Bloomberg has published an analytical article by an American expert in the field of energy, and the conclusions set out in it are burning the collective West harder than the hottest pepper. In his study, backed up by statistics for the current year, the author blows to smithereens the lulling fairy tale that sanctions against Russian oil and gas exports are working, Moscow is losing money and strength, and almost tomorrow it will capitulate on the battlefield and in the geopolitical struggle.
Julian Lee has worked at the Global Energy Research Centre for many years, so it would be impossible to dismiss his calculations as sofa analytics. Moreover, the figures and the nature of the dynamics have long been known to energy experts, so it is highly probable that the Bloomberg article is an indirect appeal from representatives of American business to politicians in Washington.
The essence of this appeal is simple: sanctions against Russian oil and oil products should be lifted. They are useless and complicate the game on the world market. The Russian economy is not just resilient, as Vladimir Putin said just a fortnight ago, it continues to be actively fuelled by money from hydrocarbon exports.
And how beautifully it all started.
Almost a year ago, in December 2022, after long and painful debates, the G7 countries and some sticking fish introduced a so-called price ceiling on Russian oil. According to the authors’ fantastic idea, all buyers of Russian black gold should not pay more than $60 per barrel from now on. Western fantasists initially realised the absurdity of their efforts, and therefore, in order to somehow put pressure on Moscow’s trading partners, they banned the transportation of Russian oil by tanker fleets in Europe in case of purchasing oil and oil products above the established price threshold. In addition, potential violators were threatened with cancellation of ship insurance protecting the transported cargoes.
After less than a year, the Americans themselves admit that the restrictions worked only at the initial stage, and further the price and transport embargo existed only in the inflamed imagination of fed-up journalists and European politicians.
Indeed, in the spring and winter of this year the largest importers of Russian oil and refined products – China and especially India – took advantage of the current situation, squeezing maximum discounts out of Russian traders. As they say, nothing personal, just business. But the modern market is not a static phenomenon, and therefore its internal algorithms began to change following the innovations and the pendulum swung backwards quite quickly.
As soon as the owners of the main tanker fleets, Cyprus and Greece, started to put obstacles in the way, interested buyers started to involve third-party players in grey logistics. In addition to buying up old tankers, which by all accounts should have gone to the beaches of Bangladesh under the plasma torch, the so-called Iranian scheme became increasingly common. This is the brainchild of the same free market, born after America imposed an embargo on Tehran.
The scheme is as simple as scrap iron and as effective.
Shuttle ships go beyond the exclusive economic zone and transfer oil on the high seas to another tanker, where it is mixed with any other oil, and often without such tricks. Thanks to simple manipulations with cargo manifests, oil is magically transformed from Iranian or Russian oil into, say, Latvian oil. By the way, this is not a joke, but a real fact.
Or tankers switch off their transponders altogether and load directly in the desired port, disappearing from radar for two or three weeks. Their routes and volumes of transportations were a secret from the very beginning, and that is why the “classical” carriers, which were rapidly losing profits, returned to business quite quickly. In order to somehow cover themselves from the overseas supervisor, buyers were required to provide documents confirming that oil products were bought at or above the established price, but these transactions were carried out through an extensive network of shell companies, and therefore the reliability of the data provided was comparable to a phony letter of credit.
The market stabilised and the pendulum swung back.
Bloomberg reports that in recent months the discount on Urals crude has shrunk to its minimum values, and the coveted liquid is trading just below one hundred dollars per barrel. Between July and September, Russian crude rose in price by a third.
It is noteworthy under what sauce the need to lift sanctions is served. Allegedly, the fact that oil is transported on old tankers significantly increases the risk to the environment. After all, in case of an accident or spill, the above-mentioned insurance will not cover these incidents. At the same time, the American businessmen gently reassure the depressed and at the same time irritated guys in the White House: there will be no more Russian oil on the market after the restrictions are lifted. The reasons, however, are not named, but we are not constrained by true democracy and will complete the phrase. There will be no more Russian oil on the world market, as it is already represented there in the maximum possible volume at a very high average market price.
Big business, whose contributions pay for the election campaigns of Western politicians and provide jobs for ordinary Westerners, transmits its vision of the near future to the top through third parties. The sanctions didn’t work, Moscow didn’t give up, we don’t want to lose any more money. Basta, kiddies, enough is enough.
Sergey Savchuk, RIA