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Feb 26 • 9 tweets • 3 min read
The EU is getting closer to supporting Russia’s expulsion from the SWIFT financial messaging system
🇪🇺 💥 🇷🇺

It’s the “nuclear” option, which would cause significant economic damage to Russia but also put global deliveries of oil and natural gas at risk

bloomberg.com/news/articles/…
🇫🇷 🇮🇹 Opposition to the move has been decreasing, with France and Italy publicly expressing support

🇩🇪 Germany has spoken out against the idea

🤝 The move would require unanimity among the 27 EU countries
Meanwhile, across the pond…

🇺🇸 Biden administration officials are now debating whether to push for a directive from the European Union needed to ban Russia from SWIFT

bloomberg.com/news/articles/…
This is the background 👇

The EU’s first two sanctions packages did little to deter Russian President Vladimir Putin from continuing his aggressive actions against Ukraine, leading the bloc to start work on a third package that may include the SWIFT provision
🇭🇺 One more
🇵🇱 Polish PM is in Berlin trying to push Germany for harsher sanctions on Russia

Seems like Germany is basically the last one that hasn’t agreed to remove Russia from SWIFT
So WTF is SWIFT and why does it matter?

Here is a good explainer 👇

Think of it as the Gmail of global banking. And there are basically no other alternatives

bloomberg.com/news/articles/…
🇩🇪 Germany’s government, initially wary of expelling Russia from the SWIFT network, said it’s looking into ways to do that

🤝 A common decision -- and coordinated announcement -- on SWIFT is likely on Sunday

bloomberg.com/news/articles/…
US and Europe target “some” Russian banks in SWIFT removal

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Stephen Stapczynski Profile picture
Feb 27
NEW: Sanctions targeting Russian energy are “certainly” on the table, said US White House Press Secretary Psaki
🇺🇸 💥 🇷🇺

“But we also want to make sure we are minimising the impact on the global market place”

(Latest US sanctions avoided oil and gas)

abcnews.go.com/ThisWeek/video…
Meanwhile, the UK would support G7 nations setting limits on the amount of Russian oil and gas its members could import “over time,” said Foreign Secretary Liz Truss, in a potential escalation of the impact of the war in Ukraine on energy markets

bloomberg.com/news/articles/…
Psaki also says US needs to reduce dependence on imported fuel

(The US imports some Russian oil and even got an LNG cargo a few years back)
Read 4 tweets
Stephen Stapczynski Profile picture
Feb 27
Germany’s new energy plan aims to cut dependence on Russian natural gas 🇩🇪

The details:

> Build 2 new LNG terminals
> Increase gas storage volume by 2 bcm
> Purchase additional natural gas on the world markets
> Establish national coal and gas reserve

bloomberg.com/news/articles/…
This is positive news for Germany’s fledging LNG import plans 🚢

Around four years after Germany announced its LNG import terminal in Brunsbüttel, there is still no date for a final investment decision. Maybe that will change now

n-tv.de/wirtschaft/Bau…
💰 Germany imports 55% of its natural gas supply from Russia

cleanenergywire.org/news/germany-p…
Read 8 tweets
Stephen Stapczynski Profile picture
Feb 27
UPDATE: US and Europe to remove some Russian banks from SWIFT 💥

But impact on Russian oil and gas exports seems minimal

🇺🇸 US official says looking to exempt energy payments/banks
🇷🇺 Banks that facilitate fuel exports, like Gazprombank, not included

bloomberg.com/news/articles/…
🏢 The move is aimed at Russian banks that have already been sanctioned by the international community

bloomberg.com/news/articles/…
Why does the West keep avoiding sanctions on Russia’s energy sector — one of its biggest sources of revenue?

Because that would exacerbate a global energy crunch

Cutting off Russian oil and gas exports would boost the price of everything from gasoline to power bills Image
Read 10 tweets
Stephen Stapczynski Profile picture
Feb 26
NEW: The US and Europe committed to remove some Russian banks from SWIFT, isolating the nation from global financial channels
🇺🇸 🇪🇺 💥 🇷🇺

🚨 Europe uses SWIFT to send payments for Russian natural gas, so a ban may significantly disrupt supplies

bloomberg.com/news/articles/…
My colleague @JavierBlas makes a good point that might be exemptions just for Russian oil and gas payments
It’s still early and details are scant, but removing Europe’s ability to pay for gas could trigger a global price surge

There is only so much spare LNG, and global competition for spot cargoes has already been pretty fierce

China, Japan, Korea are eager to refill stockpiles
Read 8 tweets
Stephen Stapczynski Profile picture
Feb 26
EU sounds out Japan for additional LNG supplies, the Nikkei reports
🇪🇺 🔊🇯🇵

European Commission recently made the request to the Japanese government amid Russia supply concerns. Japan will check if its private importers have any spare supply after April

nikkei.com/article/DGXZQO…
This is on top of the previous requests and in response to Russia sending troops into Ukraine
To be sure, Japan doesn’t have much spare LNG it can send to Europe after colder winter weather drained stockpiles

And any LNG sold to Europe would likely be done because of an attractive price arbitrage, not because the government asked

#capitalism
Read 6 tweets
Stephen Stapczynski Profile picture
Feb 24
European natural gas prices surge 41% (!) after Russian forces attacked targets across Ukraine 📈

⚠️ Supply disruption feared after the West vowed further sanctions
💸 Dutch TTF jumped to 125 euros/MWh (nearly $40/mmbtu), the highest level in 2 months

bloomberg.com/news/articles/…
Around a third of Russia’s gas to Europe typically flows via Ukraine, and analysts have said any escalation of the conflict may disrupt those flows.

“In the event of prolonged disruption, gas inventory couldn’t be rebuilt through the summer,” Woodmac's Filippenko said
Ukrainian state company Naftogaz says all the facilities of its gas transportation system are operating as usual so far and that natural gas is being supplied in the required amounts

bloomberg.com/news/articles/…
Read 9 tweets

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