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over9k said:
They can't get much of it though. No pipelines from russia to china or india - it's gotta be shipped to india and actually moved by railcar to china.
Click to expand...

True, but it's better than a total export ban on Russian oil, which I believe is what is being priced into crude oil contracts (particularly an EU oil ban).
 
waterbottle said:
True, but it's better than a total export ban on Russian oil, which I believe is what is being priced into crude oil contracts (particularly an EU oil ban).
Click to expand...
Listening/reading to some very smart people, the belief is that most of the russian infrastructure is going to be wrecked by the cold this winter and simply remain broken if they can't get the western companies like schlumberger etc back in to fix it, which they won't be able to. So even if there's not a total russian ban, they simply won't be able to supply it even if we want it.

Either way, the entirety or nearly the entirety of the russian supply goes.
 
over9k said:
Listening/reading to some very smart people, the belief is that most of the russian infrastructure is going to be wrecked by the cold this winter and simply remain broken if they can't get the western companies like schlumberger etc back in to fix it, which they won't be able to. So even if there's not a total russian ban, they simply won't be able to supply it even if we want it.

Either way, the entirety or nearly the entirety of the russian supply goes.
Click to expand...
Why won't they be able to get western countries in? EU energy security is dependent on Russian oil supply - it would make no sense to allow that supply to disappear without having obtained an alternative (which they haven't). Furthermore, the EU now officially allows they're members to transact with Russia, so unless there is a bank on all business between the two, I don't see why that would ever eventuate.
 
waterbottle said:
Why won't they be able to get western countries in? EU energy security is dependent on Russian oil supply - it would make no sense to allow that supply to disappear without having obtained an alternative (which they haven't). Furthermore, the EU now officially allows they're members to transact with Russia, so unless there is a bank on all business between the two, I don't see why that would ever eventuate.
Click to expand...
The alternative is north sea, american, and saudi oil. The saudi's are already pumping at their highest levels ever (easy to go and check) and the yanks are not far behind. There's LOTS of moves being made by the yanks and the western companies have actually all left of their own volition. Oil isn't the issue, it's gas that's the problem because there essentially *isn't* a gas unloading port for all of continental europe because gas is something you only ship if you have no other choice on account of how difficult moving it actually is. It has to be under temperature, pressure etc. Oil's not like that and europe's been getting stacks of oil from both the saudi's and the north sea for ages so the unloading, refining etc infrastructure is mostly already there. All they need to do is top up the supply (aka buy some oil) from the north sea/middle east/america. This costs a bit, but there no non-financial reason stopping them from doing it.

This isn't true for gas.

This is why you see all these sanctions on oil already in place but virtually nothing on gas, and also why the russians are responding by threatening to shut the gas pipes.


Reference companies leaving - It's actually been quite surprising how much the private sector has responded to all of this. They have well and truly GONE. They've just written billions and billions of dollars of losses off (pretty easy to go and check their quarterly statements/reports if you can be bothered) and just moved on.

But let's assume you're right - that the russians do manage to get schlumberger etc back in after everything crumbles. How long do you think it takes to fix/check/pressure test etc etc thousands of km worth of oil pipeline in -40 degree winter? With blizzards, permafrost etc? Not five minutes I can assure you of that. This is a process that takes YEARS, and that's if you can even convince them to do it in the first place.

As far as the rest of the sanctions go, they have only stalled, not been KO'd permanently. It wasn't a "no", it was a "not yet". I'll explain this part in depth in a moment. They're even trying to figure out how to (and from everything I've seen, they're doing a pretty good job of it) connect the european energy grid to the ukrainian one.

But the really big one, which has remained for the next phase of the sanctions, is tanker insurance:

If a tanker enters what an insurance company has deemed to be an active warzone, its insurance is null/void instantly. So this has shut down a tremendous amount of russian oil exports from novorossiysk (black sea port). Then you really only have primorsk (st petersburg) on the baltic sea and nakhodka (vladivostok) over at the pacific side. These have so far been continuing to operate.

Turns out that 95% of the world's tanker shipping is done by european companies for some reason. I'm not in the tanker insurance business so I don't know why but there's obviously some kind of tax or whatever reasons why. But, why doesn't actually matter either, we just need to focus on the fact that this is the case.

