The push to ban Russian oil is gaining steam. Here’s what that means for US energy prices

“I’m all for that. Ban it,” House Speaker Nancy Pelosi said this week.

A bipartisan bill, unveiled this week by Democratic Sen. Joe Manchin of West Virginia and Republican Lisa Murkowski of Alaska, would do just that.

Note that this is very different from the more sweeping step of imposing sanctions on Russian oil, a move that would prevent virtually all nations from using Russian oil.

Strictly banning US imports of Russian oil would most likely not have a dramatic impact on prices at US gas pumps, which surged this week to the highest level in nearly a decade.

That’s for a simple reason: Unlike Europe and Asia, the United States doesn’t really use much Russian oil.

Russia delivered just 90,000 barrels per day of crude oil into the United States in December, according to the most recent US government statistics.

That pales in comparison with oil that the US gets per day from Iraq (223,000), Saudi Arabia (472,000) and Mexico (492,000), let alone the 4.1 million imported from Canada each day.

‘It’s not mission critical’

Put another way, Russia represented less than 2% of all US oil imports in December, according to the US Energy Information Administration.

“It’s not mission critical. Canada, Mexico, Saudi Arabia — those are the big boys,” said Tom Kloza, global head of energy analysis at the Oil Price Information Service. “Russia is a bit player.”

Gas prices surge overnight -- biggest jump since Hurricane Katrina

Some US refineries use unfinished Russian oil, blending it with other barrels to churn out gasoline, jet fuel, diesel and other products. But even by that broader measure, Russia is far from a huge player in the United States.

Russia exported just 405,000 barrels per day of crude oil and petroleum products into the United States in December. That represents less than 5% of total US crude oil and product imports.

A symbolic ban

US refiners can live without that Russian oil, if they have to. (And they may have to, soon enough).

“This buying by refiners is mostly opportunistic in nature and not out of necessity,” said Ryan Fitzmaurice, energy strategist at Rabobank.

That’s not to say there would be no impact at all. Banning Russian oil could create modest headaches for a few refiners and make the energy system overall less efficient as oil flows are rerouted to compensate.

“In short, a US ban on Russian oil imports would be mostly symbolic,” said Fitzmaurice.

Outright sanctions are a different story

Leveling sanctions directly on Russian oil would be a much bigger deal. That would prevent not just the United States, but also countries around the world, from using Russian oil without running afoul of sanctions.

The financial consequences could be massive. World supply was already failing to keep up with demand even before Russia’s invasion of Ukraine. Russia was the No. 2 oil producer on the planet last year, pumping more oil than Canada and Iraq combined.

US allies in Europe are heavily reliant on Russian oil to keep their economies humming.

“Russian oil is not crucial to the US. It’s crucial to Europe,” said Kloza. “I don’t know what Europe is going to do without Russian crude. If you take it away, Europe is really behind the eight ball.”

‘No way to offset’

The West has gone out of its way to avoid penalizing Russian oil directly, but uncertainty over sanctions has already caused a de facto ban on Russian oil. Many refiners, traders, shippers and banks don’t want to get anywhere near the stuff.
JPMorgan estimates more than 4 million barrels per day of Russian oil has been effectively sidelined, sending oil and gasoline prices skyrocketing.

The problem is that Russia is such a big player on the world stage that it would be difficult to replace all that oil in the short term.

A potential nuclear deal with Iran, which looks increasingly likely, would help. But even that would add only about 1 million barrels per day of oil onto a market that needs much more than that.

Russia-Ukraine crisis replaces Covid as top risk to global supply chains, Moody's says

OPEC+, a group that includes Russia itself, is not coming to the rescue. The Saudi Arabia-led group has refused to open its spigots for months.

US oil companies are producing more oil, but only at a modest pace as they focus on returning cash to shareholders and deal with their own financial pressures.

“There’s no way to offset the loss of all of Russia’s exports without noticing it at the gas pump,” said Jason Bordoff, the founding director of Columbia University’s Center on Global Energy Policy. “That may be the price we’re willing to pay to tell Russia its actions are unacceptable.”

Energy prices in Europe hit record highs. A winter crisis looms

The wholesale cost of natural gas has surged to record highs in the United Kingdom, France, Spain, Germany and Italy. Bills for households and businesses are already soaring, and could go even higher as cold weather sets in and more fuel is needed for electricity generation and heating systems.

