Will OPEC Ride to the Rescue?

and the values of stocks and other assets. We'll get into it with an expert on the global energy industry and uh, you know, Vildonna. As journalists are instinct, is always to find some of the smartest people we can to explain the world to us. Luckily we didn't have to go too far this time. Yeah, we're very fortunate. We're joined this week by Javier Blass. He's a Bloomer columnist and he's the author of the World for Sale. Javier, I want to comming to the show. Hello on great

week with you. Yeah, thanks for doing the Xavier. We know you must be busy this week, Javier. Obviously, this story has so many different facets to it. I actually wanted to just take a brief step back and have you maybe layout what exactly all is going on and what you're watching. Obviously, earlier this week we had news of the US and the UK imposing certain bands on

on Russian oil imports. So maybe just layout for our audience, what are you watching, what all is happening, and potentially maybe even you know, what's the one next thing that you're looking for. So we can just basically go about two weeks ago, and the oil market was already quite tight. The recovery from COVID nineteen had been stronger than expected. Demand here in Europe was really booming. The same thing was happening in the United States, where demanding January probably

was the best January ever for oil consumption. Everyone kind of came back round Christmas, COVID was improving and and and things started to look quite good in terms of consumption. So that was the kind of the demand side of the market. The supply side was quite tight. We have a couple of years of very low prices. I mean remember two years ago we were talking about negative prices at some point. And for West Texas, intermediated is the

American crude oil benchmark. So companies have not been investing a lot and and supply was struggling, and then the oil cartel with Saudi Arabia, Russia and other countries were really keeping the market under control. So things were looking quite high and prices were rising, and then Russia launched the invasion of Ukraine. And Russia is the world's third largest oil producer, the second largest oil supporter only behind

Saudi Arabia. And what happened immediately was the market prepared for the worst cases scenario, a complete cutoff of supplies from Drassia. These are millions of barrels of oil used. To put a few numbers, Russia sports about eight million barrels a day between crude oil and refined products. That is, that's quite a lot. That will be enough to supply the whole of Germany, France, the UK, Spain and Italy together, and you will still have a bit of extra barrels

to supply another smaller European country. What happened was the fear of sancience. We didn't have at that point any official sancios on Russia, but companies were fearing that that was coming and they started to take actions themselves. They boycott Russian oil, They imposed what we call in the oil market self sancions that started to reduce the flow

of Russian oil. Some companies started to announce that they were not gonna buy any Russian oil, and then more recently it was the United States President by then here in the UK Prime Minister Johnson who announced official bands you cannot buy any Russian oils and that really has tightened the supply picture significantly and the market will use well,

it went up quite a lot. We touched a hundred and thirty nine dollars apparrel, which is choose under the peak that the record all time high that we said um in two thousand and eight, that was hundred and forty seven dollars. And then the market really started to think, okay, what if it's a complete shutdown of Russian oil exports,

can we can we manage? And many people were while that happened that really it's very difficult to manage, and we're gonna see two hundred dollars, two hundred and fifty dollars. So analys and traders were starting to really put very high numbers. But at the same time, these very high oil prices are beginning to have an impact on this pectations of economic growth. We may have our recession kid in Europe, and that's what at the same time, that's

copying the price. So you have the two pressures, and the market is trying to to find out how he's gonna play out in the next few months. But at the end of the day, what everyone is looking, every oil trade that is looking is the war in Ukraine. Yeah, but I have here. I was sticking back to when I was a kid, and um, you know, don't let my boyish looks for you, but I was actually a

kid in the nineteen seventies. And I remember nineteen seventy nine, after the Iranian Revolution, I picked up I was a paper boy, and I picked up our local newspaper and they're on the front page was a picture of my best friend's mom. You know, it's the seventies. So she had her bell bottoms on and smoking a cigarette and she was sitting on a patch of grass outside of a gas station. And and obviously the story was about

the gas shortages that the US experience back then. And I'm thinking, now, you know, a rising prices is one thing for the economy. It's it's obviously going to be a headwind for the economy, But I'm starting to worry about actual shortages. So I'm curious how you're thinking about the potential for for shortages, whether it be in the US and Europe, sort of where we might look for those first? What what kind of products might be in

short supply? First, I'm reading about potentially um European factories that won't be able to keep operating if if energy prices get too high. How are you thinking about the potential for shortages and where would you look for for it first? Well, what we are seeing at the moment, for for now is it's a huge price increase. I mean a few days ago we went about a hundred dollars a barrel for oil, and we went almost up to a hundred and forty in a matter of just

