The shadow of a worker next to a logo of Russia’s Rosneft oil company, in Nefteyugansk, Russia, on Aug. 4, 2016.Sergei Karpukhin/Reuters
Just under two years ago, when the global economy was pretty much shut down in the panicky first wave of the pandemic, oil prices actually went below zero. On Monday, they shot north of US$130 a barrel and almost hit US$140 at one point.
Natural gas prices rallied by 30 per cent, reaching an all-time high. According to Bloomberg, the benchmark Dutch wholesale price reached US$470 a barrel oil equivalent. That is not a typo.
The latest price driver?
Over the weekend, U.S. Secretary of State Antony Blinken, who was on a whirlwind tour of NATO countries in Eastern Europe, told the media that the White House was in “very active discussions” with European allies about banning Russian oil exports to the United States and Europe. An oil export ban has bipartisan support in the U.S. Congress.
His admission put the energy markets into near panic. While many energy strategists and analysts suspected that soaring prices were inevitable as the war in Ukraine war entered an ugly phase dominated by the bombardment of cities, others thought that prices would not explode because Western governments would be forever reluctant to ban a crucial source of energy: Russia is the world’s third-largest energy producer.
You can’t blame the doubters. As recently as last Thursday, the White House was playing down the likelihood of slapping an oil-export ban on Russia. And Europe, which has few domestic reserves of oil and natural gas, was resisting a ban. Russian energy exports had been exempt from sanctions, still are – but for how much longer?
In recent days, the moral argument to ban oil, and possibly gas, exports began to displace the economic argument to keep Russian exports untouched to protect families and business from a price shock. That position became increasingly untenable because energy exports are financing Russia’s war in Ukraine, to the point of cringing moral absurdity: as energy prices rose, Russia earned more export revenue to pay for its destruction of Ukraine.
Ukraine’s Foreign Minister, Dmytro Kuleba, summed it up succinctly when he said Russian oil “smells of Ukrainian blood.”
A US$10 increase in oil prices boosts Russia’s current account inflow by about US$20-billion a year. For Russia, war had never been so profitable. Oil of the Brent crude variety is now up 80 per cent in a year – gas far more – and energy accounts for about half of Russian exports. Now you know why Kremlin dwellers are smiling, or were until Mr. Blinken said that sanctions on Russian oil might be coming.
The question is whether an oil, and possibly a gas, export ban would hurt the West as much as Russia. What we know already is that the pain on Europe would greatly exceed the pain on the United States and Canada.
Thanks to the shale oil boom, the United States is a net exporter of crude oil and oil products (that is, it exports more than it imports), though not by a large amount. Since Russian crude oil imports are about 3 per cent of total American oil imports, banning them would hurt Americans only a bit.
Europe is not so blessed with homegrown supplies, which explains its reluctance to go whole hog on an import ban. According to the International Energy Agency, about 60 per cent of Russian oil exports go to Europe, and those exports account for a third of Europe’s oil demand (in November, Europe imported 4.5-million barrels a day of oil and oil products from Russia).
Europe is overly dependent on Russian gas, too, and the prospect of European gas shortages has put the gas markets into a tizzy. Royal Bank Capital Markets said Monday that gas futures for delivery in Europe or Britain were trading at 20 times to their U.S. equivalents. The enormous transatlantic price differential was not just a short-term phenomenon. One year out, European price futures were trading at five times higher than U.S. gas futures.
So Europe will enter the house of pain if Russian oil or gas exports are curtailed, let alone banned. The United States, not so much. Europe might even go into recession, since more often than not, soaring energy prices have preceded recessions. Certainly, inflation will remain high.
What about Russia?
There is no doubt a North American and European export ban would hurt. Already, the Russian energy markets are in trouble even though energy remains exempt from sanctions. According to Energy Intelligence, Russian oil exports had fallen by a third or more by last week even though Russian crude sells at a significant discount to Brent crude. Banking sanctions are behind the sharp downturn, plus the country’s pariah status. If non-Russian oil can be found, it will be bought.
To be sure, a European oil embargo would really hurt Russia – if it comes. Europe is so highly dependent on Russian oil and gas and a full import ban seems unlikely, perhaps even economically impossible. For Europe, the ugly reality is that many big European countries, especially Germany and Italy, slept-walked into creating economies that became ever more dependent on Russian energy exports, to the point Germany is shutting its nuclear reactors.
Yes an oil export ban will hurt Russia, but it will hurt Europe even more. Mr. Putin knows this.
TORONTO – Canada Goose Holdings Inc. says it has signed a deal that will result in the creation of its first eyewear collection.
