Russia and economic war by the west

Broski wrote:

lancelot wrote:I also hope they stopped using Siemens as a source for the control electronics in VVER nuclear power plants. Russia needs to remove Western dependence on their entire critical infrastructure. Siemens, Areva, whatever.

Sounds like a recipe for disaster if those control electronics come with any kind of backdoors, I'm not sure why Russia keeps doing this to themselves. They definitely have the means to become completely self sufficient in electronics.

Transnational corporations have powerful lobbies. They buy company directors, public servants and whoever is needed to do their business. However, I think Siemens has a strong dependence on the Russian market in this area and in large generators. Losing the Russian market would be quite a blow for them.

The Brussels degenerates have been making noises that paying Russia in rubles violates their precious sanctions.
So the shot to own head moment may be coming soon.

kvs wrote:The Brussels degenerates have been making noises that paying Russia in rubles violates their precious sanctions.
So the shot to own head moment may be coming soon.  

It is THE blinking moment - I read that payments in rubles still not yet came and April 15th is the deadline for advance payment.
So it all will be clear in a day - will they pay, will Vova continue to express concerns and fart diplomatic notas to dear partners, or will be valves turned shut.

teh_beard wrote:

kvs wrote:The Brussels degenerates have been making noises that paying Russia in rubles violates their precious sanctions.
So the shot to own head moment may be coming soon.  

It is THE blinking moment - I read that payments in rubles still not yet came and April 15th is the deadline for advance payment.
So it all will be clear in a day - will they pay, will Vova continue to express concerns and fart diplomatic notas to dear partners, or will be valves turned shut.

The Austrian chancellor has claimed that Putin promised him that the Europeans can continue to pay in roubles

But that is his claim

And he sounded fairly disappointed by the negotiations after he came away from them. Now he's saying that Putin actually promised him something.

We'll see who blinked

Broski wrote:

lancelot wrote:I also hope they stopped using Siemens as a source for the control electronics in VVER nuclear power plants. Russia needs to remove Western dependence on their entire critical infrastructure. Siemens, Areva, whatever.

Sounds like a recipe for disaster if those control electronics come with any kind of backdoors, I'm not sure why Russia keeps doing this to themselves. They definitely have the means to become completely self sufficient in electronics.

Because our brain-dead elites only got their asses into gear on 2014. And even then they kept saying to themselves that the West will do a deal with them. Kept offering olive branches. Kept trying to pry the EU from the US, or buddy up with Germany - as if it's all not the same thing

And unfortunately, although a great deal of progress was made, it's never enough, and there are always some oversights

The good news is that there are the same oversights by the West too. They underestimated Russian economic independence and the capabilities of their own industries. And they shot themselves in the foot with many sanctions

Anyway, the priority now is to identify areas of weakness and resolve them as quickly as possible.

teh_beard wrote:It is THE blinking moment - I read that payments in rubles still not yet came and April 15th is the deadline for advance payment.
So it all will be clear in a day - will they pay, will Vova continue to express concerns and fart diplomatic notas to dear partners, or will be valves turned shut.

Either the EU pay the price the seller asks, in the modality the seller prefers, or the gas taps will be closed. Russian gas storage is empty enough now that the winter is over. Russia can redirect all the gas that used to go to Europe to go to their own storage instead. Russia can do this for weeks. Maybe months even. While Europe needs to top off their own storage, or their reserves won't last until the end of the summer, let alone through winter. And if they still don't pay, the gas wells will be plugged, and then good luck convincing Russia to open them up again.
I think the EU will find themselves in the same position they got with Turkmenistan with Nabucco. By the time they decided to finally pay the Turkmen to get their gas, the Chinese had already built a pipeline from Turkmenistan to China, and bought all Turkmen gas for the next decade.

I think anyone expecting Iran to be the great hope will find themselves in a similar situation where the Chinese already booked all their production for a decade with the comprehensive secret bilateral deals they signed.

In a world of limited energy resources, where hydrocarbons are considered something to eliminate by the West, where institutional investors in the West are allergic to long term investments, only countries like Russia and China with more stable forms of government will be able to persevere in the segment.

https://aviation21.ru/oak-poluchila-vozmozhnost-soxranit-fortochku-v-evropu-na-budushhee/

"Russian businessmen and enterprises subject to European sanctions can sell ownership rights to companies registered in the European Union until October 9, 2022. Amendments allowing the temporary unblocking of funds, the European Union introduced in regulations No. 2022/580 dated April 8, 2022.

