🌍 Australian LNG strike worries global gas market
Plus: The US and China are still talking
Valentina Calvi
August 30, 2023
Today’s newsletter supported by:
Hi there Intriguer. If the world ever feels a tad overwhelming, just take a breath and remember that the UK hosts annual World Gravy Wrestling Championships.
Today’s briefing is a 4 min read:
🇦🇺 Did Australian LNG workers just rock the world?
🤝 The US and China are on speaking terms.
➕ Plus: London’s new low emission zone, how the papers are covering France banning the abaya in state schools, and why Chileans are googling ‘Rubiales’.
⏱️ Around the world in sixty seconds
🇵🇰 Pakistan: A court has suspended former Prime Minister Imran Khan’s recent corruption sentence. Uncertainty remains about whether the former cricket star will now be released from prison, due to other court orders allowing for his arrest.
🇺🇦 Ukraine: Kyiv says its military has reclaimed the town of Robotyne, breaking through Russian frontlines in the south. The Kremlin has denied Ukraine’s claims.
🇹🇱 Timor-Leste: Myanmar’s military junta has expelled a top Timorese diplomat in retaliation for a recent meeting between Timor-Leste’s president and Myanmar’s government-in-exile. Timor’s previous administration was criticised for failing to speak out against the Myanmar coup.
🇬🇾 Guyana: Caribbean nations have hired a British law firm to examine their case for compensation over the transatlantic slave trade. Descendants of former British prime minister Gladstone offered an apology to Guyana last week.
🇹🇷 Turkey: President Recep Tayyip Erdoğan will travel to Russia next week to meet President Putin. Erdoğan is hoping the meeting will help revive the now-defunct Black Sea grain deal.
🇦🇺 Australia | Climate & Energy
Australia spooks global LNG markets
Workers at two massive Chevron liquefied natural gas (LNG) projects in Western Australia plan to take escalating strike action from Thursday 7 September, after weeks of failed negotiations on pay and conditions.
The plants, Wheatstone and Gorgon, aren’t your ordinary LNG facilities: they produce 5-7% of the world’s total LNG supply, with 500 employees.
So gas prices have whipsawed over recent weeks as markets track each round of union negotiations in Australia. Why?
🌏 Chevron sells its Australian LNG to Asia (47% to Japan alone), and
🌍 Disruptions can force those buyers into a bidding war with Europe for replacement cargoes coming out of Qatar and the US.
LNG markets were already pretty complex:
🇷🇺 Around 16% of the EU’s LNG still comes from Russia
🏭 Some utilities switch back to coal or oil when LNG gets too pricey
🇮🇳 Places like India just buy less LNG when prices spike, and
🇪🇺 The EU has now hit its LNG storage targets early for winter.
So the strike action in Australia hasn’t started yet, could still be averted, and (if it starts) will start small. But that’s still enough to trigger global jitters.
Intrigue's take: This whole saga is a reminder that autocracies like Russia aren’t the sole source of volatility right now: it can be a Panama drought, Atlantic hurricanes, maintenance in Norway, or strikes in Australia.
And Australia is balancing so many competing interests here: boost export and tax revenue, contain local energy prices, protect its reputation among buyers and investors, steward an energy transition, and tame inflation.
Yikes. In the meantime, the world is now watching negotiations between a few hundred workers and their employer in remote Western Australia.
Also worth noting:
The same union just reached a deal to avert another LNG strike nearby. Its earlier action at an Australian Shell plant cost $1B in lost exports.
Japan has questioned Australia’s reliability as an energy supplier. Its prime minister visited the Middle East in July to firm up supplies.
📰 How newspapers covered…
France’s decision to ban abayas in state schools
Paris, France
“French education minister announces ban on Islamic abayas in schools”
Istanbul, Turkey
“Under-fire France claims Muslim overgarment abaya is a 'political sign'”
Singapore
“French ban of abaya robes in schools draws applause, criticism”
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🤝 US | Geo-economics
US Commerce Secretary Gina Raimondo and Premier Li Qiang in Beijing on Tuesday.
Photo credits: Andy Wong/Pool/Reuters
Another US cabinet member heads to China
US Commerce Secretary Gina Raimondo wraps up a four-day visit to China today (Wednesday).
🇺🇸 Raimondo has relayed various messages while in town, including that:
The US doesn’t “seek to decouple” from China
China has become “uninvestable” for US firms, and
US national security policies aren’t negotiable.
🇨🇳 For China’s part, senior reps like Premier Li Qiang said:
The US is excessively securitising and politicising trade
Beijing is trying to improve its own business environment, and
China holds “serious concerns” over US trade and investment restrictions on China.
Intrigue’s take: If this all sounds like a balancing act, that’s because it is. The sheer surface area of interaction between the two countries is so vast, it’s possible (and inevitable) that multiple things hold true at once.
So the theory here is to leverage the economic to help stabilise the political, particularly ahead of President Xi’s presumed visit to San Francisco for APEC in November. And dialogue is the key first step.
But with trust so low, it’s unclear at this point who’s still really listening.
Also worth noting:
The US Secretary of State, Treasury Secretary, and Climate Envoy have also visited since June. There’ve been no reciprocal visits from China yet.
Secretary Raimondo’s email was among those reportedly compromised by a China-based hacker group in June.
There are now 24 commercial flights between China and the US each week. That number stood at more than 300 pre-pandemic.
➕ Extra Intrigue
Here’s what people around the world googled on Tuesday 29 August:
🇦🇺 Australians searched for ‘Bali Earthquake’ updates after a 7.1 shock was recorded near the Indonesian island early yesterday morning.
Folks in 🇨🇱 Chile looked up ‘Rubiales’, after FIFA suspended the head of the Spanish Football Federation for kissing a female footballer at the Women’s World Cup earlier this month.
🇺🇦 Ukrainians searched for ‘Сергій Ільницький’ (Serhii Ilnytskyi), as services were held for a high-ranking military commander who died in combat last week.
💬 Quote of the day
As of yesterday (Tuesday), London’s ultra-low emission zone (ULEZ) now covers all of Greater London (pop: 9 million). The policy will charge drivers of older, high-emitting cars £12.50 ($15.70) per day, and has set off protests in the British capital.
🗳️ Poll time!
Do you think taxing high-emission vehicles is a good idea? |
Yesterday’s poll: Do you think economic ties are enough of a deterrent for Beijing's policy towards Taiwan?
🟨⬜️⬜️⬜️⬜️⬜️ 👍 Yes, the fallout from an invasion would devastate China's economy (23%)
🟩🟩🟩🟩🟩🟩 👎 No, Xi has made clear China will take Taiwan at all costs (75%)
⬜️⬜️⬜️⬜️⬜️⬜️ ✍️ Other (write in!) (3%)
Your two cents:
👎 J.L: “Taiwan is a non-fungible priority for Beijing. Rational cost-benefit analysis left the building a while ago.”
✍️ C.C: “It's a stalemate until China thinks it can win easily and without major economic fallout--a lesson illustrated by Russia-Ukraine.”