Through an over-arching organization called the International Group of P&I Clubs in London, vessel owners collectively purchase cover from 80 reinsurers, including from more than 20 of the 25 largest providers in the world.

As such, an insurance ban, which has remained as a non-negotiable in the next phase of the european sanctions, would make it all but impossible to obtain such cover.

The International Group’s members sort out cover for 95% of the tanker fleet for spills and other maritime liabilities. If they could no longer do so, then it would force the russians to insure their customers' tankers themselves or the purchasers to get/use sovereign indemnification (so if you were shipping the oil to india then the indian government would have to insure the tanker itself, basically).

But the thing is, the baltic sea port is too shallow to put a big supertanker in, so they can't ship any decent quantity from it. Certainly not enough to supply india and china and whoever else.

This means that the only option left is the pacific port at vladivostok, which means they essentially pump the oil all the way from western russia to the far east, and then ship it all the way back some 20,000km or whatever it is to get it to india or whoever is buying. This is at the very least, expensive as hell, and considering that the saudi's/middle east is only a few hundred KM from india, so not exactly economical. This basically leaves their only option left to really competitively sell to as china/asia.

So my point here is that even if the tankers get the sovereign indemnification, pure economics means that russian oil simply isn't competitive anywhere other than china/asia any more, and we haven't even begun to think about the geopolitical implications of buying oil off a country that all of your allies have sanctioned/condemned beyond belief.

This is a particular tightrope india is trying to walk at the moment as the russians offer their oil to them for cheap and everyone else glares at them saying "you better not take it".

234562345623462362346324.jpg

The indians are obviously trying to see what they can squeeze each side for on this.
 
over9k said:
The alternative is north sea, american, and saudi oil. The saudi's are already pumping at their highest levels ever (easy to go and check) and the yanks are not far behind. There's LOTS of moves being made by the yanks and the western companies have actually all left of their own volition. Oil isn't the issue, it's gas that's the problem because there essentially *isn't* a gas unloading port for all of continental europe because gas is something you only ship if you have no other choice on account of how difficult moving it actually is. It has to be under temperature, pressure etc. Oil's not like that and europe's been getting stacks of oil from both the saudi's and the north sea for ages so the unloading, refining etc infrastructure is mostly already there. All they need to do is top up the supply (aka buy some oil) from the north sea/middle east/america. This costs a bit, but there no non-financial reason stopping them from doing it.

This isn't true for gas.

This is why you see all these sanctions on oil already in place but virtually nothing on gas, and also why the russians are responding by threatening to shut the gas pipes.


Reference companies leaving - It's actually been quite surprising how much the private sector has responded to all of this. They have well and truly GONE. They've just written billions and billions of dollars of losses off (pretty easy to go and check their quarterly statements/reports if you can be bothered) and just moved on.

But let's assume you're right - that the russians do manage to get schlumberger etc back in after everything crumbles. How long do you think it takes to fix/check/pressure test etc etc thousands of km worth of oil pipeline in -40 degree winter? With blizzards, permafrost etc? Not five minutes I can assure you of that. This is a process that takes YEARS, and that's if you can even convince them to do it in the first place.

As far as the rest of the sanctions go, they have only stalled, not been KO'd permanently. It wasn't a "no", it was a "not yet". I'll explain this part in depth in a moment. They're even trying to figure out how to (and from everything I've seen, they're doing a pretty good job of it) connect the european energy grid to the ukrainian one.

But the really big one, which has remained for the next phase of the sanctions, is tanker insurance:

If a tanker enters what an insurance company has deemed to be an active warzone, its insurance is null/void instantly. So this has shut down a tremendous amount of russian oil exports from novorossiysk (black sea port). Then you really only have primorsk (st petersburg) on the baltic sea and nakhodka (vladivostok) over at the pacific side. These have so far been continuing to operate.

Turns out that 95% of the world's tanker shipping is done by european companies for some reason. I'm not in the tanker insurance business so I don't know why but there's obviously some kind of tax or whatever reasons why. But, why doesn't actually matter either, we just need to focus on the fact that this is the case.

