G7 rewrites its own history, weakening its pledge to end "direct public support for the international unabated fossil fuel energy sector by the end of 2022" adding now an exit clause: "except in limited circumstances"
On the Russian oil price cap, the G7 leaders agree to further talks, but (as I flagged), does NOT reach a deal:
"We task our relevant Ministers to continue to discuss these measures urgently, consulting with third countries and key stakeholders in the private sector"
G7 on oil prices and OPEC:
"We encourage producer countries to increase their production to decrease the tension in energy markets, and in this context welcome OPEC’s recent responses to tightening international markets. We call on them to continue action in this regard" #OOTT
G7 on agricultural commodity prices:
"We will moreover continue our intensive efforts to mitigate the social impacts of the rising energy and food prices, which have been exacerbated as a result of Russia’s unprovoked and unjustifiable war of choice in Ukraine" #OATT
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BREAKING: Global oil demand growth will **accelerate** to 2.2m b/d in 2023, up from 1.8m b/d in 2022, the @IEA said on its first look into next year's S/D balances.
"Global oil supply may struggle to keep pace with demand next year," the IEA said | #OOTT#ButTheRecession
As as last month, the @IEA report is full of dire warnings. Global energy policymakers can not say they weren't warned: the second half of 2022, and the full of 2023 look very, very difficult. The IEA doesn't send this warnings that often - pay attention | #OOTT
And ICYMI, this is my @opinion from Monday, warning that the 2022 oil shock was going to roll over into 2023 (as the IEA confirmed today) | #OOTTbloomberg.com/opinion/articl…
As the economic cost of the war mount, the cracks are emerging.
Today’s NYT editorial board:
“… in the end, it is still not in America’s best interest to plunge into an all-out war with Russia, even if a negotiated peace may require Ukraine to make some hard decisions…”
And this from the same editorial:
“… but popular support for a war far from U.S. shores will not continue indefinitely. Inflation is a much bigger issue for American voters than Ukraine, and the disruptions to global food and energy markets are likely to intensify…”
The full editorial comment is here, in effect making the case for peace talks in which Ukraine gives up some of the territory that Moscow has conquered since 2014 nytimes.com/2022/05/19/opi…
OIL MARKET: @IEA launches 10-point plan to "restrain" oil demand, including recommending cutting highway speeds by 10 km/h; making public transport cheaper, car-free cities on Sunday, etc.. It's the 1970s-style savings program (and it's needed!) #OOTTiea.org/reports/a-10-p…
OIL MARKET: @IEA believes that all its measures can reduce OECD oil demand by ~2.8m b/d via restrain measures. Reducing highway speeds by 10km/h alone can cut oil demand by 400,000 b/d, according to the agency's modelling.
I had been advocating for similar measures. Outside France, however, not a single OECD government is taking them seriously. For now, most are doing the exactly the opposite: cut gasoline taxes and use subsidies to support consumption bloomberg.com/opinion/articl…
This week, The World for Sale comes out in paperback
It explains how oil and commodity markets work, how they influence geopolitics, and the extraordinary power of a few traders you've probably never heard of
The book is coming out in paperback March 10th in most of the world. US and Canadian readers have to wait until next month, but the hardback is available now. Or you can buy it anywhere as ebook or audiobook smarturl.it/TheWorldForSale
Some alternatives to Amazon for UK readers (anyone struggling to find a copy in other parts of the world, DM us and we will do our best to help):
EUROPEAN ENERGY CRISIS: Norway will **subsidize** electricity after wholesale prices skyrocketed, at a cost of nearly $900 million. The government will cover half of households’ power costs from December to March when prices rise above a certain level bloomberg.com/news/articles/…
(I wonder if the Norwegian government is going to think a bit about why this is happening, and the role the interconnectors are playing -- and how Norwegian hydro power has become de facto "baseload" power for certain countries struggling with variable wind generation)
(Second thing I do wonder: does the electricity subsidy also cover re-charging an EV in Norway?) #Tesla#EVs
CLIMATE CHNAGE: UK has published a draft of the #COP26 "cover decision" (think about it as the political doc from the summit). Retains Paris language of 1.5-2.0 degrees. Ask for quick NDCs update. Calls for coal phase out, and end to fossil fuel subsidies unfccc.int/sites/default/…
As in every international negotiation, expect the document to suffer multiple changes, and be watered-down. As it happened at the G20, the early draft is an aspiration by the presidency, and in some ways designed show to environmentalist that London did try hard at #COP26
The fact that "fossil fuel subsidies" is mentioned is grabbing quite a lot of attention. Yet, it has been mentioned in G20 communiques for the last 11 years (that said, the G20 language is a bit more nuanced -- weaker -- than the #COP26 early draft language)