Russian hydrocarbon (Oil and Gas and Coal) Industry: News #4

Russia's prospects in the oil market inspire optimism, by Glen Prostakov for VZGLYAD. 02.03.2023.

The readjustment of export flows is certainly painful, both for oil buyers and for Russia itself. Russia is likely to be forced to temporarily cut oil production in the medium term.

The oil factor has again found itself at the center of the conflict between the West and Russia. The fresh forecast of the International Monetary Fund on the dynamics of the Russian economy shocked many observers. The IMF literally reversed the forecast by 180 degrees, predicting for Russian GDP in 2023 not a fall, but an increase. Throughout the past year, the fund’s forecasts regarding the decline in the Russian economy varied within 2.3–3.5%, but already at the beginning of 2023 it turned out that it might not only not fall at all, but even grow, albeit slightly (by 0.3%). And already in 2024, the IMF predicts the growth of the Russian economy by 2.1%, which will practically bring it to the pre-conflict level.

For the first time, the IMF forecast outstripped in its optimism even the calculations of the Bank of Russia and the Ministry of Economic Development of the Russian Federation - an unprecedented generosity in estimates. No less interesting are the explanations that the fund gave to its forecast. In particular, he does not expect the oil price ceiling to have a significant impact on Russian exports. “With the current G7 oil price cap in place, no significant impact on Russian oil exports is expected with a further reorientation of Russian supplies from countries that have acceded to sanctions to countries that have not imposed sanctions,” the report says.

Indeed, despite the entry into force of the embargo on pipeline oil supplies and the price ceiling on offshore supplies, Russia not only did not lose raw material exports, but even increased them. According to Bloomberg, in January, oil exports from Russia reached a record 13.9 million barrels. This means that schemes to circumvent Western sanctions with the reloading of Russian oil with the help of the “gray” tanker fleet have been launched on an industrial scale and are quite successful. Even the US is buying significant amounts of Indian oil products, supposedly made from Russian oil.

The problem remains the marginality of such deliveries and the discounts of the Urals grade in relation to the benchmark Brent. Thus, according to the Ministry of Finance, Russian oil in January was sold on average below $50 per barrel, which is more than $40 lower than the current Brent quotes. Such a selling price in the long run could create problems for the Russian budget, which is based on an average oil price of $70/bbl.

The problem has reached the highest level: President Putin instructed the government to prepare proposals by March 1 to clarify the methodology for determining prices for oil and petroleum products for taxation in order to minimize the negative impact on budget revenues. And yet, despite this, the IMF gives a very optimistic forecast for the Russian economy. The question arises: what is known in the fund, what we do not know? Let's discuss.

The outlook for the oil market looks very uncertain. In this context, the eyes are turned to two countries - China and the United States. The first makes it clear that the zero tolerance policy for Covid-19 may be revisited. The lifting of restrictions will stimulate the Chinese economy, which is a very large consumer of oil, which means that prices will also rise.

But the United States, on the contrary, threatens to reduce demand due to the expected economic recession. But the American authorities and, above all, the Federal Reserve System, apparently, are still hoping for a miracle. After all, a severe economic downturn will drastically weaken the Democrats' chances of holding on to power in the upcoming presidential election in 2024.

The miracle must be ensured, first of all, by the work of the military-industrial complex and by replacing the supply of defense products to the EU. This means that the American military-industrial complex and its lobby in Washington are theoretically interested in the longest possible confrontation in Ukraine, and possibly in new places, be it Iran, the South China Sea, Central Asia or somewhere else. Secondly, the miracle will be the result of a massive flow of European business to the United States, stimulated, on the one hand, by the growing energy crisis, and, on the other hand, by multibillion-dollar subsidies from the American government under the law "to reduce inflation."

It can be assumed that the IMF considers the accelerated growth of the Chinese economy and the delayed economic crisis in the US more than likely. This means that oil quotes will creep up (contrary to the forecasts of the same IMF), exceeding $100 per barrel. already in the current year. The discounts with which Russian oil is sold today will gradually come to naught or will be radically reduced. Their growth is largely due to the risks of buyers associated with the transportation of raw materials. Gradually refining supply chains and completing the necessary infrastructure to redirect exports will allay these fears, and there will be no reason for such a large price difference.

