WEBVTT - David Stringer on Europe's Energy Crisis (Audio)

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<v Speaker 1>Joining us now to discuss this some more. David string

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<v Speaker 1>At Bloomberg's Asia Energy Team leader, So, David, in terms

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<v Speaker 1>of intervention from the EU, what tools are on the

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<v Speaker 1>table and how effective might they be? Wonderful. It's been

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<v Speaker 1>quite an extraordinary weekend, I guess in the energy sector

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<v Speaker 1>in Europe. We've seen a number of interventions already and

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<v Speaker 1>as you mentioned, there are more measures being considered. Um

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<v Speaker 1>there should be a meeting, an emergency meeting of energy

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<v Speaker 1>ministers of the EU on Friday, and according to a

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<v Speaker 1>draft document that's been seen by Bloomberg News, that's going

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<v Speaker 1>to propose a number of things, you know, it'll it'll

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<v Speaker 1>suggest gas price caps, potentially a suspension of power derivatives trading,

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<v Speaker 1>and also potentially a windfall tax on profit, all of

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<v Speaker 1>that aimed at trying to stem the gains and gas

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<v Speaker 1>prices that we're seeing as a result of the you know,

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<v Speaker 1>the choking off of supply from Russia. Also an attempt

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<v Speaker 1>to boost liquidity of utility to a really struggling um,

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<v Speaker 1>you know, and ultimately drive down those costs for consumers,

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<v Speaker 1>for households in Europe who were were suffering now and

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<v Speaker 1>potentially going to suffer much more as we really get

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<v Speaker 1>into the most severe of the winter months. So there's

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<v Speaker 1>europe wide efforts and then there's also some countries individually,

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<v Speaker 1>like we saw from from Germany with sixty five billion

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<v Speaker 1>dollars of of relief. Are there any other moves like

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<v Speaker 1>that coming from individual countries of note? Quite? Yeah, as

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<v Speaker 1>you as you mentioned there that sixty five billion dollar

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<v Speaker 1>package announced over the weekend from Germany that that you know,

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<v Speaker 1>triggered seemingly in response to the Russian move to the

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<v Speaker 1>choke off supply through that nord Stream pipeline. We also

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<v Speaker 1>saw Nordic authorities they moved specifically to aid utilities that

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<v Speaker 1>are struggling with collateral requirements. Authorities they're saying there's a

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<v Speaker 1>risk of a Lehman moment for those utilities. So yes,

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<v Speaker 1>we're definitely seeing individual countries take take action, you know,

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<v Speaker 1>and and don't be surprised if we see something from

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<v Speaker 1>from the Czech Republic too. There were people out in

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<v Speaker 1>the streets protesting there this weekend. A real reminder of

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<v Speaker 1>the kind of pressures on the politicians to act. Yeah,

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<v Speaker 1>Lord stream closed for maintenance, what is that maintenance? And

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<v Speaker 1>EU leaders aren't buying that story, Are they absolutely not? No.

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<v Speaker 1>I mean the European Council president Sear Michelle. You know,

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<v Speaker 1>he was saying this weekend, you know, essentially calling it

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<v Speaker 1>what it was, which was the use of energy as

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<v Speaker 1>a as a weapon. Yes, you know, gas Prom, the

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<v Speaker 1>Russian supplier, has has put forward an argument that there's

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<v Speaker 1>yet another piece of maintenance that's required. But you know,

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<v Speaker 1>even even the company involved in the company that would

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<v Speaker 1>be carrying out that maintenance, Siemens, has said that there's

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<v Speaker 1>no actual reason, there's no factual basis on which they

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<v Speaker 1>to justify them cutting off that flow of gas. So, um,

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<v Speaker 1>it does look like, you know, a deliberate move by

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<v Speaker 1>Moscow just to to use its ability to flex the

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<v Speaker 1>energy supply to put pressure on Europe. I know this

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<v Speaker 1>is not your beat, but we're seeing quite a lot

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<v Speaker 1>of weakness in the euro this morning, which might suggest

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<v Speaker 1>that the crisis is going to cause the e c

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<v Speaker 1>B to be less aggressive with with raising rates. Um.

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<v Speaker 1>So I just want to kind of get your feel

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<v Speaker 1>on how how difficult this is for people in Europe,

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<v Speaker 1>because we had a guest on in the last hour

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<v Speaker 1>who said, actually, the balance sheets are pretty strong for

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<v Speaker 1>Europeans and that they may fare better than what people fear. Yeah. Well,

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<v Speaker 1>I mean, you know, I think what we've got to

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<v Speaker 1>expect is if this energy crunch intentifies, you know, if

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<v Speaker 1>that's going to put further pressure on these economies, if

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<v Speaker 1>it's going to continue to fuel that cost a living crisis,

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<v Speaker 1>then absolutely that's going to put more pressure on the

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<v Speaker 1>Euro um. You know, and and certainly the move by

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<v Speaker 1>Russia this weekend to shut off those key gas taps,

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<v Speaker 1>absolutely that will put more pressure on We will see

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<v Speaker 1>a response to that from the e c B. Um,

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<v Speaker 1>you know, I guess we'll you know, we'll have to

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<v Speaker 1>wait and look for that. But this is not a

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<v Speaker 1>positive for the euro putting energy crisis. We haven't talked

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<v Speaker 1>about the OPE plus meeting which starts today or what

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<v Speaker 1>are the dynamics that opis balancing ahead of this. I

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<v Speaker 1>mean quite interesting really, and you know, I think a

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<v Speaker 1>lot of the focus UM in the past few months

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<v Speaker 1>has been on supply. It's been on you know, the

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<v Speaker 1>ability of those OPEC plus countries to bring on more production. UM.

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<v Speaker 1>As you say, OPEC and allies including Russia, they're going

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<v Speaker 1>to meet later later Monday. UM. I think We're just

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<v Speaker 1>saying that the sort of balance of dynamics shift, A

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<v Speaker 1>lot of focus on China again, a lot of focus

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<v Speaker 1>on the impact of those lockdowns in China. You know,

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<v Speaker 1>you've you've just been sort of talking about those yourselves.

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<v Speaker 1>You know, more restrictions in place and ching do covering

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<v Speaker 1>millions of people. Is that going to eat into demand again?

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<v Speaker 1>Are you going to see weakness in demand for oil

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<v Speaker 1>and how is that balanced out by these these plans

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<v Speaker 1>to bring on more production. I think, you know, I

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<v Speaker 1>think for this meeting, a majority of p will think

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<v Speaker 1>that plus could sort of stand pat But yeah, it's

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<v Speaker 1>it's an interesting shift in dynamics, and I think we're

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<v Speaker 1>very much back to focus on demand rather than supply.

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<v Speaker 1>All right, David, out of time. I do think another

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<v Speaker 1>shift is, um the weaponization of energy. That's something that

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<v Speaker 1>we hadn't really seen all that much of up until um,

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<v Speaker 1>the sanctions on Russia and Russia's response. Anyway, David, thanks

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<v Speaker 1>very much for being with us here live on