By US Economy about to collapse due to Russian oil sanctions. It seems Russia has been able to bypass sanctions from the United States, taking some of its market share with the help of Brazil, and bypassed the European Union with the assistance of Iraq. This article looks at these issues and why the US Economy is about to collapse.
Russian energy exports increase
Russian diesel exports saw their highest volume month on record in March. Despite more restrictions on Moscow’s energy supplies, according to commodities analytics firm Kepler, since Vladimir Putin launched his war on Ukraine, the US, Europe and other Western nations have imposed a range of sanctions on Russia.
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But these are beginning to hurt the US Economy
In February, the European Union banned imports of refined Russian fuels, including diesel, after banning seaborne crude oil imports in December. Still, Russia’s oil and diesel export volumes remain elevated amid steep discounts.
In fact, crude oil shipments are back above pre-war levels thanks to China and India, and Russian diesel exports hit a record one point. 27 million barrels a day in March, Kepler data shows.
But whereas crude exports have largely consolidated into a small number of large buyers, the opposite has happened for Russian diesel exports.
Kepler lead oil analyst Matt Smith said trade flows for diesel have sprung up into many North African countries, while other key exporters such as Turkey and Saudi Arabia have increasingly imported Russian diesel in recent months, given advantageous pricing, he said.
Some nations like India and China have been ramping up imports of Russian supplies only to resell them.
Overall, Russian diesel is displacing traditional suppliers as trade flows change to make up for the loss of exports to the European market, he added. It’s a game of musical chairs, and one we’ve seen play out already with other Russian products such as fuel oil, the analyst said.
Brazil, for example, imported effectively zero Russian diesel all the way up to the end of 2022, with most of its supplies coming from EU S and other sellers.
Other countries siding with Russia hurting US Economy
According to Keep Clear data, the US sent roughly 150,000 barrels a day of diesel to Brazil. In December 2022, but that is dropped by about 50% in April.
Brazil’s diesel imports from Russia, meanwhile, surged to almost 100,000 barrels a day this month, even though the US is a much closer trade partner than Russia, suggesting Brazil is able to get cheaper supplies despite the longer distance.
Smith said Kepler isn’t Privy to the pricing involved. But the data illustrate that the economics work for both Russia and Brazil.
If it was just the odd cargo, it could be suggested that Brazil is the destination of last resort, when Russia is unable to sell its diesel to anyone else. But the volumes delivered in the last three months suggest something more regular and more of a trend.
It really does appear that Russian diesel is muscling in on U.S. market share in Brazil.
US Economy is about to collapse as Europe seek to improve relations
Europe loses out on Russian crude Europe’s oil refiners, already making do without longstanding shipments of Russian crude, are now struggling with the loss of similar supplies from northern Iraq and a shock reduction in output by several of the world’s top producer nations.
Flows from Russia, formerly the European Union’s top supplier, have plummeted by more than a million barrels a day since the country’s invasion of Ukraine in February of last year amid ever tightening sanctions.
Those reductions are now starting to bite harder because Iraq has halted shipments that reach Europe via a Turkish port in the Mediterranean Sea.
In addition, OPEC plus producers, including Russia, have announced supply curbs starting next month. That will cut output by about 1.6 million barrels a day by July.
For Europe, the loss comes at an unfortunate time. The Russian an Iraqi grades are of similar density and sulphur quality, and refiners in Asia, notably China, are ramping up demand of this so-called medium sour oil that forms their staple diet, a tough battle between Europe and Asia awaits an Asian help in Europe for barrels, potentially triggering European run cuts to balance the crude market.
Lack of fuel in Europe could speed up US Economy in collapse mode
Russian flows to Europe take a big dip in March. The EU imported 95,000 barrels a day of Russia origin euro compared with almost 1.2 million barrels daily in February last year, data compiled by Bloomberg show.
All cargo were shipped to Bulgaria, which has exemptions from EU sanctions on seaborne crude imports from Russia.
Europe has replaced at least a quarter of Russian supplies with crude from the Middle East since the spring of 2022, according to Energy Aspects.
Flows from the Atlantic basin from Norway and Angola to EU S also increased in the first three months of this year.
The International Energy Agency said in its monthly report earlier this month. But now there’s a further wrinkle from the Middle East.
Since last month, about 450,000 barrels a day of crude supplies from Iraq’s Kurdish region have been halted amid a payments dispute.
In March, at least 169,000 daily barrels of this oil shipped via Turkey’s port of Ceyhan went to EU nations, tanker tracking data show.
The curbs add to tightness in the market for medium sour crudes, as Middle East producers are also using more of their own oil to boost processing at new domestic refineries.
In the Mediterranean, prices for grades like Iraq’s Basra media, which are usually heavily discounted compared to others because of their sulphur levels, have rallied to a level that many traders see as too pricey.
Greek refiner Hellenic Petroleum SA also issued a rare tender, the first in two years to purchase prompt supply of Bosra Medium.
Some traders said the move signalled the tight availability of such barrels in the spot market amid the loss of Kurdish grades.
