Curious why Brent just spiked by over 1% (and the S&P500 took a leg lower)? The reason is headlines from Reuters citing Europe's unelected dictator, Van Rompuy who has said that sanctions should include Oil technology. However, in a hilarious twist, the unellected muppet of Europe's insolvent banks, hopes to get his sanctions cake and snort Russia's gas too, adding that Europe's sanctions should exclude the gas sector.
- LETTER FROM EU COUNCIL HEAD VAN ROMPUY TO MEMBER STATES SAYS RESTRICTIONS ON SUPPLYING TECHNOLOGY TO RUSSIA SHOULD INCLUDE OIL, BUT EXCLUDE GAS SECTOR-EU SOURCES
More from Reuters:
EU leaders seeking to agree sanctions against Russia over its actions in Ukraine are expected to include oil technology but exclude technology for Russia's all-important gas sector, EU sources said on Friday.
The scaling back of the EU's ambitions shows the difficulty of agreeing forceful sanctions against Russia without risking damage to the bloc's fragile economy.
Two sources quoted from an official letter sent to EU heads of government outlining "an emerging consensus on some key principles".
Here it appears that Europe's unelected leaders are somehow deluding themselves that if faced with escalating sanctions, Russia will not unilaterally cut off the gas to Europe.
It gets better. Reuters also added the following:
- LETTER FROM EU COUNCIL HEAD VAN ROMPUY ASKS EU LEADERS TO DELEGATE AUTHORITY TO AGREE TO RUSSIA SANCTIONS TO AMBASSADORS, AVOIDING NEED FOR SUMMIT-EU DIPLOMAT
Why? So that when things really escalate out of hand, and Russia does half gas deliveries sending Europe into a triple-dip recession or outright depression, the population will demand scalps. At that point the unelected Van Rompuys can say: "hey, don't blame us. It was all the ambassadors fault."
Lest anyone thinks that Russia is anywhere close to "blinking", allow us to disabuse you of such naive thoughts with these Reuters and BBG headlines:
- RUSSIA SAYS UKRAINE SHELLED RUSSIAN TERRITORY WITH THE INTENT TO KILL LAW ENFORCEMENT OFFICERS; PROOF FOR `FALSE' U.S. CLAIMS `SIMPLY DOESN'T EXIST' - -INVESTIGATIVE COMMITTEE STATEMENT;
But the biggest telltale is what we have said the latest escalation is all about: the South Stream - the Russian nat gas pipeline which would circumvent Ukraine entirely. "A draft document on possible sanctions on Thursday also laid out a range of technologies that could be restricted, which could have delayed development of Russia's South Stream gas project to ship gas to Europe via the Black Sea."
Because just like with Syria, so with Ukraine and all the associated brewhaha, at the heart of the ongoing conflict is nothing more than Europe's addiction to Russian energy.