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Posted on 09/30/2022 10:40:13 AM PDT by BeauBo
Russian exports of crude oil and refined products declined substantially in September... total Russian crude oil exports averaged 3.15 million barrels daily this month, which was down by 280,000 bpd from August (-9%). Crude exports to Europe slumped by 314,000 bpd from August to about 900,000 bpd (-26%).
The data shows that crude oil exports to Asia - now Russia’s biggest market - in September were down by more than 250,000 bpd to an average daily of 1.6 million barrels (-14%)... some 187,000 bpd of Russian oil on water still had no fixed destination.
Exports of refined oil products declined by 146,000 bpd this month, to 2.26 million bpd (-6%), the data also showed...
Meanwhile, Energy Intelligence reported that details have begun to emerge about the G7 oil price cap on Russian exports. Citing unnamed delegates at the APPEC energy conference, the cap for Urals crude will be set at around $50 per barrel, while the caps on Russian fuel exports will vary between premiums for some products and discounts for others.
Gasoline and diesel are among the products whose price cap will be higher than the price for Russian crude, while naphtha and high-sulfur fuel oil would be capped at a discount to crude.
One condition of the price cap system would be that parties that buy Russian crude or products under this system would be banned from reselling them, the report noted. Interestingly, refiners purchasing Russian crude oil outside the price cap system would not be sanctioned, Energy Intelligence also said.
(Excerpt) Read more at oilprice.com ...
New sanctions and price caps on Russian oil will likely be accelerated because of Putin's mobilization and annexation.
Oil is the last prop under the Russian economy and especially Government finances - now going away.
EU and Germany Oil and Fuel Imports Severely Slump in September”
Fixed/Corrected.
‘The lights are going out all over Europe and may not be lit again in our lifetime’
https://www.youtube.com/watch?v=Y5CQPtT4A48
“Interestingly, refiners purchasing Russian crude oil outside the price cap system would not be sanctioned”
That’s because China is buying Russian crude at a discount and reselling it to the West, including to the US. You can always count on Biden to have China’s back.
the volume dropped but how about the pricing??? As it sells much higher than pre-sanction what is the difference in total income???
Putin is pushing for OPEC+ (the “+” is Russia) to drop production by a million barrels a day. OPEC+ meets on the 5th. The Saudis will probably be on board, UAE will be the one that may not like the idea. Also remember that OPEC+ hasn’t been producing its quota for some months now. They can’t, just like the US, lack of investment in future production is the real problem only the insiders seem to talk about. You can’t just turn on the spigot, it takes years to really ramp up production unless you’ve already done the preliminaries.
You can thank the Global Warmists for that. They have infiltrated the investment companies just like they infiltrated our schools, etc. They control enough money to make a difference.
“the volume dropped but how about the pricing?”
The war shock price peak was over $120 per barrel, but it has dropped back by more than a third since then ($80-$90 range). September was a month of continued falling prices. Total Russian oil revenue probably peaked back around June (maybe late May).
Further sanctions and possibly this new price cap plan, will hit Russian oil revenues further.
Global recession seems more likely, as Central Banks are raising interest rates like we haven’t seen for almost half a century.
Recessions typically bring oil prices down. If the spot market oil price drops back to the pre-COVID norm of about $60/barrel, that would really squeeze Russia, because their average cost to produce is over $50/barrel (some wells more, some a bit less).
The outlook is for pretty sharply declining Russian oil revenues in coming months - perhaps historically sharply.
“Putin is pushing for OPEC+ (the “+” is Russia) to drop production by a million barrels a day.”
Also, after the election, the Biden Admin may (likely will) halt their releases from the Strategic Petroleum Reserve, which would be a million bpd less on the market then.
If you think that Russia is going to sell at the cap price then you aren’t smart.
This is one part of the strategic issues the Putin fans are avoiding paying attention too, the long term economics. Russia is getting shut out of the global economy. For the winter and next year, it will hurt. Long term, this is going to hurt Russia a lot more than people realize.
“Long term, this is going to hurt Russia a lot more than people realize.”
Russia is already the most heavily sanctioned country on Earth, and the war crimes trials have not even started yet.
Like Nordstream 1&2, a lot of gas wells and oil infrastructure will fall into inoperable conditions, much quicker than they did in balmy Venezuela.
Russia is screwed.
“If you think that Russia is going to sell at the cap price then you aren’t smart.”
They have been selling at steep discounts since the war began - over $30/barrel in many cases.
West Texas Intermediate is selling under $80/barrel now. A $30 discount would put them right at the estimated price cap (fifty-something dollars).
Bottom line: If they have more oil than they can sell, and the price is above their cost (which the cap is designed to marginally be), then they have an economic incentive to do so. They will certainly be hard up for cash.
Hard times are no longer coming for Russia, they are now here.
The discount is long gone, isn’t it? $80 won’t last unless there is a big time recession.
“Recessions typically bring oil prices down. If the spot market oil price drops back to the pre-COVID norm of about $60/barrel, that would really squeeze Russia, because their average cost to produce is over $50/barrel (some wells more, some a bit less).”
$50/barrel because Russian oil and gas fields are in very cold regions. So he invades Ukraine to seize and extract their Black Sea oil and gas that is in a mild climate. Let’s guess it costs $25/barrel to lift and produce. Plus close to European buyers.
“So he invades Ukraine to seize and extract their Black Sea oil and gas that is in a mild climate.”
If he didn’t steal, he would have to compete with it on price. That is why he invaded in 2014, after big deposits were fund off of Crimea in 2012.
“ The discount is long gone, isn’t it?”
I don’t think so. Putin is in no position to displease China.
Factual matter is not a subject of ‘thinking’. Not to mention that you misunderstand the nature of Russian-Chinese relations.
Way back in Jr High School, the teacher went on about Russia historically
seeking a warm water port. What a joke. Their navy has always been awful. Though now they want and took Crimea so they/Putin can control who extracts Black Sea oil and gaz
Russia has always been a joke. From past Tsar’s fantasies to the current money grabbing idiot with his Tsarist fantasies. The only thing I respect is the superior literature they have turned out. Long cold winters, with getting snowed in, are conducive for writing.
I say money grabbing, as in stealing another nation’s oil and gas from pure greed. Vlad can’t take it with him, and he will be gone soon. Same as the Queen of England was suddenly gone.
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