a few days. It has come down juice a bit. So whatever goes up also sometimes comes down. But if we think about physical shortages, we have not yet seen them, but they are certain corners of the energy market that they start to look extremely tight, and as time goes that's where we can see some of the shortages. I'm thinking in particular about diesel in Europe, which is very very tight, and we really qual lot on diesel important

from Russia, from Russian refineries. That market is quite tight at the moment, and I would not be surprised if the conflict in Ukraine continues that we may see at some point that there are actual shortages. We have seen already sound refineries in UH in Central Europe Northwestern Europe is starting to impost caps on the amount of diesel that they're selling to their distributors. So it's beginning to be quite real. But um it has not yet happened at the retail level, and I think it will take

a bit more time to that to emerge. Who be the customers most affected there? I'm guessing trucking firms that sort of thing. Yeah, I mean diesel is mostly about trucking. I mean diesel is also very much consume in certain European countries as as because the car fleet is very much on on diesel countries like like France, and you know, it used to be also the case here where I am in the United Kingdom. But it's it's the trucking

industry which is going to suffer the most. And the problem with that is that it means that everyone suffers because we transport everything trucking is is the backbone of our economy. So if if truckers have to pay and the trucking companies have to pay a lot more for the diesel, that means everything that we buy on the supermarket is going to be more expensive because they're gonna pass the cost increase. So we can see quite a lot of inflation in you know, supermarkets, grocery shopping here

in Europe for sure. So happier um And for listeners whenever you're listening to the we're actually speaking today. It's Wednesday, March nine, and there was a big drop in oil prices today. Part of the reason people are pointing to is that there are some signals that some producers United Arab Emirates and Iraq might uh you know, start producing more to try to make up for some of the

lost Russian supply. How do you think about sort of the whole geo politics of oil right now, the relationships between Russia and the rest of the big expert in countries. I mean, I get the impression that um, Russia has a pretty significant influence on OPEC in general these days. How do all the geo politics fit together as far as whether we can expect some other countries to to

pick up the lost supply. Mike, You're absolutely right. And this is what really gets very interesting from the mix of politics and oil because for many years Rosa was almost an enemy of OPEC. They didn't talk U Ussia was completely independent um and they were at times fighting the OPEC group and Russia will see the oil market

completely different. That changes about three years ago where Russia and Saudi Arabia the site to work together in the oil market, and that led to the creation of a new group that we call OPEC Plass, and the Plass is mostly Russia. There are other few countries, but the Plass is Russia all the sudden, after fighting for so many years, Read and Moscow were really working together in

the oil market. And now we have this tension because in another situation, typically what the White House will have done was go to Saudi Arabia and as the southeast place can you increase production is a hundred and twenty a hundred and thirty dollars a barrel, and the South is most likely will have delivered because they are not really interested. They are always the South is one high prices, but they don't really want super high prices that get

a lot of inflation and potentially an economic recession. You're selling oil. You really want a healthy economy, and these prices are not good for a healthy economy. But now it's different. The Saudist and the Russians are working together, and the last thing I believe that Saudi Arabia once is upset Bladimir Putin has been very interesting that through this conflict, Bladimir Puttin has been talking to Muhammad bin Salman, who is the Crown Prince of Saudi Arabia, and they

have been talking about energy and energy corporation. So I think that OPEC may not come to the rescue this time just because they're just working with the Russians. The geopolitics of this, to me are incredibly interesting, and I want to ask you to actually bring in two other players, which is Venezuela and Iran, because there's talks potentially of some of their oilso twice also coming online and potentially helping to offset some of the squeeze that we're seeing.

