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EU continues to important Russian oil, it has just been refined and rebadged by India, Saudi Arabia, China and others, so that a statement like this could be ma

EU continues to important Russian oil, it has just been refined and rebadged by India, Saudi Arabia, China and others, so that a statement like this could be made. EU is basically paying a premium in order to stake a claim to moral high ground they don't hold

xenospn 3y ago
They’re doing this while forcing russia to sell their crude at close to zero profit. I’d say that’s a positive.
- robertlagrant 3y ago
  It might be a positive, but the headline is completely misleading. Which is what this comment thread is about.
- atlantic 3y ago
  Do you have any data on their actual profit margins, or are you speculating?
  - lostlogin 3y ago
    Elsewhere here this link was given as proof that Russia was back where it started and hadn’t suffered loss of oil revenue. It shows export volumes pretty steady, but revenue loss of 43%. That would seem likely to have hit profits pretty hard. https://edition.cnn.com/2023/04/14/energy/russia-oil-exports-iea-report/index.html https://edition.cnn.com/2023/04/14/energy/russia-oil-exports...
    - Animatronio 3y ago
      Some would disagree with this take: https://www.cnbc.com/2023/05/24/ukraine-the-wests-oil-war-against-russia-is-losing-momentum.html https://www.cnbc.com/2023/05/24/ukraine-the-wests-oil-war-ag... Analysis published Wednesday by the Centre for Research on Energy and Clean Air, an independent Finnish think tank, found that Russia’s revenues from oil exports have recovered from levels reached in January and February. The findings show that Moscow has been able to successfully claw back earnings from fossil fuel exports in recent weeks despite the imposition of import bans from the European Union and a broader G7 oil price cap late last year. Energy analysts at CREA suggested the failure from the so-called Price Cap Coalition to revise price levels and enforce the policy had resulted in the measures “losing traction, integrity and credibility.”
      - Kbelicius 3y ago
        > Some would disagree with this take: No they would not. From the link you provided: > “Russia’s export revenue in April was down substantially year-on-year, mainly due to the impact of the EU import ban and lower oil prices. This means that Russia’s budget will likely stay in deficit, constraining military expenses,” said Lauri Myllyvirta, lead analyst at CREA and co-author of the report.
The_Colonel 3y ago
> EU is basically paying a premium in order to stake a claim to moral high ground they don't hold Not really, EU is paying a market rate just like the rest of the world. It's just that a big part of the profit which would normally go to Russia now goes to middlemen. The price cap was designed to reduce Russian profits without reducing Russian oil exports..
- yogthos 3y ago
  Europe used to get pipeline gas at a fixed price, and now it's getting LNG at a much higher rate that fluctuates with the market.
  - onepointsixC 3y ago
    Sure, but before that gas was funding a self professed foe. It's much better to not fund your enemies.
    - yogthos 3y ago
      That logic only works if Europe was the only trading partner available to Russia. What happened in practice is that Russia simply redirected trade to other countries while Europe now pays a huge markup buying from resellers.
      - DaedPsyker 3y ago
        But they aren't selling at their original price, Russia is now selling to those partners at a reduced price. At the very least it reduces the amount of funds Russia has at its disposal for the war.
        yogthos 3y ago
        The discounts Russia offers to its partners are minimal, and as CNN reports, Russia's revenues are back to pre-war levels. So, not sure what you're going on about there. https://www.cnn.com/2023/04/14/energy/russia-oil-exports-iea-report/index.html https://www.cnn.com/2023/04/14/energy/russia-oil-exports-iea...
SXX 3y ago
Situation when India and Saudi Arabia profit from that oil is much better than if Putin would get all the profits. Transportation over long distances and opacue pricing also eating into tax income and it does work. Kremlin changing oil export taxation rules every few months in attempt to recover some losses of course. It will also slowly deteriorate Russian oil refining industry since everyone just want to buy their cheaper crude oil. It will take decade and won't stop the war now, but it gonna be a huge hit in a long run. So while EU sanctions are weak they do work.
horeszko 3y ago
>"EU is basically paying a premium in order to stake a claim to moral high ground they don't hold" They may or may not be paying a premium, but it has nothing to do with "moral high ground". Its to do with not giving the regional agressor leverage over your economy. The war between Russia and Ukraine exists in the military domain, the war between Europe and Russia is currently in the economic domain. Even if sanctions only shifted the supply chain to add middlemen, it prevents Russia from having direct control on energy supplies in Europe, which improves Europe's (and Ukraine's) strategic position. Ukraine and Europe are defending their homes and people from a military/economic/political threat, an imperialist threat, and you think this is about "moral high ground"?
- ffgjgf1 3y ago
