Russian/Ukraine ordeals
Not sure how many people know of Motley Fool
Its an financiall services company which has been around for many years now. The idea of the name is that professional clowns were sometimes used to give unpopular views to noblemen... think someone like George Carlin rather than Bozo. So they tend to be a bit "edgy" in their analysis and recently seemed to have swerved into "breathless" analysis.
Anyhoo THIS seems to be telling us that the shoe is finally back on the other foot and it would not take much to make the Russians very sorry if that was the goal.
I'm not at all sure I buy the math on how to get'er done but the fragile nature of Russia's economy does seem to tell me that it wouldn't take much for the EU to sack up and make them pay. After all the mess in the Ukraine is directly related to your fumbling about trying to expand your reach into traditional Soviet spheres of influence.
Thoughts?
Its an financiall services company which has been around for many years now. The idea of the name is that professional clowns were sometimes used to give unpopular views to noblemen... think someone like George Carlin rather than Bozo. So they tend to be a bit "edgy" in their analysis and recently seemed to have swerved into "breathless" analysis.
Anyhoo THIS seems to be telling us that the shoe is finally back on the other foot and it would not take much to make the Russians very sorry if that was the goal.
I'm not at all sure I buy the math on how to get'er done but the fragile nature of Russia's economy does seem to tell me that it wouldn't take much for the EU to sack up and make them pay. After all the mess in the Ukraine is directly related to your fumbling about trying to expand your reach into traditional Soviet spheres of influence.
Thoughts?
Ssssh
The SPR to me seems only a stopgap solution. The USA has much oil in stock but it will only be enough to support demands for a few weeks. Putin's oil simply sits in the ground to be tapped a bit later. While I agree it hurts the rich oil elite in Russia, they are also swimming in money and assets.
The other issue, that Putin has the EU by the balls by cutting (natural) gas pipes is not solved. I have no idea how much LNG tankers it takes to "feed" Germany, Italy and France, but it will be costly I suppose.
The other issue, that Putin has the EU by the balls by cutting (natural) gas pipes is not solved. I have no idea how much LNG tankers it takes to "feed" Germany, Italy and France, but it will be costly I suppose.
peet wrote:QUOTE (peet @ Mar 31 2014, 06:15 AM) The SPR to me seems only a stopgap solution. The USA has much oil in stock but it will only be enough to support demands for a few weeks. Putin's oil simply sits in the ground to be tapped a bit later. While I agree it hurts the rich oil elite in Russia, they are also swimming in money and assets.
The other issue, that Putin has the EU by the balls by cutting (natural) gas pipes is not solved. I have no idea how much LNG tankers it takes to "feed" Germany, Italy and France, but it will be costly I suppose.
If you read the article (again) it says that it would only take a small continuously release to have a big impact on things for months and years. I'm not sure I buy the math and I am most certainly not saying the US needs to do anything on this one other than to support our EU friends.
A quote from it but not all of the pint they are making
QUOTE So what exactly would releasing oil from there do? Let's say U.S. production and imports from Canada and Mexico were to hold place. The U.S. would need to release about 950,000 barrels per day to meet all of the United States' current demand. Based on the SPR's 727 million barrels in storage, we could do this for well over two years and drive down global prices significantly. Surprisingly, though, we don't even need to go to that extreme. According to economist Phillip Verleger in a recent Quartz article, if the U.S. were to release only 500,000 barrels per day from the SPR, it would lead to a $10 drop in oil prices and would cost Russia $40 billion in sales. At this pace, we could maintain this pace for more than four years and could potentially cause Russia's GDP to drop by 4%.[/quote]
New Article
I agree that Russian NG and oil are a significant percentage of EU uses and not so much in the US (about 8%) and we have been dumping them as unreliable ever since the Georgian cirisis (imports down 25% according in three years according to Bloomberg) and while we are soon to be net energy exports in NG it will take years to get the facilities online. It is also true while lowering our dependency both by reductions in per captia consumption and increased internal production we are still far away from energy independence ourselves.
I simply found it interesting to think how much easier it would be for the EU to teach the Russians an economic lesson given how fragile the Russian economy is to even small changes in oil/NG prices and how deeply tied to the much more powerful EU they are at this very moment. After all the percentage of NG and oil to the EU by Russia is probably double what the overall percentage of energy consumed by the EU from Russia. If small releases effect things that much imagine what a EU wide volunteer reduction of only 5% in energy usage and another 5% reduction in all imports from Russia would do to their economy. No bloodshed and the message gets made loud and clear by both sides
It lookslike they are cozying up to the Chinese at this very moment... something I find to be a non-starter given the long and glorious mistrust between the two but hey things do change
Last edited by MrChaos on Mon Mar 31, 2014 11:06 am, edited 1 time in total.
Ssssh
I like the idea of using the SPR to give a "signal" to Russia, at least the US is doing a little bit more than "vocal expressions" our EU does so "well". Your Obama is giving stronger signals than our EU president. Pop quiz, what's the name of our President? Once again, our "mighty" EU seems more active on regulating the size and form of cucumbers than taking action on Ukraine.
The problem is that it has to be choreographed well with the OPEC countries. The local sheik will not be pleased if the global oil price drops, or fluctuates wildly.
Agreed, the only thing for the EU to be totally independent of Russia is to be self supporting with energy. My little country can take an example on Germany, with solar panels and wind turbines. I think the Germans are now swimming in energy too cheap to meter.
Russia terminated discount on gas for Ukraine, so it's safe to assume Ukraine is technically bankrupt soon.
Lucky the IMF wants to support Ukraine with a loan, and the money goes straight to .... drum roll ... Russia.
Darn, glad I don't have to play chess against Putin.
The problem is that it has to be choreographed well with the OPEC countries. The local sheik will not be pleased if the global oil price drops, or fluctuates wildly.
Agreed, the only thing for the EU to be totally independent of Russia is to be self supporting with energy. My little country can take an example on Germany, with solar panels and wind turbines. I think the Germans are now swimming in energy too cheap to meter.
Russia terminated discount on gas for Ukraine, so it's safe to assume Ukraine is technically bankrupt soon.
Lucky the IMF wants to support Ukraine with a loan, and the money goes straight to .... drum roll ... Russia.
Darn, glad I don't have to play chess against Putin.
Last edited by peet on Tue Apr 01, 2014 8:15 am, edited 1 time in total.