The very reconfiguration of export flows is, of course, painful - both for oil buyers and for Russia itself. The latter is likely to be forced to temporarily cut oil production in the medium term. Whether such a reduction will be supported by a reduction in production quotas by OPEC + is still difficult to say. The last meeting of the organization kept the quotas unchanged, while one thing is clear: there is complete mutual understanding between Russia and Saudi Arabia as key members of the expanded cartel.

Do not discount the "black swans". The events in Iran in recent days (the shelling of military infrastructure) increases the likelihood of a new escalation in the Middle East. The closure of the Strait of Hormuz by Iran, whether as a result of a counter-sanctions response or an act of hybrid warfare, will give the already volatile oil market an acceleration equal to the acceleration of free fall in reverse.

https://vz.ru/opinions/2023/2/3/1197711.html

Ben Seligman keeps harping on and on about how the GTD-110M is a single shaft design.   Gazprom does not need a two shaft design
because it mates it to another unit that does the same job.   The Mitsubishi H-100 has twice the weight of the GTD-110M and only
a two stage compressor turbine compared to four stages for the Russian engine.  

Gas turbines for natural gas pumping and processing do not require multiple modes of operation.   The regime of operation involves spin-up
from zero and then constant operation.    Electricity generation is different because there is some adjustment to demand load.   In this
case the steam turbine mated to the power turbine (e.g. PGU-165) can achieve all the flexibility of a two shaft design.  

https://thepipingtalk.com/single-shaft-gas-turbine-two-shaft-gas-turbine-multi-spool-gas-turbine/

The GTD-110M is similar to the Siemens SGT5-2000E

https://www.siemens-energy.com/global/en/offerings/power-generation/gas-turbines/sgt5-2000e.html

All western coverage of Russian tech has the stench of excrement.

Siemens after the circus carried out post-2014 with Crimean turbines was forced to transfer physical technical documentation to Russia as a part of ... punishment
I guess that some Russkie turbines can represent ... some ... similarities ...
Accidentally, of course

As far as I remember, many heavy load industrial gas turbines are single shaft. It is different for the aeroderivative, which are 2 or 3 shafts.

In such cases Siemens has several nice engines only because they bought a decade ago the industrial gas turbine sector of Rolls-Royce (which headquarter was in Montreal).

The best aeroderivative gas turbine engine Siemens has (also used in the north stream 1 pipeline) is a derivative of Rolls-Royce Trent 800 engine (one of the option for the original Boeing 777).

Possibly Russia has some aeroderivative PS-90 gas turbine for industrial use.

I look forward to when the larger PD-35 will be developed also in industrial and marine versions.

And as tank engine. 

European Union no longer determines price of Russian Oil, Rosneft chief says, 02.07.2023.

The EU embargo on Russian oil exports by sea, together with the price ceiling on oil and petroleum products coming from Russia, has triggered a shift in the world's supply of this commodity.

In a matter of months, Moscow redirected most of its oil flows, which used to go to Europe, to Asian markets. The country has increased its supply by sea to China, India and Turkey at the expense of Western nations.

Oil exports to India alone increased 33-fold in December, with Russia now becoming the country's biggest supplier, replacing Iraq. About 70 percent of the cargo of the Russian brand Urals transported last month went to New Delhi, according to Reuters.

"If Russian oil does not enter the European market, then there is no reference price. Reference prices will be formed in the zones where oil volumes actually go, " Sechin stressed during his speech at the India Energy Week forum.

The Russian government is now discussing how to calculate Russia's taxable oil price after the import ban and the imposition of price ceilings by the EU and G7 countries.

Currently, for tax purposes, the average price of the Urals brand is set on the world market, in particular in the ports of Augusta (Italy) and Rotterdam (Netherlands). But due to sanctions, Russian oil is practically not supplied through these countries.

Sechin also suggested that "futures contracts, future agreements" should be abandoned at the first stage in order to regulate market indicators.

Yandex Translate from Portuguese

https://sputniknewsbrasil.com.br/20230207/uniao-europeia-ja-nao-determina-preco-do-petroleo-russo-afirma-chefe-da-rosneft-27453777.html

Europe decided to help Russian oil products, by Olga Samofalova for VZGLYAD. 02.08.2023.

