Putin -- Update -- September 12, 2022

Question: is the market anticipating end of hostilities in Ukraine?

Clearly:

• Russia over-extended herself;
• Russia literally ran out of munitions;
• if the Pentagon is concerned about munitions in pipeline, imagine Russia
  
• Russia literally ran into US intelligence
• Ukraine successfully exploited Russia's tactical centers of gravity: railroad junctions.
• Ukraine cut off the snake's head when the rails were cut
  
• Russian army probably ran out of food;
• so many casualties, complete loss of morale;
• complete loss of faith in battlefield leadership;
• tactical nuclear threat real
• Putin is no longer in charge of his generals
• turn this around: think if US under Trump had this loss to Iran -- would Pentagon take the blame?
• would Pentagon allow Trump to go nuclear?
  

Latest, 2:45 p.m. CT, Monday, September 12, 2022, link here. At the link, "the Ukrainians strike back."

Latest, 12:07 p.m. CT, Monday, September 12, 2022, link here. At the link, scroll down thee whole thread:

And, link here:

From Bloomberg today:

The rout of Russia’s army in northeast Ukraine over the past few days has many hoping momentum has shifted decisively away from Moscow.

In the energy war, Vladimir Putin’s brigades actually look in better shape. Europe is paying many times more than normal for gas supplies, putting its currency on the skids and the economy on the verge of recession.

But look beyond this winter and it’s possible to see how Putin’s energy weapon will backfire.

It’s easy to forget now, but the biggest beneficiaries of the oil embargoes of the 1970s weren’t Riyadh or Tehran. Oil production from Middle Eastern countries fell by about 4.6 million daily barrels between 1972 and 1982. Ironically, Moscow was the biggest winner: Soviet production rose by 4.3 million barrels.

By cutting off almost all gas supply to Europe, Putin all but guarantees a similar outcome to the Gulf five decades ago — losing market share to alternative suppliers and new energy sources.

The ways Putin is squandering his energy dominance are the subject of a fascinating two-part interview between Georgetown University energy expert Thane Gustafson and my colleague Liam Denning.

In the longer run, commodity consumers always have the option of substitution, a fact that hydrocarbon states perennially underestimate in trying to extract leverage.

Moscow doesn’t just face rivals in the form of giant gas exporters from Qatar to the US — supplies that will flow even faster once new import terminals start opening — it’s also challenged by affordable alternatives.

Take hydrogen. The availability of Russia’s dirt-cheap pipeline gas was one reason why green hydrogen seemed unlikely to displace methane in Europe’s energy system — even at a targeted 1.80 euros ($1.82) per kilogram by 2030, or a bit less than 17 euros a megawatt-hour. Today, it’s been about 18 months since we’ve seen benchmark gas futures so cheap.

The Middle East paid for using energy as a weapon in the 1970s with punishing recessions in the early 1980s, followed by a multidecade struggle to regain the upper hand. Russia faces the eventual prospect of an even more resounding economic defeat.

Cataclysmic losses / outsized opportunities: link here.

Today: link here.

Putin and Xi are meeting. 

Earlier:

Link here.

Posted earlier:

Link here.

Okay, that was yesterday.

Now this:

What catches your eye?

Yeah, that was written in March, about one month into the invasion and already things were not going well.

If that was a serious question then, with all the supporting arguments, imagine how much more things have changed for the worse for Putin.

I think it's time for the EU (and the US) to lift all sanctions on Russia's selling and moving oil and natural gas but lift none of the other sanctions. Doing so would do two things:

• "save" Europe with regard to energy, inflation;
• exhaust Russia's SPR.

It would have no effect on the outcome of the war. Analogy: Reagan's Star Wars. As far as I remember, Reagan put in place no sanctions on Russia. He simply went head-to-head with Russia, and won.