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4 Apr, 25 tweets, 12 min read
1/ Keep an open mind to the mounting tensions in the ongoing Russian-Ukrainian conflict while markets remains unprepared for it to go from minor to major.

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2/ Upfront, below a brief summary on the conflict which is ongoing for 7 years now & its rapid escalation behind (most media coverage) scenes.

3/ For the past weeks, Russia has significantly increased military assets around its Ukraine borders & continues to do so. What got my attention in likely unbiased tweet below? Russia's preparation may involve Belarus too!

4/ Should Russia try to make this the annexation of Ukraine rather than a more intensive "local" conflict, markets remain unprepared IMHO. Pro-Memoria:

porcelaintwinz.com/vladimir-putin…
5/ More motives: Since Russia's annexation of Crimea, Ukraine cut off its water supply. W supply by other means is expensive. While this is not new, grabbing southern parts of Ukraine would address a rising issue. Unlikely enough on its own though.

6/ Oops: VVP & cronies robbed their country. Keeping citizens distracted is always on agenda. Unfortunately, @navalny masterfully displayed VVP crimes in preparation of his imprisonment this Feb 21. The original had 116m views on a 140m population!

7/ How to know if they move from preparation to war? Russia's leadership likes to use the Nazi playbook, i.e. accusing others of their own attentions. One thus have to look for propaganda that Russia needs to "defend itself" which seems to increasing now.

8/ The conflict continues to draw little international media attention. But certain political analysts explain more about it...

9/ As the ongoing war has escalated sharply in recent days, both the Ukrainian & Russian governments however have issued official statements.

nytimes.com/2021/03/30/wor…
10/ Russia has also verbally prepared its full list of options. One relevant "hint" came from Lavrov when issuing the warning that an "escalation" in east Ukraine could "destroy" it. My point: this may well go from "minor to major" this time.

i24news.tv/en/news/intern…
11/ There are other "dots" to connect. Here, the Kremlin as usual slams the EU for deteriorating relations. Of course, this is rubbish, but the timing of the statement suits the above agenda (i.e. "not our mistake").

bing.com/videos/search?…
12/ Of course, none of the above is news to Western leaders. They know what is brewing. For instance, @potus announced his "unwavering" support to the Ukrainian people on the weekend.

msn.com/en-us/news/wor…
13/ @potus may also consider the people of Belarus as this crisis may address "other issues" of VPP & Lukashenko. At least, do not be surprise if this conflict will involve Belarus in some shape or form as Lukashenko has open invoices to pay to VVP.

theguardian.com/world/2020/sep…
14/ This is of course purely coincidental but #Russia’s Chief of Staff Gen. Gerasimov & US Chairman of the Joint Chiefs of Staff Gen. #Milley discussed issues of "mutual interest" in phone talk on 31 March 2021 - that is last Wednesday.

15/ Today, @NATO seemingly annouced to hold joint military drills with Ukraine amid escalating tensions with Russia. I could not find such a statement on their Website. This remains to be confirmed.

thehill.com/policy/interna…
16/ Sadly, EU responses so far remain an (unnecessary) embarrassment. My apologies, but the muppets in charge do not seem to understanding their cards & how best to play them with VVP. You knew that already. My point: it does not contain a bully.

17/ Whether this becomes a "market event" will be path dependent. If @potus gets involved, this has potential to go from "minor to major" or stop quickly. It may be positive for US LNG export & related shipping rates. Not ready to speculate further.

usnews.com/news/world/art…
18/ Below a list of knowledgeable accounts "all matters Eastern Europe / Russia". My apologies for the many more not mention. End.