The European Union was afraid that because of the introduced “price ceiling” for Russian oil products, a diesel crisis would break out in the union itself or even around the world. Therefore, the EU hastened to make a number of exceptions. They were officially announced on the website of the European Commission. What are these concessions and why did the EU go for them?

The EU excluded from the "price ceiling" part of Russian oil products. This was reported on the official website of the European Commission. First, they removed oil products produced from Russian raw materials abroad by foreign companies from the “price ceiling”.

Secondly, the "price ceiling" does not apply to products that were obtained by mixing Russian oil products with foreign ones. “If Russian oil products are processed in a third country by mixing with those produced in another state, then Russian oil products are no longer considered Russian, and the price limit does not apply,” the EC website says.

Thus, Europe, in fact, legalizes schemes that have already been formed by the market.
Earlier, the EU already made a similar clarification in the summer of 2022 in the context of the embargo on oil and oil products as part of the sixth package of anti-Russian sanctions. Now clarifications were required as part of the introduction of a ceiling on prices for Russian resources, introduced on February 5th.

“Back in 2022, India was actively processing Russian oil and sending oil products to the European Union and even to the United States. Now, in connection with the introduction of a price ceiling, it is specified that oil products from Russian oil can not only be supplied to the European Union, but also transported without the requirement of a “price ceiling”, that is, at any price. This means that shipowners may not shy away from oil products from India,” says the expert of the Financial University under the Government of the Russian Federation and the National Energy Security Fund Igor Yushkov. Turkey and China also use this practice. It is profitable to buy crude oil from Russia at a discount, and sell oil products to Europe and even the US at market prices.

In January, India shipped 172,000 barrels of diesel to Europe daily, the most since October 2021. Another 89 thousand barrels of gasoline and diesel fuel per day India supplied to New York. And this is the highest figure in almost four years, according to the analytical company Kpler. India's earnings and influence in the global oil market will continue to rise this year.

The EU makes such concessions for Russian oil products primarily in order to save itself from a shortage and a diesel crisis. The United States is guided by absolutely the same considerations. The West needs something to replace the Russian oil products that it has banned. If we extend the price ceiling to new suppliers, then a crisis is inevitable. It will be unprofitable for India to sell diesel to Europe and the USA at a price of $100 per barrel (this is the price ceiling for diesel), it will look for other buyers.

The second story allows mixing Russian oil products with oil or oil products from other countries. Such a mixture ceases to be toxic, and any tanker can carry it at any price. There are no restrictions on the carriage of such a mixture, explains Yushkov.

“This story is interesting because it helps Russia to transport its oil products in the most affordable way in terms of volumes. But, on the other hand, the limitation of our income still remains,” says the FNEB expert.

It will take a tanker to deliver Russian diesel or fuel oil to the tanker at sea or in the port, where our goods will be mixed with other oil products. And this delivery period falls into the “price ceiling,” explains Yushkov. True, the so-called twilight fleet, which consists of tankers loyal to Russia and not complying with sanctions, may be involved here. According to the expert, those shipowners who work in the gray zone and turn off transponders to hide the movement of the vessel will continue to work in the gray zone. It makes no sense for them to change an established and profitable business. Perhaps now they simply will not have to deliver Russian oil products to the end consumer, but only to the “mixing point”. Then the ship will be able to quickly return to the Russian port for new volumes of oil products.

Yushkov recalls that such a mixture can be supplied to the European Union itself according to the old rules as part of the clarification on the embargo on petroleum products. “It was stated there that if you mix Russian oil with some other oil or with other oil products, you must indicate the share of the Russian and non-Russian product. And only the volume that was not of Russian origin can be unloaded into the EU. And if you do not specify the share of Russian oil, then you have no right to unload anything at all. I think this rule will continue to operate,” says Yushkov.

Both stories save Europe itself. The first is to reduce the risks of a diesel crisis with a shortage and rising prices within the European Union. The second one helps to keep Russian oil products on the world market. Because the departure of such a significant player as Russia from it will create a shortage and price growth already on the world market. And the EU, as an importer, will be able to fully experience all the negative consequences of the global oil crisis.