And that is also the other hugely interesting side of the geopolitics. We have sanciens on already two other countries, as you mentioned, Iran and Venezuela. On Venezuela is mostly lane to the oppression of the regime of Maduro against the opposition. In the case of Iran is about the

nuclear program. So now the United States is working to try to see if they can't reach some kind of agreement with both countries that can resolve the outstanding political issues, the national security issues, and then that will mean the return of oil from both countries, and that could be

quite significant. Iran, there was a nuclear deal, probably can put on the market between half a million and six hundred thousand bars a day quite quickly, and then going perhaps too about a million parars a day within one year. Venezuela is less clear, but perhaps can put a few hundred thousand extra, a few hundred thousand powers of the extra into the market. But when you are in a very tight situation and I'm fearing that you may lose quite a lot of supply from from Russia, that will

be extremely helpful. But it gets very complicated for the White House because now both Venezuela and Iran knows that the United States really want to reach a deal. So you don't have in a negotiation table the last thing that you want on the other side of the table is that the other that you know, they know that you are in a bit of a weak position. So it just getting extremely interesting to observe. And that's the

other thing that the oil market is looking. So it's this massive kind of four dimensional geopolitical chess on oil with Vasia, the Southeast Iran, Venezuela, and the White House right and then here in the US Saviera. Obviously domestically, it's a huge political football, as we say, um, I remember a few years ago when oil prices were crashing, there was a lot of talk about, well, what is

sort of the break even uh price for oil? To make a lot of the fracking projects in the US economically viable, I have to assume at over a hundred dollar barrel. Basically every project in the US is viable now. But there is a lot of debate about whether you know, U Republicans claiming Biden is holding back production and the White House pushing back saying, well, there's nine thousand approved licenses that aren't being used. How do you see that

all playing out? I mean, has the US shale industry sort of been you know, bitten once by by oversupply and and and we'll be a little reluctant to to turn on the spickets too much this time. Where is this price is so high that it'll it'll be full steam ahead with all the US projects. Mike. The price is so high that I think that you could go and drilling your back job and you can find oil. It will be profitable. I mean, it's a d LD as a barrel. It is more than an offer almost

every project to make money. But the problem is the sailing industry in the US have gone through a really tough time. The last couple of years have been difficult investors and unhappy. They are focusing on returns. They don't want companies to grow production because they think that they will float the market and trigger another price collapse. And they really want to focus on pay down there and deliver big dividends to US buy backs, dividends. That's the

game in town. And that means that executives on the on the U s sail industry are very reluctant to increase production very fast. And then the whole industry fields under attack by the White House, the Energy Transition, the signaling from the Biden administration of the future that is going to be fossil fuel, more focused on solar renewables, electric vehicles, and they kind of feel that they are not to make any favors to the administration. So you have this tension going on right now, and I I

think that both sides will find a compromise. Prices are high enough for anyone in the US industry to may money, and I think that the administration, the Biden administration, some point is going to realize that it has a big asset at home that a provide security can produce oil, and it will find a way used to kind of work together with with the industry. I'm really curious if maybe you can give us a time frame of how

quickly US supplies could come online. I'm you know, we hear and read all of these different stories, but what I'm uncertain of is how quickly any of this can actually come online. Even with the case for Iran or Venezuela, I'm hearing months or even you know later, way down later this year. So what do the timeframes actually look like. So in the case of it Ran in Venezuela, very much depends. You need a political agreement with those countries and it just we don't know when when that was

gonna be achieved. We we previously thought that there was a firm deadline, a red line of last week for our Iranian deal. That that that that ended, and we we still are observing the conversations and the negotiations continuing, so we don't really know when that's gonna happen. And if there is a deal, it's gonna take probably a couple of months before any extra oil could come from

from Iran. Venezuela is even more complicated. The conversations have used started, and I don't think that we're about to see a production increase in Venezuela also a country that first of all will need to make investments on his industry to growth. And then in the US, the shale industry.

We call shale in in oil short cycle because it can really go faster than the traditional big, big projects of big oil, which used to take five or six years from finding the oil to to kind of starting production. But short in oil means actually several months, it's not a few days, and it's a bit more complete. It that use, you know, the flick of a switch. It used. The company's needs to drill, they need to find them workers, and it's not very different to the rest of the

American economy. Workers are in sort of supply. They move away from sail, they went somewhere else to work. Um, they're making more money that they were making back, you know, when they were working in Texas, so they don't really want to go back. And in general, the industry is finding that they have a lot of supply chains that is affecting other parts of the economy and they're also suffering them. So what executives are telling me is, look,

it's a hundred dollars pluss. Oil will drill more. We'll try to increase production, but don't expect that tomorrow we're gonna be pumping more than expect even next month or on a couple of months from now. I think that most people think that the first that we can see a reaction from the U sil industry in terms of extra barrels is probably around late summer. Right. I want

to ask you about the pipelines from Russia to Europe. Um. Obviously, the nord Stream to project was canceled as a result of the invasion, but if you look at a map of Ukraine, there are a bunch of pipelines going right through headed to Europe, and I can't help but worry, UM if somehow they're disrupted, either a bomb hits one, or the electricity is taken out, or the the people who maintain them, you know, I know it's typically not a huge staff needed to maintain one of them, but

you do need people to to keep the gas flowing. How big of a risk are these pipelines to um some sort of disruption because of the war? UM? And I would I would tend to think that would be a major crisis situation if for Europe, if something like that were to disrupt that supply. What how are you thinking about that? Well, we're keeping a very close high on those four pipelines, is the main concern of the market.