Through an over-arching organization called the International Group of P&I Clubs in London, vessel owners collectively purchase cover from 80 reinsurers, including from more than 20 of the 25 largest providers in the world.

As such, an insurance ban, which has remained as a non-negotiable in the next phase of the european sanctions, would make it all but impossible to obtain such cover.

The International Group’s members sort out cover for 95% of the tanker fleet for spills and other maritime liabilities. If they could no longer do so, then it would force the russians to insure their customers' tankers themselves or the purchasers to get/use sovereign indemnification (so if you were shipping the oil to india then the indian government would have to insure the tanker itself, basically).

But the thing is, the baltic sea port is too shallow to put a big supertanker in, so they can't ship any decent quantity from it. Certainly not enough to supply india and china and whoever else.

This means that the only option left is the pacific port at vladivostok, which means they essentially pump the oil all the way from western russia to the far east, and then ship it all the way back some 20,000km or whatever it is to get it to india or whoever is buying. This is at the very least, expensive as hell, and considering that the saudi's/middle east is only a few hundred KM from india, so not exactly economical. This basically leaves their only option left to really competitively sell to as china/asia.

So my point here is that even if the tankers get the sovereign indemnification, pure economics means that russian oil simply isn't competitive anywhere other than china/asia any more, and we haven't even begun to think about the geopolitical implications of buying oil off a country that all of your allies have sanctioned/condemned beyond belief.

This is a particular tightrope india is trying to walk at the moment as the russians offer their oil to them for cheap and everyone else glares at them saying "you better not take it".

View attachment 141995

The indians are obviously trying to see what they can squeeze each side for on this.
Click to expand...

Good points re: oil, all of which points to a downtrend in POO IMO, but doesn't explain what Europe does RE: Gas.
Essentially Europe will be cutting their nose to spite their face. Does not make sense to me.

Re: geopolitics, the US has already given their blessing for not imposing an oil ban on Russia. They've proposed tarrifs instead.
 
The world’s top investor, Warren Buffet, this week loaded up on oil stocks ahead of what is expected to be another upward surge in the commodity’s price, with a leading Dutch bank tipping a potential rise from an already inflated US$113 a barrel to an all-time high of US$200/bbl.

smallcaps.com.au

Big-name investors, politicians embracing oil and gas, as price tipped to surge

Follow the money (and follow the politics) because this week’s hot advice is that when it comes to investing in energy, money and politics are heading in
smallcaps.com.au smallcaps.com.au
 
waterbottle said:
I take y


Good points re: oil, all of which points to a downtrend in POO IMO, but doesn't explain what Europe does RE: Gas.
Essentially Europe will be cutting their nose to spite their face. Does not make sense to me.
Click to expand...
Gas is the real thorn in the side. There's very little they can do about it and they know it, hence the russians threatening it.

1345234563245.jpg

"Quickly" still means bloody ages as it's not exactly an easy thing to construct a gas unloading facility.
 
over9k said:
Gas is the real thorn in the side. There's very little they can do about it and they know it, hence the russians threatening it.

View attachment 141996

"Quickly" still means bloody ages as it's not exactly an easy thing to construct a gas unloading facility.
Click to expand...
Bloomberg reporter Javier Blas says US diesel prices are now trading at the equivalent of US$175 a barrel. The current diesel dilemma is not enough global refining capacity.

Lo & behold China can come to the rescue if it chooses too - but the US & allies decided to label China as our enemy so good luck with China helping us out regarding diesel.

If you think about it - just about everything runs on diesel - so watch this space.
 
over9k said:
They can't get much of it though. No pipelines from russia to china or india - it's gotta be shipped to india and actually moved by railcar to china.
Click to expand...
don't worry those pipelines will be built soon enough ( both China and Russia have a BIG incentive AND can be single-minded pursuing a target )

watch for signs of Russia-India pipeline rumors ( that should be a logical moves for both nations ( i would have included Pakistan but after the regime change , i am not so sure about the intelligence of the new leadership )

BTW there is a cross Russia railway system , time will tell if Russia-China-India think that system needs to be upgraded
 
waterbottle said:
Good points re: oil, all of which points to a downtrend in POO IMO, but doesn't explain what Europe does RE: Gas.
Essentially Europe will be cutting their nose to spite their face. Does not make sense to me.

