We await Russia's response. I suspect it will be more than adequate. Yet another hole will appear in the West's foot.
""Moscow is working on mechanisms to ban the application of the price ceiling for Russian oil, regardless of the established level"
Russia Deputy Prime Minister Novak
"Russia will embargo countries that support the Washington-proposed price cap on its oil...In my opinion, this is a complete absurdity… To those companies or countries that will impose restrictions, we will not supply our oil and oil products, because we are not going to work under non-market conditions”
Deputy Prime Minister of the Russian Federation Alexander Novak 01 September 2022
"Why should Russia maintain oil production of 10 million bpd if we can (more) effectively consume and export 7 million-8 million bpd without losses to the state budget, domestic consumption? Which is better - to sell 10 barrels of crude for $50 or 7, but for $80?"
Leonid Fedun, Vice President Lukoil 30 May 2022
“If you look at how many ships have been sold over the past six months to undisclosed buyers, it’s very clear that a fleet is being built up in order to transport this...”
Christian Ingerslev, CEO Maersk Tankers A/S 24 October 2022
"...while Europe happily purchases "banned" Russian oil and gas resold from India and China (at a huge markup), its actions have served as a gold mine for a creaky - literally - subsector of shipping, and as Western shipping and maritime services firms now steer clear of Russian oil to avoid falling foul of sanctions or harming their reputations, new companies have leapt into the void, and they're snapping up old tankers that might normally be scrapped.
As Reuters reports, ageing tankers have been sold in recent months by Greek and Norwegian owners for record prices to pop-up Middle Eastern and Asian buyers taking advantage of sky-high charter prices for vessels willing to ship Russian oil to India and China...with new entrants keen to get a slice of the Russian business, second-hand oil tanker prices have surged, especially for Aframax vessels that can carry up to 600,000 barrels, the standard size used for loading crude at Russia's Baltic ports...The price tag for 20-year-old Aframaxes has jumped 86% from $11.8 million on Jan. 1 to $22 million now, according to valuation company VesselsValue....
...some of the vessels involved in shipping Iranian and Venezuelan oil were shifting to transporting Russian oil.It estimated that the so-called shadow fleet shipping oil from those two countries and some of them also for Russia was made up of 107 Aframaxes, 65 larger Suezmaxes and 82 VLCCs"
ZeroHedge 7 December 2022
"Despite its initial concerns, government-owned reinsurer GIC Re will help establish an INR5 billion (SG$88.7 million) insurance pool covering India’s imports from Russia.While officially known as the fertiliser pool, it may also be used to insure risks of oil and gas importation from Russia, Business Standard reported. GIC Re will contribute around 40% of the pool, while the rest will be from an assortment of Indian insurers, including several government-owned ones."
Insurance Business Asia 22 June 2022
“The competition for non-Russian diesel barrels will be fierce, with EU countries having to bid cargoes from the US, Middle East and India away from their traditional buyers”
IEA November 2022
"As for green energy, let me repeat that everything needs to be prepared for this before a final transition.
Systemic measures limiting the development of traditional energy sources have triggered this serious crisis. There is no funding; banks do not give loans either in Europe or the United States. Why is everything limited? Banks do not approve loans, do not insure, do not allocate land. Transport is not upgraded for oil and gas shipping, and this has continued for years. Considerable underfunding in the energy sector has led to shortages. This is what happened.
The United States is allocating oil from its strategic reserves – well, this is good, but they will have to be replenished and the market analysts understand this. Today, they have withdrawn oil from strategic reserves and tomorrow they will have to buy it again. We are hearing that they will buy when prices go down.
But they are not going down. So what? Wake up! You will have to buy at high prices because prices have gone up again.
What do we have to do with this? These blunders in the energy sector were made by those who have to think about it and deal with it."
Vladimir Putin 27 October 2022
"That's partly a function of the pandemic, after lockdowns destroyed demand and forced refiners to close some of their least profitable plants. But the looming transition away from fossil fuels has also dented investments in the sector. Since 2020, US refining capacity has shrunk by more than 1 million barrels per day. Meanwhile in Europe, shipping disruptions and worker strikes have also eaten into refinery production."
