The writing is on the walls for Europe in terms of this coming winter – It can get ugly.
Along with natural gas imports from Russia cut by 80% through Nord Stream 1 along with the most of oil shipments, the EUROPEAN is going to be scrambling for whichever fuel sources they can discover to supply electricity and heating through the coming winter. Two sources that were originally suggested as alternatives had been Iran and Venezuela.
Increased Iranian coal and oil exports to the west are highly dependent on the tentative nuclear deal, but since Goldman Sachs recently recommended, such a deal is unlikely anytime soon as deadlines on proposals have not been met and the Israeli government phone calls for negotiators to ‘ walk away. ‘
Venezuela had restarted shipments in order to Europe after 2 years people sanctions under a deal which allows them to trade oil meant for debt relief. However , the country’s government has now suspended those shipments , saying it is no longer interested in oil-for-debt deals plus instead wants refined fuels from Italian and Spanish producers in exchange for primitive.
This might appear to be a backwards exchange yet Venezuela’s own refineries are struggling to remain in operation because of lack of investment and lack of repairs. Refined fuels would help them to get back on their feet in terms of energy and industry. A few of Venezuela’s own heavy oil operations require imported diluents in order to continue. The particular EU says it currently has no plans to raise restrictions on the oil-for-debt arrangement, which means Europe has now lost yet another energy source.
Sanctions on Venezuela along with declining investments have strangled their oil industry, with overall production dropping by 38% this July compared to a year ago. Joe Biden’s initial moves to reopen talks with Maduro triggered inflated expectations that Venezuelan oil would flow once again and counteract tight global markets plus rising prices. European countries in particular will soon become desperate for energy alternatives, which will probably result in a scouring associated with markets this autumn to satisfy bare minimum requirements for heating system.
If this occurs and no regular sources of energy can be found to fill the void left by Ruskies sanctions, prices will rise precipitously in the EU. Not only that, but with European countries buying up energy supplies wherever they can find them, available sources will also shrink for every various other nation including the US. Get ready for oil and energy prices to spike once more as winter’s chill results.