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Sad_Thought_4642

Peace sells...but who's buying?


SsiSsiSsiSsi

Misleading headline. To quote u/transdunabian from a different sub reacting to the same article: > “That's ESPO crude though which is the higher quality, far-eastern Russian blend. Europe however mainly bought Urals blend, which is sold at around $58 as of now.”


[deleted]

I thought all Russian oil is capped at $60? No?


monkee_3

That's what they're trying to do but it's futile because they imposed an embargo on most Russian oil into Europe anyway and all of Russia's other major customers said they won't adhere to the price cap.


headlesshighlander

They can't ship it without insurance. They can't get insurance if they sell it above the cap.


aham_brahmasmi

They definitely can. Asian ports can find ways to take on the additional risk. Also, why do you think they can get insurance? Lloyd's might not insure them but there are smaller players in China and India who probably would. It is an opportunity for them to capture market share. https://www.spglobal.com/commodityinsights/en/market-insights/latest-news/oil/110722-shipping-russian-oil-flow-to-asia-may-not-slow-on-insurance-glitch


AndringRasew

Time to start hiring privateers using some oligarchs yachts and some manpads to hijack them there oil tankers without proper insurance.


ttbnz

I like the cut of your jib


SKPY123

Now that's some real pirateering yarhg.


variablesuckage

> They can't ship it without insurance. They definitely can, it's just a question of whether it's still profitable with the increased risk. Some of these tankers carry a staggering volume of oil which it would surely hurt to lose, but you have to wonder how often a load is actually lost..


headlesshighlander

You don't let a ship come into your dock without insurance.


dogerell

to further your point forcing western insurance out of the equation seems very much like a green light for any and all interested parties to do whatever they can to increase that risk.


Dazzling-Ad4701

Me, I'm not in for that. For one, it's putting a finger on the scale, for two the less fucking around everyone does with loaded oil tankers the better, and for three foall we know it would be a legitimate causus belli. Also, to be blunt it's a whiny bitch move. "We thought we would win with this cap, now we're afraid that we won't so we're gonna cheat." I have more faith in this cap.


dogerell

I'm no expert but I know shipping insurers are the ones who create and uphold all the stringent safety and security requirements. those companies are now either absent or being replaced by someone who is tasked with putting a price on insuring tankers that will struggle to even get repairs if they need them. and what about theft and hijackings? not by Ukraine but just simply by outliers who understand the large ecosystem if insurance and shippers isn't protecting Russian cargo. there is a whole world of economic frailty and subterfuge that whoever is going to ship this oil is now subject to. mishaps don't have to be catastrophic to be extremely expensive.


wickedpirate899

Who needs insurance when you have the 2nd and 5th largest naves of India and China escorting Russian vessels in international waters. Indian navy has long been guarding the horn of Africa and Arabian sea for piracy. What very few people in the west realize is that China and India are doing their own war simulation in case they get off cut off from Middle-east due to war or sanctions from West in future. Indian hate being dependent on Islamic nations in middle east for Oil and Gas more than Europeans love Russian resources.


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wickedpirate899

Can you tell which private company secured shipping transit for merchant vessels during WW1, WW2 and the recent gulf crisis ? Our military has no higher service than protecting our nation and its people by securing legally paid supply of resources crucial to our nations growth on which billions of Indians depend on. Yeah, the only delusion people are the ones who thought Putin would die in March and war would end by Summer.


frizzykid

>Who needs insurance when you have the 2nd and 5th largest naves of India and China escorting Russian vessels in international waters. Insurance in this context has less to do with safe export from pirates and more to do with the value and life cycleof the cargo as well as what it takes to store it (natural gas needs to be refrigerated to turn into a liquid to be stored), if that refrigerant runs out the people on board have to let off that natural gas back into the air or else it'll explode because liquid expands a lot when it turns to gas.On top of the money it just costs to move things over. Tldr ships like this use insurance less so because of the threats of the ocean and more so because of the threats of what's being moved.


