Panic Sweep Across Energy Supply Chains As China Aggressively Reselling Russian Gas

1 Sept 2022 The world is going through the most severe shortage of energy supplies that we have ever seen in modern times. The imbalance between supply and demand is pushing prices to absolutely astonishing levels, and sending many major economies to the edge of a disaster. Natural gas supplies, in particular, are shrinking all across the U.S. and Europe after Russia’s aggression on Ukraine resulted in a series of western sanctions on Russian exports. But while western nations suffer from energy scarcity, and populations face energy poverty, the Kremlin and Beijing continue to profit with record-high prices. In fact, a new report reveals that China is now aggressively reselling Russian liquified natural gas to energy-strapped countries in Europe and all over the world, effectively circumventing sanctions and helping to boost costs up 700% in some places. A rush for energy is now here, and the supply shock is likely to only get worse from this point on. Over the past three months alone, China spent $18.9 billion on Russian oil, gas, and coal, almost double the amount a year earlier, the latest customs data show. Meanwhile, India spent $5.1 billion in the same period, more than five times the value of a year ago.

That’s an additional $13 billion in revenue from both countries compared to the same months in 2021. Although Europe continues to reject Russian energy exports, Sinopec data shows that China has been reselling Russian liquefied natural gas shipments to European countries. ZeroHedge experts noted yesterday that “China has been quietly reselling Russian LNG to the one place that desperately needs it more than anything: Europe – and of course, it is charging a kidney’s worth of markups in the process.” Make no mistake: all of these “excess” energy supplies were soured in part or in whole in Russia, but since it has been “tolled” in China, it is no longer Russian. It is instead being branded as Chinese LNG, they exposed. The main problem is that as soon as economic activity bounces back in China, the situation will quickly reverse, and Beijing will no longer resell Russian gas to keep Europe warm during the coming winter. At the end of the day, what the West has done was to make energy more expensive and scarce to itself while remaining primarily reliant on the exports of the country it now wants to ban. Worse even, is the fact that Europe could buy these supplies for less than half the price that it is paying right now. Instead, it has to pay 6 to 7 times more just to virtue signal to the world that it won’t fund Putin’s regime when in reality it is paying extra to both Xi and to Putin, who are both collecting a premium price thanks to the overall market scarcity. It’s no wonder why European authorities are rushing to fill storage reserves so there’s enough gas to meet household heating and industrial needs over the northern winter. With European wholesale natural gas, coal, and CO2 prices near all-time highs, Europeans are facing a real threat of energy poverty, one which may in fact last for many years. In Germany, electricity prices have risen by a staggering 720% from the beginning of the year. This is a seismic energy supply shock that is destabilizing the entire West. The social, economic, and political fabric of the U.S. and Europe has never been so vulnerable to external disruptions. And once again, we, the consumers, are the ones who were left to deal with a myriad of terrible repercussions. 

: https://www.epiceconomist.com/

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