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Tragedy on Top of Crisis May Strengthen Stand Against Russia in U.S. and Europe

The downing of a commercial Boeing 777 in the Ukrainian war zone on Thursday inflamed an already volatile international crisis and may bolster President Obama ’s efforts to isolate Russia if evidence points to complicity by Moscow’s separatist allies. Mr. Obama was careful not to offer any judgments in his only public comments on the crash. But Vice President Joseph R. Biden Jr. said bluntly that the aircraft with 298 people on board was “blown out of the sky,” and the White House late Thursday issued a statement linking the crash to a crisis “fueled by Russian support for the separatists.” If investigators are able to confirm suspicions that the Malaysia Airlines jet was brought down by a surface-to-air missile fired by pro-Russian rebels who mistook it for a military aircraft, American officials expressed hope that the tragedy will underscore their case that Moscow has been violating […]

Posted On : Published By : Tom Whipple
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U.S. Sanctions Squeeze Putin, Stop Short of Economic War

The most aggressive U.S. sanctions yet on Russia are intended to inflict pain on President Vladimir Putin ’s inner circle for supporting Ukrainian separatists, while giving the Russian leader room to reverse course before the standoff escalates into economic warfare. The pressure on Putin could increase dramatically if it becomes clear that, as some U.S. officials now think, Russia-backed separatists were responsible for shooting down a Malaysia Airlines (MAS) jet yesterday, killing all 298 people on board. New penalties, enacted before the airliner was downed, target Russian banks, energy and military firms run by Putin loyalists, but they spare gas giant OAO Gazprom, reflecting a strategy to shield Europe from a wintertime natural gas cutoff and to escalate gradually, rather than risking blowback on the U.S. and European economies. The Obama administration’s latest action makes “very clear that we are prepared in a calibrated and thoughtful way to increase […]

Posted On : Published By : Tom Whipple
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Russian Markets Hit By Fresh U.S. Sanctions

A fresh round of U.S. sanctions once again ripped into Russia’s markets, with stocks, bonds and the ruble taking a hit. The new restrictions, which target Russian state-controlled oil giant OAO Rosneft and other top firms, follow weeks of U.S. threats that Russia would face repercussions unless it helped defuse the crisis in eastern Ukraine, where pro-Russia separatists have been fighting the Ukrainian government for months. Moscow’s MICEX index slid 2.4%, with investors interpreting the measures as more likely to hold back the Russian economy than previous sanctions. By the end of the day, the index capitalization shrank by $4.4 billion. Rosneft shares fell 4.5%, while gas company Novatek–also a target of the new sanctions–shed 5.5%. The yield on Rosneft’s benchmark bond due 2022 jumped to 6.1% from 5.3% the previous day, according to Tradeweb. The increase reflects a rise in the interest […]

Posted On : Published By : Tom Whipple
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Ukraine's gas sector coping, EU says

Some of the proposals offered to break the Russian grip on the Ukrainian energy sector are working, a top European official said Thursday in Brussels. Outgoing European Commission President Jose Manuel Barroso updated leaders in Brussels on the status of trilateral negotiations between the European Union, Russia and Ukraine. Simmering conflict in Ukraine, a former Soviet republic, grew out of its late 2013 decision to look beyond the Russian sphere of influence. Ukraine earlier this year signed an association agreement with the European Union. Beyond strategic areas, Barroso said energy supply to Ukraine is an area of concern. Russia suspended gas deliveries to Ukraine because of debt woes and similar rows in 2006 and 2009 left downstream European consumers in the cold. At this stage, the president said, Ukraine is meeting its energy needs with domestic sources and alternative suppliers. Some of its neighbors have reversed gas flows toward […]

Posted On : Published By : Tom Whipple
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Ukraine’s gas sector coping, EU says

Some of the proposals offered to break the Russian grip on the Ukrainian energy sector are working, a top European official said Thursday in Brussels. Outgoing European Commission President Jose Manuel Barroso updated leaders in Brussels on the status of trilateral negotiations between the European Union, Russia and Ukraine. Simmering conflict in Ukraine, a former Soviet republic, grew out of its late 2013 decision to look beyond the Russian sphere of influence. Ukraine earlier this year signed an association agreement with the European Union. Beyond strategic areas, Barroso said energy supply to Ukraine is an area of concern. Russia suspended gas deliveries to Ukraine because of debt woes and similar rows in 2006 and 2009 left downstream European consumers in the cold. At this stage, the president said, Ukraine is meeting its energy needs with domestic sources and alternative suppliers. Some of its neighbors have reversed gas flows toward […]