  > it prevents Russia from having direct control on energy supplies in Europe, which improves Europe's ( This mainly applied to gas and not oil though. The point of the sanctions is to primarily decreases Russia’s oil revenue.
- carlosjobim 3y ago
  So you're smart enough to understand this, and the European Union is smart enough to understand this - but the Russians are too stupid to understand it? You don't have any duty to defend every action of European politicians. You will certainly never be rewarded for your loyalty to them. The best reward you can hope for is increased taxation of your labour and the worst reward is being drafted into an industrialized war. The EU are not winning against Russia by purchasing energy from them through middlemen.
  - belltaco 3y ago
    > but the Russians are too stupid to understand it Who said they don't understand it? What can they do about it? Nothing.
    - yogthos 3y ago
      What they can and have done about it is to redirect their trade towards non western countries that constitute the majority of the world. Plenty of recent articles clearly show that the sanctions have been an utter failure in practice. The only entity that's being severely hurt here is Europe. https://archive.is/2023.02.23-211202/https://www.nytimes.com/interactive/2023/02/23/world/russia-ukraine-geopolitics.html https://archive.is/2023.02.23-211202/https://www.nytimes.com... https://archive.ph/Niqwh https://archive.ph/Niqwh https://nationalinterest.org/feature/can-we-please-stop-comparing-russia%E2%80%99s-economy-italy%E2%80%99s-206404 https://nationalinterest.org/feature/can-we-please-stop-comp... https://www.reuters.com/markets/europe/russian-economy-ministry-improves-2023-gdp-growth-forecast-2023-04-14/ https://www.reuters.com/markets/europe/russian-economy-minis... https://www.theguardian.com/business/2023/may/21/the-west-tightening-russian-sanctions-a-sign-of-failure https://www.theguardian.com/business/2023/may/21/the-west-ti...
lisasays 3y ago
What numbers are you working off of? The indications I'm seeing are that some rebagged oil maybe getting through to the EU - but not at scale. It's definitely not simply a matter of moral high ground. Independent of the sympathies they may have for the Ukrainian side -- it is objectively in the cold, pragmatic self-interest of European countries to not let themselves be beholden to as capricious and unstable a supplier as Russia.
anovikov 3y ago
Well, EU was never dependent on Russian oil. Oil is a commodity. A large international market for it exists and it is cheap to transport, and sufficient import throughput was always possible. So there was no dependence: at no point Putin could say, "do X or else we will cut your oil supply" - that won't have any effect, they'd just buy oil elsewhere (heating market up considerably yes, but entire world market in which Russia doesn't have such a high share, equally). Russian choice would be to either sell it's oil to someone else instead, resulting in no effective change and no pressure applied to Europe at all, or not sell it to anyone and ruin his country, but having everyone else pay probably, double or triple the price to Arabs/USA for the oil they import. What changed now is that he has to sell that oil to others at a steep discount leaving him almost no profit, with the middlemen making all that profit instead - which is OK. But, EU statement mainly referred to gas, not oil. With gas, situation is a lot clearer - Russia simply stopped producing the gas EU stopped buying, because they can't technically sell it elsewhere, and EU buys it mainly from USA. It took almost a year for market to readjust but now the prices are same as they used to be before all these events.
- lostlogin 3y ago
  > It took almost a year for market to readjust but now the prices are same as they used to be before all these events. And that’s perfect, for the EU. Russia won’t be enjoying that, which was the entire point. I hadn’t realised gas prices had dropped so much.
x3874 3y ago
[flagged]
BenoitP 3y ago
That's still a rung lower in the added value chain. Minus the additional transportation. Minus slanted negotiation by China and India. Also oil extraction is quite capital-intensive. A well will output most of its potential in the first 3 years. Currently, Russia is running on existing wells, and it currently is not profitable to establish new wells for them. For example Venezuela sits on deposits bigger than Saudi Arabia. At current prices it is not profitable to extract it. They could buy runway for some time running negative, though. Provided they have the internal means to do so. And there's the question of how much reserves and commercial balance they run at. That's what brought them to the negotiation table in 2014. We'll see what happens in a year or two. Sanctions work.
Brian_K_White 3y ago
The indirection itself serves a perfectly valid purpose, which is to remove a lever of control from Russia. They are paying a premium for independence. Any given barrel of oil may or may not still come originally from Russia, but Russia can not use it as a lever any more, because there is no single channel any more. Russia would have to stop selling to everyone in the world, or raise prices to everyone in the world. This probably even drives prices down, which both helps everyone else and hurts Russia.
rejectfinite 3y ago
What country are you from?
- deleted 3y ago
  [deleted]

xenospn 3y ago

They’re doing this while forcing russia to sell their crude at close to zero profit. I’d say that’s a positive.