“In terms of oil, the market has already rebuilt, there has been an exchange of sales markets. Russia came to Asia, and those who came to Asia, for example, Middle Eastern manufacturers, moved to Europe. And with oil products, the story is a little more specific, the markets are more complex. The Europeans were clearly concerned about how the story with oil products would turn out and no matter what happened, and they themselves did not have a diesel shortage. Therefore, such clarifications and exceptions,” concludes the interlocutor.

https://vz.ru/economy/2023/2/8/1198329.html

That article is BS.
The sanctions and "price caps" don´t work. Most of it is just show for the public.

The limitation of our income remains

Someone who states this is not an expert. Rather a 5th columnist.

The price cap of course does work, it's just elementary economics.
Russia has refused to sell oil to the countries that have introduced a cap.

It means Russia has less places to sell it to, thus its bargaining power decreases and so does the price it can sell it for. The West though must get it from somewhere, and as a result buys it a premium from resellers. End result is that Russia loses money, the West loses money, and various people in India, China, Turkey, etc.. make money.

Chapter and verse on how the US planned and carried out the attack, the USN deep diving team with the Norwegians. Long article.

https://seymourhersh.substack.com/p/how-america-took-out-the-nord-stream

It means Russia has less places to sell it to, thus its bargaining power decreases and so does the price it can sell it for. The West though must get it from somewhere, and as a result buys it a premium from resellers. End result is that Russia loses money, the West loses money, and various people in India, China, Turkey, etc.. make money.

Except now that it is clear they won't refuse processed products the third party suppliers don't need discounts to get them to buy from Russia so the discounts can be phased out and the cost can be passed on to the consumer in the west.

Russia still makes a profit. To say they lose money is wrong. They don't make as much money as they could, but Russia has never squeezed their customers for top returns like western companies do.

Russia was happy to sell energy to Europe at affordable prices with long-term fixed prices to make planning and management easier, even if they don't make top dollar.

Now Europe can buy from US companies... I am sure they will give plenty of discounts...

https://t.me/therussianmarket/4933
Russia to voluntarily cut oil output by 500,000 bpd in March

Russia plans in March to voluntarily reduce oil production by 500,000 barrels per day, Russian Deputy Prime Minister Alexander Novak said. The cut is equivalent to about 5% of Russian oil output.

"In the future [the price cap] may not only lead to lower investment in the oil sector and, accordingly, to an oil shortage, but also spread to other sectors of the world economy with similar consequences," Novak said.

"In this regard, Russia will voluntarily cut production by 500,000 barrels per day in March. This will contribute to the restoration of market relations," Novak added.

The G7 nations, the EU and Australia agreed in December to cap the price at which Western brokers, insurers and shippers could trade Russia's seaborne oil for markets elsewhere at $60 a barrel.

The EU also imposed similar restrictions in February 2023, capping imports of Russia’s diesel and refined oil at $100 and $45 a barrel, respectively.

UEC supplied six gas pumping units to the richest gas field in the Arctic, 02.15.2023.

Rostec United Engine Corporation shipped six GPA-25 gas pumping units with a capacity of 25 MW to the Kharasaveyskoye gas condensate field in Yamal. This field is unique because of the colossal gas reserves, the volume of which is estimated at 2 trillion cubic metres . The equipment is adapted to arctic climatic conditions and is highly reliable.

The units will be installed at the booster compressor station, they will provide the necessary gas pressure for its supply to the main gas pipeline. The equipment is delivered in maximum factory readiness, which reduces transportation costs and reduces installation time on site.

“Complex deliveries of domestic gas turbine equipment as part of the implementation of key projects of national importance, ensuring high-quality service and repairs throughout the entire life cycle of products are the priority tasks of Rostec State Corporation companies. GPA-25 gas turbine gas compressor units are the most demanded equipment today due to their power, reliability and ability to operate both in the Arctic climate and in the southern regions of the country. The total capacity of the GPA-25 units delivered to our customers has now reached 1.8 GW,” said Andrey Vorobyov, General Director of UEC Engineering.

UEC Engineering is the sole supplier of gas pumping and power equipment manufactured by the United Engine Corporation.