“We’ve seen huge price increases,” said Dimitri Vergne, head of the energy team at The European Consumer Organization. “It’s worrying ahead of the winter, when gas consumption will necessarily increase.”

A complex web of factors is at play. A cold spring depleted natural gas inventories. Rebuilding stocks has been tough, thanks to an unexpected jump in demand as the economy bounces back from Covid-19 and a growing appetite for liquified natural gas (LNG) in China. Russia is also supplying less natural gas to the market than before the pandemic.

The deteriorating situation is quickly transforming into a full-blown crisis. Spain has announced emergency measures to cut energy bills, while France plans to make one-time €100 ($117) payments to nearly 6 million lower-income households. In the United Kingdom — where natural gas spikes have already threatened to exacerbate food shortages — Prime Minister Boris Johnson’s team is debating the extent to which it should offer state support. A UK price cap for consumers is being maintained, but that’s helping to push small British energy companies out of business.
Industries across the region are seeing costs take off. Some British steelmakers have had to suspend operations, according to trade group UK Steel. Norway’s Yara (YARIY), a fertilizer company, is cutting production of ammonia in Europe by around 40% because of the record high natural gas price.

“Right now, it’s unprofitable to produce ammonia in Europe,” said Yara CEO Svein Tore Holsether, noting that it costs $900 to produce a metric ton that sells for just $600. The company will temporarily rely on plants in other parts of the world to supply customers.

The fallout could weigh on Europe’s economy, while exacerbating fears about inflation at a delicate moment in the pandemic recovery.

“To the extent people are worried about the higher cost of energy, they may be inclined to hold back on spending,” said Jessica Hinds, Europe economist at Capital Economics.

What’s happening

The leap in natural gas prices can be traced back to a chilly spring. Cold weather through April and the beginning of May forced a drawdown in natural gas stocks during a period when demand typically eases.

“We started this whole process of putting gas away … six weeks later than we normally would,” said Tom Marzec-Manser, a natural gas analyst at market intelligence firm ICIS.

But the problems don’t end there. China has also been outbidding Europe for LNG, which is preferred as a cleaner alternative to coal as the country tries to make its economy greener.

As a result, the price of power for next-day delivery in France jumped 149% between the beginning of August and Sept. 15, according to data from ICIS. In Germany, prices leaped 119%.

And in Britain, which operates a just-in-time market and doesn’t have the same storage capacity as continental Europe, costs have surged 298%. Delayed maintenance work, as well as a fire that shut down a power cable that transmits electricity supplies from France, has piled on the pressure.

In this environment, European countries would typically turn to Russia, which meets about a third of the continent’s natural gas needs. But supplies from Gazprom, the state-backed natural gas company, have been lower than usual. The International Energy Agency on Tuesday called on the country to open the taps.

“Although Russia is running production at very high levels, there are still fears it can’t produce enough to satisfy Europe’s very high demand,” Wood Mackenzie analyst Graham Freedman said. “There are concerns there may not be enough gas in [Gazprom’s] storage to get through the winter.”

Marzec-Manser said it’s hard to pin down exactly what’s happening in Russia. There were some production problems over the summer, and the country is also experiencing higher domestic demand, he said. There are also theories that Moscow is intentionally supplying less than it could to encourage Germany to speed its approvals process for the controversial Nord Stream 2 Pipeline, which will transport natural gas directly from Russia into the European Union.

Norway, which supplies about 20% of the natural gas consumed in Europe, is trying to help fill the gap. Equinor, the state energy company, announced this week that it would increase exports starting in October. But in the near-term, experts warn pressure on prices is unlikely to ease.

Britain most exposed

Political leaders are trying to assuage fears that the public could go without power or heat as the temperature drops.

“We do not expect supply emergencies to occur this winter,” Kwasi Kwarteng, the UK business secretary, told Parliament on Monday. “There is absolutely no question … of the lights going out or people being unable to heat their homes.”

UK bails out an American company to prevent food supply crisis

But it’s increasingly clear that the crisis will be costly, and could weigh on the region’s economy while the effects of Covid-19 are still being felt.

The situation is particularly acute in the United Kingdom, where seven small energy providers — including Avro Energy, which supplied about 580,000 customers — have failed in recent weeks because their costs have soared. Dozens more are on the brink.