The transfer of assets within the indicated six months is entitled to “individuals or legal entities, organizations or bodies” included in the sanctions list in connection with the events in Ukraine, according to the amendments made to the fifth package of sanctions against Russia. At the same time, the proceeds from such sales will remain frozen."

Pfft. Does this say what I think it says? If I get this right, the Russian oligarchs can offload their riches in the EU to a front man, they can even sell their assets to them for 1 EUR. Then that front man resells everything and stuffs the money into Dubai or some place like that. Genius.

15 the deadline eh?

Happy to be surprised at Russia being firm but I'm counting on an extension, as always. It's after all the well known pattern. Once that pattern breaks we'll at least have one precedent for once.

People who think that CIA/NSA/MI6 backdoors are "tin foil hat conspiracy theories" are mentally retarded.
The sanctions against Russia which are a masturbatory festival of "high tech" export restrictions for some
peculiar reason explicitly exclude telecommunications equipment and internet software.

No doubt the George Soros "Open Society" lobby at work here. Plus Cisco and Qualcomm.

So one of the primary objectives of NATzO via its Kiev regime proxies was to ethnically cleans the Donbass to
open up production of "shale" gas deposits and supply them to its EU minions. This way they would displace
Russia from the market. This is not some 10 year old story even though it goes back from before 2014. It
is very recent (if I find a link I will post it).

The inanity of the NATzO is in another dimension. The tight gas deposits in the Donbass are nowhere
near the volumes needed to replace Russia. This is how the decider hacks in Washington think. They
have next to zero awareness of the facts but are high on the gases put out by their yes-men court
analysts.

Human rights was never a serious concern of NATzO. It is a tiny fig leaf on its rotting economics agenda
junk.

The US has tried to sell the notion of Europe doing a "shale revolution" of its own for over a decade. It would be a great way to sell their consulting services and horizontal drilling equipment. Except the French, which supposedly have shale deposits, decided against it on environmental grounds. The Poles and Ukrainians were all over it. Salivating at the chance they could get shale oil and fracked gas. Except after paying through the nose for the US's extensive consulting services, on their supposedly prime shale deposits, it seems those expensive US consultants *cough* Hunter Biden *cough* didn't find anything of much substance.

The Chinese have been trying to produce oil out of their shales for like decades. Almost as much time as Canada did with their tar sands. The result is really dirty, really expensive oil, in tiny quantities. The Chinese still have not given up.

Last time I heard about it, the next great white hope for Poland is small modular nuclear reactors designed by US private companies which aren't in service anywhere. These US nuclear companies popped up like mushrooms several years back with Bill Gates' TerraPower being one of the first. Most of these companies product consists of fancy PowerPoint slides and computer animations. You can guess how well that should turn out.

Russia has found a replacement for Europe for coal supplies, by Olga Samofalova for VZGLYAD. April 15, 2022.

While the West turns its nose up at Russian energy resources at a loss, India, on the contrary, is establishing new trade ties with Russia. It turned out that the Indians are buying up not only Russian oil, but also Russian coal, on which Europe has imposed an embargo. Experts are confident that Delhi will easily be able to absorb European volumes of coal from Russia. But the Indian character will have to be shown to the United States.

India began to buy not only Russian oil, but also Russian coal. Prior to the imposition of Western sanctions against Russian hydrocarbons, the role of Russian oil and coal was insignificant in the Indian market. However, the pragmatic Indians, apparently, are ready to become a new market for Russia to replace the American and European markets.

In March, coal deliveries to India from Russia reached a maximum in the last two years. India bought 1.04 million tons of coal from Russia, the highest level since January 2020, according to analyst firm Kpler. As many as two thirds of the March volume fell on the ports of the Russian Far East. In early April, India announced that it plans to double its imports of Russian coking coal.

In 2021, the EU bought 48.7 million tons of thermal and coking coal from Russia for $3.7 billion. This is slightly less than a quarter of all Russian coal exports (227 million tons). At the same time, in recent months, Europe began to buy more from Russia - 5 million tons of coal per month. “The growth in shipments to India is growth from a very low base. But the deliveries are still impressive,” says Sergey Kondratyev, deputy head of the economic department of the Institute for Energy and Finance. In 2021, the share of Russian coal in India was only 2%.