As a power drive in the units, gas turbine engines PS-90GP-25 manufactured by UEC-Perm Motors and NK-36ST manufactured by UEC-Kuznetsov (part of the Rostec United Engine Corporation) are used.

The GPA-25 gas compressor units were developed by the UEC-Gas Turbines enterprise by order of Gazprom. A total of 75 GPA-25 units were produced, which are currently operating at gas condensate fields and compressor stations of the gas company. Serial production started in 2013.

The Kharasaveyskoye gas condensate field is located on the Yamal Peninsula, predominantly onshore and partly in the Kara Sea. The design level of production is 32 billion cubic meters of gas per year.

https://sdelanounas.ru/blogs/150188/

Donbass Devushka
@PeImeniPusha
Chairman of the State Duma Vyacheslav Volodin urged to calculate the damage suffered by the Russian Federation as a result of the incident with the Nord Streams, and, if a decision is made, to recover it from the funds of foreign companies located in Russia.

Economic war is heating up.

Seems this has flown under the radar.

http://publication.pravo.gov.ru/Document/View/0001202302060031

On February 4th, Prime Minister Mishustin signed a decree authorizing Gazprom to form its own "private security organization" to bolster the protection of its assets. This what I assume is basically a new PMC, "Staf Center" is already underway being formed, it seems like.

I guess Gazprom is expecting something, like Nord Stream-esque sabotage of its operations in the Arctic or so.

Donbass Devushka
@PeImeniPusha
Chairman of the State Duma Vyacheslav Volodin urged to calculate the damage suffered by the Russian Federation as a result of the incident with the Nord Streams, and, if a decision is made, to recover it from the funds of foreign companies located in Russia.

That's absolutely fantastic, I hope they overestimate the cost of damage done by 400% and collect on those EU/UK/US assets in Russia.

It will discourage western investment in Russia... which is good for Russia because the tit for tat response from the west that started this was started by the west... so now any Russian investing in western companies or buying properties in the west will have to bring their money and resources home to invest locally which is also good for Russia.

It seems that when the west was being all nice to Iran that Siemens was selling turbines to Iran and that Iran are now sharing that technology with Russia... not giving it away of course, but trading it I am sure.... Russia is getting very good value for money and Iran is making money and probably getting access to technologies in return... essentially they are helping each other to get over their west dependences.

Great for both countries.

Not so good for German companies who will now compete internationally against their own improved gear.

Putin called the reserves of "Gazprom" astronomical, 02.17.2023.

Putin described Gazprom's reserves as astronomical for any country.

MOSCOW, February 17 - RIA Novosti. The explored reserves of Gazprom in various fields can be considered "astronomical for any country," Russian President Vladimir Putin said during a video conference with employees of the state corporation.

"Well, here are the Bovanenkovskoye and Kharasaveyskoye fields. In the first case, 4.9 trillion cubic meters of proven reserves, almost five trillion. In the second case, about two trillion. These are astronomical reserves for any country,” the head of state noted.

According to him, Gazprom has other opportunities, "which are simply incommensurable with any other gas-producing country in the world."

Putin today congratulated Gazprom on its 30th anniversary, the event was attended by the head of the company Alexei Miller . During his speech, the president said that gas "was and will continue to be a valuable resource and real asset for a long time," and demand for it will grow at the expense of China and the Asia-Pacific region.

https://ria.ru/20230217/gazprom-1852670545.html

No chance: the Saudis surrendered China to Russia, by Natalia Dembiskaya for RIANOVOSTI. 02.20.2023.

Demand for oil has skyrocketed in China. Saudi Arabia was the main supplier, but Russia is taking over the lead, offering good discounts. Local refineries lined up for oil products. For Riyadh, this was a complete surprise.

Took the lead

In 2022, Moscow significantly increased hydrocarbon supplies to China and India. Key Asian economies were actively absorbing the raw materials that the European market had lost. But in China, Saudi Arabia was still in the lead.

According to Chinese customs, 86.25 million tons of oil came from Russia - 1.72 million barrels per day, which is eight percent more than in 2021. The Chinese bought 87.49 million tons from the Saudis.

The world's second economy is highly dependent on energy imports: up to 72% of oil and 45% of gas comes from abroad.

Therefore, no fuel is superfluous for Beijing. Russia has already been in the lead in China - from May to July 2022. But in August, Saudi Arabia regained the top spot.

