Washington is in talks with Qatar over gas supplies for Europe as speculation over Russian invasion of Ukraine intensifies
US officials are reportedly negotiating opportunities for contingency steps to secure energy supplies to European nations if a possible conflict between Russia and Ukraine disrupts current deliveries.
“We’re looking at what can be done in preparation for an event, especially midwinter with very low [European natural gas] supplies in storage,” a senior US administration official said, as quoted by FT.
“We discussed what can be moved around the market, what can help… the things we can prepare now for deployment if and when there is an escalated crisis.”
The talks with Qatar and member states of the European Union are being held as the bloc is struggling with a severe energy crunch, which is sending prices for natural gas soaring to record highs. The crisis could become even more intense if the White House introduces new punitive measures against Russia should Moscow launch a military assault on Ukraine.
Speculation about an invasion was initiated by Ukrainian and US officials several months ago, and has been actively fueled by both government officials and Western media outlets. The Russian authorities made it clear that it has no plans of this kind.
Moreover, Western nations have accused Russia of squeezing gas supplies in the midst of the energy crunch. The allegations, repeatedly rejected by the Russian government, have been actively used by Washington in the longstanding debate with Berlin over the necessity of launching the Nord Stream 2 gas pipeline, the construction of which was led by Russian state-run energy giant Gazprom.
In an attempt to ramp up sales of liquified natural gas (LNG) to Europe markets, the US has regularly accused EU member states of heavy reliance on Russian gas supplies, persistently offering its LNG, the price of which is up to 40% higher than the piped gas, as an alternative source of fuel.
Potential sanctions over the Russia-Ukraine conflict may target major Russian commercial banks, Russia’s energy sector, blocking the state’s access to bond markets, cutting the country off from the SWIFT international payment system, and intensifying export control measures.
Europe will almost certainly face extremely high prices in the event of sanction-related supply disruptions, and co-ordinated government action will be required to source seaborne LNG cargoes, according to an unnamed energy industry executive, as quoted by the media.
“They will effectively have to compete for all the supply in the market, taking cargoes away from Asia, and the likely end result is the taxpayer will pay,” the executive said.
Russian tech billionaire Pavel Durov warns of major risks for high-tech economy
Pavel Durov, the executive director and founder of Telegram, one of the world’s most popular messaging apps, has said a proposal to ban cryptocurrency mining and crypto-related transactions via Russian financial services would lead to an inevitable outflow of IT specialists.
The ban, which has been touted by Russia’s central bank, would also destroy a number of sectors in the high-tech economy, the billionaire said, noting that no developed country has prohibited cryptocurrencies.
“Such a ban will inevitably slow down the development of blockchain technologies in general,” Durov said in the post shared on his Telegram channel and on VK, Russia’s most popular social media platform.
“These technologies improve the efficiency and safety of a wide range of human activities, from finance to the arts.”
Earlier this week, the Central Bank of Russia called for the issuance, circulation, exchange, and trade of cryptocurrencies and stablecoins to be prohibited, as well as banning the organization of these operations on Russian soil.
The 37-year-old billionaire highlighted that “Russia’s neighboring states, from Ukraine to Uzbekistan, are adopting advanced laws and regulations related to the blockchain sector, as they are not willing to be left behind technological and economic progress.”
According to Durov, Russia is one of the world’s leading nations when it comes to the number of high-end professionals working in the blockchain industry.
“Thoughtful regulation will allow the country to balance the distribution of forces in the international financial system and become one of the major players in the new economy,” he added.
The businessman admitted that regulatory drive is natural for state authorities when it comes to the circulation of cryptocurrencies, but a total ban on assets of this kind is throwing “the baby out with the bathwater.”
“The step could hardly stop unconscientious participants, but it will put an end to legal Russian projects in the area,” Durov said.
French Champagne houses toast record sales and exports
France’s Comite Champagne trade association, which represents over 16,000 winegrowers and 320 champagne houses, on Wednesday reported record high sales for 2021.
It says France exported a historic high of 180 million bottles of champagne in 2021, which is a 38% increase compared to 2020. Total shipments jumped 32% to 322 million bottles, despite the lingering effects of Covid-19 pandemic lockdowns, which resulted in the closure of many bars and restaurants. Overall, global sales hit a record of roughly $6.2 billion.
“This recovery is a welcome surprise for the people of Champagne after a troubled 2020 (with figures down by 18%) impacted by the closure of main points of consumption and the shortage of celebratory events across the world,” said Maxime Toubart, co-president of the Comite Champagne.
The association reported that demand started to gradually accelerate in April 2021, explaining the change by the fact that “consumers have chosen to entertain themselves at home, compensating for the generally gloomy mood with new moments of conviviality and sharing.”
‘Champagne’ is an exclusive brand name used for wines produced in the French Champagne region, northeast of Paris. Champagne winegrowers had a troublesome year in 2021, with the area hit by severe frosts in spring, which damaged 30% of the crop, while mildew resulted in the loss of up to 30% more.
Cryptocurrency’s price plunged below $35,000 for the first time since July
The world’s biggest digital asset, Bitcoin, fell as low as $34,042.78 on Saturday, marking a drop of 7.2%. It has recovered most of those losses, and was trading at $35,445 at 14:19 GMT. Other cryptocurrencies saw declines as well, with Ethereum down 12%. Solana and Cardano each dropped at least 17%, according to Coinbase.
“Margin positions being liquidated caused a wave of additional sell pressure, as assets that had been held as collateral were forcibly sold to pay for margin loans,” Hayden Hughes, chief executive officer at Alpha Impact in Singapore, told Bloomberg.
The expert expects the cryptocurrency to take some time for a bottom to form and for confidence to return, before projecting any sort of bullishness.
Bitcoin’s downfall from its all-time high of nearly $69,000 in November has erased some $600 billion from its market value, and more than $1 trillion has been reportedly lost from the aggregate crypto market. According to Bespoke Investment Group as quoted by the agency, this marks the second-largest-ever decline in dollar terms for both, while there have been much larger percentage drawdowns for both Bitcoin and the aggregate market.
The slump in both cryptocurrencies and stocks was caused by the latest move by the US Federal Reserve to tighten monetary policy at a faster pace than expected. In an effort to revive the economy, the Fed may increase key interest rates three times this year, according to Reuters polls.
The cryptocurrency market has also been rocked by China’s crackdown on virtual currencies, as well as Russian moves of a similar nature. Last year, Beijing prohibited cryptocurrency mining in the Sichuan Valley, triggering an adverse impact on the market.
The country now has the world’s fourth-largest forex holdings
Russia’s foreign exchange reserves surged by $7.7 billion last week, with its total holdings reaching a record $638.2 billion, according to the country’s central bank.
From January 7 to 14, its international reserves grew by 1.2%, according to the latest data from the regulator. On January 7, their volume had amounted to $630.5 billion.
The surge was reported to be the result of planned purchases of foreign currencies and a positive market reassessment.
The increase has seen Russia move up from fifth to fourth place in the tally of the world’s largest foreign reserve holders. The change is also due to India – which previously held the fourth-largest reserves – having reduced its stockpile during the first week of January. The ranking may change yet again when other nations update their figures.
Russia’s international reserves consist of monetary gold, foreign currencies, and special drawing rights, the last of which are at the disposal of the central bank and the government.
Over the past six years, the central bank has nearly doubled its reserves. They had plunged to $356 billion in 2015 due to the government’s efforts to bail out the economy during the 2014 oil price crisis.
