Ban Russia Oil? How?

There's momentum in Congress to ban Russian oil. Does it matter? 

Oil is fungible, assuming it trades at all. Germany made exceptions on SWIFT for energy. Yet, some contracts have been cancelled. 

And natural gas futures have soared. So has wheat.

Record High Wheat Price

Wheat futures chart courtesy of Barchart.com

European Natural Gas Surges To New Record Highs As Russian Pipeline Flows Stall

Zerohedge notes European Natural Gas Surges To New Record Highs As Russian Pipeline Flows Stall.

Similarly, OilPrice comments on Intermittent Gas Flow Supply From Russia to Germany

Natural gas, except for liquid natural gas, is much more of a local thing than crude.

The Internal Energy Agency (IEA) says Europe can cut natural gas imports from Russia significantly within a year. 

By "significantly " the IEA means by a third and it is at a steep cost.

"Reducing reliance on Russian gas will not be simple for the EU, requiring a concerted and sustained policy effort across multiple sectors, alongside strong international dialogue on energy markets and security." says the IEA. 

It also requires Germany to step up nuclear energy despite Green demands.

U.K. Factories Halt Some Production as Energy Prices Surge

Bloomberg reports U.K. Factories Halt Some Production as Energy Prices Surge

A survey by Make UK, the manufacturing industry group, found that 17% of companies have had to “temporarily halt production of products that are energy intensive to fabricate” this year.

Gas prices have risen 59-fold since May 2020, and oil prices are at a seven year high, making it increasingly costly for factories to maintain output. Russia’s invasion of Ukraine has made a bad situation worse, driving energy prices higher and leading to shortages of essential components. Car makers in Europe have closed factories for a lack of parts in recent days. 

Huge Warning Shot by Russia 

In what is clearly a huge warning shot by Putin, ZeroHedge reports Russia "Recommends" Fertilizer Makers To Halt All Exports

• RUSSIA RECOMMENDS FERTILIZER MAKERS TO HALT EXPORTS: IFX
• RUSSIAN MINISTRY CITES LOGISTICS ISSUES ON FERTILIZERS: IFX

I like the quotes around recommend.

Fertilizers include nitrogen, potash, ammonia. Russia accounts for around 18% of potash and 20% of ammonia.

Global Fertilizer Flows Could Face “Prolonged Disruptions” 

Farm Policy News reports Global Fertilizer Flows Could Face “Prolonged Disruptions,” as Grains Extend “Blistering Rally”

• Reuters writer Rod Nickel reported this week that, “Canada’s Nutrien Ltd, the world’s biggest fertilizer producer, said on Tuesday that Russia’s invasion of Ukraine could result in prolonged disruptions to the global supply of potash and nitrogen crop nutrients.
• “The United States, European Union and other countries have imposed economic sanctions against Russia, moves that could hinder its exports of natural gas, potash and nitrogen. Belarus, Russia’s ally, is already subject to European and U.S. sanctions that have restricted its potash exports,” the Reuters article said.
• “If the global trade in fertilizer is further disrupted, it will mean higher costs for farmers across the globe, and in turn more food inflation at a time when global food prices have already been hitting record highs. Prices for the widely used nitrogen fertilizer urea in New Orleans surged 29% from the previous week—a record for the 45-year Green Markets index—after Russia invaded Ukraine.”
• A New York Times opinion column by Michael J. Puma and Megan Konar noted on Tuesday that, “Fertilizer scarcity jeopardizes global crop production at a time when some or all of the 13 percent of global corn and 12 percent of global wheat exports from Ukraine could be lost.”
• Bloomberg writer Chunzi Xu reported on Tuesday that, “U.S. farmers and truckers are paying the highest price for diesel in nine years after oil soared above $100 a barrel amid intensifying sanctions against Russia.”
• The EU as a whole is usually a net importer of corn for its livestock sector, with Ukraine one of its main suppliers. The bloc’s agriculture ministers will hold a special meeting on Wednesday to discuss the impact of the war in Ukraine.