Oil, Nearshoring, NatWest and EVs

Scandal Of Russian Oil

Since the Ukraine War started two years ago, Russia has been ‘blacklisted’ by various Governments globally, on the basis that buying its oil and gas is effectively helping to fund its ongoing attacks on Ukraine.

Governments called Russia out for the unwarranted attack on its neighbour and voiced their disapproval by way of sanctions.

The G7 countries and their allies put a price cap of $60 a barrel on Russian crude.

Those countries then put into place bans on companies providing shipping or insurance services helping the trade of the Russian oil, unless it was well below that gap.

However, did you know that there is an ageing shadow fleet of tankers, operated by untraceable owners, that is helping Russia to continue to supply its resource and thereby to fuel its own adversarial efforts.

What is more, UK-based shipping management companies are said to be involved with tankers carrying Russian oil.

While it is also suggested that some 30% of the Russian oil being transported globally is insured on the Lloyds market.

Why Are We Not Going For Oil Licences?

The dominance of overseas companies going for North Sea oil and gas exploration licences really makes me wonder why UK companies are being so reticent in applying in force.

Of the 74 areas of UK North Sea and Atlantic waters that are scoped for drilling, the bulk are being awarded to foreign operators, with several winners coming from Norway, Malaysia and South Korea.

Surely, we have such a reliance on energy in this country, that we should perhaps have protected our resource assets more, by demanding carried % participation as our fields get denuded in due course.

Nearshoring Versus Offshoring

I note that the Red Sea hassles caused by the Yemen-based, Iran-funded, Houthi rebels is now bringing about other supply changes.

Not only has the missile bombardment of ships in the seas ahead of the Suez Canal meant that an extra 3,500-mile major re-routing around the Cape of Good Hope has delayed freight deliveries by 10 to 15 days – but it is now hitting ‘fast-supply’ retailers.

A number of High Street and online retail operations, like Marks & Sparks, Next, Primark, Boohoo and ASOS, have put into effect a series of European and UK-based suppliers of items, such as fashion clothing, to fill in the time gap, with stocks waiting to be topped up by the slower Far East deliveries.

NatWest Aiming At 2m New Investors

Come June, the City whispers suggest, we will be seeing a mass offering of Government-owned stock in the NatWest banking group.

Having baled-out the bank to the tune of some £45.5bn in the financial crisis of 2007-2009, giving it a stake of 84% of its equity, the British Government has now ended up with £7bn worth of its shares.

Admittedly that is after a number of shares have been drip-fed onto the market over the intervening years.

The taxpayer’s stake of nearly 36% today is being primed-up for sale to back to UK taxpayers.

Saatchi’s have been lined up to feed ads out ahead of the retail sale, with older market players commenting that it could well be another sell-off like that for British Gas way back in 1986 – which was when the ‘Tell Sid’ marketing campaign proved extremely effective.

We may well see further details being announced on the planned sale by Jeremy Hunt on 6^th March.

17% Drop In M&A Deals Last Year

Consultancy group PwC Global has pushed out a report that the amount of Mergers & Acquisitions business deals transacted in 2023 was some 17% lower than the previous year.

On a global basis the UK saw a steeper decline than across the world, faring almost three times worse than the global average of 6% down.

Some 3,628 deals in 2023 compared with 4,362 in 2022, while the actual deal value dropped 41% from £150bn to just £88bn last year.

Of that total, some 955 deals were handled within the technology, media and communications sectors, followed closely by the 899 deals in the automotive sector.

Methinks that the Private Equity boys must be working hard eyeing up potential victims in the quieter marketplace.

Crypto Collapse Coming?

I don’t know about you, but I certainly get masses of contact from various players within the crypto sector.

They continually hint that I am missing out on the fortunes that are being made by participating in the greatest game in town.

It feels like there are masses of weekly articles in the media concerning crypto thefts, frauds, scams and the like.

I am sure that I have missed out on making millions, but I actually feel richer from not having played.

So, I worry for investors when I see reports from Marc Cohodes, a former Wall Street hedge fund boss, stating that he foresees a larger crisis than the $7bn FTX fraud coming as the US allows exchange-traded-funds to enter the market.

Electric Vehicles Sector Has Problems

Valued at £10bn previously, the electric van maker Arrival has gone into administration.

Without actually selling one single van it has, apparently, burned its way through over £1bn of its funds.

With the help of administrators EY, the former NASDAQ quoted company, which floated in 2021, is now seeking to sell off its various assets like electric vehicle platforms, software, its research and development assets and its intellectual property.

That is not good news for a number of its initial backers like BlackRock, Hyundai and BNP Paribas.

EV sales to private buyers in the UK are said to have been down by a quarter in January.

The froth, it is being reckoned, has gone out of the market following the UK Government extending to 2035 the banning date for selling internal combustion engine vehicles, from the previously set 2030 dateline.

Did you know that there believed to be 1m electric cars on the UK roads currently?

That figure could well explode when and if EV charger units become substantially more evident around the country.

The motor trade is certainly not impressed by the current roll-out of charger infrastructure across the UK.

It is quite a deterrent to both fleet operators and private users alike.

The UK Government’s aim is to have over 300,000 public charging points – there are currently under 55,000.

Elsewhere, it is noteworthy that Volvo has pulled out of providing further financial support to Polestar, its dedicated electric marque.

Massive competition in the marketplace driven by Chinese manufacturers, who dominate the EV sector, is unsettling the other larger players.

No Apologies Given

I make no apologies in stating that my car is a near 20-year-old German-made automatic petrol-driven machine, which has 130,000 miles on the clock and shifts like a dream.

It will not be replaced by an EV and will probably outlive me.