Observers predicted: this is not for long. With the market reopening after the COVID-19 restrictions, the Saudis will face stiffer competition from OPEC+ partner Russia.

excessive greed

And so it happens. The Chinese economy is reviving, passenger traffic is growing, traffic is growing, and the huge oil refining sector is gaining momentum. Consumption is expected to skyrocket.

According to the forecasts of the International Energy Agency (IEA), in 2023, global oil demand will increase by 1.9 million barrels per day, to a record 101.7 million.

The largest producer is rubbing its hands: state-owned Saudi Aramco has already raised the price of its flagship Arab Light blend by 20 cents per barrel. For Chinese refineries, this is an extremely unpleasant surprise. Processors, on the contrary, counted on the fact that raw materials would become cheaper. After all, while the actual demand for it lags behind optimistic forecasts.

Reasonable prices

As a result, the alignment of forces may change as early as the second quarter. And this will happen not only in China. Asia will rely on Russian raw materials.

"Chinese refiners will have to maximize their spot purchases from the US and Brazil, Angola and Nigeria, but above all from Russia," OilPrice notes.

Moscow has good discounts, and Riyadh had to make room. So, according to Refinitiv Oil Research, in January, China purchased 2.03 million barrels per day of Russian oil, and from KSA - 1.77.

According to Bloomberg forecasts, the next large-scale purchases of Russian raw materials by Chinese giants PetroChina and CNOOC are coming. As a result, daily imports will add another half a million.

Add fuel oil

This also applies to oil products from Russia, which Europe demonstratively refused. Independent Chinese refineries are already eyeing fuel oil.

Moreover, Moscow redirected a significant part of the export of fuel oil and vacuum gas oil (VGO) to Asia and the Middle East even before the European embargo, which entered into force on February 5.

Although China is a net exporter of refined fuels, many refineries process fuel oil into high value-added diesel and gasoline. At the same time, one must take into account the cheapness of the Russian product and the absence of quotas for the import of crude oil for private enterprises, Reuters notes.

China purchased a record 3.89 million barrels of fuel oil from Russia in January, according to Kpler. And March deliveries are estimated to nearly double to 6.75 million.

Analysts say: Moscow and Riyadh clashed in a tough fight for the world's largest importer of crude oil. So far Russia is winning.

https://ria.ru/20230220/kitay-1852758862.html

Analysts say: Moscow and Riyadh clashed in a tough fight for the world's largest importer of crude oil. So far Russia is winning

No clash at all... China needs more oil and is buying more oil... Russia and Saudia Arabia are both selling more oil to China... Europe is losing because some of that extra oil is going to processing to be sent on to Europe at a higher price than the EU could have processed it for so the price of fuels is going up and China is profiting from it and Russia still makes its money despite the Eu embargo...

The west loses, Russia wins, Saudi Arabia wins, and China wins... and the US laughs at how stupid the Europeans are.

https://oilprice.com/Energy/Energy-General/Russian-Oil-Sanctions-Have-Redrawn-Global-Trade-Maps.html

Russian Oil Sanctions Have Redrawn Global Trade Maps

Both India and China are importing Russian crude at a record pace.
Energy Intelligence: at least 20 trading companies—but probably a lot more—are sending Russian oil around the world.
According to Trafigura, the total number of tankers that have been “reserved” to carry Russian oil could be as high as 600, of which 400 crude tankers.

In January, Indian imports of Russian crude oil reached a record. These were up by 9.2 percent on the month to a daily average of 1.4 million barrels. This month, China’s oil imports from Russia are expected to reach a record at 1.66 million bpd.

Taken together, India and China are then taking in more than half of Russia’s total daily crude oil exports, which before the war in Ukraine averaged around 5 million bpd. A lot of that used to be absorbed by Europe. Now, Russia is finding new markets. And a whole new industry of oil traders is emerging.
Energy Intelligence reported this month that at least 20 trading companies—but probably a lot more—are sending Russian oil around the world, replacing all the big commodity market players that pulled out of the country after the EU and the G7 began sanctioning it for its invasion of Ukraine.

