Re:The euro has tumbled near parity to the US dollar
by dathinab on Monday July 11, 2022 @05:22PM
(#32062072)
but it's about gas, always has been
Oil heating in Germany isn't supper common, it depends a bit on the region as it was trendy during some time in the past but most oil heating which had been build in the past has been replaced by gas at some point in the last 20 years.
Oil follows the "law of one price" globally; https://public.wsu.edu/~hallagan/EconS327/weeks/week9/LOOP.p... global prices converge since it's an identical commodity that can be transported with low friction.
When the EU restricts russian oil, India and China buy more, and then EU buys more oil from elsewhere -- it's a global market that readjusts relatively quickly.
There is some short term friction around switching costs and infrastructure, moreso for volatile-to-transport gas than for oil, but this shouldn't be a meaningful factor to currency. There are tons of other impacts of war, such as general destruction of capital and people's productivity, as well as plenty of other explanatory factors that would have a bigger effect here.