robertlagrant 3y ago
It might be a positive, but the headline is completely misleading. Which is what this comment thread is about.
atlantic 3y ago
Do you have any data on their actual profit margins, or are you speculating?
- lostlogin 3y ago
  Elsewhere here this link was given as proof that Russia was back where it started and hadn’t suffered loss of oil revenue. It shows export volumes pretty steady, but revenue loss of 43%. That would seem likely to have hit profits pretty hard. https://edition.cnn.com/2023/04/14/energy/russia-oil-exports-iea-report/index.html https://edition.cnn.com/2023/04/14/energy/russia-oil-exports...
  - Animatronio 3y ago
    Some would disagree with this take: https://www.cnbc.com/2023/05/24/ukraine-the-wests-oil-war-against-russia-is-losing-momentum.html https://www.cnbc.com/2023/05/24/ukraine-the-wests-oil-war-ag... Analysis published Wednesday by the Centre for Research on Energy and Clean Air, an independent Finnish think tank, found that Russia’s revenues from oil exports have recovered from levels reached in January and February. The findings show that Moscow has been able to successfully claw back earnings from fossil fuel exports in recent weeks despite the imposition of import bans from the European Union and a broader G7 oil price cap late last year. Energy analysts at CREA suggested the failure from the so-called Price Cap Coalition to revise price levels and enforce the policy had resulted in the measures “losing traction, integrity and credibility.”
    - Kbelicius 3y ago
      > Some would disagree with this take: No they would not. From the link you provided: > “Russia’s export revenue in April was down substantially year-on-year, mainly due to the impact of the EU import ban and lower oil prices. This means that Russia’s budget will likely stay in deficit, constraining military expenses,” said Lauri Myllyvirta, lead analyst at CREA and co-author of the report.

The_Colonel 3y ago

> EU is basically paying a premium in order to stake a claim to moral high ground they don't hold Not really, EU is paying a market rate just like the rest of the world. It's just that a big part of the profit which would normally go to Russia now goes to middlemen. The price cap was designed to reduce Russian profits without reducing Russian oil exports..

yogthos 3y ago
Europe used to get pipeline gas at a fixed price, and now it's getting LNG at a much higher rate that fluctuates with the market.
- onepointsixC 3y ago
  Sure, but before that gas was funding a self professed foe. It's much better to not fund your enemies.
  - yogthos 3y ago
    That logic only works if Europe was the only trading partner available to Russia. What happened in practice is that Russia simply redirected trade to other countries while Europe now pays a huge markup buying from resellers.
    - DaedPsyker 3y ago
      But they aren't selling at their original price, Russia is now selling to those partners at a reduced price. At the very least it reduces the amount of funds Russia has at its disposal for the war.
      - yogthos 3y ago
        The discounts Russia offers to its partners are minimal, and as CNN reports, Russia's revenues are back to pre-war levels. So, not sure what you're going on about there. https://www.cnn.com/2023/04/14/energy/russia-oil-exports-iea-report/index.html https://www.cnn.com/2023/04/14/energy/russia-oil-exports-iea...

SXX 3y ago

Situation when India and Saudi Arabia profit from that oil is much better than if Putin would get all the profits. Transportation over long distances and opacue pricing also eating into tax income and it does work. Kremlin changing oil export taxation rules every few months in attempt to recover some losses of course. It will also slowly deteriorate Russian oil refining industry since everyone just want to buy their cheaper crude oil. It will take decade and won't stop the war now, but it gonna be a huge hit in a long run. So while EU sanctions are weak they do work.

horeszko 3y ago

>"EU is basically paying a premium in order to stake a claim to moral high ground they don't hold" They may or may not be paying a premium, but it has nothing to do with "moral high ground". Its to do with not giving the regional agressor leverage over your economy. The war between Russia and Ukraine exists in the military domain, the war between Europe and Russia is currently in the economic domain. Even if sanctions only shifted the supply chain to add middlemen, it prevents Russia from having direct control on energy supplies in Europe, which improves Europe's (and Ukraine's) strategic position. Ukraine and Europe are defending their homes and people from a military/economic/political threat, an imperialist threat, and you think this is about "moral high ground"?

