia is cut as Biden says he would consider personal sanctions against Putin

The US has helped prepare for the diversion of natural gas supplies from around the world to Europe in the event that the flow from Russia is cut, in an effort to blunt Vladimir Putin’s most powerful economic weapon.

As fears of an invasion of Ukraine have grown, US officials said on Tuesday that they had been negotiating with global suppliers, and they were now confident that Europe would not suffer from a sudden loss of energy for heating in the middle of winter.

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Kremlin denies restricting gas supplies to Europe for political gain

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European gas prices climb close to record highs as flows on key pipeline move towards Russia

The Kremlin has denied using Russia’s gas resources to turn the screw on Europe, after gas in a pipeline to Germany switched direction to flow eastwards for a second day, keeping prices near record highs as midwinter approaches.

Flows through the Yamal-Europe pipeline to Germany declined over the weekend before stopping on Tuesday and reversing, data from the network operator Gascade showed.

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Gas crisis fuels call for UK to update energy security policy

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As rising tensions with Russia over Ukraine drive prices to record highs, experts warn of lack of strategy for gas supply

Ministers are relying on an outdated energy security policy, leading academics have warned, as escalating tensions between Russia and western leaders propelled the gas market to record price highs.

UK gas reached a record closing price of 322.5 pence per therm on Tuesday, according to data from market price experts at ICIS, vaulting ahead of the previous high of just over 298p/therm set in early October this year.

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Gazprom profits as Russia prospers from Europe’s gas crisis

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State-owned company accused of ‘selling as much gas as possible without lowering market prices’

• Gas prices near record highs as Berlin rejects pipeline from Russia

About 12.7bn cubic feet of gas flowed into Europe from Russia’s state-owned Gazprom last month. The world’s largest gas producer typically supplies more than a third of the needs of countries across the European Union, but in November flows dwindled to a six-year low.

Gas supplies from Russia have fallen well short of pre-pandemic levels for months. The volumes of Russian gas flowing into homes, businesses and storage facilities this year have been almost a quarter below those in 2019.

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Gas prices near record highs as Berlin rejects pipeline from Russia

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Germany says escalating tensions over Ukraine are one factor in Nord Stream 2 not getting green light

• Gazprom profits as Russia prospers from Europe’s gas crisis

Gas prices across the UK and Europe are on course to return to record highs after Germany said a controversial pipeline from Russia could not be approved amid deepening tensions on the Ukrainian border.

The German foreign minister, Annalena Baerbock, said the Nord Stream 2 pipeline could not be given the green light in its current form because it did not meet the requirements of EU energy law.

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Germany’s foreign minister under pressure over Nord Stream 2 sanctions

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Annalena Baerbock has sympathy with US demands, but there is considerable Social Democrat support for Russia’s pipeline

Germany’s new foreign minister, Annalena Baerbock, has been caught a diplomatic vice days into the job, as US puts pressure on the coalition government in Berlin to vow to block the Nord Stream 2 pipeline in the event of Russia invading Ukraine.

The controversial pipeline project, which runs from Ust-Luga in Russia to Lubmin in north-east Germany, is also likely to be the first test of the new German government’s unity of approach.

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Old UK oilwells could be turned into CO2 burial test sites

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Exclusive: Consortium of energy firms and universities says underground storage of hydrogen can also be investigated

Exhausted oil and gas wells would be turned into the UK’s first deep test sites for burying carbon dioxide next year, under plans from a consortium of universities and energy companies.

There are hundreds of active onshore oil and gas wells in the UK. But as they come to the end of their lives, some need to be redeployed for trials of pumping CO2 underground and monitoring it to ensure it does not escape, the group says. The test wells could also be used to assess how hydrogen can be stored underground.

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Shell to go ahead with seismic tests in whale breeding grounds after court win

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Judgment rules company can blast sound waves in search for oil along South Africa’s eastern coastline

Royal Dutch Shell will move ahead with seismic tests to explore for oil in vital whale breeding grounds along South Africa’s eastern coastline after a court dismissed an 11th-hour legal challenge by environmental groups.

The judgment, by a South African high court, allows Shell to begin firing within days extremely loud sound waves through the relatively untouched marine environment of the Wild Coast, which is home to whales, dolphins and seals.

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Germany suspends approval for Nord Stream 2 gas pipeline

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Move follows mounting politcal pressure to scrap project in setback to Kremlin-backed project

Germany has suspended its approval process for the controversial Nord Stream 2 gas pipeline which would double its reliance on Russian gas following growing geopolitical pressure to scrap the project.

Energy markets across Europe surged after the German energy regulator suspended its certification process, in a big setback to Kremlin-backed Gazprom’s plans to extend Russian gas dominance via a new pipeline across the Baltic Sea.

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Palm oil land grabs ‘trashing’ environment and displacing people

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Growing rush for land is destroying ecosystems and disrupting lives to satisfy global demand for goods, study warns

Businesses and governments must stop the growing rush of commodities-driven land grabbing, which is “trashing” the environment and displacing people, says new research.

Palm oil and cobalt were extreme risks for land grabs according to an analysis of 170 commodities by research firm Verisk Maplecroft published last week. It also warned that, alongside cobalt, other minerals used for “clean” technology, including silicon, zinc, copper, were high risk and undermined the sector’s label.

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A wealth of sorrow: why Nigeria’s abundant oil reserves are really a curse

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It is known as the resource curse: assets that should bring wealth and stability but instead lead to corruption and poverty. And for Nigeria, oil is the culprit

In Nigeria, oil has been more of a curse than a blessing. Weak institutions of state and poor governance in managing the vast revenues have led the country to fail to realise its full potential in a textbook example of what academics know as the “resource curse”.

First coined by Prof Richard Auty in 1994, the term refers to the inability of nations to use their windfall wealth to improve their population’s lot and bolster their economies. The rich natural resources bring corruption and poverty to a nation, rather than positive economic development and, counterintuitively, these countries end up with lower growth and development than those without natural resources.

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Shell and BP paid zero tax on North Sea gas and oil for three years

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Firms defend paying no corporation tax after government handed out billions to energy giants

Shell and BP, which together produce more than 1.7bn tonnes of greenhouse gases a year, have not paid any corporation tax on oil and gas production in the North Sea for the last three years, company filings reveal.

The oil giants, which have an annual global footprint of greenhouse gases more than five times bigger than Britain’s, are benefiting from billions of pounds of tax breaks and reliefs for oil and gas production.

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Europe’s soaring gas prices: does Russia hold solution to crisis?

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Some believe Kremlin sees gas prices as chance for Gazprom to pressure west to speed up Nord Stream 2 approval

The natural gas market has entered uncharted territory. The movements in the price of gas on Wednesday had been, in the words of one analyst, “unprecedented since the year dot of gas liberalisation in Europe”. In record swings, Dutch wholesale gas, a European benchmark, soared by 30% within one period of three or four hours from an already eye-watering level.

These are chilling numbers for European governments with winter stretching ahead, and when the EU sneezes, the UK, heavily reliant on imports from across the Channel, also catches a cold.

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