Most of the Russian oil will remain in Asia. That is what the smaller tankers are for. Russia does not need to sell to Europe. Actually, Russia can and should reduce its oil production. That will drive oil prices higher. Europe with the bar on shipping lines (most of them European country owned) and insurance companies (European insurance companies) are about to lose business big time. They will be carrying full market price oil to Europe but, will the shipping companies not set higher prices to offset the long time it takes to travel to Europe? Also, the less shipping volumes puts pressure on them to raise shipping rates on European customers. Otherwise, they will all go belly up.
The Greek shipping companies are crying big crocodile tears but they are rolling in cash with all the shipping and reshipping and re-jiggering rates and all sorts of new routes exploding daily due to the chaos. It's a gravy train for them. They had a good gig going too by running Venezuelan oil but I guess the Americano's cut it off by reading the sanctions riot act to Greece.
Russia's "friends" will only buy their oil for a mere $38 per barrel --- which is probably below their production costs. Russia wishes they could get the $60 per barrel as per the imposed price cap. The western oil price cap is turning out to be hugely successful and is effectively bankrupting Russia's aggression. It is time to turn up the pressure. Russia Oil-Price Cap Defies Skeptics With So Far, So Good Start https://finance.yahoo.com/news/russia-oil-price-cap-defies-210056647.html?fr=sycsrp_catchall (Bloomberg) -- Once seen as misguided and unworkable, the US-conceived price cap on Russian crude oil exports is showing signs of success — for now — since it was implemented late last year. Moscow’s budget deficit widened to a record amid the slump in prices, with Russian grades falling faster than global prices as supply hasn’t been severely disrupted, the two key aims of the idea that was hatched by the US Treasury Department last year as part of the global response to President Vladimir Putin’s invasion of Ukraine. “If the goal of Western powers was to have their cake and eat it too, then the cap is presently working as planned,” said Raad Alkadiri, managing director for energy, climate and resources at Eurasia Group in Washington. “Russian flows have been diverted but not disrupted for the most part, and prices have not risen.” Crude shipments out of two major western Russian ports averaged just under $40 a barrel during the first days of January, according to data from Argus Media, which gathers prices in the physical market. That’s down more than 35% from the November average and roughly 50% from June. Over those same periods, Brent crude, a global benchmark, fell about 15% and 37%, respectively. That suggests weaker demand from a slowing global economy can’t fully account for the drop in Russian prices, and its export volume hasn’t slipped enough that lower supply is pushing international prices back the other way. The US Treasury’s deputy secretary, Wally Adeyemo, said he and his colleagues were pleased with the results, but reacted cautiously when asked if the plan could be declared a success. “Until the invasion of Ukraine is done, we’re not going to declare anything,” he said in an interview. The European Union’s decision last June to stop importing almost all seaborne Russian oil from Dec. 5 forced Moscow to look elsewhere to sell about 2 million barrels a day. While it found outlets in China, India and Turkey, that concentrated group of buyers seized upon their leverage to secure deep discounts. On top of that, Russia has been forced to absorb the extra costs for the longer shipping distances. “What has hurt Russia is having to swing cargoes from Europe to Asia and be forced to accept the discount,” said Paul Horsnell, head of commodities research at Standard Chartered Bank in London. “Lack of access to Europe is what has mattered, not the price cap.” The cap was designed as a way to partly undercut EU sanctions, which the US feared might backfire by cutting supply. In addition to the embargo on Russian oil, the EU and UK barred their companies from offering key services to any shipper carrying Russian oil anywhere in the world, which included insurers who dominate the global market for underwriting oil tankers. That set off alarm bells in Washington, where US Treasury officials feared the sanctions might trap 2 million to 3 million barrels a day inside Russia, sending global prices spiking well above $100 a barrel. Officials even worried that higher prices on lower output could end up benefiting Russia while driving the rest of the world into recession. Against that worst-case scenario, the cap was conceived as a release valve to allow Russia continued access to EU and UK shipping services so long as cargoes were priced under an agreed cap, which was ultimately set at $60. The US had to charm, plead and bully Group of Seven governments and then the EU into backing the scheme just in time for the Dec. 5 deadline. To be sure, Russian export volumes fell in the weeks following Dec. 5, but bad weather, port maintenance and a shift by Russia to exporting refined products may explain much of that. The cap advocates also got lucky. A cooling global economic outlook combined with the leverage already applied by Russia’s few buyers meant that Moscow was already selling much of its crude below the $60 cap before it even came into effect. For shipments priced over the cap, mostly coming from Russia’s eastern ports, Russia and its buyers have apparently been able to line up shipping and service providers from outside the EU and UK. Still, the US and its allies must navigate an uncertain path forward for the cap, beginning with a review of the crude price, which begins in January, and related caps for refined fuels that must be agreed by Feb. 5. Some EU members are already clamoring to tighten the screws on Moscow by lowering the crude cap, but squeezing too hard risks pushing Putin to cut production in an attempt to provoke a price spike the US has always sought to avoid. Any change to the cap would require a unanimous vote by the EU’s 27 member governments, according to an EU official. Adeyemo wouldn’t comment on whether the US will want to adjust the cap. While one aim of the cap, he said, is to reduce Moscow’s revenue, the US also wants to make sure Russia has a continued incentive to export its oil. “We feel at the moment the $60 amount that we’ve set is accomplishing our two goals,” he said.
Not to put too fine a point on this, but, yes, Russia cannot afford to produce at a certain point, and that point is only a few dollars lower than the discount price they are giving. However, some people think that countries such as India are just gouging them and taking advantage of the deep discount. No doubt there is some of that going on but what enters into the discussion is that Russia's oil (big country, not all sources are the same quality) is low grade dirty sh#t compared to the Malaysian, Quatar, Saudi grades. India, in fact has to process the Russian oil further to make it useable. Even if they are converting it to diesel they are starting from a dirtier point. So they have to get it at discount because it needs more work. Doesn't matter what India thinks of the Ukraine war or whether they are foes or friends of Russia. They still need a discount on Russia oil to work with it. Venezuelan oil is nasty sh#t too. Makes good bunker oil for ships engines. If you don't mind the black cloud of smoke blotting out the sun.
https://oilprice.com/Latest-Energy-News/World-News/EU-Gas-Demand-Fell-More-Than-Target.html EU Gas Demand Fell More Than Target
An exceptionally warm winter does wonders. But it will also have the same polices that got the EU into the crisis in the first place to be seen as "See, we were correct" which almost certainly guarantees this won't be the last we see of it.
Economic genius Vladimir Putin has single-handedly accelerated the European Union's transition to renewable energy use. EU climate czar: Putin’s war accelerated green transition https://apnews.com/article/russia-u...union-europe-b38199c0e8410df19274be163906b36f
You're even dumber than I had previously thought if you think Europe (or anyone else for that matter) is going to be able to transition to renewable energy any time soon. I often wonder if people just want to believe so strongly in their political narratives that they ignore things like physics, and materials, and energy, and money.