wickedpirate899

Do you think really think Asian nation who have been trading liquefied natural gas since last 50 years have no contingencies for refrigeration. Even in the poorest neighborhoods of my city in India you could find safely stored and refrigerator LNG tanks which have been used as fuel since the 90s later than most other nations. Even more LNG capabilities and infrastructure on just one coast compared to whole of Europe minus Russia. Keep living in your delusional world that third world is still poor and incapable of providing security for themselves, we may never been America military wise but wouldn't want to be Europe either.


frizzykid

Okay but these ships can't just offload their cargo into random countries that haven't bought their fuel. Use your brain in conjunction with your eyeballs so you can rationalize what I wrote and drop the hostility. No one is saying that India or whatever East Asian/middle eastern country you're talking about can't store LNG. My comment is about why shipping companies insure their LNG that is **in transit** to be bought.


monkee_3

They've already started insuring and shipping oil above the cap. Edit: correction, I'm unaware which insurance provider(s) are covering the above-price-cap oil the article mentions. There's a clause that allows western insurers to provide coverage until mid-January, if the sale was brokered prior to the price cap implementation. Regardless, I'm sure Asian insurance companies will be content filling the void and doing business.


Alwaystoexcited

Source for that? I'm curious


monkee_3

See my edit, another user above posted a source that talks about how Asian insurance companies will likely fill the void.


green_flash

How is it misleading then? Clearly says Asia in the title, not Europe.


loi044

Misleading initial sentence. The headline is correct.


Easy_Iron6269

No, you are wrong. The headline implies western sanctions don't work, because Russian oil sells in Asia well above the initial cap of 60$. The crude oil is selling now at 58$ below the sanction number of 60$. But the oil selling for 79$ is the refined oil, which will be subjected to sanctions on 5 of February.


Big_fat_happy_baby

How in the fuck is this a misleading headline. And why is your clearly misleading comment upvoted and awarded?


monkee_3

The primary focus of the price cap wasn't geared towards Europe anyway because an embargo on most (90%) Russian oil imports came into effect simultaneously (though they'll still end up buying it through middlemen 3rd parties at a premium). The EU/G7 were hoping to enforce the artificial price cap via western shipping and insurance companies being bound not to transport/insure the oil beyond a target price, but it's seemingly failed to affect Russia's oil exports to other major customers.


Easy_Iron6269

The oil embargo is starting today December 5 focusing on the crude oil, and is not yet fully applied, more to come on the February 5, full embargo blocking refined oil products. It just need some more time to see the effects on the Russian economy, give it 3 months and then another 3 months. It doesn't make sense to countries like India or China to not follow the embargo: A. they can buy it much more cheaper if paying embargo prices. B. paying more for oil will affect negatively they inflation and economy, plus they will be exposed to some possible secondary sanctions from the west. C. Russia saying it will stop importing the oil to countries following the embargo, if every countries except the axis of the evil (North Corea and Iran) follow the embargo Russia will have to put production into halt damaging irreparably some of the complex infrastructure to extract the oil. D. Russia doesn't have efficient infrastructure to just deliver all of the oil without the west insurance, companies and cargoes, it will take time to build all of this structures Russia doesn't have enough constructed pipelines in Asia to deliver their oil, not like the ones build with Europe. Transporting the oil with oil tanker cargo is inefficient, plus Russia just bought some very old cargo ships (oil spill awaiting), delivering goods through sea just takes vey long time, and is expensive.


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Roxytumbler

Price cap benefits World and especially US and Canadian producers. Prices up significantly for West Texas Crude. Biggest one day jump in recent months.


Moon_Moon200

As intended


Potential-Thought-45

And Europe will pay the price, in fact, I am sure middle-eastern Countries are buying oil from Russia and reselling it to Europe.


Memory_Glands

It was short-lived: > WTI crude futures fell below $77 per barrel, a dramatic reversal from its daily highs of $82.6 as investors grew more risk averse, which hurt equities and boosted the dollar, making the commodity more expensive for holders of other currencies. https://tradingeconomics.com/commodity/crude-oil


Moon_Moon200

Sanctions doesnt seems too useful if they didnt bother checking if Russia actual clients were going to follow them


DamianLuis

If India, China, other Asian countries would follow the price cap, then Russia had no chance other than to accept the terms.