Re: geopolitics, the US has already given their blessing for not imposing an oil ban on Russia. They've proposed tarrifs instead.
Click to expand...
LOL

tariffs are a tax on the end-user ( they are nuts it they think it will have a happy ending )

but yes of course , tariffs they NEED the income to prop up the Ukraine washing machine ( operation )

Europe hasn't made sense for over a decade , even Bozo the clown saw the UK had to desert the EU
 
divs4ever said:
don't worry those pipelines will be built soon enough ( both China and Russia have a BIG incentive AND can be single-minded pursuing a target )

watch for signs of Russia-India pipeline rumors ( that should be a logical moves for both nations ( i would have included Pakistan but after the regime change , i am not so sure about the intelligence of the new leadership )

BTW there is a cross Russia railway system , time will tell if Russia-China-India think that system needs to be upgraded
Click to expand...
Nah you're off the mark here divs, you have to first of all find someone able and willing to build them (aka the western companies) and even then, we're talking multi year projects.

You need both the skills and the time and the russians have neither.
 
Telamelo said:
Bloomberg reporter Javier Blas says US diesel prices are now trading at the equivalent of US$175 a barrel. The current diesel dilemma is not enough global refining capacity.

Lo & behold China can come to the rescue if it chooses too - but the US & allies decided to label China as our enemy so good luck with China helping us out regarding diesel.

If you think about it - just about everything runs on diesel - so watch this space.
Click to expand...
Yep, tractors and trucks run on diesel and it's tractors and trucks that grow and transport food.

Combine this with the fact that gas is used to make fertiliser and we see huge food price inflation/shortages.
 
over9k said:
Nah you're off the mark here divs, you have to first of all find someone able and willing to build them (aka the western companies) and even then, we're talking multi year projects.

You need both the skills and the time and the russians have neither.
Click to expand...
the Saudis are much more friendly , the Chinese have back-doors everywhere ( worthwhile ) and you forget who has the lead in the space race ( it ISN'T the US )

AND China-India-Russia have close to one third of the global population and as long as US dollars are avoided they can print PLENTY of money .. MMT will work for something like a massive pipeline system or rail system ( if constructed properly )

AND if they are short of workers there are some North Koreans who would probably sign up for some foreign income ( nice and handy to the Siberian end of the project )
 
According to the Financial Times the Saudis are pushing for Russia to stay in OPEC +

Saudi Arabia has signalled it will stand by Russia as a member of the Opec+ group of oil producers despite tightening western sanctions on Moscow and a potential EU ban on Russian oil imports. Prince Abdulaziz bin Salman, the energy minister, told the Financial Times that Riyadh was hoping “to work out an agreement with Opec+ . . . which includes Russia”, insisting the “world should appreciate the value” of the alliance of producers. A new production deal is on the agenda as Opec+ output quotas put in place in April 2020 are set to expire in three months while energy consumers grapple with oil prices at their highest levels in a decade. Prince Abdulaziz’s comments are an important sign of support for Russia from a traditional US ally as the west tries to isolate the country and its oil production falls, raising questions about its place in the Opec+ group. Riyadh has been resisting western pressure to raise crude output to help bring down prices in the wake of Russia’s invasion of Ukraine, insisting there is not a lack of supply. Prince Abdulaziz said it was too early to say what a new agreement might look like given the uncertainties in the market, but added that Opec+ would increase production “if the demand is there”.
Click to expand...

I've never been able to work out the price of oil.

Can anyone enlighten me?

gg
 
over9k said:
Listening/reading to some very smart people, the belief is that most of the russian infrastructure is going to be wrecked by the cold this winter and simply remain broken if they can't get the western companies like schlumberger etc back in to fix it, which they won't be able to. So even if there's not a total russian ban, they simply won't be able to supply it even if we want it.

Either way, the entirety or nearly the entirety of the russian supply goes.
Click to expand...
23462624562456425.jpg

HMMMMMM.

And it's not even winter yet.
 

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