Putin asks OPEC to finance his war
Oil got a nice little pop last night as Vladimir Putin asked OPEC to fund his war:
Russia will likely propose that OPEC+ cut oil production by around 1 million barrels a day at its next meeting in October, a source familiar with the Russian view said on Tuesday.
The meeting will take place on October 5 amid falling oil prices and months of high market volatility that have prompted another major OPEC+ producer, Saudi Arabia, to say the group may cut production .
I know OPEC wants to keep prices high but, at this point, why would they accept that?
Russian oil flows have so far held steady, with India and China stepping into the breach created by MD sanctions. But Europe will completely ban Russian oil in February 2023, and over time Russian flows will naturally decline thereafter as geopolitical and logistical attrition intensifies:
All OPEC has to do is wait for Russia to come out and reclaim its declining market share. Why would he do anything else?
The only reason is that he sees what I’m doing: a looming global recession that affects tank demand. If so, then he was going to cut oil anyway, so Russia is not very relevant.
On another front, Australia is enjoying another gas warning signal as the war in Ukraine triggers two new shocks:
We have reached the point in the war where Vladimir Putin becomes petty.
That high school nemesis who put toilet paper in your house after you mistakenly drove on their elaborate proposal with your Jeep Wrangler? Increase the bet by around 59.2 billion cubic meters and you will better understand what Putin is doing with the Nord Stream pipeline. In less than 24 hours, this conduit caused not one, not two, but THREE leaks off the Danish coast. Chance? Javier Blas thinks not, writing this has all the hallmarks of Putin’s anger.
The Russian leader, losing ground in Ukraine, seems to be re-enacting “Do Revenge” on the world stage. Except instead of a sex tape, he lets out an entire power source straight into the freezing Baltic Sea. The decision is desperate but effective, according to Javier. Gas prices surged and traders betting on the Nord Stream reopening when Mercury goes retrograde took an L.
Who did it is unclear, but the implications are. Pierre Zeihan:
Either way, things look set to get worse, not better, for near-term energy supply.
Bring on the recession!