Russo-Ukrainian War 2014-23 and Invasion

[Duque de Bragança]

The main effort now must be to reduce crude exports. That's the main source of Russian income now.

I'm not sure that's really possible - but I think it's a profound and permanent shift for Europe. Which is also good though I don't think we're anywhere near over the challenges - though prices now are far more manageable (and it is unseasonably warm in Western Europe at least).

Reports of LNG cargos waiting in Iberian waters and ports, same situation in the UK, to wait for a colder weather to sell LNG at a better price.

[Berkut]

The main effort now must be to reduce crude exports. That's the main source of Russian income now.

I'm not sure that's really possible - but I think it's a profound and permanent shift for Europe. Which is also good though I don't think we're anywhere near over the challenges - though prices now are far more manageable (and it is unseasonably warm in Western Europe at least).

Reports of LNG cargos waiting in Iberian waters and ports, same situation in the UK, to wait for a colder weather to sell LNG at a better price.

That seems unlikely? I think.

The price would have to go up a massive amount to make it profitable to leave a ship sitting there waiting for the price of its cargo to move. And incredibly risky.

[celedhring]

What I have seen reported is that Iberian lng terminals can't cope with all the deliveries (and we have the largest capacity in the EU), hence ships have to wait in port to be unloaded.

[grumbler]

What I have seen reported is that Iberian lng terminals can't cope with all the deliveries (and we have the largest capacity in the EU), hence ships have to wait in port to be unloaded.

That sounds much more likely.

[Duque de Bragança]

What I have seen reported is that Iberian lng terminals can't cope with all the deliveries (and we have the largest capacity in the EU), hence ships have to wait in port to be unloaded.

Reported by Le Monde here but maybe with some bias (it's nowadays le Monde after all):

https://www.lemonde.fr/economie/article/2022/10/24/gaz-l-europe-est-passee-en-moins-de-trois-mois-de-la-penurie-au-trop-plein_6147081_3234.html]]https://www.lemonde.fr/economie/article/2022/10/24/gaz-l-europe-est-passee-en-moins-de-trois-mois-de-la-penurie-au-trop-plein_6147081_3234.html

https://www.lemonde.fr/economie/article/2022/10/24/gaz-l-europe-est-passee-en-moins-de-trois-mois-de-la-penurie-au-trop-plein_6147081_3234.html

CHRONIQUE


Philippe Escande


https://www.lemonde.fr/en/economy/article/2022/10/25/gas-europe-has-gone-from-shortage-to-overflow-in-less-than-three-months_6001734_19.html

'Europe has gone from a gas shortage to overflow in less than three months'
COLUMN

Philippe Escande
While dozens of LNG tankers are queuing up in Spain and the UK, some people are questioning the need to increase fossil fuel storage and transport capacity in the midst of the fight against climate change.Published on October 25, 2022 at 15h11, updated at 15h18 on October 25, 2022  Time to 2 min.  Lire en français

Energy news is so fluid that it regularly provides us with strange scenarios. The European Council for example, which met on Friday, October 21, struggling to find an agreement to cap the price of gas in Europe, while in the background dozens of cargo ships full of the same fuel were queuing in Spain or the United Kingdom to unload their precious cargo.
On October 17 and 18, the Bloomberg and Reuters news agencies counted more than seven LNG tankers anchored in Cadiz Bay, Andalusia, and two in Milford Bay, United Kingdom. More than 35 of them are currently circling in waters off the Spanish and Portuguese coasts. In less than three months, Europe has gone from a shortage to an overflow. As a result, prices on the spot market – i.e. for immediate delivery – have collapsed by 80% from their August peak. They are now lower than they were a year ago, before the outbreak of war in Ukraine.

Mild weather has reduced the need for heating, the Chinese slowdown has reduced demand and European industry has reduced its consumption in the face of soaring prices this summer. Consequently, reserves are all full. We no longer know where to put them. Naturally, some significant deviations remain. For a delivery this winter, the price is twice as high, while gas remains two to three times more expensive in the Czech Republic than France or the United Kingdom. This situation is encouraging those who charter ships to wait in the sun for a while until the price rises again with the return of cold weather.
Anachronistic
This situation gives Germany an argument against the principle of a price cap. It asserts that a high tariff discourages over-consumption. But it also removes the argument that such a cap would divert deliveries to other parts of the world. The phenomenon also raises the question of the advisability of building new LNG terminals on the Old Continent.
Europe already has the highest density of this type of installation in the world (about 30). But they're not well distributed. Spain has too many, while Germany doesn't have enough. This has prompted pressure from Berlin for France to come to an agreement with Spain around building a new pipeline to sell Spanish LNG to northern and central Europe.

