China’s Russian energy pause looks very temporary 8 Apr 2022 Companies are holding off new oil purchases to avoid stumbling into secondary sanctions. But the Chinese are top owners of Russia’s key gas export facilities in the strategic Arctic. Beijing has a strong incentive to resist disruption to its long-term energy security plans.
Russia’s gold reserves buy Putin a few options 28 Mar 2022 The Russian leader has a $140 bln stash of the yellow metal. Using it, however, can require shell companies and middlemen. Putin’s regime may have some experience helping Venezuela turn bullion into euros. Though U.S. prosecutors will give chase, the gold trail is hard to follow.
American pigs also need pandemic readiness 28 Mar 2022 African swine fever is in the western hemisphere for the first time in 40 years. Unlike, say, in China, U.S. mainland hog farmers and bacon lovers benefit from a zero-ASF reality for now. But far more than the $23 bln of annual economic output is at stake if the virus gets in.
Energy windfall taxes are messy, unfair, and vital 23 Mar 2022 Europe can theoretically raise hundreds of billions of euros from utilities benefitting from soaring energy prices. To get near that this year, some utilities could be shaken down inefficiently or unjustly. Public anger at rising energy bills means states still have to try.
Aramco health adds spice to Saudi’s yuan dilemma 21 Mar 2022 Riyadh’s $2.3 trln oil giant is looking to hike output. If the kingdom starts to price some crude sales in yuan instead of dollars, higher Chinese exports could increase its stocks of renminbi. That could focus Saudi minds on whether to hitch its future to Beijing or Washington.
Energy market bailout is cheaper of two evils 18 Mar 2022 Europe’s gas producers and utilities want state support to offset the wild swings in commodity prices since Russia invaded Ukraine. Given this could aid big oil companies like Shell, that sounds wrong. But a market breakdown would be worse, and states can levy windfall taxes.
Hong Kong may have a buyer if it wants to dump LME 18 Mar 2022 The London Metal Exchange’s nickel-trading goofs have upset customers and damaged its good name. Owner HKEX’s vision to link western and eastern markets already faced challenges. At the right price, U.S. rival ICE might get another shot at the prize it missed out on in 2012.
Shell company digs deep for Glencore copper 18 Mar 2022 Cash and potential new equity cover only half the $1.1 bln Metals Acquisition is paying to buy an Aussie mine from the commodities giant. A raft of debt and some future revenue will plug the gap. Copper’s role in the energy transition makes the financial engineering worthwhile.
Hot war thaws formerly frozen trade routes 17 Mar 2022 Algeria shunned imports of French wheat in a diplomatic row. That has changed because of shortages after Russia invaded Ukraine. The U.S. has even talked to vilified Venezuela. Amid political hype about self-reliance, globalization still matters – even if it requires compromise.
Nickel gets nixed, French firms linger in Russia 17 Mar 2022 The war in Ukraine is affecting far corners of global finance. In the Viewsroom podcast, Breakingviews columnists explain how the conflict helped bring nickel trading to a halt in London. And why oil giant Total and carmaker Renault are resisting the exodus by Western companies.
LME’s nickel business is halfway out the door 16 Mar 2022 The London Metal Exchange again suspended trading in the energy transition material, a week after wiping trades. The latest mess means custom is already heading elsewhere. The LME’s best hope is that a lack of oven-ready alternative venues leads to a degree of inertia.
Russia punches economic hole above its weight 16 Mar 2022 The country that was a trade minnow during the Cold War became a big commodities exporter. That’s why the isolation of an economy smaller than Texas is pushing up global prices of energy, wheat and other goods. Though some countries can help fill the gap, consumers will suffer.
Nickel’s return may leave everyone underwhelmed 15 Mar 2022 The London Metal Exchange will restart trading in the commodity on Wednesday, a week after the bourse suspended the market amid epic price rises. The LME’s decision to void trades angered financial investors. New safeguards may irk traditional members it was trying to protect.
Nickel crisis puts ‘too big to fail’ back on table 15 Mar 2022 Chinese metal producer Tsingshan won Beijing's support after an $8 bln hit in a short squeeze. It’s a reminder systemic risk is not the domain of big banks alone. The more financial contagion stems from Russia's war, the likelier other governments will face a similar choice.
Gas guzzlers face reckoning from Ukraine shock 14 Mar 2022 Prices of raw materials and fuel have soared after the Russian invasion. That could push drivers to swap big cars like the Jeep Wrangler for more energy-efficient rides. With big vehicles currently bringing in roughly half of sales, that’s a problem for the $4 trln auto industry.
Rio’s Mongolian generosity reflects strategic bind 14 Mar 2022 The $120 bln miner has offered $2.7 bln to buy out minority investors in Turquoise Hill, which controls the giant Oyu Tolgoi copper mine. Rio Tinto could have paid less last year. But its lack of metals needed for alternative energy makes it vital to remove any future barriers.
U.S. shale won’t wean the West off Russian crude 11 Mar 2022 Fracking transformed the U.S. oil patch and made America a net exporter. But even with high prices, there are limits. Public companies are wary of over-investing, and even private firms are finding land is scarce. They may struggle to replace more than 10% of Russia's output.
Russia fertiliser crisis cultivates world of pain 11 Mar 2022 The country is a major exporter of potash and urea, nutrients underpinning food security. The fallout from Moscow’s Ukraine war exacerbates a price and supply crisis. Top importers India and Brazil will be hit hard; smaller, economically weaker buyers will be even worse off.
Gauging the global backlash against Russia 10 Mar 2022 The shockwaves from President Vladimir Putin’s invasion of Ukraine are reverberating around the world. In our Viewsroom podcast, Breakingviews columnists debate the country’s isolation, the impact on Asia, Europe’s plan to wean itself off Russian gas, and the fallout for banks.
Russian wheat squeeze sows seeds of global unrest 9 Mar 2022 Prices of the grain soared to record highs following Moscow’s invasion of Ukraine, a major producer. A previous spike in 2007 led to riots in Africa and Asia while pushing up subsidy costs. This time major importers like Egypt already have low reserves, spelling greater trouble.