Until August, when the EU ban on Russian coal comes into effect, demand for it outside Europe will increase significantly. “Whether it will be possible to redirect the entire volume from Europe to the East is still an open question. But we must understand that even if at first Russia loses 1–2 million tons of monthly export shipments, or 10–20 million tons per year, this will not become a critical failure for the Russian coal industry and will not set it back decades. Russian coal miners will return to the positions of 2018-2019, they will have good prospects for starting to increase exports again in 2023,” Kondratyev said.

On average, Russia supplied the EU with 4 million tons of coal per month. Potentially, India could easily absorb this volume, especially if Russian coal is discounted. The money issue for India, as for many developing countries, is now extremely important.

“For India, discounts on both oil and coal are simply vital. Delhi sees what is happening in neighboring Sri Lanka, where the economy is in dire straits, defaults have been declared and riots are raging.

India needs energy at the lowest possible price, because this allows it to lower prices, or at least not increase them for the population. Developing countries have little choice: either raise prices and face very dire social and economic consequences, or subsidize energy prices, which hits the budget hard,” explains Kondratiev.

What volumes will be redirected from Europe, depends not only on the existing demand in India. He's very tall here. India is the second largest consumer and importer of coal in the world after China. Hindus depend on coal supplies by as much as 85%. Coal accounts for about 70% of electricity generation in the country. Russia is the sixth largest producer of coal, and quality coal, which will be sold at a discount due to sanctions. Russia and India can help each other in this situation.

But besides supply and demand, there are a number of other factors. First, there may be logistical problems. “Now a large volume of coal supplies goes through the northwestern ports. But for the shipment of coal to India, it is better to choose the ports of the south. But there may be difficulties with the supply of coal by rail. The railway in the southern region has a large passenger load due to flight restrictions in the region, which also affects freight traffic,” explains Kondratiev.

Secondly, problems may arise with dry cargo ships, which are necessary for transshipment of coal. Russian exporters have mostly chartered ships on the open market, and some shipping companies may refuse to work with them. This will increase freight rates for Russian coal miners. “However, this is not critical. Because coal prices are at historical highs. Russian shippers will be able to withstand the rise in freight costs. And in the absence of a formal ban on working with coal cargo from Russia, there will still be those who want to transport Russian coal at such high freight rates. Developing countries also have bulk carriers,” says Sergey Kondratiev.

Thirdly, in order for India to receive Russian coal at a favorable price, Russian companies need to negotiate directly with Indian buyers on supplies. “In the story of Russian oil, which was sold at a record discount, it turned out that Indian buyers often did not see this discount and even paid for it with a premium to Brent. Because they did not buy Russian oil directly, but from international traders who pocketed the discount amount. This reduced the buyer's incentive for a serious increase in purchases,” says Kondratiev.

Therefore, it is necessary to agree on coal between Russia and India without intermediaries. And Russia, of course, is interested in concluding not spot, that is, one-time, but long-term contracts for a year or more.

Another risk is geopolitical. “There are quite a lot of private consumers in India. They pay more attention to discounts, but unlike state-owned companies, they are more likely to be afraid of sanctions threats from the US and Europe due to cooperation with Russian companies,” the IEF expert believes. The US is already trying to force Delhi, so far in words, to take a more anti-Russian stance. Such pressure against India will increase, the expert believes.

“If India shows character in connection with US pressure, then after a while it can take almost all of our coal exports to the EU,” analysts of "Freedom Finance" consider. Coal consumption in India in 2021 rose to 1.06 billion tons, but production in 2020-2021 fell to 716.1 million tons. “Even with an increase in production in 2022, India still has to import more than 200 million tons. And Russia needs to redirect about 50 million tons. Earlier, the Indian government has already spoken about its intention to increase imports from Russia to 40 tons per year. If this plan is implemented, then most of the exports will already be redirected, it will remain to find buyers for about 10 million tons, which will not be difficult to do in the conditions of the global shortage,” analysts at Freedom Finance say.

India and China together can take over the entire Russian volume from the European market. China imports about the same amount of coal as India, more than 200 million tons. The Kuzbass authorities have already announced their readiness to reorient coal exports from the EU to China and India; last year, 36.3 million tons were shipped to the EU from this region. Delhi and Beijing are also discussing with Moscow the possibility of paying in local currencies and using local payment systems, which will secure these transactions from the "hands" of the West.