Is Russia selling oil in large amounts going to be the cause of the US Economy collapsing in 2023?
Russia oil shadow Fleet, a United Nations agency that overseas shipping raised concerns about the shadow fleet of tankers that has emerged to transport oil amid sanctions calling for more steps to boost safety states that become aware of ships going dark or turning off their transponders should be subject to more inspections, according to the legal committee of the International Maritime Organisation.
The panel also took issue with the practise of ship to ship transfers of oil on the open ocean, saying that it heightens the risk of pollution for coastal states, countries including Spain, Australia, the US and Canada are part of a push at the MO to increase oversight of the murky activities in oil trading that have emerged within the last year.
US Economy beginning to collapse due to Russian oil sanctions
Russia’s invasion of Ukraine and subsequent sanctions by Western governments upended shipping routes for the world’s most traded commodity, Spain, which has witnessed a surge in the activity off its North African enclave of Shuda said it plans to call for stronger rules governing ship to ship transfers of oil at the IMO’s assembly meeting later this year.
The topic is especially sensitive for the country because it suffered one of the worst oil spills in European history when a tanker called the Prestige split in half, leaking almost all its cargo of heavy fuel oil into the sea off the country’s coast.
While more Russian crude has flowed to Asia within the last year. A shadow fleet of hundreds of ageing vessels has emerged to facilitate the trade.
The committee mentioned a 26 year old tanker called the Turbo, which Bloomberg reported Sunday had collected the same cargo of heavy fuel from the same Russian port as the Prestige.
Tankers in the dark fleet posed a real and high risk of incident. Particularly when engaged in ship to ship transfers as they disguised the cargo’s destinations or origins, or avoided oversight or regulation by flag or coastal states, the panel said.
The Russian delegation to the IMO called for governments not to abuse sanctions and to stop restricting actions of other states while seeing the benefit of some additional oversight.
Russia, said the source of current concerns is rooted in illegitimate sanctions
According to the committee, the European price cap, which took effect in December 2022, has not helped Russian crude flows to Europe, but more of it continues to flow into India and China on a massive shadow fleet of tankers believed to have been built up ahead of the price cap implementation trend is here to stay.
The Urals crude oil grade was historically supplied into Europe using a massive network of transcontinental pipeline networks and through ports in the Baltic as well as Black Sea.
Owing to its geographic proximity, most of the Russian barrels used to find home in European refiners.
Therefore, the price of the grade was. Rotterdam and represented the value that mainly European refiners saw in the grade.
Since that trade has been replaced by a novel flow to India, there have been wide market speculations on the level of prices. Indian refiners have been paying for the distressed grade shipment in small sized Aframax vessels, In addition difficulties in securing insurance.
Hurdles in securing ships in financing as well as payment related issues meant that the landed price of these barrels to Indian refiners are looking quite different as compared to the CIF Rotterdam price for Urals crude.
Among the keen watchers of this market include various regulators, government and non-government entities around the world trying to find the value of Russian crude oil to determine how the efforts to curtail oil revenues has been working.
US oil, gas and energy decisions will collapse the US Economy
The crude oil trading community have been watching this flow keenly as well since invariably the deeper discounted barrels from Russia have been giving tough competition to spot barrels from the Middle East, West Africa as well as the Atlantic basin.
For instance, the price of some key Nigerian grades preferred by Indian refiners saw some downward pressure in 2022 as the refiners were looking towards Urals crude to fill the spot volumes instead.
Russian oil flows to India have been barely a year old, but at around. 1.5 million bpd It already makes up more than 30%. More than 30% of Indian crude oil imports.
The massive inflows seem unlikely to dissipate anytime soon owing to the geopolitical situation in Europe, where the negative sentiment towards consuming Russian energy is expected to remain.
For now, the flow of Russian oil into India has mostly remained undelivered at port Dapps terms.
As the unconventional logistics of Urals into India looks difficult for domestic refineries to handle. While economic incentives of discounts are large enough to keep the interest alive for those cargos in the foreseeable future.
The independently assessed value of Urals crude in India provides much needed transparency on the value of Russian crude oil being delivered into the South Asian country.
Since the launch, there has been significant interest in the assessment as analysts, governments, refiners, traders, sellers and buyers have started to get a fair understanding of the price for one of the most talked about oil flows in the world.
The price has been keenly watched by various market participants and used as an important point of reference when trading Russian.
Crude oil volumes especially when the same is being traded through non-traditional supply sources.
The flow of this oil in its economics will continue to remain a key theme in the Indian refining space that continues to grow in size, making India an important source of global oil demand growth.
India’s refining runs are expected to grow from 5.25 million bpd to five. 9 million bpd by 2025 as fuel demand continues to grow at 4.50% price assessments not only bring some clarity in the opaque post invasion world of Russian oil flows, but also signals an important reference point for the wider market which directly or indirectly is impacted by this trade flow realignment guys.
Is the US Economy about to collapse due to Russian oil sanctions?
When you consider the above factors and that hostile nations are forming other methods of currency to trade in oil and given the large debts the US has its clear this could lead to the Economic collapse to the US as the signs are beginning to show.
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