Are exactly four pipelines. One is for oil we call it Druzba, and three are for natural gas called Surd, Youth, Progress and Brotherhood, and everyone is looking at them. There are UM stations on the border between Ukraine and Western Europe, so we can monitor the flows almost on real time on the Bloomberg terminal, and I have monitors all the time to try to see the flows there, and surprisingly

nothing has happened. I mean, we're talking about oil and natural guys, that's two things that don't go well with bombs and missiles and so on. And two weeks into the war nothing has happened to them. Incredibly more gases flowing through Ukraine today into Europe that there was flowing two weeks ago before before the war started. But if anything were to happen to those pipelines, it will be

really really bad. DRUSBA on oil prices will go high and it would be complicated because sound refineries they don't have much option to that pipeline. If we stuffered a problem on any of the three natural gas pipelines, or god forbid on the three at the same time, it's almost game over for natural gas supply in Europe. That will be really difficult. I mean, we can do it,

but it would be difficult and super expensive. Natural gas prices will just fly and it will they will go high and off that today's super high prices will look like, oh gosh, do you remember when prices were low like that? That's the kind of I mean, everyone is super nervous about it, and is that there even enough US energy to sort of get there in time? No, you, you will not be able to to to to supply with with allengy. You we will have to adjust that the

hard way. Super high prices. Everyone in Europe trying to reduce consumption and the industry, the manufacturing industry, energy intensive companies. Would you simply shut down? That's a scary prospect. I wanted to ask you if you can maybe talk about the con sumer aspect here, because we've heard some service in the US and also in Europe of consumers saying

that they're willing to tolerate higher gas prices. But then I'm wondering what you think happens when when we do actually start to see higher and higher gas prices at the pump, and how that plays into all of this. I think that consumers generally understand that facing Bladimir Putin is going to have an economic cause, and they understand that is a big supplier of natural resources, particularly oil and gas, so they are expecting that this is going

to have a cause. But we are in the early days of the conflict, and the key question needs if this continues and we are three months from now, six months from now, and you know, let's hope that doesn't happen because the human cause in Ukraine would be massive. But if that continues for a long time, I don't know if the public is going to be as accepting as it is now At the moment, I think that there is acute sense of acceptance that this is a price that they're willing to pay. It depends also how

high prices go. One thing is that the oil price goes to a hundred and twenty dollars a barrel. Another thing is that goes to a hundred and seventy five or two hundred dollars a barrel um. So that is and then political leaders are going to have to do a bit of education. They're going to have to address the nation and and tell them what is going to happen and why we are paying higher prices for gas

and and and and utilities. That has started and we saw President by Them doing a bit of that this week when he announced the export the import band on Russian oil. Has not really happened as much here in Europe.

Has perhaps happened in France, but not elsewhere. And the other thing that is associated with that is that at some point, particularly in Europe, political leaders may need to ask people to conserve energy, lower your thermal state a couple of the Greek celsius, so you're consuming a bit less natural guys. Perhaps making public transportation free on the weekends so people leave their car at home and take the bus or the underground. There are things that we did, Mike,

you you may remember this. We did this in the seventies. Uh in some European countries you could not drive on a Sunday because there was not enough gasoline. So they are measures that we may need to take. But I think that if it gets to that situation is when it's just gonna be complicated for many politicians. And when I have been speaking to some leaders over the last few days, I can't tell you one thing that it

comes on every conversation. No one wants to deliver the famous speech of Jimmy Carter with his cardigan, just basically talking about energy sortages. They think that they have to do that they lose the next election, so they're very aware that it's not gonna be easy, right right. I think the I feel like the notion of car pulling was invented in the of these year and all that

and Vildanna. We had those giant station wagons. Back then you can fit about the whole baseball team into the back of one of those to get to UH, to get to practice. So, UM, you know that there's always something to some adjustments to be made. Have you you know?

