Page 9 - bneMag Dec22

bne December 2022 Companies & Markets I 9
85% of the anticipated increase in global supply that year, or around 20 bcm.
If Russian gas supply to Europe is halted completely, and if Chinese LNG imports ramp up, the IEA estimates that there will be a 30 bcm supply-demand gap for Europe, at a time when the continent will urgently need to restock on the floor for the following winter. This gap could represent nearly half of the gas needed to fill storage facilities to 95% of capacity by the start of next year’s heating period.
Not out of the woods yet
“With the recent mild weather and lower gas prices, there
is a danger of complacency creeping into the conversation around Europe’s gas supplies, but we are by no means out of the woods yet,” IEA executive director Fatih Birol said. “When we look at the latest trends and likely developments in global and European gas markets, we see that Europe is set to face an even sterner challenge next winter.”
Governments need to carry out “immediate action,” Birol said, “to speed up improvements in energy efficiency and accelerate the deployment of renewables and heat pumps – and other steps to structurally reduce gas demand.”
“This is why governments need to be taking immediate action to speed up improvements in energy efficiency and accelerate the deployment of renewables and heat pumps – and other steps to structurally reduce gas demand,” Birol said. “This
is essential for Europe’s energy security, the wellbeing of its citizens and industries, and its clean energy transition. The IEA will continue to work closely with the European Commission and governments across Europe and beyond to help tackle these challenges.”
Russia’s winter generals
Russia’s greatest weapon in the current standoff with the West over Ukraine has been its natural gas supply. Its army has performed badly in this war; its attempts to create a global political alliance against Western hegemony have failed; its economy is now in freefall. But the more that Moscow uses its gas as a weapon, the less leverage it has.
Russia has already cut gas supply to Europe by close to two thirds on a year-on-year basis in 2022. This will surely lead to a deep economic recession that will likely spread globally, and, ironically, this will also hurt the Russian economy when the prices of all commodities collapse, as they did after the 2008 financial crisis.
But so far Russia’s effort has not won any concessions
from Europe. European governments continue to send increasingly more arms and funding to assist with Ukraine’s war effort. And the more that the Kremlin reduces its gas supply, the more Europe realises that a future without Russian gas supply is possible.
A lot will depend on the weather in the coming months. But so far the winter generals that defeated Napoleon and Hitler in their attempts to defeat Russia have not appeared. Europe, to date, is dealing with an unusually warm winter. Despite disruptions, global LNG supply is relatively ample. The Chinese economic slowdown, which has led the country to cut imports by a record percentage, has gifted Europe with a very convenient blessing. Countries across Asia are forgetting their climate commitments, for economic necessity. They are turning coal plants back on, and reducing their gas intake. And that unused gas is going to Europe.
Russia’s VTB brings down the curtains in London on its “100+year history”
Jason Corcoran in Dublin
VTB, the Kremlin’s second-largest bank, has brought down the curtains on “the final chapter” in its “100+year history” in the City of London, according to its latest regulatory filing.
The 145-page annual accounts for its UK unit, which were published on November 3, clearly illustrates the extent to which Russian bankers have been ostracised and cast out of London since Russia invaded Ukraine on February 24.
“As the bank enters what is likely to be the final chapter in its 100+year history, I would like to thank all the staff – past and present – for their loyalty and unwavering commitment to the
bank,” laments its chairman, Philip Dayer, a loyal servant to VTB for almost a decade.
In a script seemingly vetted by the Kremlin, the filing cites “the events of February 24" and the "continued hostilities between the Russian Federation and Ukraine" as the reason for its departure.
In Russia, media outlets are banned for using the words “war” and “invasion”, while President Vladimir Putin insists on calling the war "a special military operation" as part of a “denazification” and “desatanisation” of Ukraine – accusations that have been lampooned as ludicrous propaganda by the West.
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