India Calls Surge in Oil Prices a Global Problem: Davos Update

Members of the global elite are back in Davos after a two-year hiatus due to the pandemic.

The World Economic Forum’s annual meeting gets underway on Monday at the Swiss ski resort, albeit with fewer big names from Wall Street and politics. But there’s still much to discuss given the war in Ukraine, including rampant inflation, risks of food shortages and climate change.

The first day’s main event is a virtual speech from Ukraine President Volodymyr Zelenskiy. International Monetary Fund Managing Director Kristalina Georgieva and Bank of France Governor Francois Villeroy de Galhau appear on panels.

Tune into Bloomberg Television for interviews with Standard Chartered Chief Executive Officer Bill Winters, US Special Envoy John Kerry, Carlyle Group Co-Founder David Rubenstein and Qualcomm CEO Cristiano Amon among many others.

Canada Offers Help With ‘Critical Minerals’ (11:20 am)

Canada can be “part of the solution” as countries and businesses seek more energy security, Francois-Philippe Champagne, Canada’s innovation, science and industry minister, told Bloomberg TV.

Supply chains are becoming more regional, “certainly more emphasis on resiliency than pure efficiency,” and Canada can help with critical minerals, he said. The country can also help power the world with “greener solutions,” he said.

Ukraine Makes War Crimes Case (11:05 am)

Ukrainian officials in Davos, including a group of mayors, launched an exhibit of photos and video showing alleged war crimes committed by Russian troops. Speaking at the exhibition launch by video address, Andriy Yermak – an aide to President Zelenskiy – said the exhibit, which features 4,600 pieces of evidence, was not just a symbolic move. “It’s honest, it’s fair,” he said.

The WEF this year features a large Ukrainian continent, including Zelenskiy’s keynote via video link, and no Russian presence. The site of exhibit was particularly poignant, occupying the building that usually serves as “Russia House” at the WEF, but now dubbed “Russian War Crimes House.”

Germany Wants Market Changes to Limit Energy Prices (10:45 am)

German Economy Minister Robert Habeck called for changes in the rules governing energy markets to try to keep a member on surging prices and limit Russia’s earnings from selling fossil fuels.

“Not only Gazprom and Putin have earned a fortune but also some companies have,” Habeck said on an energy panel. “So this is what I meant when I said that we have to keep the markets open but we have to change the rules,” he said, adding that one option could be for consumers to “agree that we do not pay any price. ”

“There has to be more creativity, more flexibility to think the unthinkable, to find solutions over the short term that we do not give all the money to Putin,” Habeck said. “We have to find new solutions and we have to find them fast.”

Oil Surge Is a Global Problem (10:40 am)

Indian Oil and Gas Minister Hardeep Singh Puri says high crude prices are escalating inflation and causing living standards to decline in a number of countries. “Let’s make no mistake: oil at $ 110 a barrel constitutes a challenge for the entire world,” he said. Several of India’s neighbors in “severe dire straits.”

Pain is being felt in India itself, where 60 million citizens fill up at the pump every day, he added. The ongoing energy crises show that consumers “need to move on the green path faster” with the transition to renewable energy sources. In the interim, governments need to ensure there’s enough hydrocarbon-based fuels to satisfy present demand. “We need to make sure there is no energy shortage in any form in a large country,” he said.

Ukraine Calls for Further Russian Isolation (10:35 am)

Speaking hours before Zelenskiy addresses the conference virtually, Ukraine’s First Deputy Prime Minister Yulia Svyrydenko took to a Davos stage to say Russia’s invasion had put the “world on edge” and more could be done to isolate it.

“Russia uses its leverage like a weapon,” she said. “Food, energy. Now it’s treating the world with world hunger. Their actions are intentional. There should be reaction on its weaponization of everything. ”

She said companies that have bypassed the economic curbs imposed after the invasion should face sanctions too. “Armies win battles but the economy wins wars,” she said. “Now is not the time for a cost benefit analysis. We have to cut Russia off from the global economy completely. ”

Tougher Sanctions on Russia Urged (9:30 am)

The world needs to do more to “impose pain on Russia’s elite,” Republican Congresswoman Ann Wagner said. “The Russian elite must understand that continued support for Putin is no longer in their interests,” she said.

During a panel on sanctions, Eric Cantor, vice chairman of Moelis & Co., also called for “tightening the vice” on Russia but stressed that the US should secure the support of its allies. Because of the dollar’s status as a reserve currency, “every time we use it even our allies and our friends start to wonder why is it that you can do this, and how are we going to make sure that we do not become subject to those sanctions, ”he said.

