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Russia rejects $60-a-barrel cap on its oil; warns of cutoffs

53 Comments
By JAMEY KEATEN

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Why Europe is more than willing to pay four times the amount for fuel, I will never understand.

5 ( +15 / -10 )

Wait, very soon the EU will accuse Russia of using oil as a weapon.

He's right.

Monday: We'll refuse to buy Russian oil, that'll teach em.

Tuesday: The evil Russians stopped sending us their oil and sent it to China and India instead. They're using oil as a weapon and trying to damage our economies and starve the people of Europe.

Btw, Pakistan announced it will start importing Russian oil, disregarding the sanctions. Why not, if the EU doesn't want it, here's an opportunity to get some.

-2 ( +20 / -22 )

Poor Mister Putin.

Can't sell oil for seventy.

Except in China.

($60 oil haiku)

-4 ( +11 / -15 )

well things will get more serious now,Russia dont need to worry bit eu and west will____soon.

-11 ( +10 / -21 )

eu and west will____soon

eu and west will Triumph soon

-5 ( +13 / -18 )

European are hurting miserable, Germany is paying a half trillion in fuel subsidizes to industry and the public,while the US industries are not effected by the war

-5 ( +10 / -15 )

The Russians seem to forget basic economic definitions and the laws of engineering.

Demand is defined as “The willingness AND ability to purchase a given good or service at a given price. It takes both. I haven’t got a Porsche because I don’t have the willingness to pay for one (at the expense of my children’s’ university education). I don’t own a rocket ship because I don’t have the economic ability to pay for one. (Sadly, law-aways for a Saturn V are not available…)

If the Europeans decide for political reasons that they are not paying Russia more than $60 a barrel for oil, then that’s that. I’m sure the Saudis, US, Venezuela (although it’s high sulfur content makes it more difficult to refine) or any other petro-country looking to make a buck will fill the void.

Secondly, Oil has to be shipped. Almost all Russia’s pipelines run East-West to its primary customers in Europe. It has precious little infrastructure to ship Oil, South to China (which has reduced its demand due to economic circumstances) or India. Even using a historic “All-of-government” program would take YEARS to get the necessary infrastructure built. In short, they cannot just ship it all south.

If it tried the tanker approach, Russia would need a maritime capability roughly equivalent to the current world tanker capacity (much of which is engaged in already negotiated contracts with countries not at war and thus not requiring crushing insurance contracts) AND, the ports close to its oil production are frozen over several months a year.

As anyone can see from the level of freak-out on the part of the dwarf-midget’s goons, the Russians are well and truly screwed. The EU is United, it’s not paying more than $60/barrel, is prepared to live without Russian oil and there is (____)-all Pooh-tin can do about it.

No wonder he allegedly “soiled himself.”

0 ( +16 / -16 )

the US industries are not effected by the war

so why are you always complaining about it ?

12 ( +17 / -5 )

Nemo,A Ukrainain corrupt official got a Porsche , maybe courtesy of the US taxpayers Google New Voice Ukraine Porsche

-8 ( +9 / -17 )

Any oil refused by Europe will either stay inside Russia or go to China.

If you could allocate a liter of diesel, where would you rather put it?

Into a truck delivering bread in Europe or into a Russian tank in Ukraine?

If the European gas stations don't want it, the Russian army will gladly take it.

-7 ( +10 / -17 )

the Russian army will gladly take it.

& the Ukrainian military will gladly blow it up

3 ( +15 / -12 )

If you could allocate a liter of diesel, where would you rather put it?

Into a truck delivering bread in Europe or into a Russian tank in Ukraine?

You have a quaint 60s era idea of logistics (owing no doubt in part to your Russian upbringing).

And since all the tanks in Ukraine are either burning tombs for their crews or have been captured by the UA, I guess I’d go with “Ukraine.”

On behalf of Zelenski, I’d like to say thanks for helping solve that riddle.

1 ( +13 / -12 )

More sanctions on European consumers... Even the EU states will continue buying Russian oil as they have been doing since the invasion. Much of it via India. Russian oil shipped and stored in India becomes Indian oil...

