Putin could embargo Russia’s ~~ 8 million barrels per day of oil, and embargo Russia’s exports of 1/3 of Europe’s natural gas.
Overnight Russia would replace Saudi Arabia as OPEC’s price-setting power-broker.
A Putin embargo of petroleum products would not work out as you have described. The Saudi oil minister has already said that they don't care if the price of crude drops another $20/bbl, therefore the Saudis would pick up the slack for Europe. Likely the Qataris, who are super flush with NG, would pick up the slack in natty.
Altruism from the Ay-rabs? Hardly. Look at the advantages they garner from stepping into Russia's shoes as supplier. Probably gain long-term customers AND have these new customers spend a bundle on infrastructure? Check. Probably negotiate all sorts of social advantages/programmes for the otherwise-soon-to-be-despised Muzzies in Europe? Oh, yeah. Sticking a fork in a competing supplier's eye? Absolutely...that's half of what this price drop is all about. (The other half, btw, is a combination of attempting to damage fracking/alternative production worldwide AND regaining the absolute whip hand over several recalcitrant OPEC nations).
And never mind my thoughts on this situation, ok? The mkt is ALREADY coming round to my view. Didja see the 650 bp one-day rise in Russian short rates? They didn't do it for practice, laddie; they bumped the rates (and they will again, have no doubt) to forestall an absolutely horrendous currency crash. Anyone who thinks otherwise simply doesn't remember recent history.
Specifically, July/August 1998. VSO's (Russian short-rate instruments, not unlike Short Sterling or Eurodollar) hit **85%** just before the Russian default and currency debacle. Here's a hint: their short rates are not anywhere near 85%...yet.
Russia isn't going to replace anybody at anything in this economic/crude price cycle.
FReegards to you, but you really should find a different horse on which to bet.
“Putin could embargo Russia’s ~~ 8 million barrels per day of oil, and embargo Russia’s exports of 1/3 of Europe’s natural gas.”
As far as natural gas to Europe is concerned he doesn’t have to embargo. He can just raise the price. There is no place the Europeans can go to replace Russian gas in the short to medium term. Pay up or freeze.