- Bloomberg
"Look, they are trying to put a price cap on energy resources, on oil and gas. Who produces them? Russia, Arab countries, Latin America, Asia, Indonesia, Qatar, Saudi Arabia, the UAE produce oil, too. The United States produces both oil and gas, but they consume everything: they have little left for the external market. That is, it is produced in those countries, but consumed in Europe and in the United States.I believe that what they are trying to do now is a remnant of colonialism. They are used to robbing other countries. Indeed, to a large extent, the rise of European countries’ economies is based on slave trade and robbery of Africa, Asia, and Latin America. To a large extent, the prosperity of the United States grew out of the slave trade and the use of slave labour, and then, of course, as a result of the First and Second World Wars, which is obvious. But they are used to robbing others. And an attempt at non-market regulation in the sphere of the economy is the same colonial robbery, or, in any case, an attempt at colonial robbery."
- Vladimir Putin 22 December 2022
"...just balance the books, they want to ensure a steady stream of surpluses,” said Robert Mogielnicki, a senior scholar at the Arab Gulf States Institute in Washington, adding that the kingdom “would like to see prices moving closer to the high $90s.”
Saudi Arabia has the lowest oil extraction cost in the world, at around $3 per barrel. That means the vast majority of the revenue earned from each barrel goes into its coffers. And those funds are needed to finance everything from futuristic trillion-dollar cities in the desert to a sizeable government wage bill, despite the introduction of new taxes in recent years and attempts to diversify the economy.
“The high price [needed to balance the budget] is because of the large spending on government services, infrastructure investment, public sector, etc,” said Omar Al-Ubaydli...conventional tax instruments are largely absent, especially personal income tax.”
CNN 7 October 2022
"Executive order on special economic fuel-and-energy measures in response to the price cap on Russian oil and oil products established by some foreign states
December 27, 2022
19:05
This Executive Order was signed in response to the unfriendly actions taken by the United States, other foreign states and international organisations that sided with them, to establish a price cap on Russian oil and oil products, which is in violation of international law.
The Executive Order is aimed at protecting the national interests of the Russian Federation and is in compliance with the following federal laws: No. 281-FZ On Special Economic Measures and Coercive Measures of December 30, 2006, No. 390 FZ On Security of December 28, 2010, and No. 127-FZ On Measures Impacting (Counteracting) the Hostile Actions of the United States of America and Other Foreign States, dated June 4, 2018.
The Executive Order has established that in connection with the ban imposed by the United States, and other foreign countries that sided with them, on the transport of Russian oil and oil products and related services, which is applied if the price of Russian oil and oil products is above the limit established by said foreign states (price limit mechanism), Russia bans the sale of oil and oil products to foreign companies and individuals if the contracts on these sales include the use of this mechanism directly or indirectly. The established ban applies to all stages of sales up to and including the final buyer.
The ban on Russian oil sales established by the current Executive Order becomes valid on the day of its entry into force.
The ban on sales of Russian oil products, as established by the current Executive Order, is to be applied on the date determined by the Government of the Russian Federation but no earlier than the date of its entry into force.
Russian oil and oil product sales, that are banned by the Executive Order, may be carried out under a special decision of the President of the Russian Federation.
The Government of the Russian Federation has been given related instructions.
The Ministry of Energy of the Russian Federation was instructed to monitor compliance with this Executive Order based on a procedure to be determined by the Government.
The Ministry of Energy of the Russian Federation was given the right to release official statements on the uses of the Executive Order with approval from the Ministry of Finance.
An interdepartmental working group on issues related to fuel-and-energy activities was charged with ensuring compliance with the Executive Order.
This Executive Order enters into force on February 1, 2023 and will be valid until July 1, 2023. "
27 December 2022
"A traffic jam of oil tankers has formed in Turkish waters after Western powers imposed a “price cap” on Russian oil and Ankara demanded insurers guarantee that any vessels navigating its straits were fully insured...In light of the price cap, four oil industry executives said Turkey had demanded new proof of insurance....19 crude oil tankers were awaiting passage through Turkish waters on Monday. The ships had anchored near the Bosphorus and Dardanelles straits, which connect Russia’s Black Sea ports to international markets... the International Group of P&I Clubs...stated on Monday that the Turkish request went “far beyond” the general information normally required...Russian insurance companies provided letters of confirmation to Turkish authorities in order to secure passage through Turkish waters. The shippers with insurance from western providers were the ones being held up, according to the source." Full story at AZGeopolitics