The biggest problem with the price cap and Russia's refusal to "play along" will be the shortage of supply and the G7 asking OPEC to pump more oil to lower the price..... Good luck getting Iraq, Iran and Venezuela to go along with that.

-5 ( +10 / -15 )

Good luck getting Iraq, Iran and Venezuela to go along with that.

He’s, because OPEC has always been so United in the past…

-5 ( +5 / -10 )

“Yes, because OPEC has always been so united in the past.”

Damn Autocorrect.

1 ( +9 / -8 )

If there is a cartel of oil sellers (OPEC), why not have a cartel of oil buyers? I like that idea.

It reminds me of Canada's drug-review purchasing boards, which play a key role in bringing down the cost of healthcare in Canada to around half of what it is in "free market" USA.

1 ( +10 / -9 )

And since all the tanks in Ukraine are either burning tombs for their crews or have been captured by the UA, I guess I’d go with “Ukraine.”

Apologies, I forgot to add the very important modifier “Russian” to the noun “tanks”. (That one is my own fault. No Autocorrect there…)

Very important as UA tanks seem to be doing just fine and in fact are increasing in number. In fact, YA has more tanks now than it did at the start of the war without any imports of Western made tanks. Thanks, Russia!

-6 ( +5 / -11 )

If there is a cartel of oil sellers (OPEC), why not have a cartel of oil buyers? I like that idea.

An EXCELLENT point!

-1 ( +8 / -9 )

The latest survey, conducted by Russia's Federal Protective Service (FSO), showed a major drop in support for continuing the war among Russians between July (57%) and November (25%).

Only 25% of Russians support continuing the war’

Putin is facing opposition on multiple fronts. From the Russian people. From the military. From those who would like to take Putin’s place like Prigozhin and Kadyrov. From the oligarchs.

Putin’s days are numbered

-2 ( +8 / -10 )

Big Mistake, Russia will probably end up sell it's oil to who ever wants it then they will turn around and sell it at twice the cost to the very same countries that are imposing the cap. This happened in the past, so Good Luck.

9 ( +14 / -5 )

In war, you want to decrease your enemy's supply of fuel.

The EU should be ordering as much fuel as possible to get it out of Russia and make less available to the Russian army.

Who loses with this decision? - European drivers, truckers, and people who heat their homes with fuel.

Who wins with this decision? - Drivers in Russia, and the fuel procurement division of the Russian military... and China and India.

Europe can keep that paper fiat thing they call USD, and Russia will keep its fuel, which is the true value and wealth.

-5 ( +10 / -15 )

Looking forward to the day when we can all say goodbye for good to the Russians and the Arabs in terms of serving our energy needs.

-1 ( +9 / -10 )

The country that is not miserable at Christmas,is the winner, Ukrainain are the biggest shipper of Russia gas

-8 ( +5 / -13 )

Not going to work while China and India are not on board. While Russia can export to those and other countries it can thumb its' nose at the West as well as afford to continue the war in Ukraine. Time for realpolitik.

2 ( +6 / -4 )

Not going to work while China and India are not on board. While Russia can export to those and other countries it can thumb its' nose at the West as well as afford to continue the war in Ukraine. Time for realpolitik.

Even if China and India were on board to buy up surplus Russian oil, how will they take delivery? The world maritime capacity isn’t enough and the pipeline infrastructure just simply does not exist.

These small details need attending to. Otherwise, it’d be a very sound theory.

2 ( +10 / -8 )

Even if China and India were on board to buy up surplus Russian oil, how will they take delivery? 

not to mention the huge discount that they’re buying it at

it can thumb its' nose at the West 

more a case of ‘cutting off its nose to spite its face’

4 ( +9 / -5 )

geronimo2006

Not going to work while China and India are not on board. While Russia can export to those and other countries it can thumb its' nose at the West as well as afford to continue the war in Ukraine. Time for realpolitik.

What? China and India are already supporting the price cap. Russia is selling them oil below $60!

4 ( +8 / -4 )

Notice a few things.

Now the fuel Japan gets from its joint venture we have already been told is except for caps and sanctions.

So this has zero effect on Japan.

But it just may if Russia turns around and cuts Japan off from the joint venture supplies in retaliation for voting for this.

The limit is set to take effect Monday, along with an EU embargo on Russian oil shipped by sea.

