Best in Energy – 7 March 2022

U.S./EU discuss ban on Russian oil imports

White House wary about higher oil prices

U.S dilemma: sanctions and inflation ($WSJ)

U.S./Iran nuclear talks focus on final items

U.S./Venezuela officials hold negotiations

U.S./Venezuela sanctions could be relaxed

Iran’s timetable for boosting oil exports

U.S. shale firms unable to raise output ($FT)

Freight flows badly disrupted by war ($WSJ)

BRENT’s front-month futures contract is trading at $126 per barrel, the highest in real terms since July 2014 and in the 87th percentile for all months since 1990. Traders are anticipating U.S. and EU sanctions on Russia’s oil exports will remove millions of barrels per day from the market in the next few months. Policymakers have been careful to exempt Russia’s energy exports from sanctions so far. But traders have proved reluctant to handle cargoes given the legal and reputational risks involved so the exemption is proving ineffective – illustrated by the outcry over Shell’s purchase of a cargo on Friday. Traders anticipate even the legal exemption could be removed in the next few days as policymakers come under intense public pressure to toughen sanctions further:

EUROPE‘s benchmark gas futures price is at a record €260/MWh – signalling urgent need to conserve as much gas as possible to start rebuilding depleted inventories ahead of winter 2022/23:

GLOBAL FOOD PRICES hit a record high in February and were up +20% compared with the same month a year earlier – even before the conflict between Russia and Ukraine intensified and threatened to disrupt shipments from two of the world’s largest grain exporters. Food price inflation is set to accelerate further if the conflict is prolonged. The combination of rapidly escalating prices for food, energy and other industrial commodities would be severely recessionary:

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Published by

John Kemp

Energy analyst, public policy specialist, amateur historian