Vitol, Trafigura, BP, Shell, Equinor—all of them upped and left whatever business they had in Russia, leaving an empty space. It did not take very long for this space to fill, it seems. It has been filled with newly set up trading firms, most of them set up very recently and outside Europe. And they are not trading in dollars or euros.

The trades that these companies are conducting with Russian oil and fuels are being financed by banks in the United Arab Emirates and Turkey, with European banks, like European commodity traders, “out of the picture,” as Energy Intelligence puts it.

They are out of the picture because of the sanctions and, most recently, the G7 price cap scheme that bans European companies from getting involved in the trade of Russian oil unless it is capped at $60 per barrel of crude. With the Europeans and the Americans out, others are making money.

Most of the new crop of traders involved in moving Russian crude and fuels around the world are based in Dubai, the Energy Intelligence report notes, but Hong Kong is another hub for such trades.

“You will see more of these companies, their names will keep on changing and it will become harder and harder to know who’s behind them,” one oil trading veteran who Energy Intelligence did not name told the news outlet.
Much of Russia’s oil and fuels in this new trade environment are being shipped by a so-called shadow fleet of tankers worth some $2.2 billion, according to a recent Bloomberg report. This has pushed freight rates higher once again, and some in the industry are beginning to worry about a permanent shortage of vessels to carry other oil and fuels around the world.

According to Trafigura, the total number of tankers that have been “reserved” to carry Russian oil could be as high as 600, of which 400 crude tankers. And, according to a senior executive from one tanker company, “These ships will be dedicated to those shadow trades and de facto removed from the markets that we would find ourselves in.”

Earlier this month, the IEA reported that both Russia’s oil production and exports have proven surprisingly resilient to Western sanctions. The head of the agency’s oil industry and markets division, Toril Bosoni, told CNBC that Russian oil output had only fallen by 160,000 bpd from pre-war levels and exports were down by 400,000 bpd—a decline partially offset by higher exports to China, India, and Turkey.

Bosoni noted, however, that despite this surprising resilience, sanctions are working, especially the G7 price cap because, thanks to it, Russia is making less money from its oil. Yet Bloomberg, in its report about Chinese imports of Russian crude, notes that “Urals and ESPO crude were pegged at a discount of $13 and $8 a barrel, respectively, to Brent on a delivered basis.”

Brent is currently trading above $80 per barrel at the moment. A $13 discount would therefore be higher than the $60 price cap that G7 and the EU set for Russian crude oil if it is to be shipped by Western tanker operators and insured by Western insurers. So, if the numbers cited by Bloomberg, based on reports from traders, are accurate, then a certain amount of Russian oil is not selling at such steep discounts.

The IEA’s Bosoni reported that in January, export revenues for Russia were about $13 billion, that’s down 36% from a year ago,” adding that “Russian fiscal receipts from the oil industry is down 48% in the year, so in that sense we can say that the price cap is having its intended effect.”

CNBC then noted that Urals crude had averaged $49.49 per barrel in January while Brent crude averaged $85 that month. That would certainly suggest some efficacy for the price cap and other sanctions.

However, the Bloomberg report suggests the discount may be slimming down as the market settles into its new normal. That new normal appears to involve a lot of new, opaque oil trading firms, a large fleet of tankers, and a lot of trade, excluding dollars and euros.

The IEA’s Bosoni reported that in January, export revenues for Russia were about $13 billion, that’s down 36% from a year ago,” adding that “Russian fiscal receipts from the oil industry is down 48% in the year, so in that sense we can say that the price cap is having its intended effect.”

What they won't tell you though is that Brent Crude Oil was trading at $120 last March and now it's down to $80 this year, a reduction in profit of.... 33%. So I guess sanctions and price caps are effective against western oil producers as well even when they're not the intended target?

If you actually think about it, the actual kinetic war is just a sideshow. The real war is being fought with Rubles, oil, and gas.

Germany alone lost its immensely vital strategic chemical industry - not even strategic bombings could do that!

A 33% reduction in profit is a very small price to pay for the permanent crippling of an entire continent that has been the most dangerous threat to Russia for centuries.

It is much better than that.
They didn't lose the chemical industry but transferred its operations to the US and ... China.

This but with Putler:


Who would've thought the greatest Russian Germanophile would end up as Germany's undertaker?