WSJ is reporting that an effect of the Iranian situation, China is now thinking about restarting negotiations with Russia about a pipeline.
This leaves me with very conflicted feelings, hehehe.
On the one hand - I'm sorry our boy Iran got run over by a truck...
On the other hand... this pipeline business is just so freaking important. We've been chasing the Chinese for the better part of ten years, begging them to sign this contract. They've been wrinkling their nose, and furrowing their eyebrows, and making all sorts of ridiculous demands. They basically wanted the gas for free.
When we had Europe, we managed to negotiate the Power of Siberia pipeline - albeit on pretty ****** terms. When we lost our main customer, China really had us between a rock and a hard place. And now... how the tables have turned!
Too bad it's gonna take like 5 years to bring this pipe online. But once it gets going, it won't shut down for the better part of a century.
Supposedly China has some internal rule where they don't want more than 20% of their energy supplies coming from a single source. They're gonna have to amend that, and become like the Germans - sitting tightly on Russia's oil needle.
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Maybe I should put this in the stock trading thread... but I have a near 100% confidence level in that Russia's European pipelines will be restarted.
It may take a very long time before it reaches the 150-200 billion cubic meters we used to supply annually, but it should rise to 50-75 bcm pretty quickly. This should act as additional pressure on China.
First, I think supplies through the southern corridor will increase. Then the Ukrainian pipeline will be relaunched (to help meet their budget needs, and as a "soft" form of reparations from Russia). The finally stage would be the relaunching of the Nord Stream pipes 1 and 2.