The deal announced on Thursday by the Toronto-based luxury apparel company comes in the form of an exclusive, long-term global licensing agreement with Marchon Eyewear Inc.
The terms and value of the agreement were not disclosed, but Marchon produces eyewear for brands including Lacoste, Nike, Calvin Klein, Ferragamo, Longchamp and Zeiss.
Marchon plans to roll out both sunglasses and optical wear under the Canada Goose name next spring, starting in North America.
Canada Goose says the eyewear will be sold through optical retailers, department stores, Canada Goose shops and its website.
Canada Goose CEO Dani Reiss told The Canadian Press in August that he envisioned his company eventually expanding into eyewear and luggage.
This report by The Canadian Press was first published Sept. 19, 2024.
Almost seven years since news broke of an alleged conspiracy to fix the price of packaged bread across Canada, the saga isn’t over: the Competition Bureau continues to investigate the companies that may have been involved, and two class-action lawsuits continue to work their way through the courts.
Here’s a timeline of key events in the bread price-fixing case.
Oct. 31, 2017: The Competition Bureau says it’s investigating allegations of bread price-fixing and that it was granted search warrants in the case. Several grocers confirm they are co-operating in the probe.
Dec. 19, 2017: Loblaw and George Weston say they participated in an “industry-wide price-fixing arrangement” to raise the price of packaged bread. The companies say they have been co-operating in the Competition Bureau’s investigation since March 2015, when they self-reported to the bureau upon discovering anti-competitive behaviour, and are receiving immunity from prosecution. They announce they are offering $25 gift cards to customers amid the ongoing investigation into alleged bread price-fixing.
Jan. 31, 2018: In court documents, the Competition Bureau says at least $1.50 was added to the price of a loaf of bread between about 2001 and 2016.
Dec. 20, 2019: A class-action lawsuit in a Quebec court against multiple grocers and food companies is certified against a number of companies allegedly involved in bread price-fixing, including Loblaw, George Weston, Metro, Sobeys, Walmart Canada, Canada Bread and Giant Tiger (which have all denied involvement, except for Loblaw and George Weston, which later settled with the plaintiffs).
Dec. 31, 2021: A class-action lawsuit in an Ontario court covering all Canadian residents except those in Quebec who bought packaged bread from a company named in the suit is certified against roughly the same group of companies.
June 21, 2023: Bakery giant Canada Bread Co. is fined $50 million after pleading guilty to four counts of price-fixing under the Competition Act as part of the Competition Bureau’s ongoing investigation.
Oct. 25 2023: Canada Bread files a statement of defence in the Ontario class action denying participating in the alleged conspiracy and saying any anti-competitive behaviour it participated in was at the direction and to the benefit of its then-majority owner Maple Leaf Foods, which is not a defendant in the case (neither is its current owner Grupo Bimbo). Maple Leaf calls Canada Bread’s accusations “baseless.”
Dec. 20, 2023: Metro files new documents in the Ontario class action accusing Loblaw and its parent company George Weston of conspiring to implicate it in the alleged scheme, denying involvement. Sobeys has made a similar claim. The two companies deny the allegations.
July 25, 2024: Loblaw and George Weston say they agreed to pay a combined $500 million to settle both the Ontario and Quebec class-action lawsuits. Loblaw’s share of the settlement includes a $96-million credit for the gift cards it gave out years earlier.
Sept. 12, 2024: Canada Bread files new documents in Ontario court as part of the class action, claiming Maple Leaf used it as a “shield” to avoid liability in the alleged scheme. Maple Leaf was a majority shareholder of Canada Bread until 2014, and the company claims it’s liable for any price-fixing activity. Maple Leaf refutes the claims.
This report by The Canadian Press was first published Sept. 19, 2024.
Companies in this story: (TSX:L, TSX:MFI, TSX:MRU, TSX:EMP.A, TSX:WN)
TORONTO – TD Bank Group, which is mired in a money laundering scandal in the U.S., says chief executive Bharat Masrani will retire next year.
Masrani, who will retire officially on April 10, 2025, says the bank’s, “anti-money laundering challenges,” took place on his watch and he takes full responsibility.
The bank named Raymond Chun, TD’s group head, Canadian personal banking, as his successor.
As part of a transition plan, Chun will become chief operating officer on Nov. 1 before taking over the top job when Masrani steps down at the bank’s annual meeting next year.
TD also announced that Riaz Ahmed, group head, wholesale banking and president and CEO of TD Securities, will retire at the end of January 2025.
TD has taken billions in charges related to ongoing U.S. investigations into the failure of its anti-money laundering program.
This report by The Canadian Press was first published Sept. 19, 2024.
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