Oil & Gas

Robinhood’s reversal, Russian oil cap

30 Jun 2022

The digital brokerage is worth less than a quarter of its $32 bln IPO value. In this Viewsroom podcast, Breakingviews columnists argue that its $7 bln cash pile and ample user base make it an attractive target. Also, Western leaders’ plan to restrict funds to Moscow may backfire.

Uniper woes could force reality check on Berlin

30 Jun 2022

The German utility needs state support after Russia cut gas supplies, forcing it to buy more expensive fuel instead. A better alternative would be for the regulator to allow Uniper to pass the cost on to consumers, dampening demand. The risk of open-ended bailouts helps its case.

Saving energy now is an EU no-brainer

28 Jun 2022

The bloc has hiked LNG imports by 50% to replenish storages and cut its Russian gas dependency. But if Moscow turns off the taps, Germany could sink into recession. All the more reason to kick off energy-saving measures this summer and try to curb gas prices by cutting demand.

Mukesh Ambani lays groundwork to divide and rule

29 Jun 2022

The tycoon’s son Akash is taking over the telecom unit as a first step in transferring the $220 bln empire to his three children. Spinoffs will probably follow. Ensuring family interests align should help avoid a repeat of his own epic sibling feud and preserve the group’s power.

G7’s Russia cap could send oil prices up, not down

28 Jun 2022

The developed nations club wants to cut Moscow’s revenue by curbing crude export prices. To work, a cap needs to be global in scope, air-tight to avoid sanctions evasion, and have Russian acceptance of the forced discount. Without these it may mean less supply, and higher prices.

American shipping law doesn’t sail

27 Jun 2022

A U.S. act passed in 1920 requires ships traveling between U.S. ports to be American made and operated. But that has doubled the cost of transporting gas from Houston to New York, among other things. Eliminating the old rule would ease pressures on shortages – and rising prices.

Capital Calls: Russian default, Inflation and debt

27 Jun 2022

Concise views on global finance: Moscow defaulted on its foreign debt for the first time in over 100 years, leaving bondholders in limbo; the Bank for International Settlements wants rates raised “quickly and decisively”, but is also worried about higher borrowing costs.

Germany’s gas action plan pulls its punches

24 Jun 2022

As Gazprom restricts supplies, Berlin is switching coal power plants back on and squabbling over nuclear energy. But it’s still shielding Germans from high prices. A better ploy would be to use fiscal buffers to protect poorer citizens, thus incentivising everyone to use less.

Buffett puffs heavily on oil cigar butts

23 Jun 2022

Berkshire keeps upping its energy bets, now owning a quarter of $52 bln shale driller Occidental, counting warrants. That’s a change from his past commodity producer skepticism, reinforced by oily slips. Waning prospects, and lower investment, make it more of a Buffett business.

Capital Calls: Bank stress tests, Japan inflation

24 Jun 2022

Concise views on global finance: U.S. lenders passed the latest Federal Reserve capital exams, but they’re bound to be more stressful next time; the country’s consumer prices rose 2.1% in May, intensifying a standoff between the central bank and bond investors.

Gas tax holiday accomplishes little, costs a lot

22 Jun 2022

Joe Biden’s call to suspend U.S. federal gas taxes will shave some cents off costs at the pump. But it's regressive, works against long-term goals to reduce fossil fuel use and could even stoke inflation. That’s a high price to pay for a pre-election popularity bump.

Capital Calls: SoftBank Arm-twisting

22 Jun 2022

Concise views on global finance: The UK government may be eyeing desperate measures to keep SoftBank-owned chip group Arm's IPO in London.

Western bankers’ long wait for Gulf gold pays off

20 Jun 2022

Not long ago, U.S. and European lenders’ Middle East jobs meant low-paid work and no play. Now, oil-funded deal flow in Riyadh and Dubai is robust even as it falls elsewhere. That’s a boon for the likes of JPMorgan and Citi, who stuck it out and are now boosting their teams.

Harold Hamm’s deal ushers in oil’s last hurrah

14 Jun 2022

The shale pioneer wants to buy the remaining 17% of Continental Resources, valuing the firm at $25 bln. The small premium - and outlook for oil prices - means he can be a huge beneficiary of wells pumping cash as fossil fuels’ future wanes. Others might as well follow the lead.

EU gas jumps from Russia frying pan to U.S. fire

9 Jun 2022

An explosion in Texas knocked out nearly 20% of U.S. liquefied natural gas exports for three weeks or more. That’s a setback for European nations counting on other countries to ease their dependence on Russian pipelines. For America, the excess supply is a temporary respite.

Europe’s energy subsidies help Putin and pollution

8 Jun 2022

EU leaders are trying to cushion the blow of rocketing energy bills. But keeping a lid on gas prices encourages consumption, which enriches Russia and hinders decarbonisation. Better focus public support on poorer households, and push harder on energy efficiency.

Hydrogen IPO finds rare pocket of market optimism

6 Jun 2022

Italy’s De Nora, which makes components to produce a green variety of the gas, is seeking a June listing. That’s bold after choppy markets deflated other high-flying upstarts. Tapping into Europe’s drive to end its fossil-fuel dependency will help pump up a 5 bln euro valuation.

Capital Calls: Inflation-proof Dr Martens, Saipem

1 Jun 2022

Concise views on global finance: The UK bootmaker’s polished results offer glimmer of hope to embattled retailers; the Italian energy-services group reassures investors with $550 mln sale of its onshore drilling unit.

Oil embargo will hurt Putin more than EU

31 May 2022

Europe will halt 75% of Russian crude imports now and 90% by year end. Replacing the lost fuel will hike EU consumers’ red-hot energy bills. Moscow can sell oil elsewhere but may still lose more than a third of its most lucrative export revenue source, hurting its war machine.

Oil’s discards show the thrill of boring spinoffs

27 May 2022

A decade ago, oil firms jettisoned slow-growing refineries like Marathon Petroleum to focus on high-margin exploration. These businesses have returned far more than the exciting drilling business. The gap could widen, encouraging Big Oil to consider something similar.