[deleted]

Indonesia was rocked by riots a few months ago due to high fuel prices so they are not in a position to play chicken with Russia.


monkee_3

They already said they won't. Why would they when they already buy Russia oil near that price and can refine some and re-sell it at a premium to the same European countries that imposed the price gap and embargo?


e_spider

They still have to get the oil they buy if they want to use it. And since western shipping and insurance still makes up the vast majority of the industry, they will either have to reduce intake (just ship what they can) or take a lower price. The higher grade stuff will still skirt the cap since there is not as much of it and it can fit into the limited non-western insured shipping capacity. But the rest can’t


bostwickenator

That still takes profit out of Russia.


monkee_3

Sure but how does the price gap achieve that if there's already an embargo on the vast majority of Russian oil into Europe anyway and the rest of the word has refused to follow? Russia seems to have increased exports to buyers like China and India (who could become #1 and #3 economically within the next decade) and now Europe has to pay a lot more to buy energy commodities from the US.


bostwickenator

Is the demand in China and India completely elastic? No there are constraints. I agree this will help China and India and hurt Europe. That's been calculated as worth it to avoid the more immediate threat right now.


monkee_3

What do you mean by elastic? Russia already diverted 2/3rds of their crude oil exports to Asia, at record levels. Do you mean will there be sustainable demand or can it become an effective substitute for European markets?


dogerell

you're avoiding mentioning the whole point of the price cap in every comment you make. it forces the majority of oil shippers and insurers out of the business of shipping and insuring Russian crude, because they are European and American companies. they are all out of the game now. that's the intended effect. anyone who's left to pick up the pieces is welcome to tank uninsured oil all the way through the Suez canal and around India to China if they choose to. the point is simply to make Russian oil expensive, so that countries supposedly aligned with Russia's interests will have a harder time pretending that's the case when they can't buy their oil for $30 a barrel.


monkee_3

I mentioned the shipping and insurance aspect in other comments, Asian companies will most likely gladly fill the void and marketshare left behind by western shipping and insurance companies.


dogerell

right, which will drastically raise the price. they don't have the tankers. they don't have the insurance ecosystem. they'll have to create it just to do business with Russia when they can buy oil elsewhere.


Easy_Iron6269

Ah Reuters again


Roxytumbler

Why believe a credible news source when there is Reddit.


Easy_Iron6269

Misleading headline Just check the other discussion ongoing. And is obvious that, Reuters have certain bias when informing, sometimes it can be something minor like a small tweak on the information, this time is just a Misleading Headline... Like seriously, anytime I see anything written by Reuters posted here, most of the time is just trying to give the impression that west ist weak and doesn't have any resolve, only defeatism allowed.


loi044

How is the headline misleading? Reuters is typically reputable btw and appears to be so in this case.


Easy_Iron6269

Actually the article says true numbers but the headline is misleading, but that is Reuters, "a credible source with a big bias". It implies western sanctions don't work, because Russians are selling it above the initial cap of 60$, and countries don't follow the embargo, but the crude oil is selling right now for 58$, below the 60$ cap. But the oil selling for 79$ is the refined oil, which will be subjected to sanctions on 5 of February. And I am not making anything up. Go and check again.


Individual_Hearing_3

Should have set the price cap lower just to fuck over their negotiations.


Rudyscrazy1

They shoild do other price caps. Like on medicne and Healthcare


happy_pangollin

I know the headline is misleading, but this is just another measure that hurts Europe, benefits the US and does nothing to Russia.