If Russian gas leaves Europe for India, then some supplier will have to leave the Indian market. Australia is the largest exporter of coal to India today.

“If India continues to increase supplies from Russia, then Australian coal will go to the EU markets. Moreover, Australia is geographically much further from the EU countries than the Russian Federation, which means that coal prices will also be higher, due to increased logistics costs. And for India, prices, on the contrary, will become lower, since Russia is still forced to sell its energy resources at a big discount. It reaches 20–30%,” Freedom Finance analysts say.

Apparently, not China, but India, can benefit from all this sanctions struggle between the West and Russia, if you look for at least some pluses in the situation.

“In my opinion, absolutely everyone will lose, because the general price level is rising and will rise again. Of course, Indian companies will buy Russian oil and coal at a discount, but one must understand that this discount will come from the already high price. At the same time, the economies of India, Europe, the United States and Russia are losing out, because the prices of many goods are now at the maximum level. To some extent, this is beneficial for Russia, because we export a lot of energy resources and raw materials, which have grown in price. But due to sanctions restrictions, this benefit is also incomplete,” concludes Sergey Kondratiev from the IEF.

https://vz.ru/economy/2022/4/15/1153956.html

India has always said the reason it doesn't buy much Russian oil is the transport cost versus nearby ME oil makes it expensive

maybe another way of looking at the "discount" is a "transport subsidy" .... that was probably going to happen anyway ?
regardless of Ukraine events ....

checkout this graph on Trading Economics site

Eurozone .... Balance of Trade
the place started tanking late last year .....

https://tradingeconomics.com/euro-area/balance-of-trade

sure looks to me that is was cheap raw materials from Russia over several decades that underpinned Europe's current prosperity ...

and now they are about to discover the truth

ouch ....

Europe will have to replace Russian commodities with Canadian, Australian, and Middle Eastern ones. It will be a lot more expensive.
Just the transportation costs alone add up to quite a lot for cheap commodities. And the infrastructure to replace Russian one this does not exist.
Where will you get the processed nickel, aluminium, titanium, etc metal? The fertilizer? The oil and refined oil products like diesel and aviation gas and distillates?
In Southern Europe they talk about using natural gas from Algeria. But Algeria keeps reducing the amount of natural gas they export. For example instead of selling natural gas to make nitrogen fertilizer they want to sell the fertilizer or the ammonia to make it. Ever since Algeria started their exports of ammonia the amount of natural gas they export keeps shrinking. For them it is immensely more profitable to sell ammonia than natural gas. Ammonia is also a lot more energy dense and easier to transport by ship than LNG.

The Europeans claim they will replace Russian coal totally this year. But coal market is tight. And a lot of that Russian coal comes from Kuzbas. Just look at a map. Kuzbas is closer to China than Europe. And China is a major coal market seeking to replace Australian (because of trade war) and now Indonesian (because of intermittent supply) coal.

Canada cannot supply oil and natural gas to the EU. Its export market is the USA. It does not have the LNG port capacity and
does not have the natural gas production to divert outside sale to the USA. The endlessly hyped tar sands ("oil" sands) oil
production is 3.25 million barrels per day and going to the USA. The eastern half of Canada imports oil from abroad. The
trade in Canada occurs more readily across the provincial border with the USA than with other provinces.

One of the most pressing issues will be finalizing LNG trains and petrochemical projects they are working on in Far East and North. Hopefully, they will manage to finish АГХК, which is built by SINOPEC and SIBUR. Supposed to be biggest basic polymer factory in the world. Also, it is connected to АГПЗ that is in finishing stages. Far East LNG is frozen ( Rosneft amd Exxon). Still not surenwhat is going on with NOVATEK Yamal LNG. Those are big projects that were supposed to be a base for reindustrialization of Far East and North regions. Next 6 months to a year will be a good barometers on how will Ru economy be able to cope with sanctions and what are the losses going to be.
@ GarryB I don't agree with you that selling commodities to India with big discount is completely positive for Russia. Good thing is that they should have buyers, bad thing is that they will lose substantial amount of extra profits. India is buying said commodities not because of good heart, but because of discounts. I hope that with passing time discounts will shrink substantially.
Also, i hope to see soon if there will be a change of direction of whole economic framework of the country. Now that cat is out of the bag, they need to close loopholes and start to tax oligarchs with progressive tax rates.Give them tax breaks if they invest. Neoliberal policies of last 20+ years need to be changed.