Posted On : Published By : Tom Whipple
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The Big One – Russia’s Bazhenov Shale

As U.S. and EU policymakers have imposed targeted sanctions on Russian individuals and firms in response to the crisis in Ukraine, Western companies have sought to insulate their own projects from the political imbroglio and continue developing the country’s vast oil and gas resources. Exxon Mobil and Shell have joint ventures with Rosneft and Gazprom respectively to explore and produce shale oil and gas from beneath the swampy plains of Western Siberia and both want to be allowed to continue operating there. It’s easy to see why. The West Siberian basin is the largest petroleum basin in the world, covering 2.2 million square kilometres between the Ural Mountains and Yenisei River, extending from Kazakhstan in the south to under parts of the Kara Sea in the north. The region contains dozens of super-giant and giant oilfields, including Samotlor with 28 billion barrels of oil originally in place, and Urengoy […]

Posted On : Published By : ASPO-USA
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How Can We Feed Billions More People?

How Can We Feed Billions More People? One out of every eight people in the world goes hungry. The United Nations Food and Agricultural Organization, which calculated this figure , has also reported that 852 million of these 870 million hungry people live in developing countries. Worse, the world population will likely balloon from its present 7.1 billion to 9.6 billion by 2050 . Scientists say this will be coupled with a projected doubling in demand for crops by that same year. Researchers at the University of Minnesota’s Institute on the Environment now argue in a Science paper, however, that it is possible to feed at least 3 billion more people—with existing cropland. These researchers claim that a “small set of regions, crops, and actions” could “provide strategic global opportunities to increase yields, reduce the environmental impact of agriculture, and deliver food more efficiently from what is already grown.” […]

Posted On : Published By : Tom Whipple
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Oil Gain on Russian Sanctions Seen Muted on Spare Capacity

Gains in crude prices driven by new sanctions on Russia will be limited because there’s sufficient spare export capacity and no shortage of global supply, according to Nomura Holdings Inc. and Sapient Global Markets. Brent crude for September delivery was little changed at about $107 a barrel in London trading today after the U.S. Treasury Department said OAO Rosneft, Russia’s biggest oil company, and natural gas producer OAO Novatek are among those hit by the penalties. Futures rose 2 percent to $111.20 on March 3 after Ukraine mobilized its army reserves as its neighbor seized control of the Black Sea region of Crimea. The measures are the latest response to what U.S. and European leaders say is President Vladimir Putin’s refusal to end support for rebels who have been battling Ukrainian government forces in the east. The Organization of Petroleum Exporting Countries, which last month pledged to replace any […]

Posted On : Published By : Tom Whipple
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Natural-Gas Futures Rise on Expected Demand Increases

Natural-gas futures rose Wednesday as traders anticipate increased demand from power generators that have new incentives to switch away from coal. Prices for the front-month August contract settled up 2.2 cents, or 0.5%, at $4.119 per million British thermal units on the New York Mercantile Exchange. The front-month contract closed trading at a six-month low on Tuesday. Mild weather and high natural-gas prices this summer so far have encouraged operators of power plants to keep burning coal, which allowed a rapid build-up in gas supplies. However, after falling 14% since hitting a one-month high on June 12, gas prices are low enough for the fuel to be competitive with coal again. Aaron Calder, senior market analyst at energy-consulting firm Gelber & Associates in Houston, has identified $3.91/MMBtu as a point where power generators are likely to switch from burning coal to burning natural gas. Some producers […]

Posted On : Published By : Tom Whipple
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Negotiators Turn to Possible Extension of Iran Nuclear Talks

Iranian Foreign Minister Javad Zarif at a news conference in Vienna on Tuesday. Reuters VIENNA—Negotiations over Iran’s nuclear program on Wednesday turned to the possible extension of the talks, with senior officials saying the current round could end as early as Friday. U.S. Secretary of State John Kerry , who left Vienna on Tuesday after two days of talks with his Iranian counterpart, met with U.S. President Barack Obama and Vice President Joe Biden to discuss the negotiations and "talk about the path forward," a senior State Department official said. Meanwhile, in Vienna, negotiators from the U.S., Iran and the European Union met for discussions that focused mainly on options for extending the negotiations, a western diplomat said. On Tuesday, both Mr. Kerry and Iranian Foreign Minister Javad Zarif signaled that negotiations would likely continue, and diplomats said the most-likely scenario was that Sunday’s deadline would be pushed back […]

Posted On : Published By : Tom Whipple