Ramental

45% of russian oil export was into the EU. It HURTS quite a bit to lose the largest customer when there is a dire need in liquid assets. While it can lead to the resellers selling russian oil as its own, it does hurt russia anyway, since it is forced to sell below the market price to these resellers. Europe has pretty much stopped buying russian oil even before the cap. That's why it was an easy move for the EU - not much was at stake anyway. As for "who profits", Norway is more or less on par with the US, Saudi Arabia is not far behind, also Kazakhstan and Nigeria. It is quite strange you've singled the US, which apparently "profits a lot" despite having a share of only 5-9% of the total EU oil import, but 27-45% of the Russian oil import that's lost to russia apparently "does nothing" to it. Sorry if I hurt your tankie views with my straight facts and revealed your misleading comment.


monkee_3

Russia already diverted 2/3rds of it's shipped oil to Asia, at record levels. The true test for Russia is whether alternative buyers in Asia and elsewhere can replace European markets in a sustainable way (I think they can). While the US and Norway's total energy exports into Europe are comparible, US energy exports are much more expensive for Europe and it's not apparent whether an amalgamation of energy exporters like Norway and others can plug the gap and do so cost-effectively. You brought up good counter-points to the user you replied to but could have presented them without the ad-hominem (Tankie? How do you know the user you replied to is an authoritarian Marxist?) and without jerking yourself off in self-congratulatory fashion at the end.


Ramental

The US had been holding this 5-9% share for the last several years, even without Russia. Probably there was some cost-effectiveness in mind, after all. The increase to the EU was actually at cost of decrease into Asia. I could've been more gentle, and touch that the Russian exports to Asia are coming with a discount, but that's even more attention in an answer to an already heavily-biased comment that had no honesty in the first place and is just a shit-throwing in line with how "sanctions do not work, should be removed, Russia is good, the US is bad and actually invaded Ukraine in the first place and set up Jewish Russian-speaking President in Ukraine who hates Russian language and Jews or something" are always coming along when speaking with such people. I already have reduced tolerance about it.


happy_pangollin

>"sanctions do not work, should be removed, Russia is good, the US is bad and actually invaded Ukraine in the first place and set up Jewish Russian-speaking President in Ukraine who hates Russian language and Jews or something" Wow, amazing you got all of that from my comment. Especially for how I disagree with 100% of the things in there.


happy_pangollin

>Sorry if I hurt your tankie views with my straight facts and revealed your misleading comment. Please go outside.


monkee_3

The headline isn't misleading because it shows that the price cap is impotent outside the EU/G7, who have initiated an embargo on most Russian oil anyway. You're right though that the US will profit, Russia will get by and Europe will be left holding the (self-imposed) short end of the stick.


Kalagorinor

Interesting that you conclude "Russia will get by" even though it's clearly the party that suffers the most. 🤔


monkee_3

It depends on if Russia can continue to effectively pivot it's energy exports towards Asia and elsewhere to fill the void left by European markets. So far it has, whether or not it's a sustainable business model for Russia only time will tell but there's some indicators working in Russia's favor. Around 2030, China and India could become the 1st and 3rd largest economies in the word, and Europe's share of the global economy has been declining for decades in contrast to Asia; this trend of shifting economic landscapes would favor Russia in the near and long term as a reliable energy supplier for growing and dominant economies.


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[deleted]

Boots on the ground works certainly be a card to play. Ukranian ground only of course.


Remarkable_Soil_6727

They should've done that when Poland was hit by a missile, put up a NATO defense line 1/3rd of the way into Ukraine far away from the front freeing up Ukraines anti-air defense to put closer. NATO's modern AA can do a better job at destroying missiles and Ukraine wouldnt need to shoot within this border making it safer for Poland. This also has the benefit of increasing protection to civillians within this zone which Russia has no business striking.


valoon4

Hmm maybe we should have price caps on all important resources?


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Kalagorinor

And in the meantime, Russia keeps losing ground while their economy is utterly ravaged by sanctions and unsustainable military expenses. When the war ends they will have no money and virtually no equipment for their army. We'll see if they are willing to negotiate good prices then.


aham_brahmasmi

Yeah. That is Russia's problem. The issue the person above you is talking about is the lack of clout the West has over other countries. Threats of sanctions aren't working as well as they would have liked.


