Russia’s Ban on Marine Insurance May Increase Demand for Gas Products

The central bank of Russia is planning to take measures in the event of further sanctions. In the event that the Moscow Exchange and the National Clearing Center are sanctioned, the central bank wants to ensure that the USDRUB can be managed.

In his statement, the Bank of Russia wrote the following: “To ensure the safety of customers and the efficient operation of the financial system, the Bank of Russia is conducting a variety of activities with market participants and construction organizations.”

The Swiss Franc (CHF) has already been suspended from trading against the Ruble and the US Dollar by the Moscow Exchange. The Japanese yen (JPY) will be suspended from trading and exchange starting August 8, 2022.

CHF and JPY are currencies that often benefit from safe movements.

Gazprom Cuts Gas Supply and Maritime Insurance

Gazprom cut gas supplies to Europe last week, with the Nord Stream pipeline supplying only 20% of its capacity. At the end of the week Gazprom announced that it has suspended gas supply to Latvia, which uses gas for 27% of its energy.

The EU is trying to increase its gas supplies including natural gas (LNG) from other countries such as the US, Qatar and Norway. Unlike crude oil, natural gas is still trading near its recent highs.

A plan to block Russia from the Lloyd’s of London marine insurance market is delayed. Banning Russia from marine insurance means limiting Russia’s access to oil tankers.

However, Biden’s administration expressed dissatisfaction with the move. When the United States is suffering from inflation, such actions can raise energy prices, which can continue the current inflation despite the Fed’s actions (increasing rates).

The UK will ban ships carrying Russian oil to the country from the end of the year. The EU insurance ban came into effect on June 4, however, existing contracts will remain in place until the end of 2022.

Rosneft Excluded?

European companies cannot be prevented from paying Rosneft to buy or transport oil to countries outside the EU. This is to ensure that global energy will not be affected too much.

The US has been trying to convince the EU that Russian oil will be supplied to other countries (outside the EU and the US) as long as the price is below the market price. The US is pushing to lower gasoline prices ahead of midterm elections in November. Setting oil prices for the first time before the ban on marine insurance (end of 2022) is one of the priorities in the US.

Russia has increased its gas exports to China. Power of Siberia, a pipeline that has been used to transport natural gas to Europe will also be connected to China, allowing the Russian government to distance itself from natural gas exporters.

source: cnbc

China has been receiving Russian pipeline gas and limited LNG. Due to the covid-19 shutdown, demand for LNG has been low. China’s LNG demand is expected to remain low in September.

However, if China’s LNG demand increases it may begin to compete with Europe for LNG exports.

EU members have reached a political unity to voluntarily reduce natural gas demand by 15% this coming winter. However, the Council decree stated that it is possible for the ‘Union notice’ to start (security protection), which means that the 15% gas reduction should be acceptable.

According to ICEThe ICE UK OCM Gas Spot saw its highest daily volume (ADV) since 2014.

Developing Natural Oil Resources

CFD traders should consider starting natural gas products in addition to ETFs. While the focus has been on green energy (Saxo bank launched renewable energy basket earlier this year), as we approach December (when the marine insurance ban may be implemented) volatility may increase.

Forex market volumes often increase in response to risk events. Although it is still early to know how the conflict between Russia and Europe will end, providing more gas products to meet the needs of investors may be the right way for traders to take.

The central bank of Russia is planning to take measures in the event of further sanctions. In the event that the Moscow Exchange and the National Clearing Center are sanctioned, the central bank wants to ensure that the USDRUB can be managed.

In his statement, the Bank of Russia wrote the following: “To ensure the safety of customers and the efficient operation of the financial system, the Bank of Russia is conducting a variety of activities with market participants and construction organizations.”

The Swiss Franc (CHF) has already been suspended from trading against the Ruble and the US Dollar by the Moscow Exchange. The Japanese yen (JPY) will be suspended from trading and exchange starting August 8, 2022.

CHF and JPY are currencies that often benefit from safe movements.

Gazprom Cuts Gas Supply and Maritime Insurance

Gazprom cut gas supplies to Europe last week, with the Nord Stream pipeline supplying only 20% of its capacity. At the end of the week Gazprom announced that it has suspended gas supply to Latvia, which uses gas for 27% of its energy.

The EU is trying to increase its gas supplies including natural gas (LNG) from other countries such as the US, Qatar and Norway. Unlike crude oil, natural gas is still trading near its recent highs.

A plan to block Russia from the Lloyd’s of London marine insurance market is delayed. Banning Russia from marine insurance means limiting Russia’s access to oil tankers.

However, Biden’s administration expressed dissatisfaction with the move. As the United States suffers from inflation, such actions can raise energy prices, which can continue the current inflation despite the Fed’s actions (increasing rates).

The UK will ban ships carrying Russian oil to the country from the end of the year. The EU insurance ban came into effect on June 4, however, existing contracts will remain in place until the end of 2022.

Rosneft Excluded?

European companies cannot be prevented from paying Rosneft to buy or transport oil to countries outside the EU. This is to ensure that global energy will not be affected too much.

The US has been trying to convince the EU that Russian oil will be supplied to other countries (outside the EU and the US) as long as the price is below the market price. The US is pushing to lower gasoline prices ahead of midterm elections in November. Setting oil prices for the first time before the ban on marine insurance (end of 2022) is one of the priorities in the US.

Russia has increased its gas exports to China. Power of Siberia, a pipeline that has been used to transport natural gas to Europe will also be connected to China, allowing the Russian government to distance itself from natural gas exporters.

source: cnbc

China has been receiving Russian pipeline gas and limited LNG. Due to the covid-19 shutdown, demand for LNG has been low. China’s LNG demand is expected to remain low in September.

However, if China’s LNG demand increases it may begin to compete with Europe for LNG exports.

EU members have reached a political unity to voluntarily reduce natural gas demand by 15% this coming winter. However, the Council decree stated that it is possible for the ‘Union notice’ to start (security protection), which means that the 15% gas reduction should be acceptable.

According to ICEThe ICE UK OCM Gas Spot saw its highest daily volume (ADV) since 2014.

Developing Natural Oil Resources

CFD traders should consider starting natural gas products in addition to ETFs. While the focus has been on green energy (Saxo bank launched renewable energy basket earlier this year), as we approach December (when the marine insurance ban may be implemented) volatility may increase.

Forex market volumes often increase in response to risk events. Although it is still early to know how the conflict between Russia and Europe will end, providing more gas products to meet the needs of investors may be the right way for traders to take.