REFINERIES: As television and radio stations continue to discuss the refineries’ “windfall profits” (with part of the opposition calling for a one-off tax), a striking reversal is under way in the European refining market.
According to the Financial Times, refining margins in north-western Europe plunged from $54 a barrel in early September to as low as minus $11 on 5 October, before recovering to nearly $3 yesterday!
If this trend intensifies, it could lead some refineries in the Old Continent to curb production.
The reason is a surge in the cost of procuring crude oil (not so much futures prices as the price of physical crude, which has risen far more), as well as in shipping costs, which have reached the… stratosphere. Prices for several refined products, however, have not kept pace to the same extent.
If you think this is a phenomenon confined to northern Europe, our sources in the Greek market say that is not the case.
In the Mediterranean, refining margins, which had previously topped $30-$40 a barrel, have fallen since 2 October to single digits, between $6 and $9.
In other words, just weeks after some international financial firms forecast that margins would remain high for more than two years, reality has proved them wrong—at least temporarily.
REFINERIES II: What does all this mean for Motor Oil and Helleniq Energy? According to our sources, less than one might think. That is because the two Greek groups have invested heavily in modernising their facilities and have built margins of around $5-$6 a barrel into their plans.
That is in contrast to many older refineries in Central and Northern Europe, which have not made comparable investments and may now be forced to curb production.
But there is another, often overlooked, side to the issue. A strong domestic refining industry is a strategic advantage for Greece, particularly during periods of war and turmoil in international markets.
It ensures greater security of supply and reduces reliance on imports of finished fuels. In addition to the price subsidies the companies provide, it can also help contain prices by limiting the country’s exposure to even more expensive imports when shortages arise.
It is worth remembering this when the discussion starts to focus solely on “windfall profits”. Refining is once again proving to be an extremely cyclical business.
With big “ups”, but also sharp “downs”.
PASOK: This column has often referred to the main opposition party’s major “battle for Greater Athens”, since the region that accounts for almost half the country’s electorate remains the party’s “green” weak link.
So much so that at both the previous general election and the recent European elections, it came third or fourth, even behind the KKE in some areas.
PASOK is conducting a major campaign across Attica these days and, according to Harilaou Trikoupi, more than 80 teams have fanned out across its neighbourhoods, comprising 100 party officials, MPs and MEPs.
The campaign visits took in shops, restaurants and workplaces, where people could learn about the party’s policies. The challenge now is to secure “a mass turnout” at Sunday’s main political rally in Aigaleo, where Nikos Androulakis will speak.
SYRIZA: Over the next ten days, many MPs elected on a SYRIZA ticket who have since become independents and are heading for ELAS will begin resigning and giving up their seats.
Not only because Syriza headquarters publicly called them out by publicising their earlier statements that “the seat belongs to the party” and “it is not a personal trophy”, but also because the Tsipras camp has tightened the screws: anyone who resigns shortly before an election is called will have no place in ELAS or—naturally—on its candidate lists.
The twist, though, which will be… equal parts farce and tragedy, concerns the next candidates in line, who will be asked to take the oath in place of those who resign. Those heading for Alexis Tsipras’s party will presumably refuse to take the seats, while those who want neither ELAS nor SYRIZA will declare themselves… independent.
How many will want to remain in the party on whose ticket they were elected? Unknown.
For now, there are cases such as ELAS secretary Miltos Hatzigiannakis, who will take up the seat vacated by Symeon Kedikoglou; Giannis Dragasakis, who filled Efi Achtsioglou’s vacant seat and immediately declared himself independent; and others, such as Giannis Karipidis, who replaced the resigning Vassilis Kokkalis and remained in SYRIZA.
This saga will end only when elections are called and Parliament is dissolved…
GEROVASSILI: Amid all this, Olga Gerovassili managed to anger the current SYRIZA with her leak claiming there is no longer a SYRIZA for her to give her seat to, because Kasselakis’s people are not SYRIZA…
Among those who hit the roof was the party’s organisational secretary, Giannis Boulekos, who two years ago tabled the famous motion of no confidence against then-leader Stefanos Kasselakis, paving the way for his ouster.
“Come on, Boulekos is no Kasselakis loyalist” rang out like a chant inside SYRIZA and around its headquarters, with the laughter also aimed at Pavlos Polakis, who pulled the rug out from under Stefanos with a public mea culpa over his initial support for him.
And they are all preparing their next salvo against Ms Gerovassili if she does not give up her seat…
SYRIZA II: To be fair, Syriza headquarters’ reluctance to demand seats back from other former SYRIZA MPs who became independents and subsequently joined PASOK, one after another, did not go unnoticed.
Why? Because SYRIZA officials are keen on a partnership with Nikos Androulakis’s party, so the last thing they want is to open even the slightest rift in that relationship.
SYRIZA secretary Nikos Pappas said as much yesterday: while Harilaou Trikoupi shows no sign of wanting to cooperate, “never say never in politics”.
Given all we have seen in politics generally and on the Left in particular, who could disagree?…
VERTICAL CORRIDOR: The removal of Kimberly Guilfoyle from her post as US ambassador to Greece has caused a stir around the crucial project.
The trigger was her active involvement in promoting the project, which aims to transport US LNG to Europe via Greece.
Experienced observers, however, say the two issues should not be linked: Washington’s decision to advance its energy plans through Greece predates Ms Guilfoyle and will therefore go ahead. The Greek government’s timely mobilisation and high-level contacts with members of the Trump administration also helped.
In the same vein, the well-known journalist Michalis Ignatiou says: “The Vertical Corridor project was launched at the initiative of the US administration. It was part of Trumpian policy on energy dominance.”
He also recalls Stavros Papastavrou’s frequent contacts with Energy Secretary Chris Wright and Interior Secretary Doug Burgum, who took charge of all the negotiations.
IOBE: Yesterday’s presentation of the IOBE report briefly took us back to the Maastricht era, after a question about whether debate might reopen over easing European fiscal rules, at a time when major European economies are facing mounting pressure.
IOBE director general Nikos Vettas recalled the famous limits of a 3% deficit and public debt of 60% of GDP, noting that “a lot of water has flowed under the bridge since then”.
The main problem is that larger deficits also need to be financed. Here, Mr Vettas set out the real dilemma: either monetary financing, which central banks used for years but which has limits and side effects, or borrowing from markets, with the bill passed on to future generations.
IOBE II: He also described a curious tug-of-war between three sides: central banks, which are asking governments to take responsibility; governments, which want lower interest rates and more room for manoeuvre; and investors, who see higher risks and demand higher returns.
When even major economies such as France, Germany and Italy are under pressure, it is clear that the debate is far from theoretical. All the more so when political risk is added to borrowing costs.
In other words, you can revisit the rules. But you have to convince lenders.
EURONEXT ATHENS: Around 100 members of Euronext’s senior management team from across Europe were in Athens over the previous three days to discuss the group’s prospects and strategy.
The programme also included a highly symbolic visit to the Acropolis and its museum. Stéphane Boujnah, Euronext’s chief executive and chairman of its Executive Board, is a well-known admirer of Greek history and archaeology, and made his mark on the meeting with that choice.
Equally symbolic was the gift given to each participant: a copy of Thucydides’ History of the Peloponnesian War, translated into the different languages spoken across the group.
The ancient Greek historian’s work, with its timeless analyses of power, leadership and the decisions that shape the course of societies, added a different dimension to discussions about the group’s future.
After all, Pericles’ saying, “Either you rest or remain free”, is one Boujnah himself often cites.
A message that takes on particular significance today, as Euronext seeks to strengthen European capital markets and help shape a more resilient and competitive Europe.