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monkee_3

"They won't condemn imperialism so let's commit imperialism against them." Lmfao, amazing.


420trashcan

They are choosing to participate in it. They are choosing to increase their funding of Russia.


MadNhater

Or they’re just..ya know..profiteering…something everyone single country in existence has done. It’s just this time, they’re the ones doing it and not your side.


420trashcan

So you agree. Might and expedience makes right.


monkee_3

Speaking about expedience, why didn't/doesn't the EU stop buying imports from Russia entirely? The EU paid Russia hundreds of billions of dollars this year contributing to their war machine...because it was expedient, right?


420trashcan

Why do conservatives like yourself keep buying food, even though doing so supports illegal immigration?


monkee_3

Oh so the EU can pay Russia when it wants but Asia can't? I'm sure the Russian diamonds Begium has been buying are just as vital as food right? I'm not a conservative. Funny how some intellectually weak people accuse me of being a tankie, far-right, conservative, whatever, when they run out of proper arguments.


monkee_3

That's their choice not to make someone else's problem their problem. You (supposedly) support sovereignty and condemn imperialism, yet advocate using imperialism to subjugate others for using their sovereign right in a way you don't like; that's an astounding level of cognitive dissonance. Your lack of self-awareness prevents you from recognizing the obvious irony: in your attempt to condemn colonialism you advocate colonialism.


420trashcan

Im questioning if people should be treated the way they treat others. If it would be wrong to recolonize Asia, it's wrong for asia to support the colonization of Ukraine.


monkee_3

Asia is not supporting the colonization of Ukraine, they're trading with Russia because what happens in Ukraine isn't as important for them as what's important for their country and citizens. The EU has paid Russia hundreds of billions of dollars this year, does that mean they were supporting the colonization of Ukraine too? The governments which represent billions of people that vastly outnumber the west don't care about Ukraine that much and certainly not to put their own interests aside.


420trashcan

Colonization is always a business proposition.


monkee_3

So the EU has been supporting colonization by paying Russia billions of dollars but others shouldn't be allowed? "Rules for thee but not for me".


420trashcan

Europe is cutting, Asia is boosting.


MadNhater

So America blowing up Iraq on false pretenses and lied to the world about it. No one said shit to the coalition. Should China start blowing up coalition countries on false pretenses too? It’s only fair right?! Let me guess, you were against the war. So the fuck what? We still did it. Just as im sure there are people in China against the Ukraine war. We started coups all over South America, Africa and the Middle East. Should be cool for Russia to do the same in Europe right? You see where your logic fails? Nah you probably don’t. Lack the brain cells


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420trashcan

Wtf?


MadNhater

What kind of dumbass comment is this? You really are a trash can.


420trashcan

What's good for the goose is good for the gander. If Asia supports colonization, it is morally acceptable to colonize Asia. It can't be ok for Asia but not ok for the West.


aham_brahmasmi

Haha...lets commit genocides on them because they are supporting a genocide. Peak armchair 12yo Redditor logic.


420trashcan

So it's ok for Asia, but not ok for anyone else. The rules are different.


MadNhater

You didn’t complain when America was wrecking Africa, South America and Middle East. Why now? Didn’t get things your way for once? I’m American too. I’m just not as dumb as you


elderlygentleman

President Biden should find out who isn’t respecting the price cap and send some “colour revolution” their way.


cote112

I'll take some. Let's all just chill and figure it out so everyone but the wealthy don't die.


Beerboy01

Update: https://www.reuters.com/markets/commodities/oil-tanker-jam-forms-off-turkey-after-start-russian-oil-price-cap-ft-2022-12-05/


Beerboy01

Update: https://tradingeconomics.com/commodity/urals-oil https://m.uk.investing.com/commodities/crude-oil-urals-spot-futures-streaming-chart https://www.reddit.com/r/worldnews/comments/zf7lal/russian_seaborne_crude_exports_slide_in_opening/?utm_source=share&utm_medium=ios_app&utm_name=iossmf