Other British industries are at risk, too. On Tuesday, the UK government said it had agreed to subsidize a major US fertilizer manufacturer at a cost of several million pounds to taxpayers in order to reopen factories that supply most of the carbon dioxide Britain’s food supply chain needs.
CF Industries (CF) decided last week to halt operations at its UK fertilizer plants because soaring natural gas prices had made them unprofitable. CO2 is used to stun animals for slaughter, as well as in packaging to extend the shelf life of fresh, chilled and baked goods.
A fertilizer factory in Ince, United Kingdom, one of two shut down by CF Industries because of high natural gas prices.

“I do not see people freezing,” said Michael Grubb, a professor of energy and climate change at University College London. “I do see unenviable choices, between a lot of companies going bust and who picks up the tab.”

The Confederation of British Industry, a UK business lobby group, emphasized Wednesday that “significant” price rises hit both businesses and consumers.

“It’s essential vulnerable customers and key energy intensive companies, which underpin critical UK supply chains, are well supported throughout the winter,” Matthew Fell, the chief policy director, said in a statement.

A lot rides on the weather. Henning Gloystein, director of the energy, climate and resources practice at Eurasia Group, thinks that if the next few months yield particularly cold weather, there could be further pressure on certain industries to reduce consumption of natural gas to prioritize supplies to households.

“If it gets cold this winter, [supplies] could get really tight,” he said. “Politically, that’s really toxic.”

Governments will do what they can to shield consumers from rising prices, Gloystein continued, noting that price caps and subsidies are likely to persist. But economists are already revising their inflation expectations for the coming months, cautioning that natural gas shortages will only make price increases triggered by rising demand and ongoing supply chain problems worse.

Prices for CO2 paid by the UK food industry, for example, will go up despite the temporary subsidy to CF Industries. To what extent that gets passed on down the chain to supermarket shelves remains to be seen.

“At the moment, it definitely seems likely we’ll be seeing higher inflation in the short term,” Hinds of Capital Economics said. “And this is probably going to run into next year.”

She predicted that a previous estimate of headline inflation of 3.5% for Europe in the final months of 2021 could rise to 4%.

“Gas prices could push inflation further above [the] 2% [target] for longer,” Bank of America analysts said in a recent note to clients.

— Hanna Ziady and Anna Cooban contributed reporting.

Energy prices: IEA urges Russia to pump more natural gas to Europe

The Paris-based group said in a statement that while Russia is fulfilling its long-term contracts to European customers, exports are down from their 2019 level. Russia is the European Union’s largest supplier of natural gas.

“The IEA believes that Russia could do more to increase gas availability to Europe and ensure storage is filled to adequate levels in preparation for the coming winter heating season,” the energy watchdog said. “This is also an opportunity for Russia to underscore its credentials as a reliable supplier to the European market,” it added.

Established in 1974 by the world’s richest economies in response to an oil embargo by major producers, the IEA monitors global supplies and the transition to sustainable energy sources.

Gas prices have risen sharply across Europe as a result of depleted stocks, a strong recovery in demand, in particular from Asia, and low supplies from Russia. Other factors include a particularly cold and long heating season in Europe last winter, and lower wind energy in recent weeks, according to the IEA. Electricity prices are also soaring.

In a statement to CNN Business, Gazprom (GZPFY), Russia’s state-backed exporter of pipeline gas, said that the company has increased gas exports this year to a level “close to the historically recorded high,” which was reached in 2018.

“Gazprom supplies gas in accordance with the customers’ requests in full compliance with the existing contractual obligations and seeks to satisfy the requests for additional supplies due to the available possibilities,” it added.

Europe's gas crisis is also a renewables crisis, but there are ready solutions

But the IEA said that the European gas market could face “further stress tests from unplanned outages and sharp cold spells, especially if they occur late in the winter.”

The surge in gas, coal and carbon prices in Europe have sent electricity prices to their highest levels in over a decade. In Germany and Spain, prices in September have been around three or four times the averages seen in in the past two years, according to the IEA.

IEA executive director Fatih Birol said it would be “inaccurate and misleading” to blame the increase in natural gas prices on the clean energy transition.

“Well-managed clean energy transitions are a solution to the issues that we are seeing in gas and electricity markets today — not the cause of them,” he added.

Energy Business And Finance

The College of Business requires a minimum grade level average of 2.000 in business and economics programs as a commencement requirement. The Investment Analysis choice focuses on the theoretical and practical elements of funding valuation, selection, and portfolio administration, for both individual and institutional investors. With a hundred thirty scholar orgs and greater than 1,000 events, there’s always something to do on campus.

