How? I thought the EU wasn’t buying Oil from Russia at this point?
Plus with renewables on the rise surely that’s plugging some of the gaps too?
Big_Bookkeeper1678 on
That’s the point. Putin wanted Trump to do this. Bibi agreed.
ChungsGhost on
Because not everyone pays for Russian fossil fuels at the sanctions’ discounted rate.
The Russians’ reference crude price is “Urals Oil” and that price has typically moved in line with all other prices (e.g. Brent) even when it’s traded at a discount to those other values. A similar principle holds for their natural gas (shipped by pipeline and as LNG alike).
Europeans were the biggest and most reliable customers for Siberia’s decomposed dinosaurs and plants until February 2022, but Russian stuff still finds it way to other markets. In the short-term then, a sustained increase to prices is a net benefit for the Russians and indeed helps shore up their budget by reducing any deficit at the very least. From the Ukrainians’ standpoint this definitely stings considering how incapable the EU is of approving a *loan* of 90 bn Euros.
Anyone who’s buying Russian fossil fuels on a contract with a floating price will pay more per unit than before, even when the deliverable volume stays the same.
lacerantplainer on
Let’s hope the price spike isn’t long lasting
sMilling_70 on
Potus helping his buddy.
Unlucky-Associate266 on
The article should have mentioned that the rise in the price of Urals oil from ~$40 to ~$60 doesn’t just represent a 50% rise in receipts. The impact on Russia’s margin – the profit it makes on a barrel of oil – is far greater. If it cost Russia $35 to sell a barrel of oil, it makes $5 at $40 a barrel. It makes 400% more if it can sell at $60. It is that margin that provides the tax base on which Russian government spending depends. If a Russian oil producer can make 500% more profit, the Russian government’s revenues from it rise by 500%. That sucks, but it’s there.
Hughsey1 on
Yep might do short term, long term less drones.
questionnmark on
Apparently they had around 100 million barrels of crude floating around on their shadow fleet, which ironically might just undermine the effectiveness of closing the straights of Hormuz.
Emergency_Link7328 on
Everything Trump does ends up helping Russia.
What a coincidence!
No_Economics_4678 on
Do not expect Trump aka Mr “I’ll end the war in 24 hours” to have any concern or the start of a plan to counter Russia’s temporary strengthening. He’ll just watch thousands being murdered thinking Putin is a strong man to respect. Like every week.
IncorporateThings on
I don’t think so.
They’re losing tankers steadily, and their largest markets were India and China. India just made deals to nerf that into the ground and will be receiving oil from Venezuela. China has a glut of oil at the moment and simply won’t be willing to pay higher prices from Russia, as they have shown multiple times in the past.
So long as interception of their shadow tankers continues unabated, I think the decline will continue.
So not only will Russia have to continue selling at a discount compared to others, their ability to actually move their oil is continuing to deteriorate. Lovely thing about oil storage, by the way… when it gets full, if there are no alternatives, you have to start capping wells or just burning the stuff off. Capping wells (and later reopening them) is difficult/expensive and requires highly trained personnel and special equipment; burning the stuff off is a huge waste and also quite polluting. Hitting their storage capacity continuously will really add up over time.
Turkey might buy more Russian oil, but their capacity is only so large. I don’t think Europeans are going to start back tracking at this point, they kind of crossed the Rubicon a while ago with regards to Russian oil. I could be wrong, though.
WiseAct446 on
Unless someone destroyed the Russian ghost fleet…
Nope_______ on
Maybe get the Europeans to stop buying gas and oil from them
13 commenti
How? I thought the EU wasn’t buying Oil from Russia at this point?
Plus with renewables on the rise surely that’s plugging some of the gaps too?
That’s the point. Putin wanted Trump to do this. Bibi agreed.
Because not everyone pays for Russian fossil fuels at the sanctions’ discounted rate.
The Russians’ reference crude price is “Urals Oil” and that price has typically moved in line with all other prices (e.g. Brent) even when it’s traded at a discount to those other values. A similar principle holds for their natural gas (shipped by pipeline and as LNG alike).
Europeans were the biggest and most reliable customers for Siberia’s decomposed dinosaurs and plants until February 2022, but Russian stuff still finds it way to other markets. In the short-term then, a sustained increase to prices is a net benefit for the Russians and indeed helps shore up their budget by reducing any deficit at the very least. From the Ukrainians’ standpoint this definitely stings considering how incapable the EU is of approving a *loan* of 90 bn Euros.
Anyone who’s buying Russian fossil fuels on a contract with a floating price will pay more per unit than before, even when the deliverable volume stays the same.
Let’s hope the price spike isn’t long lasting
Potus helping his buddy.
The article should have mentioned that the rise in the price of Urals oil from ~$40 to ~$60 doesn’t just represent a 50% rise in receipts. The impact on Russia’s margin – the profit it makes on a barrel of oil – is far greater. If it cost Russia $35 to sell a barrel of oil, it makes $5 at $40 a barrel. It makes 400% more if it can sell at $60. It is that margin that provides the tax base on which Russian government spending depends. If a Russian oil producer can make 500% more profit, the Russian government’s revenues from it rise by 500%. That sucks, but it’s there.
Yep might do short term, long term less drones.
Apparently they had around 100 million barrels of crude floating around on their shadow fleet, which ironically might just undermine the effectiveness of closing the straights of Hormuz.
Everything Trump does ends up helping Russia.
What a coincidence!
Do not expect Trump aka Mr “I’ll end the war in 24 hours” to have any concern or the start of a plan to counter Russia’s temporary strengthening. He’ll just watch thousands being murdered thinking Putin is a strong man to respect. Like every week.
I don’t think so.
They’re losing tankers steadily, and their largest markets were India and China. India just made deals to nerf that into the ground and will be receiving oil from Venezuela. China has a glut of oil at the moment and simply won’t be willing to pay higher prices from Russia, as they have shown multiple times in the past.
So long as interception of their shadow tankers continues unabated, I think the decline will continue.
So not only will Russia have to continue selling at a discount compared to others, their ability to actually move their oil is continuing to deteriorate. Lovely thing about oil storage, by the way… when it gets full, if there are no alternatives, you have to start capping wells or just burning the stuff off. Capping wells (and later reopening them) is difficult/expensive and requires highly trained personnel and special equipment; burning the stuff off is a huge waste and also quite polluting. Hitting their storage capacity continuously will really add up over time.
Turkey might buy more Russian oil, but their capacity is only so large. I don’t think Europeans are going to start back tracking at this point, they kind of crossed the Rubicon a while ago with regards to Russian oil. I could be wrong, though.
Unless someone destroyed the Russian ghost fleet…
Maybe get the Europeans to stop buying gas and oil from them