I was looking at the oil futures curve, and for listeners who are are not familiar with its typical shape, it's typically what's known as backwardation, which means that UH oil for immediate delivery or the next couple of months is typically priced higher than for deliveries say a year

or two from now. Have your What really caught my eye, though, is I I looked at the curve and then compared it to where it was a month ago, and the backwardation is obviously extreme now that the very near term prices are way higher than say, later in the year, next year. Well, what fascinated to me is looking all the way out to UM, they're about I think it was eighteen or nineteen dollars a barrel higher than they were a month ago for for that far out in

the curve. Now, markets don't always get it right, but it feels to me like, you know, traders are pressing in sort of a permanent shift higher um at least out six seven years. I mean, is that reasonable or do you think the markets have it right about that to that extent? Where is this sort of just such an uncertain market that um, you know, you can't necessarily take the market signals for um, you know, being the

best protector of the future. I think that we need to wait a bit and see how things start to stabilize. I mean, the market has moved a lot in in really a matter of four or five days, and the back end of the curve, as you you're told it has also moved a lot, and it's not very yet

clear why he is moving that. I mean, one of the reasons is that some consumers of oil, and I'm talking about big companies have started to panic and they have not covert, they have not hedged, they have not both insurance for future delivery, and they're beginning to try to say, hold on one second, we really need to

to have a bit of more insurance. And I'm talking about airlines, tracking companies and and unsimilar and that has really triggered this increase on the back end of the cure because that's where this company is usually by their their insurance, So that's one of the elements that it triggered that movement. But I think it's a bit too early to say we have seen an structural shape in

oil prices to the outside. But certainly, as I said, at the beginning, even before the war started, the market was feeling really tied and it was really a sense that prices needed to move higher just from the demand side, didn't. Yeah, mostly for the demand side. I mean, the demand recovery has been remarkable. I mean only a few months ago we were talking about peak oil demand and we all were gonna be working from home that was going to

reduce permanently the consumption of gasoline and diesel. And where we have found is that actually some of the chain just on the economic structure that they came from, COVID maybe more energy intensive. We are using a lot more deliveries at home rather than going ourselves shopping, and actually that it really increased the amount of castl in that that you need to do. I mean, you are getting the band of the track to your door with whatever

you're buying. I'm kind of embarrassed myself of the amount of deliveries that I get every day at home. I mean, you know, we really need to stop going online and shopping and and and that really may have really lifted oil demand higher on a partmanent basis, right, And and then the efficiencies aren't there. You know, you can get three different trucks from Amazon on any given day rather

than one one delivery exactly. And there are other things like, for example, at the moment, I give you my personal anecdote. At the moment, I'm working three days a week into the newsroom and usually works a couple of days at home. So what happened. The news room is permanently open, so it means that it's heated, but I'm also hitting at home for a couple of days, So we are consuming more natural gas for hitting that previously. That's in the

gas market. They call it double hitting. We had not really thought about the impact, but when you multiply that impact for twenty five million households in the United Kingdom, that really matters. So what we thought that probably was a permanent drop in oil demand actually is resulting on much higher, very strong oil demand. And also a lot of people don't feel yet completely safe using public transportation, so rather than pick up a plane to fly somewhere

a couple of hours. They will rather do this very long or a long at least loan laundree for my European standards, and then just drive and all the sudden you have more gasoline consumption. Another big story this week was that the you said it was going to look to cut about I think it was of its gas and words from Russia. I want to ask you how

realistic that is and how it would actually look in reality. Well, as all of these targets, I think that there is a lot of ambition that you set a very high target, so you hope for the best, and then you you kind of settled for something a bit lower. And I think that the European Commission put a very embasical target and I don't think that they're expecting to have to hit it. But in a way, it very much depends on what happened. I mean, perhaps Europe that doesn't have

the option. If Russia shuts down the natural gas flow, well we will have to learn to live with no gas from Russia whatsoever. If those pipelines that we were discussing earlier just get blown up, it is more or less the same thing. So it's possible to achieve, but it's gonna be extremely difficult and it will mean much higher prices for a longer period of time. I mean, Europe at the moment, bias is still between thirty five

and forty of the gas. There is not enough llergy facilities around the world to kind of fill that gap without living current consumers of energy short of supply, so very and busiess target probably unrealistic, but it kind of signals the commitment of Europe to try to resolve the problem. And I think that this is one of the biggest

changes that we may see long term on GUS. I don't think that whatever happens with Ukraine, even if you know a settlement was achieved next week, I don't think that Europe will free ever comfortable relying of natural gas from Brazia as you did in the past. That is just that has changed forever. Well along that line of things.