April 15, 2021 Finding the proper paystub generator is a crucial part of processing payroll. Students will learn basic business terminology and capabilities utilized in business. Topics include an overview of varied features Finance of world economies and the economic interdependency of countries. Included are a research of banking methods and the relationships of business to government, labor, and worldwide commerce. Preparation and exploration are included for further training as faculty business majors and /or for post-high college careers within the business group.

Business Finance Accomplished In A Unique Way

It seems something like the net banking dashboard page, butut instead of exhibiting your checking and savings accounts, the snapshot reveals your company’s property, liabilities, and fairness. We create the mandatory monthly monetary statements you need—all of that are accessible online—and give you every little thing you’ll need handy to your CPA at tax time. Expenses are any cash paid out for the everyday operating of your company. This may include internet service, printing supplies, and office space rental. Expenses are different from property as a result of they typically maintain no potential for resale, or are consumable . It lets you keep tabs on your company’s financial health and makes your CPA’s job simpler come tax time.

There are two accounting strategies small companies can use—cash and accrual. You’ll need to select a system earlier than the end of your first tax 12 months, after which stick to it yearly following. If your business started as a facet hustle, you could already have some preliminary gross sales data. Even a few numbers may help Business you figure out which of your merchandise are bestsellers and what occasions of yr your gross sales shall be high or low. Keep in thoughts you’ll also incur the price of credit card chargebacks for fraudulent or disputed transactions. Sometimes gadgets get broken, whether or not on their way to you or on their means from you to a buyer.

Training And Certifications Claims Adjusters, Appraisers, Examiners, And Investigators Need

Budgeting is a well-liked financial planning tool that comes from forecasting efforts. Generally, you prepare budgets with multiple line objects that characterize the dollar value of how a lot money is allocated for a selected expense. Most – if not all – organizations find that creating and adhering to a finances is beneficial in preserving financial exercise on observe. Just like in private finances, a budget will gauge spending and saving habits that could assist or hinder monetary targets. The Governing Board needs to offer a secure faculty setting that enables all college students equal access and opportunities within the district’s academic, extracurricular, and different instructional assist packages, companies, and activities. The Business & Finance Academy offers a pathway to college and career success by instructing the basics of business entrepreneurship with a focus on progressive pondering. This immersive multi-year sequence of classes and work-based learning experiences prepares students for the challenges of school coursework in business and associated majors and gives them a competitive benefit within the job market.

  • Undergraduate college students learn to manage a diversified portfolio of shares by way of a semester-long Applied Equity Valuation course.
  • Ranked as one of the best regional faculties in the South, we provide 70+ fields of study, profession preparation and noteworthy assist.

She does one-on-one mentoring and consulting centered on entrepreneurship and practical business skills. Ratio analysis is used to match a firm’s efficiency with that of other companies in the identical business or with the efficiency of business generally. It can be used to check developments within the firm’s performance over time and thus to anticipate problems before they develop. An increase in money holdings, for example, reduces risk; but, because cash just isn’t an earning asset, converting different forms of assets to money reduces the firm’s profitability. Similarly, the utilization of further debt can increase the profitability of a firm , however more debt means more risk.

Related Finance Occupations

Get examples of what utilities did for their customers, what effects these measures had on utility financials and operations, and any lessons learned going forward. Kick off the convention by sharing your hot topics and priorities in buyer accounting and providers in a lively dialogue with peers from utilities like yours. Preconference seminars supply longer class instances, smaller class sizes, interactive formats, and skilled instructors. Benefit from engaging breakout classes led by business consultants and public power colleagues — take residence actionable concepts and tactics.

Business & Finance

Provides students and researchers with easy-to-understand entries on lots of of necessary terms, ideas and ideas allow readers to develop a deeper understanding of the sector. The Trading Room provides undergraduate students access to the tools and software utilized by investment professionals. The nervousness young folks have about maturing of their twenties has lead Business & Finance to the word “adulting” becoming quite popular. It’s a useful, albeit somewhat glib, catch-all time period for taking good care of your self. In truth, the actual sign of maturity resides a life that’s within your control, and for that, there are several iOS apps to assist. With these 5 apps, anybody can “grownup” — or no less than faux it when they need to.