Speaker 1: Joining us now to discuss this some more. David string
Speaker 1: At Bloomberg's Asia Energy Team leader, So, David, in terms
Speaker 1: of intervention from the EU, what tools are on the
Speaker 1: table and how effective might they be? Wonderful. It's been
Speaker 1: quite an extraordinary weekend, I guess in the energy sector
Speaker 1: in Europe. We've seen a number of interventions already and
Speaker 1: as you mentioned, there are more measures being considered. Um
Speaker 1: there should be a meeting, an emergency meeting of energy
Speaker 1: ministers of the EU on Friday, and according to a
Speaker 1: draft document that's been seen by Bloomberg News, that's going
Speaker 1: to propose a number of things, you know, it'll it'll
Speaker 1: suggest gas price caps, potentially a suspension of power derivatives trading,
Speaker 1: and also potentially a windfall tax on profit, all of
Speaker 1: that aimed at trying to stem the gains and gas
Speaker 1: prices that we're seeing as a result of the you know,
Speaker 1: the choking off of supply from Russia. Also an attempt
Speaker 1: to boost liquidity of utility to a really struggling um,
Speaker 1: you know, and ultimately drive down those costs for consumers,
Speaker 1: for households in Europe who were were suffering now and
Speaker 1: potentially going to suffer much more as we really get
Speaker 1: into the most severe of the winter months. So there's
Speaker 1: europe wide efforts and then there's also some countries individually,
Speaker 1: like we saw from from Germany with sixty five billion
Speaker 1: dollars of of relief. Are there any other moves like
Speaker 1: that coming from individual countries of note? Quite? Yeah, as
Speaker 1: you as you mentioned there that sixty five billion dollar
Speaker 1: package announced over the weekend from Germany that that you know,
Speaker 1: triggered seemingly in response to the Russian move to the
Speaker 1: choke off supply through that nord Stream pipeline. We also
Speaker 1: saw Nordic authorities they moved specifically to aid utilities that
Speaker 1: are struggling with collateral requirements. Authorities they're saying there's a
Speaker 1: risk of a Lehman moment for those utilities. So yes,
Speaker 1: we're definitely seeing individual countries take take action, you know,
Speaker 1: and and don't be surprised if we see something from
Speaker 1: from the Czech Republic too. There were people out in
Speaker 1: the streets protesting there this weekend. A real reminder of
Speaker 1: the kind of pressures on the politicians to act. Yeah,
Speaker 1: Lord stream closed for maintenance, what is that maintenance? And
Speaker 1: EU leaders aren't buying that story, Are they absolutely not? No.
Speaker 1: I mean the European Council president Sear Michelle. You know,
Speaker 1: he was saying this weekend, you know, essentially calling it
Speaker 1: what it was, which was the use of energy as
Speaker 1: a as a weapon. Yes, you know, gas Prom, the
Speaker 1: Russian supplier, has has put forward an argument that there's
Speaker 1: yet another piece of maintenance that's required. But you know,
Speaker 1: even even the company involved in the company that would
Speaker 1: be carrying out that maintenance, Siemens, has said that there's
Speaker 1: no actual reason, there's no factual basis on which they
Speaker 1: to justify them cutting off that flow of gas. So, um,
Speaker 1: it does look like, you know, a deliberate move by
Speaker 1: Moscow just to to use its ability to flex the
Speaker 1: energy supply to put pressure on Europe. I know this
Speaker 1: is not your beat, but we're seeing quite a lot
Speaker 1: of weakness in the euro this morning, which might suggest
Speaker 1: that the crisis is going to cause the e c
Speaker 1: B to be less aggressive with with raising rates. Um.
Speaker 1: So I just want to kind of get your feel
Speaker 1: on how how difficult this is for people in Europe,
Speaker 1: because we had a guest on in the last hour
Speaker 1: who said, actually, the balance sheets are pretty strong for
Speaker 1: Europeans and that they may fare better than what people fear. Yeah. Well,
Speaker 1: I mean, you know, I think what we've got to
Speaker 1: expect is if this energy crunch intentifies, you know, if
Speaker 1: that's going to put further pressure on these economies, if
Speaker 1: it's going to continue to fuel that cost a living crisis,
Speaker 1: then absolutely that's going to put more pressure on the
Speaker 1: Euro um. You know, and and certainly the move by
Speaker 1: Russia this weekend to shut off those key gas taps,
Speaker 1: absolutely that will put more pressure on We will see
Speaker 1: a response to that from the e c B. Um,
Speaker 1: you know, I guess we'll you know, we'll have to
Speaker 1: wait and look for that. But this is not a
Speaker 1: positive for the euro putting energy crisis. We haven't talked
Speaker 1: about the OPE plus meeting which starts today or what
Speaker 1: are the dynamics that opis balancing ahead of this. I
Speaker 1: mean quite interesting really, and you know, I think a
Speaker 1: lot of the focus UM in the past few months
Speaker 1: has been on supply. It's been on you know, the
Speaker 1: ability of those OPEC plus countries to bring on more production. UM.
Speaker 1: As you say, OPEC and allies including Russia, they're going
Speaker 1: to meet later later Monday. UM. I think We're just
Speaker 1: saying that the sort of balance of dynamics shift, A
Speaker 1: lot of focus on China again, a lot of focus
Speaker 1: on the impact of those lockdowns in China. You know,
Speaker 1: you've you've just been sort of talking about those yourselves.
Speaker 1: You know, more restrictions in place and ching do covering
Speaker 1: millions of people. Is that going to eat into demand again?
Speaker 1: Are you going to see weakness in demand for oil
Speaker 1: and how is that balanced out by these these plans
Speaker 1: to bring on more production. I think, you know, I
Speaker 1: think for this meeting, a majority of p will think
Speaker 1: that plus could sort of stand pat But yeah, it's
Speaker 1: it's an interesting shift in dynamics, and I think we're
Speaker 1: very much back to focus on demand rather than supply.
Speaker 1: All right, David, out of time. I do think another
Speaker 1: shift is, um the weaponization of energy. That's something that
Speaker 1: we hadn't really seen all that much of up until um,
Speaker 1: the sanctions on Russia and Russia's response. Anyway, David, thanks
Speaker 1: very much for being with us here live on