There is the EU out or it thought "by sea" we heard a lot about North stream gas line but we forget oil pipelines are Europe's main source of Russian oil.

Again the valve get shut this winter major problem.

Let me point out this small thing.

The Japanese government is now subsidizing fuel.

In the UK the health crisis is compounded by closures of private surgeries that have seen their power bills triple example one was paying £30,000 a year and toda6is paying over £100,000 for power to run the surgery (private medical office) without adjustments by the NHS.

Deisel prices

On average the EU is over € 1.60 to € 1.80 ($1.70 to $1.90 )pretty much everywhere (a litre)

In the USA it is $1.35 to $1.80 ( € 1.30 to € 1.75)

Japan at the pumps

¥ 130 to ¥ 140 ( $ 1.00 to $1.10 € 0.95 to € 1.00)

Now reminder all ships and large trucks use Diesel and Diesel is far more a factor in the prices you pay at the store than gasoline.

So if the price of Diesel goes up of supply drops get ready to pay a lot lot lot more and/or go without.

No you will not directly see the high price of Diesel affect you but it will in the end.

Note the inflation rates.

Europe 10% to over 20%

In most cases higher the fuel price the higher the inflation

The USA inflation nearing 8%

Japan 3.8% if oil from Russia stops look up and expect those same inflation rates.

Oh you think you have the money to ride out the storm, does your neighbour, your wife's/husband's Japanese elderly family members?

Remember nearly 30% of the population of Japan are retired on fixed incomes.

-3 ( +5 / -8 )

.67 dollar an hours is the minimum wage in Ukraine,think about all the money Ukrainain can skim out of American

-9 ( +3 / -12 )

Under Friday's agreements, insurance companies and other firms needed to ship oil would only be able to deal with Russian crude if the oil is priced at or below the cap. Most insurers are located in the EU and the United Kingdom and could be required to observe the ceiling.

The author of The "story" hard to call it and article when it has no research and just repeats what the western governments tell him.

It took 1 second

Sep 6, 2021 — CHINA is now the world's second-largest provider of hull insurance, after overtaking Lloyd's on market share, the International Union of ..

What this means is comments like this

Even if China and India were on board to buy up surplus Russian oil, how will they take delivery?

Are answered by a simple Google search.

Jul 29, 2022 — A Chinese group is using “dark” tankers to take on Russia oil in the middle of the Atlantic, in a hazardous effort to ship more of the ...

Etc....

I am not sure what century many are living in but China has its own fleet of merchant ships a very big one, its own fleet of oils tankers again a very big one, it's one maritime insurance companies and again very big very powerful.

I think much of the west is living in a fantasy that China still is just a place for cheap trinkets, wake up things have changed.

China and India don't need the western ships or insurance companies

-2 ( +8 / -10 )

Commodities are fluid and once on water commodities like energy and food go to the highest bidder. You don't want to bid the world price, you ain't getting any.

1 ( +3 / -2 )

Welcome to not being sold oil because of this stupid virtue signal.

Potential Buyers don’t set the price, they just set if they will be buying or not.

-3 ( +6 / -9 )

Commodities are fluid and once on water commodities like energy and food go to the highest bidder. You don't want to bid the world price, you ain't getting any.

If you are part of a purchase cartel with market power, you set the price. That's the beauty of it.

-8 ( +2 / -10 )

I'm sure that the 'thinkers' in NATOs 'think tank' figure that they can both use the claim the "Russia has weaponized oil" to keep the population from reacting negatively to the economic crisis the efforts to prop up Zelensky have made worse and manage to convince OPEC to ramp up production or reduce shipments to China enough to allow NATO to start making enough weapons and ammunition to continue to prop up Zelensky.

The problem is that OPEC can't even continue to export at the present levels without investing in a major overhaul and upgrade, costs that the bankers for the dictatorships know won't be recovered before the sector is shut down, and America's failing efforts to overthrow the democracies have left them in no mood to do them any favors.

-5 ( +3 / -8 )

Can we as consumers also set our prices at the stores?

5 ( +6 / -1 )

It'll just get in the back door anyway.