ffgjgf1 3y ago
> it prevents Russia from having direct control on energy supplies in Europe, which improves Europe's ( This mainly applied to gas and not oil though. The point of the sanctions is to primarily decreases Russia’s oil revenue.
carlosjobim 3y ago
So you're smart enough to understand this, and the European Union is smart enough to understand this - but the Russians are too stupid to understand it? You don't have any duty to defend every action of European politicians. You will certainly never be rewarded for your loyalty to them. The best reward you can hope for is increased taxation of your labour and the worst reward is being drafted into an industrialized war. The EU are not winning against Russia by purchasing energy from them through middlemen.
- belltaco 3y ago
  > but the Russians are too stupid to understand it Who said they don't understand it? What can they do about it? Nothing.
  - yogthos 3y ago
    What they can and have done about it is to redirect their trade towards non western countries that constitute the majority of the world. Plenty of recent articles clearly show that the sanctions have been an utter failure in practice. The only entity that's being severely hurt here is Europe. https://archive.is/2023.02.23-211202/https://www.nytimes.com/interactive/2023/02/23/world/russia-ukraine-geopolitics.html https://archive.is/2023.02.23-211202/https://www.nytimes.com... https://archive.ph/Niqwh https://archive.ph/Niqwh https://nationalinterest.org/feature/can-we-please-stop-comparing-russia%E2%80%99s-economy-italy%E2%80%99s-206404 https://nationalinterest.org/feature/can-we-please-stop-comp... https://www.reuters.com/markets/europe/russian-economy-ministry-improves-2023-gdp-growth-forecast-2023-04-14/ https://www.reuters.com/markets/europe/russian-economy-minis... https://www.theguardian.com/business/2023/may/21/the-west-tightening-russian-sanctions-a-sign-of-failure https://www.theguardian.com/business/2023/may/21/the-west-ti...

lisasays 3y ago

What numbers are you working off of? The indications I'm seeing are that some rebagged oil maybe getting through to the EU - but not at scale. It's definitely not simply a matter of moral high ground. Independent of the sympathies they may have for the Ukrainian side -- it is objectively in the cold, pragmatic self-interest of European countries to not let themselves be beholden to as capricious and unstable a supplier as Russia.

anovikov 3y ago

Well, EU was never dependent on Russian oil. Oil is a commodity. A large international market for it exists and it is cheap to transport, and sufficient import throughput was always possible. So there was no dependence: at no point Putin could say, "do X or else we will cut your oil supply" - that won't have any effect, they'd just buy oil elsewhere (heating market up considerably yes, but entire world market in which Russia doesn't have such a high share, equally). Russian choice would be to either sell it's oil to someone else instead, resulting in no effective change and no pressure applied to Europe at all, or not sell it to anyone and ruin his country, but having everyone else pay probably, double or triple the price to Arabs/USA for the oil they import. What changed now is that he has to sell that oil to others at a steep discount leaving him almost no profit, with the middlemen making all that profit instead - which is OK. But, EU statement mainly referred to gas, not oil. With gas, situation is a lot clearer - Russia simply stopped producing the gas EU stopped buying, because they can't technically sell it elsewhere, and EU buys it mainly from USA. It took almost a year for market to readjust but now the prices are same as they used to be before all these events.

lostlogin 3y ago
> It took almost a year for market to readjust but now the prices are same as they used to be before all these events. And that’s perfect, for the EU. Russia won’t be enjoying that, which was the entire point. I hadn’t realised gas prices had dropped so much.

x3874 3y ago

[flagged]

BenoitP 3y ago

That's still a rung lower in the added value chain. Minus the additional transportation. Minus slanted negotiation by China and India. Also oil extraction is quite capital-intensive. A well will output most of its potential in the first 3 years. Currently, Russia is running on existing wells, and it currently is not profitable to establish new wells for them. For example Venezuela sits on deposits bigger than Saudi Arabia. At current prices it is not profitable to extract it. They could buy runway for some time running negative, though. Provided they have the internal means to do so. And there's the question of how much reserves and commercial balance they run at. That's what brought them to the negotiation table in 2014. We'll see what happens in a year or two. Sanctions work.

Brian_K_White 3y ago

The indirection itself serves a perfectly valid purpose, which is to remove a lever of control from Russia. They are paying a premium for independence. Any given barrel of oil may or may not still come originally from Russia, but Russia can not use it as a lever any more, because there is no single channel any more. Russia would have to stop selling to everyone in the world, or raise prices to everyone in the world. This probably even drives prices down, which both helps everyone else and hurts Russia.

rejectfinite 3y ago

What country are you from?

deleted 3y ago
[deleted]