Excessively increasing natural gas storage and transport capacities in the midst of the battle against fossil fuels seems anachronistic, to say the least. It would be a pity to invest billions in a technology whose decline we're welcoming. Hence the idea proposed by France of an undersea pipeline between Barcelona and Marseille, with its promoters quick to explain that it would be used to transport hydrogen, destined to replace natural gas in the coming decades. But this colossal project raises countless technological and environmental questions and is not expected to see the light of day for many years.

Executive Summary

Les Échos, French business paper, says it's capacity problems in European ports (Iberian and UK ports are more than enough but e.g Germany and Central Europe (Gazprom markets) have nothing in terms of capacity- but notes prices are relatively lower since industrial clients reduced their use of gas and warm temperatures for october have helped in maintaining somewhat lower prices.
More speculation in sending the LNG to Asia is not impossible, but deemed not likely, for now.

Gaz : l'embouteillage inédit de navires méthaniers aux portes de l'Europe
Des navires transportant du gaz naturel liquéfié (GNL) attendaient, cette semaine, aux larges des côtes espagnoles et britanniques. Les installations européennes d'importation de GNL sont saturées alors que la demande a explosé pour remplacer le gaz russe à l'approche de l'hiver.


Cette semaine, au moins sept navires transportant du GNL attendaient au large de la côte sud-ouest de l'Espagne.
(Javier Carrion/Europa Press/ABACA)


Par Enrique Moreira
Publié le 21 oct. 2022 à 13:19Mis à jour le 21 oct. 2022 à 16:22
C'est du jamais vu encore en Europe. « Un nombre sans précédent de méthaniers a mouillé l'ancre au large [du Vieux Continent] alors que la congestion des terminaux de regazéification et la flambée des prix compliquent davantage la situation de l'approvisionnement », constate Jacob Dick, du site spécialisé Natural Gas Intelligence.
Cette semaine, au moins sept navires transportant du GNL attendaient au large de la côte sud-ouest de l'Espagne. Tandis que deux autres étaient ancrés près du terminal de Milford Haven, au Royaume-Uni, selon les données de suivi des navires de Bloomberg. Pis encore, une trentaine de méthaniers tourneraient au ralenti ou navigueraient lentement aux abords de l'Europe, en attendant de pouvoir décharger leur gaz, note le Wall Street Journal.
Des capacités mal réparties
Au total, le Vieux Continent dispose d'une trentaine de terminaux de regazéification pouvant recevoir du GNL. Une densité unique au monde mais qui n'a pas suffi à absorber l'explosion soudaine de la demande après la baisse des livraisons de gaz russe dans la foulée de la guerre en Ukraine.


Surtout, les capacités d'importation sont mal réparties. Elles sont abondantes au Royaume-Uni, en Espagne ou encore au Portugal, des pays peu dépendants de la Russie, et inexistantes en Allemagne ou dans certains pays d'Europe centrale - qui achètent massivement à Gazprom. Et même si Berlin, comme d'autres Etats-membres de l'Union, ont annoncé la construction de terminaux, ces derniers prendront plusieurs années à sortir de terre.


Ralentissement de la consommation
Par ailleurs, les prix du gaz ont explosé avec la guerre en Ukraine, contraignant les industriels européens à ralentir leur production pour ne pas voir flamber leur facture énergétique. Ils ont donc réduit leur consommation. Tandis que les températures encore clémentes pour la saison ont ralenti les besoins en gaz pour le chauffage des habitations en Allemagne, en France, en Italie ou encore en Espagne.