Most ships are registered in countries with extremely lax regulations to begin with

https://www.republicworld.com/world-news/uk-news/uk-importing-massive-amount-of-russian-oil-despite-sanctions-amid-ukraine-war-report-articleshow.html

1 ( +2 / -1 )

@Nemo Pretty limited "purchasing cartel" and any of those countries that need oil will cheat. Everything relies on oil.

1 ( +6 / -5 )

Jul 29, 2022 — A Chinese group is using “dark” tankers to take on Russia oil in the middle of the Atlantic, in a hazardous effort to ship more of the ...

AS missed the term “hazardous”. Which could be substituted with “uneconomical” or “unscalable.”In other words, what works for a puddly little state like DORK, wouldn’t be worth the risk for China.

Nor does it deal with the fact that Russian ports near its fields are frozen in moths at a time.

Nor does it deal with the maritime capacity needed to get the oil to the dark tankers, which does not currently exist, and couldn’t get insured in the first place would take years to build. Oh, and ship builders like to actually get paid in real money too

And that doesn’t even take into account the reputational risk to the shipping company or the risk of seizure of their tanker for carrying out such a deal should it become illicit.

Oh, and the risk of loss of business with any company doing business in the West.

But sure that would totally work.

I think it’s less a question of “which century we are living in?” And more of a question of “What reality is one of us living in?”

Because it’s sure not this one.

-4 ( +3 / -7 )

@Nemo Pretty limited "purchasing cartel" and any of those countries that need oil will cheat. Everything relies on oil.

The same logic applies to sellers as well. So, which is it going to be? The buyers stand firm because it’s in their national security interests? Or the sellers cave because they’re greedy?

One doesn’t have the gift of foresight, but in this case, I’d wager on the buyers.

-2 ( +3 / -5 )

When the oil starts pouring in to Europe from the EastMed pipeline of Israel, that would really hurt Russia. This will be the hook in the jaw of Putin (Gog) to bring him along with Turkey, Iran, Sudan, and Libya to the mountains of Jahweh for a spOIL. This will destroy strong nations and radical Islam that will create a power vacuum that will be filled in by the one world govt of the final world dictator who will be destroyed by the King of Kings when He comes back with his earlier raptured saints to reign over all the world in His millennial kingdom.

-2 ( +3 / -5 )

Here’s an idea idiots , stop using oil like you promised too years ago…wow, don’t blame Putin for your own lazy inaction Europe…

-1 ( +5 / -6 )

Just to point out the forward thinking.

Financial time just yesterday pointed out Russia has secretly bought another 100 older oil tankers through brokers (looks like they may have been Indian brokers).

These are old should be end of life but are all have ended up in Russia, China and India been/being upgraded and are/will be in service now or soon.

That brings Russia's oil tanker fleet to between 300 and 350 ships Russian insurance or perhaps Chinese and good to go.

Perhaps announcing a cap for months and months giving Russia the time to prepare wasn't the best move!

-5 ( +5 / -10 )

Nemo

You keep say XYZ about "DORK" (your own word) funny the USA just purchased a load of "DORK" ammunition for Ukrainian soviet area guns they purchased through certain African countries that have stock.

So that is hilarious "

-6 ( +3 / -9 )

Russia had a fleet of about 100 oil tankers. During this year, 2022 it acquired about 100 aging tankers to expand its fleet.

It will not resolve all of Russia's problems transporting its oil.

https://www.ft.com/content/cdef936b-852e-43d8-ae55-33bcbbb82eb6

China has about 150 oil tankers. Not enough to ship all its oil.

China also receives about 800,000 barrels of Russian oil via pipeline from pre-existing government frameworks, meaning it consumes nearly 2 million barrels a day. It accounts for 15% of Urals' global demand, according to Reuters.

1 ( +4 / -3 )

“It would be necessary to lower it to $30 in order to destroy the enemy’s economy faster,” Andriy Yermak, the head of Zelenskyy’s office, wrote on Telegram, staking out a position also favored by Poland — a leading critic of Russian President Vladimir Putin's war in Ukraine.

Yeah, or just don't buy any of their oil.

3 ( +5 / -2 )

China has about 150 oil tankers. Not enough to ship all its oil.

