Ukraine Latest: Yellen Warns Russia Risks ‘Shut In’ of Some Oil
US Treasury Secretary Janet Yellen said it’s “very likely” that European Union sanctions will force Russia to offer some crude oil exports at a price set by the US and its allies, if Moscow wishes to prevent a shut-in of some supplies. “They’re going to be looking for buyers, and we think they’re going to have a hard time selling all of it,” Yellen said Saturday in an interview with Bloomberg News. An EU ban on seaborne imports of Russian crude starts on Dec. 5.
© Brendan Smialowski/AFP via Getty Images US Treasury Secretary Janet Yellen said G7's price cap on Russian oil will limit Moscow's energy revenue even if there's demand. Brendan Smialowski/AFP via Getty Images
- India can buy as much Russian oil as it likes, US Treasury Secretary Yellen told Reuters.
- However, India can't use Western shipping, insurance, and financial services in such deals, she said.
- It would be tough for heavily sanctioned Russia to find substitutes for such Western services, she said.
Check out these photos of the massive floating gas terminals that could help to solve Europe's energy crisis
- Europe is hoping that a troop of floating gas terminals will help to solve its energy crisis.
- The specialist vessels reheat superchilled liquid fuel, converting it into gas that can be pumped onshore.
- At least 25 are headed to Europe as countries try to replace the pipeline gas choked off by Russia.
Several European countries are turning to high-tech floating vessels in a bid to reduce their reliance on Russian energy.
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Moscow has fueled an energy crisis in Europe by cutting off key pipeline gas supplies, but the specialist ships will enable countries like Germany to import seaborne natural gas for the first time.
At least 25 floating storage and regasification units (FSRUs) are headed to Europe, according to S&P Global.
Moored offshore, the FSRUs store and then reheat liquefied natural gas before pumping it onshore. That allows countries on the continent to import energy by sea from major exporters like the US, Qatar, and Australia.
Here are some photos showing the FSRUs and floating terminals Europe hopes will help meet its winter energy needs and replace the missing Russian gas:
Germany has chartered five FSRUs from three shipping companies— Dynagas, Hoëgh, and Texas-based Excelerate Energy.
Highly reliant on Russian gas imports, Germany has led the charge in Europe for FSRUs by chartering five vessels. The country found itself particularly exposed to Moscow slashing supply via the Nord Stream 1 pipeline to Germany before completely halting all flows indefinitely.
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Energy giant Uniper has invested around 65 million euros ($65 million) to build Germany's first liquefied natural gas terminal at Wilhelmshaven.
As well as chartering ships, European countries are spending to build the necessary infrastructure for FSRUs to dock in ports.
The units store super-chilled liquefied natural gas, which is typically transported at a temperature of around -250 F, before using seawater to reheat it so that it can be pumped onshore in its original gaseous form.
This new infrastructure will enable FSRUs to dock on Germany's northwestern coast from October 2023.
"All the steps we take to free ourselves as quickly as possible from the clutches of Russian imports are more necessary than ever," economy minister Robert Habeck said about the deployment of the five vessels.
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Two FSRUs, Exmar S-188 and Golar Igloo, will pump natural gas onshore from mid-September.
The Netherlands hopes that the two FSRUs that are docked at Eemshaven will help it completely phase out its dependence on energy from Russia as quickly as possible.
Greece has chartered five vessels in an effort to redefine itself as an energy supplier for south-east Europe.
Like Germany, Greece has chartered five vessels. It aims to set itself up as a supplier of energy for the southeast of Europe.
Greek company Gastrade plans to open an FSRU at Alexandroupolis, which will supply gas from the northeast of the country.
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The FSRU will be able to supply gas to much of southern Europe.
The FSRU will store and reheat liquefied natural gas, then supply the fuel to Greece, Bulgaria, Hungary, North Macedonia, Romania, and eventually Ukraine via these pipelines.
Going into next year, the units should ease bottlenecks and help iron out the dislocations between hubs in Europe, according to Platts Analytics.
Some countries started building FSRU projects before the Ukraine war broke out in February.
Turkey's publicly owned Ertugrul Gazi FSRU has been working at full capacity since July 2021.
Another FSRU project is scheduled to open later this year in Turkey.
The Ertugrul Gazi FSRU pumped around 2.1 billion cubic meters of gas onshore to the country in its first year, according to Turkey's energy ministry.
The country has another FSRU project underway that it plans to launch later in 2022.
India can buy as much oil from Russia as it likes — even at prices above a G7 imposed price cap — but stringent conditions apply, US Treasury Secretary Janet Yellen told Reuters Friday.
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Ukraine hopes that the Patriot battery Germany will send to Poland can protect its skies from Russia as well.“I accepted with satisfaction the proposal of the German Minister of Defense regarding the deployment of additional Patriot missile launchers in our country,” Blaszczak said in a tweet. “During today's telephone conversation with the German side, I will propose that the system be stationed at the border with Ukraine.
Indian oil companies can purchase oil at any price they want, as long as they don't use Western services like insurance, finance, and maritime services which are bound by the price cap, Yellen said, per Reuters.
Concerns have been mounting over increasing Russian crude oil exports to India, despite sweeping sanctions against Moscow to curb funding for its war in Ukraine. In October, Russia surpassed Saudi Arabia and Iraq to become India's top oil supplier.
Indian foreign minister Subrahmanyam Jaishankar said last week his country will continue buying discounted Russian oil as the relationship has worked to India's benefit. An anonymous Indian official also told Reuters the country will not follow the G7 price cap mechanism.
Despite India's proclivities towards Russian oil, Yellen appeared to be confident that Indian wouldn't find many substitutes for Western insurance, finance and maritime services.
"Russia is going to find it very difficult to continue shipping as much oil as they have done when the EU stops buying Russian oil," Yellen told Reuters, referring to a ban on most Russian crude imports by the European Union from December 5. "They're going to be heavily in search of buyers. And many buyers are reliant on Western services."
Russian energy giant Rosneft is already working on a solution as the company is expanding its oil tanker chartering business, Reuters reported in October, citing three sources familiar with the matter. There are also smaller insurance companies, including Chinese ones, that would be willing to support the sale of Russian oil even at prices above the price cap, S&P Global reported earlier in November.
But Yellen told Reuters that even with such additional capacity — which includes using a secretive network of ships — Russia will still "find it very difficult to sell all the oil that they have been selling without a reasonable price."
The G7 is still working on details of the price cap for Russian oil, which will come into force on December 5, US State Department ambassador James O'Brien told reporters in Brussels on November 4.
The G7 is counting on the price cap to slash the amount of oil revenue Russia will be earning, even if demand for the fuel persists. Russian oil "is going to be selling at bargain prices and we're happy to have India get that bargain or Africa or China. It's fine," Yellen said.
The world has been struggling to replace Russian energy supply since the US, the EU, and their allies started imposing hard hitting sanctions against Moscow for the invasion of Ukraine.
Germany, in particular, faces an imminent energy crisis as it was reliant on Russian natural gas, but its storage capacities are currently full, ahead of winter, the German energy regulator said on Tuesday.
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