Further Forecast Downgrades Possible: IMF (9:20 am)

The International Monetary Fund may need to further trim forecasts for economic growth this year but does not expect a global recession, according to Managing Director Kristalina Georgieva.

She told Bloomberg TV in Davos that there have been some “incremental changes” since the Fund last month cut its global growth forecast to 3.6%, including “tightening of financial conditions,” the rise in the value of the dollar and a slowdown in China. ”

“All of this is making further downgrades not out of the question and for some countries there is now an increased risk of recession,” she said. “But we do not anticipate a global recession.”

Producers Must Prove Clean Energy Credentials: Sharma (9:15 am)

Oil and gas producers making “extraordinary” profits due to high prices must show how they are investing their promised billions of dollars in clean energy in order to avoid windfall tax in the UK, according to COP26 President Alok Sharma.

Sharma, a member of the British Government, said he wants producers to set out quarterly plans showing how they are delivering on a clean-energy transition. If they fail to do so, then “all options are on the table”, he said. “What they’ve talked about is investing some of that money –- billions – in clean energy,” he said. “It’s a matter of transparency, it’s a matter of fairness.”

Pain And Gain On The Path To A Cleaner Climate (9:15 am)

Political and business leaders need to be clear with the public that “there will be pain in the process” of getting to net zero and a nature-positive world, said Kjerstin Braathen, CEO of Norways’ DNB Bank, citing energy shortages and inflationary pressures. “We need to start talking about that because if we do not there’s no business, there’s no economy, there’s no welfare.”

During a panel on what governments and business can do to accelerate progress, Patrick Odier, chairman of the board of directors at Bank Lombard Odier in Switzerland, said that the environment needs to be “at the center of capital allocation and credit activities.” He said “the stars are aligned” to accelerate the process because the financial sector has identified gaps in the market, while companies recognize the value of nature as an asset and government are addressing social impacts.

Algebris Sees Stocks Tumbling Further (9:10 am)

US stocks have further to fall because expectations for earnings are still too high, according to Davide Serra, chief executive officer of Algebris Investments.

The S&P 500 will fall to a base of 3200 to 3400 points, down from 3901 currently, Serra said in a Bloomberg TV interview. The money manager, who founded Algebris in 2006, also flagged a “sad” mood at Davos because of the war in Ukraine. “Three hours from here, people are dying and shooting each other,” he said. “And so I think that’s why it’s different.”

IEA’s Birol Warns of Global Recession Risk (8:45 am)

Oil producers need to act responsibly to help keep a lid on prices otherwise there is a risk of global recession, according to Fatih Birol, the executive director of the International Energy Agency.

“If we do not make a positive contribution here we may see prices even going higher, being much more volatile and becoming a major risk of recession for the global economy,” Birol said in an interview with Bloomberg TV from Davos. “This summer will be difficult because as we know in summer oil demand normally goes up,” he said, adding that a major question is whether demand from China will remain flat due to weakness in the economy there.

Credit Suisse CEO Says He Has ‘Clear Mandate’ (8:25 am)

Credit Suisse Group AG Chief Executive Officer Thomas Gottstein, who has been under pressure because of a string of scandals and earnings setbacks, said he has a “clear mandate” from the board to continue in his position.

Responding to questions about his future, Gottstein said in a Bloomberg Television interview that he is focused on executing the bank’s strategy and is working well with other members of the executive board.

Germany Warns of Food ‘Catastrophe’ (8 am)

Germany’s Habeck said the WEF can help policy makers coordinate strategy on how to address a looming global food “catastrophe” and reiterated an accusation that Russian President Vladimir Putin is weaponizing hunger.

“We should not kid ourselves that there are limits to Putin’s brutality,” Habeck said in an interview with Germany’s Deutschlandfunk radio. “The task here at Davos is for us to recognize that hunger is being used as a weapon,” he added. “That’s why it’s good that the discussions are taking place in person here again and so many people are coming.”

WHO Envoy Sees Cost-of-Living Risks (7:55 am)

A special envoy to the World Health Organization warned that 94 countries are at risk of facing severe hunger or famine and that surging consumer prices threatens disruption.

“This cost-of-living crisis could lead to the worst set of economic and social challenges we’ve seen in four or five decades,” David Nabarro, special envoy for Covid-19 at the WHO, said at the launch of the Edelman Trust Barometer in Davos. Energy shortages are driving up production costs and leading to shortages of fertilizer, potentially affecting 1.7 billion people, he added.

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