King about the longer term, um, I'm curious what you think about the prospects for nuclear power because, uh, you know, on one hand, you have this situation that sort of argues in favor of you know, building more plants at home, being more self sufficient for electricity generation. With with nuclear On the other hand, you've got fighting around Chernobyl and the power plant in the south, kind of reminding us all of the dangers of it um and the risks to it. How do you think that balances out and

shakes out in the future. Is is this whole situation, um, good or bad for the prospects of nuclear power? So this is the first time that actually there has been at war on a country with nuclear power, with nuclear power stations, which is you know, um, it's quite shocking. And and again if I was saying that, you know, pipeline is full of gas and oil, don't react well with you know, bombs and missiles, nuclear plants, even words uh and and and certainly is worrying a lot of

faults in the in the nuclear industry. What could happen so far? I think the both sides are trying to are aware of the dangers and no one wants to have another chernovil Um. But you know, here in Western Europe, I think that has just prompted a huge rethinking about nuclear power. I don't think that countries that were more or less against nuclear power are just about to start building nuclear stations. But the nuclear power stations on those

countries that they were a target for decommissioning. I think that those are gonna run for longer as long as it's safe, and that as long as all the upgrades can be I think that countries like Germany, Belgiun, Spain are gonna run the nuclear power plants for longer. France they said, for sure, it's gonna be building more nuclear

power plants, the same thing for the United Kingdom. All the sudden, even the green parties in continental Europe, which traditionally against nuclear power, as saying, well, this is not great, but let's be realistic. We really need to reduce our dependence on Russia, and we really need baseload electricity supply and nuclear dost so for now we're going to need that. And then just to hit on one more big topic which we haven't brought up yet, which is cyber attacks.

And I'm wondering how the prospect of cyber attacks on you know, any of these facilities, how are you thinking about How should we all be thinking about it? This has been a huge concern of the whole energy industry, not uice, oil and gas, but utilities. Um in general, utilities were very worried degreed electricity greed and for now nothing has happened that we know, but nothing has happened

linked to Ukraine or Russia. Obviously, last year we have an attack on Colonial which is this big pipe and transporting gasoline, diesel and jet fuel all the way from the US Gulf of Mexico area all the way up to the New York area, and that was tracked to hackers in Russia. So there was a lot of concern that as Russia was invading Ukraine was going to see a wave of cyber attacks across the European Union. We

have not seen that. The question is are we not seeing that because Russian hackers are not launching the attacks or because the companies have spent a really significant amount of money really building defenses against cyber attacks, And probably is a combination on both. But it remains a big source of concern on everyone on the industry. And I think that in particular areas like utilities and degree the electricity degree almost is the main concern that they have heavier.

Plus we are so grateful to get your insights heavier. The author of the world for sale any power and the traders who barter the Earth's resources with Jack Farchie, Have you are really insightful? Before we let you go, though, we do have a trudition on this show where before I let you go, we have to hear about the craziest thing you saw in markets this week. I have a suspicion what it is, but but tell us what's

the craziest thing you saw in markets this week? Well, my I'm bringing you a treat because it's not the craziest thing that I have seen in markets this week. Is the craziest thing that I have seen in markets on my whole journalistic life, which sadly already stands for twenty four years. That was the price of nicol, and nicole is this metal that you know. It used to be a boring market and no one really pay a lot of attention other than you know, journalist like me

and then the people on the nicol market. It used to stainless steel. But now nicole has another big use that these high efficiency batteries for the electric vehicles. I mean, Tesla has a lot of nicol on free battery and Elan Mans recently twitted that one of his main concerns was the supply or of nickel. So what happened was we have a sort of sort of squeeze in the nickel market and the price went just ballistic. H A couple of weeks ago, a ton or a metric ton

of nickel cost about twenty dollars at one point. This week it costs more than a hundred thousand. The market went up two hundred and fifty percent in two days, and the London metal has changed. Here in London where nickel trades have to take the extraordinary measure of shutting down the market used to stop the madness, and we don't know when trading is gonna restart. It's just gonna be shut down for several days. It truly is one of the wildest stories. I agree with you, one of

the wildest I think I've ever seen. Too. Oh do you have you been holding nicol and your bunker there? No, I haven't been. What the bank of reference for our listeners is the recording room moment? But no, I wish I had been. What a week? Well, how about you volda, what's the craziest thing you saw this week? I don't know if I want to call it the craziest or the wildest or anything like that. But it's something that just really struck me. And actually Javier already brought it up.