Les réserves de gaz françaises remplies à presque 90 %
En conséquence, les réserves des pays européens restent bien remplies et ne peuvent absorber l'afflux de navires chargés de GNL. Les importations en Europe du nord-ouest et en Italie ont en effet atteint un total de 1,9 million de tonnes au cours de la semaine dernière, soit environ 58 % de plus qu'à la même période un mois plus tôt, selon Bloomberg.
Une attente fructueuse

Ce « bouchon » de navires méthaniers pourrait à terme jouer des tours à l'Europe. Si d'aventure les prix du GNL venaient à augmenter fortement en Asie, les traders ayant affrété les cargos pourraient décider d'envoyer leur cargaison là-bas. Mais les conditions de marché rendent cette éventualité peu probable, estiment les analystes. Car la ruée du Vieux Continent vers le gaz naturel liquéfié a fait bondir les coûts d'affrètement des navires. Dès lors, le trajet vers l'Asie et le retour vers les Etats-Unis d'où le GNL provient généralement coûterait très cher.

Par ailleurs, la demande en Asie reste pour l'heure modérée. La Chine n'ayant pas décidé d'assouplir ses restrictions en matière de Covid-19, freinant de la sorte la poursuite de la reprise de son industrie. Les besoins en gaz du pays sont ainsi moins importants qu'auparavant.
Enfin, la volatilité des prix de l'énergie en ce moment est si intense que les traders préfèrent attendre l'hiver pour vendre leur gaz, au moment où la demande devrait être la plus forte et fera donc augmenter les prix. Ils gagneraient ainsi plus d'argent à vendre leur chargement d'ici quelques mois que dans quelques semaines. Cette technique bien connue des pétroliers notamment s'appelle le « contango ».

[Josquius]

So.... How about those energy bills?
Is it one of those cases where the energy firms got away with higher prices so they'll stick with them even when the need is gone?

[Admiral Yi]

So.... How about those energy bills?
Is it one of those cases where the energy firms got away with higher prices so they'll stick with them even when the need is gone?

If there is a need, what exactly did they "get away with?"

[Zoupa]

Robbery?

Late stage capitalism is a hoot.

[HVC]

So.... How about those energy bills?
Is it one of those cases where the energy firms got away with higher prices so they'll stick with them even when the need is gone?

If there is a need, what exactly did they "get away with?"

At the very least isnt it price fixing in his scenario?

[Jacob]

If consumer prices are only elastic upwards but not downwards in response to changing supplies and wholesale prices, it would indicate that there's a problem in the market place, no?

[Barrister]

So.... How about those energy bills?
Is it one of those cases where the energy firms got away with higher prices so they'll stick with them even when the need is gone?

If there is a need, what exactly did they "get away with?"

At the very least isnt it price fixing in his scenario?

Isn't this classic arbitrage?  Buy something at a low price, hold on to it, sell at a higher price later on.

Remember this isn't free for the shipping companies - they have to pay the not insignificant costs of keeping a ship sitting at sea.

Besides you can look at them providing a valuable service - with LNG storage full or nearly full in Europe, the shipping companies are using their ships as a kind of excess storage until it's needed.


(Abritrage might not exactly be the right word)

[HVC]

I didn't read it as a comment of holding commodities waiting for a price increase (which is a dick.
 move in the current political environment, but isn't illegal i don't think) . I read it as companies
 all jacking up prices using the situation  as an excuse without the intent to lower them back once said situaton passes.

[Admiral Yi]

At the very least isnt it price fixing in his scenario?

Price fixing requires either a monopoly or a conspiracy.

Are we talking about LNG tankers in Spain or British electricity prices?  I thought the latter, you seem to think the former.

[HVC]

At the very least isnt it price fixing in his scenario?

Price fixing requires either a monopoly or a conspiracy.

Are we talking about LNG tankers in Spain or British electricity prices?  I thought the latter, you seem to think the former.

What counts as conspiracy? If it's a gentleman's agreement between utility companies not to lower prices, does that count? Or does it have to be more formal to count as price fixing?

[Admiral Yi]

What counts as conspiracy? If it's a gentleman's agreement between utility companies not to lower prices, does that count? Or does it have to be more formal to count as price fixing?

Well they're not going to sign a contract and announce it at a press briefing because it's illegal.

Electricity generation is an impossible case for price fixing because, definitely in the US and I'm pretty sure in most countries, consumer prices are heavily regulated and need prior approval of regulating bodies.