Nope

Panama was the world's largest flag state for oil tankers, with 528 of the vessels in its registry. Six other flag states had more than 200 registered oil tankers: Liberia (464), Singapore (355), China (252), Russia (250), the Marshall Islands (234) and the Bahamas (209).

This doesn't include the shadow fleet's of both Russia and China and doesn't include the recently purchased 100 older tankers.

-5 ( +5 / -10 )

Russia is already selling its oil to China and India at a price close to the cap. Neither China nor India will agree to the price cap because they don't want to spoil their relationship with Russia.

That means that even if oil is sold a bit above the price cap to buyers in China or India the easiest option would be to ship the oil at the price cap and then make separate payments to Russian oil companies to reimburse the pending amount.

This can be done by avoiding the petrodollar. Such a mechanism (the rupee rouble pact) was already in place between India and the Soviet Union during the Cold War. A couple of smaller Indian banks which don't have global exposure and don't care much about Western sanctions have already opened Nostro accounts with Sberbank, and Sberbank has Vostro accounts with these banks. Once both parties agree on the exchange rate its obvious that it will be business as usual as far as trade with Russia is concerned.

1 ( +5 / -4 )

The Russians have autonomous battalions from Muslims, Buddhists and Shamans. By all accounts, to the extreme irritation of the Pope

Um, ok…..

1 ( +4 / -3 )

Nemo, a purchasing cartel can only set the price they'll buy something for if they're a big enough share of the market, and can go longer not purchasing than the seller can go not selling to them.

NATO may be a big user (because of overconsumption) but not a big enough buyer to be able to force Russia, Iran, or Venezuela into capitulation.

NATO also cannot afford not to buy for very long.

The OPEC dictatorships are more susceptible to pressure but NATO can't risk several of them falling to the prodemocracy movements in their countries, and their oil exporting infrastructure is aging and even if they wanted to overhaul it enough to support the cap scheme, the overhaul would take too long, and the investment never break even before the need to keep the climate catastrophe from becoming a civilization ending calamity forces the end of oil.

-2 ( +6 / -8 )

You keep say XYZ about "DORK" (your own word) funny the USA just purchased a load of "DORK" ammunition for Ukrainian soviet area guns they purchased through certain African countries that have stock.

So that is hilarious

It also has no relevance to THIS topic.

So chuckle away.

Just as a reminder, the topic is a $60/barrel oil price cap and it’s feasibility.

DORK efforts (I’m glad you like my accidentally discovered term for the absolute worst state on the planet.) to illegally import oil have no relevance to a major power being unable to Import oil at scale. Purchases of 3rd party ammo are not embarrassing for us as we don’t make that ammo. As it designs the weapons and dictates the caliber used, what’s Russia’s excuse again?

It is true that some Chinese companies might not care about reputational risk and may even self-insure.

But no international shipper interested in stable business contacts (all of them) or any Chinese shipper interested in future business (most of them) is going to do something as self-defeating as illicit oil transfers on the high seas.

Now THATS an idea worthy of a giggle.

-2 ( +5 / -7 )

According to a 2018 study, nearly half of the ships in Panama's registry were Japanese-owned. About nine percent were Chinese-owned.

 As of 2020, 9,596 out of 56,000 ships in the world's merchant fleets, or 17 percent of the total, were under the flag of Panama.

Anonymous Chinese shipowner spends $376m on tankers for Russian STS hub.

Thirteen tankers at the heart of the new ship-to-ship transshipment hub established mid-Atlantic to consolidate Russia-origin oil cargoes.

MYSTERY surrounds the identity of a China-based shipowner who has spent around $376m to acquire 13 tankers for deployment in high-risk, ship-to-ship transfers of Russia-origin crude in the middle of the Atlantic Ocean.

https://lloydslist.maritimeintelligence.informa.com/LL1141873/Anonymous-Chinese-shipowner-spends-$376m-on-tankers-for-Russian-STS-hub

2 ( +6 / -4 )

don’t blame Putin for your own lazy inaction Europe…

can we blame Putin for invading Ukraine & ruining the lives of millions of people ?

4 ( +9 / -5 )

The Llyods of London HQ is owned by Ping An Insurance. A Chinese company. Was owned by the German asset management fund Commerz Real which sold it for £260 in 2013.

2 ( +4 / -2 )

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