It was a story I read in the Wall Street Journal which the title was Ukrainians risk their lives to keep Russian gas flowing to Europe. So Javier had mentioned that Europe right now is actually importing more Russian natural gas than before the invasion, and there's actually a crew of Ukrainians who are keeping it flowing. And the reason is, and this is why I chose this one. I was hoping to sort of explain it a little bit and

maybe Hoavier can give us more insights. But the more gas flowing now because of a deal that was struck actually years ago with gas prom where customers pay according to the level at which gas traded a month ago, and a month ago prices were lower. It is it is one of their I know that's the right war, but it's it's one of the ironies of the war.

We we we we were thinking that the guys was going to stop flowing through Ukraine, and actually European utilities are buying more gas from Russia through Ukraine and paying more money to gaspron which is ultimately controlled by bloody mill putin just because what a bit of corporate greed.

I mean, it's cheaper for these utilities to buy through the long term contract with GASPRON and then they can't resell the gas at the spot price, which is much higher, So they are maximizing their contract with GASPRON in the middle of a war. I call it capitalism in times of war. I know that some people will be less sympathetic than than that. That that that comment absolutely absolutely all right, well I'll give you mine before we go.

And this is UM. I think the one thing that has struck a lot of people about this words there have been moments of comic relief. You know, Voldimir's Lensky obviously started out as a comic actor, and I feel like his spirit sort of trickles down UH to the

rest of the country. Um. For example, there are all sorts of videos of farmers UH stealing Russian tanks with their trackers hooking, hooking them up on a tow rope and stealing them, to the point where the tax authority in Ukraine issued a statement saying, UM, if you steal a Russian tank, you don't have to declare it has income on your on your tax return. But anyway, someone put up a listing on eBay for a used Russian

T seventy two tank and uh. This was alerted to me by the Twitter user financial Gambler, who I know is an avid listener of the show. I had actually seen it, but I never thought of it for the craziest thing. Now, it turns out the listing was boguscutting the snopes. It wasn't a real listening. But I think the fact that many of us were wondering whether or not this was real and thinking it possibly could be real.

Uh shows you how crazy things have gotten. But just for fun, even though it's a fake listening, we're still gonna play prices right because I think it's a reasonable price for a used Russian T seventy two tank. Data. What do you think the buy it now price on eBay was for this fake listing for a Russian tank? I can't give There's no way I would never who would ever consider buying it. There's no way I can

even come up with it with a number. All right, havevier, what do you think that the buy it now price for a used Russian TEA seventy two tanks should be? I I don't know it was a T seventy two, but I have seen one in action Russian tank in in in um saddly in the Middle East, so I know how it's scary they look, and I don't really want to bid, but okay, if I have to guess the twit went wild, so everyone would be bid in

UM half a million. That's pretty good. It's pretty good, fo, so you're you're you're pretty good, pretty close, and uh, who knows what it takes to fill that thing up at the pump, though you know I was gonna be expensive. I wonder what they must run on diesel? I guess huh, they run on decent but you can't funny enough some of those thanks, they really run on almost anything. But you could run then on jet fuel almost the same the same product cast as you would put on a plane.

Can I imagine they're real guest coustlers though I can't imagine they're very They're not gonna be cheap, so factor that into your price. But again, have your such a privilege for us to get your insights at this time, and I know you've had a busy week, so we we really appreciate it. My pleasure. Thank you for having me, Thank you for joining us What Goes Up. We'll be back next week and soil. Then you can find us on the Bloomberg Terminal, website and app, or wherever you

get your podcasts. We love it if you took the time to rate and review the show on Apple Podcasts so more listeners can find us. And you can find us on Twitter. Follow me at Reaganonymous. Bilbona Hierrich is at Bilbona Hierrich. You can also follow Bloomberg Podcasts at podcasts I. Thank you to Charlie Pelleta Bloomberg Radio. What Goes Up is produced by Magnus Hendrickson ahead of Bloomberg podcast is Francesco Levy. Thanks for listening, See you next time.