@Billbrowder @mbk_center @vtchakarova @alexstubb @Kasparov63 @Halsrethink @mashagessen @DarthPutinKGB @anneapplebaum @OlgaNYC1211 @CITeam_en
Update...
Update confirming this May be major as Belarus is involved.
Sad reality of EU #realpolitik summarised
An interesting assessment on VVP’s possible intentions which more or less confirm the above.
Russian military ramp up continues, seemingly from all parts of the country...
And some news on propaganda. Remember, one has to look for news why Russia has to “defend itself”
Of course, @NATO membership is part of the mix and why a conflict (as with #georgia ) mustn’t stop from a Russian interest perspective as territory disputes automatically prevents membership.
#NATO

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More from @BurggrabenH

Alexander Stahel Profile picture
3 Apr
Was naively hoping for an updated propaganda playbook since the days of the “Polish invasion of Nazi Germany” (1939) which forced the Wehrmacht to “defend” itself.
And the next step in Joseph Goebbel’s playbook.
Reason: entertainment of the plebs; water for Crimea; strongman BS....
Read 5 tweets
Alexander Stahel Profile picture
30 Dec 20
On #PTAL #TAL: Today, company announced pilot sales to Atlantic through Amazonian river of Peru and Brazil. While a small first step, let me explain the strategic context 1/
Base case, PetroTal exports Bretana oil through the Peruvian pipeline system, owned and operated by PetroPeru. System is modern and has a ample capacity...2/
Including barging to ship oil to so called pump station 1, we assume all-in transportation cost of around $13/bbl for all our intrinsic modelling work. This is slightly higher than mgmt guidance. 3/
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Alexander Stahel Profile picture
28 Nov 20
1/ Let us share some fundamentals on #gold price, given latest price action has been testing nerves of bulls after 50% increase post 2018.

Thread @Mintgecko @TheLastDegree @GMoneyResearch @AdamMancini4 Image
2/ View gold as a currency Image
3/ Like other currencies, #gold prices are volatile despite safe heaven backdrop... Image
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Alexander Stahel Profile picture
23 Apr 20
On #tankers: Let us help our audience on why we are long tankers. Thread...

1) A VLCC vessel has high operating leverage, allowing an investor to earn a very high ROIC, if you hit the cycle right.
In fact, a VLCC vessel may earn a multiple of its invested capital in one good year. See below our illustration for $EURN...
For that however, you need to understand the cycle! Which is why we developed a proprietary, bottom-up tanker market model over the years. Here a snapshot of our output mask...(it is a detailed model, believe us).
Read 12 tweets
Alexander Stahel Profile picture
2 Apr 20
My view/Thread:

Message: SEC, be aware of FAKE NEWS that manipulate the market.

1) Trafigura/Vitol assume 30-35mbpd demand collapse in April and then some. Land storage working capacity realistically up to 600 mb now.

Message: Storage is full in May even with 15 mbpd cut.
2) How does OPEC+ want to even manage that kind of cut? First the numbers:

OPEC: In Feb 20 they produced 27.8 mbpd.
FSU: In Feb 20 they produce 11.4 mbpd

Combined 40 mpbd (incl. Oman et al of "plus circle")
3) Swing producer are Saudi, UAE & Kuwait. They can "swing" to reduce output & represent a combined 20 mbpd, but less exports, say 17 mbpd.

- NIG unreliable/mainly offshore;
- Libya output only 0.16 due to civil war;
- VEZ 0.5; in hospital;
- Iraq 4.6; unreliable;
- Iran: ..
Read 14 tweets
Alexander Stahel Profile picture
23 Mar 20
On Tankers/Oil: (thread)

Recently, I read sector analyses assuming shut ins of oil wells to be rapid at current prices & storage therefore less acute.

Of course we disagree strongly. As we explained repeatedly, this is a prisoners dilemma which will make shuts ins slow....
...because suppliers maybe hedged, have well cash opex < 20-25 (note that this comes down to product mix; more gas means lower well head price); are offshore & thus incur high shut in/on cost when assumed this is temporary (2-3 months); have strong BS (majors); are badly run etc.
We assume price signal of oil has to be a lot stronger as we run out of storage to force shut ins by May. Assume 12 mb/d demand collapse in Q2: 90 * 12 = 1080 million barrels (mb); Storage capacity: 950 mb! Ergo: Tankers need to provide storage regardless of contango.
Read 8 tweets

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