Thread by @faisalislam

Brent crude oil goes over $100 a barrel for first time since 2014 as Russia attacks Ukraine

Pride of Manchester winner @jezmyers just sent me this pic as families try to escape out of one of the main motorways from Kyiv, where he went to try to help his partner & family with visas…

Ukraine has closed its airspace to civilian planes and EASA has sent out a warning “there is a risk of both intentional targeting and misidentification of civil aircraft” - so limited normal routes out - HT @Theothebald

From the south:

https://twitter.com/bbcbreakfast/status/1496754825689710597

On the debate within the EU over how tough or not, sanctions package will be…

https://twitter.com/matinastevis/status/1496758467943866374

Gas prices spiking again UK futures up 26% on invasion, to 272p per therm… not quite as high as the spike in Autumn yet, but had settled below £2 over past few weeks, and we’ll above normal 60-70p level. If this is sustained, serious further impact in Autumn on bills..

When you interview people from Gazprom, one of main talking points is to remind how gas supply to Western Europe continued even during the Cold War… both sides know, even as tough sanctions tabled today, Europe will be buying hundreds of millions of its main export every day…

So v different backdrop to say August 1990 when European Commission banned oil imports from Iraq and Kuwait, after Iraqs invasion of the latter… some European countries remain utterly dependent on Russian gas… though difficult to imagine a bigger advert for a fundamental change

Or another way to put this - actually serious sanctions, that could cripple the Russian economy enough to change Putins calculus, will also have a politically, economically and socially material impact on most European nations… question is what appetite is for this.

Moscow Stock exchange proper crash there - losing 30-40% of its value, half this week… chart via @Refinitiv

All time low of 87 roubles to the dollar for the Russian currency prompts talk of Russian Central Bank intervention using, quite literally, its warchest of $635 billion of forex reserves… central bank was put on US sanctions list this week.

State gas giant Gazprom has halved in value on Moscow stock exchange, just today…

Actually Gazprom rebounded a bit to only being a third down - gas supplies to Europe announced as continuing uninterrupted, indeed higher….

Have a look though at Sberbanks London listing - down 70% now but lost over 90% of value at one point - markets guessing on sanctions

Ex Finnish PM Aho resigns from Sberbank board citing “the general situation”…. Over to Gerhard Schroeder at Nordstream…

https://twitter.com/turunsanomat/status/1496764725832691717

With oil & gas surging again and likely to be sustained for weeks/months, economists starting to see UK inflation peaking above 8% or higher…

… but I doubt Bank of England would additionally hike as a result of extra inflationary pressure from geopolitical event such as this.

And this impact on food prices from Ukraine is also likely to be material for inflation… esp grain

https://twitter.com/scotfoodjames/status/1496772639158845447?s=21

The PM Boris Johnson promises “massive package of sanctions” sufficient to “hobble” the Russian economy after its invasion of Ukraine… details to come…

Chancellor @RishiSunak in his Mais lecture says significant further sanctions are coming against Russia and that “we must, acting in unison with our allies, apply severe economic cost to these actions”.

Chancellor has “spoken to the Governor of the Bank of England this morning and we are closely coordinating across the financial authorities to monitor financial stability. And we are also keeping a careful watch on energy markets”

NEW UK wholesale gas prices now back above £3 per therm - normally 60ish p … for past month or so had fallen below £2. If sustained will filter significantly into further rises in energy bills in winter over and above the record one’s coming now

Interesting update from Matina here… “when the facts change…”

https://twitter.com/matinastevis/status/1496832617957703685?s=21

UEFA condemns Russia’s invasion, but doesn’t yet confirm officially that the St Petersburg Champions League final scheduled form May in the Gazprom Arena has been scrapped

https://twitter.com/uefa/status/1496853577943425024?s=21

Sports corrs say the CL final move is a done deal the above is just formality … this from the German team sponsored by Gazprom (which used to be managed by united manager) is interesting…

https://twitter.com/s04_en/status/1496844095225937924

NEW PM to Commons:

“G7 agreed to maximize the economic price Putin will pay”… half the worlds economy against 2%…

“Full asset freeze on VTB” - a significant Russian bank and “totally exclude Russian banks from UK, stopping them from accessing sterling”

Aeroflot banned from UK…

Export bans on dual use products…

“Kleptocracy cell” set up at National Crime Agency “oligarchs in London will have nowhere to hide” says PM.

“Nothing is off table” as regards excluding Russia from SWIFT

“Oil price has risen strongly. Government will do everything possible to safeguard our own people from the repercussions for the cost of living”, says PM, as fuel prices and domestic energy prices, already at records, could rise by significantly more again as a result of invasion

Analysts & some in industry can see how rise in gas prices to £3 a therm, & plausible reason why these conditions last many weeks or months, would lead to another energy price rise in Autumn of the level seen in April. Even £3k a year bills, which would be unpayable for millions

Ie this is very very serious in economic terms. Even as that might seem absurd on the scale of invasions of European capitals and fighting near Chernobyl…

& economics is the primary theatre though which the West is fighting Putin - causing him economic chaos… the IIF, a bankers think tank, points out latest tranche of sanctions is aimed at domestic banks, will cause “bank runs” in Russia and “average Russians will feel the cost”

See IIF chief economist:
“Key goal” of West is now to push Russia into “as deep a recession as possible”….

https://twitter.com/robinbrooksiif/status/1496844483593388032

And the bank run analysis:

https://twitter.com/elinaribakova/status/1496729304373288962

And this shows why targeting VTB bank, which has offices opposite the Bank of England, is a big deal … esp vs the first round of sanctions on v small@banks