Posted on 06/05/2022 7:01:44 AM PDT by JonPreston
Agreed
“You claimed the sanctions were reducing output. In essence, it dropped in April and went right back up in May.”
You confuse production and shipping. And you don’t seem to understand that the amount shipped does not say squat about production levels. And you don’t seem to understand that just because the amount shipped by boat doubled in the last 4 months, that says SQUAT about what is the increase that is needed. If they need 3X or 4X or 5X, “double” doesn’t cut it.
A company produces 100 widgets in Jan and ships 50. In February they produce 10 and ship 100. Do you claim production went up in February, because “shipping “doubled”?
Did you read this?
“it is difficult and costly for Russia to divert its energy elsewhere.”
“Because many companies have since shunned Russian crude, the minority of companies that are willing to continue shipping it are able to collect bumper fees.”
Why do I have to explain these basics to you?
Then it's not Russian oil any more, you see.
The ruble is at 63 today, and Short Bus Biden’s diaper is at a deuce or two...
Other insurers will step up to the plate to bypass the fossils in The City.
Oil will not stay this high forever, and then all those gains will go POOF, as they sell less oil, at lower prices, having to give their Indian and Chinese friends big discounts from the market price.
The cool part of being a Democrat and/or a Neocon is never admitting you f&^%ed up.
Bonus points—you get to blame anybody and everybody for the bad consequences of your evil/stupidity.
I hereby nominate you for the Bidet Council of Economic Advisors—always wrong, all the time.
The POINT is that western nation citizens are funding Putin's war while simultaneously funding Ukraine's war.
Putin is not being hurt by this.
There was a bow wave of orders before sanctions take effect, as customers stocked up, and Russian oil was selling at a discount to the market price (about 20%).
There were virtually no Government imposed bans on Russian oil during those first few months. Even the ban on Russian ships at some ports specifically excluded those carrying oil, and most of the oil is carried on non-Russian ships anyway.
Reductions so far have been mostly voluntary, in preparation for Government imposed restrictions. Is this temporary or permanent? How has total Russian production or export changed?
Some modes of shipping increased, as the article highlights. They point to an increase of around 21 million barrels per day (bpd) in April, and around 27 million bpd in May - around one million bpd more, that flowed through Greek, Cypriot and Maltese ships, over those two months.
But that was not an increase in total Russian production, or total Russian export volumes. It was just a re-routing of some.
Before the war, Russia was producing over 11 million bpd in total, now it has dipped below 9 million bpd.
Before the war, Russia sold the EU about 4 million bpd. 2-3 million bpd of that is expected to not make it to market (anywhere) at the end of this year, as actual Government restrictions go into place there.
Russia (like Iran) will continue to find routes and middlemen to move some of its oil - but they will face increasing costs and logistical difficulties, and have to pay smuggler’s discounts.
Total Russian volume is going to continue to drop, as sanctions continue to ratchet (that was actually the point of the article - identifying where Russian oil is leaking through, to recommend new policies to shut off that route).
The rising price has substantially offset the lower volumes, in terms of total revenue, but when prices drop back down, it will be on much lower total volume of exports, with higher inherent market and transportation costs. There will be whack-a-mole as new routes are cracked down upon, but the easier to identify and control main routes will reduce total volumes significantly.
OPEC and OPEC+ this last week formally reallocated production quotas, to begin formally increasing non-Russian production, to balance global supply and demand. The additional increase in Saudi Arabia’s production will be about 3% of Russia’s exports, per month. The UAE and Iraq are expected to soon begin increasing their production as well.
They have only a fraction of the lifting costs to produce oil that Russian fields have, and are much closer by ship to Europe, than Russian exports are to India or China. They also enjoy the most favorable rates for financing, insurance and transaction costs - all of which will likely be targeted by sanctions against future Russian cargoes(some, like insurance, recently went into effect for future cargoes).
There are a lot of moving parts, but this is a seismic shift in the market, and Russia is losing a huge amount of future business.
Please provide a source your comments
So the huge inflation that Russia has, the huge expenses to build lots of new infrastructure to now ship oil to Asia, the huge costs to retool it’s manufacturing with non Western parts, industrial controllers, IT systems, etc., all of that to you costs ZERO. IT just happens by MAGIC, no cost and no lost production profits. This is why I can’t take you seriously.
“Russian Ruble Soars to 4-Year High Against US Dollar”
And on Thursday when the Russian central bank intervened to knock the ruble down because a strong ruble was hurting exports, you and you ilk all chimed in and said that was good. So that intervention has been completely undone.
Your strong ruble is hurting exporters. And for a country like Russia that exports twice what they import, that’s not a good thing. Their central bank knows that, you are clueless.
Western media is beginning to shift on the war.
The Hill
Could Russia win a public relations war against the west?
Not Russia, but the United States becomes the most isolated country in the world - The Hill
Now The Hill writes that the US and its allies seem to be in a different position, struggling to find an acceptable compromise to end the sting operation.
First, foreign wars tend to boost ratings very well in the beginning, especially if they are effectively “advertised” by the media. But if they don’t end quickly enough and with a decisive victory at a reasonable cost, public support and political consensus start to play out completely in the opposite direction. Secondly, the economic war against Russia has done more damage to Western countries that have trusted the US.
“Restrictive measures cause more damage to the Western economy. The ruble reached a two-year high in May, and Russian energy and agricultural exports bring record earnings to Moscow ,” writes The Hill journalist Moloney.
Thirdly, the US failed to rally the whole world against Russia. Only 65 out of 195 countries joined the American sanctions - China, India, Brazil, Mexico and Indonesia refused to participate in the economic war against Moscow.
“A striking example of the rejection of assumptions about US dominance was the recent G-20 summit meeting, when the US delegation refused to speak by the Russian delegate, and only 3 of 19 other delegations followed suit. All this suggests that it is not Russia that is the most isolated superpower in the world, but perhaps the United States itself, ” the article says.
Analyzing the development of events, the American journalist came to the conclusion that Putin’s policy is not so “shameful and inept” as it was actively promoted in the Western press.
So when the Russian central bank knocked down the ruble, you had this big long winded post how that was all good and needed, “hurting exporters”. So now that intervention has failed and the ruble is even stronger, what do you say now?
Please Google any particulars you wish to verify.
Okay, I will go over this again for you. You tried to make a big deal out of the ruble falling back from the highs it had recently made. You interpreted that as an indication of developing negativity about Russia’s future.
So I posted and explained to you that it was caused by a deliberate attempt (lowering interest rates) by the Russian central bank to lower the ruble which had been soaring because a very strong currency creates problems for exporters.
At the time I pointed out that despite 3 interest rate reductions they could not get the ruble as low as they desired. In the last statement issued with that interest rate reduction they indicated they expected they would need to do a further 100 basis points reduction.
If and when that happens the ruble will likely decline again...temporarily. Central banks cannot control currency rates. They can, and do, enact policies that can nudge rates in their desired direction.
All central banks do this, including our own. But, nudging does not mean they can set the currency rate. I and most economists expect the ruble to strengthen over time because Russia’s economic picture is becoming more favorable. They own what everyone wants to buy.
I’ll believe your post when you establish the veracity of it.
You are free to objectively verify specifics.
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