Ukraine - Russia Conflict
- Thread starter randomradio
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There's not much space for diversification outside transportation. Just road transport alone uses up 50% of all oil consumed. Then petrochemicals are being regulated as well. Gas to hydrogen transition is becoming more important now.
Anyway, it's about reaching the peak. Once oil consumption hits the peak, it's over for oil, because prices will keep falling after that point. Mainly because the main oil consumers, China, Europe and US will start reducing consumption drastically. Out of 100 million bpd, more than 50 million are consumed in these three regions. They are also where EV penetration is the highest. India and Vietnam are irrelevant in comparison.
In fact, it's very likely that oil consumption has already peaked in advanced economies. As per BP, not just Europe, but the global peak was achieved in 2019 itself.
Peak means even the addition of consumption from other growing developing countries won't make up for the loss of business elsewhere.
Yes, but road transport is all that's likely to be going in the short-term, which still leaves 50%. Then you have to allow for growing markets in the other uses as developing economies expand, plus hydrogen cars.
Prices will fall, but they'll level off, I reckon at about half what they are now in real terms, which will still be hugely profitable for many oil countries. But you're right, Russia has done itself out of the final years of max profitability in the most important oil markets, a big own goal. It will take Middle Eastern oil 6 months to ramp up production, but after that they will have more or less exclusive access to the NA and EU markets, and Russia will be stuck peddling to China and India. At the same time Indian petrochemical exports to the EU and NA will likely be blocked off too to ensure sanctions on Russia are fully implemented.
The developing world can't compensate the loss of the Big Three.
Russia won't be under any real strain as long as they get oil markets elsewhere. Their per barrel production rate is less than $4. Anything above that is a profit. With China buying 2-3 million bpd and with India managing 1-1.5 million bpd, they got their market already. Their pre-sanctions crude export was 4.7 million bpd. And China could buy even more than 2-3 million. A few more countries are interested in buying Russian oil as well. To put that in perspective, Europe imported 2.2 million bpd of oil and 1.2 million bpd of petroleum in 2021.
Furthermore, China is already a major gas market and India is following suit. And it's gonna take a few years for Europe to give up Russian gas.
Europe won't block Indian petro imports. The blowback will be extremely severe in terms of market access. India does not need the EU and NA, the EU and NA need India. In any case, Europe needs India's refining capacity. Plus there's the Western desire to make India richer and stronger, which would allow for faster diversification away from oil, so it doesn't make sense to sanction India.
Why India is the big winner as EU's Russia oil ban redraws energy trade map
Europe's plan to wean itself off Russian oil and refined products is transforming India into a key player, says RBC Capital Markets.
www.marketwatch.com
Footage has emerged of the Russian helicopter KA-52 pursuing and destroying a vehicle of the Ukrainian armed forces. The video at the end is changed, because after the destruction of the car, the footage is too hard.
The Russian Ministry of Defense showed the combat work of the T-80BV tank and the BTR-82A armored personnel carrier of the Marine Corps in Ukraine. The crew of the T-80BV uses a complex tactical element - "flank shooting" and suppresses the strongholds of the Armed Forces of Ukraine with fire.
Former President of Ukraine Petro Poroshenko, who is now in the UK, bought used DAF military trucks for the Ukrainian army with the money of his foundation
The Russian Ministry of Defense showed the combat work of the T-80BV tank and the BTR-82A armored personnel carrier of the Marine Corps in Ukraine. The crew of the T-80BV uses a complex tactical element - "flank shooting" and suppresses the strongholds of the Armed Forces of Ukraine with fire.
Former President of Ukraine Petro Poroshenko, who is now in the UK, bought used DAF military trucks for the Ukrainian army with the money of his foundation
Not completely and not in the short-term but there are a lot of people in the developing world. So in the long term, non-transport uses could partially compensate for the loss of the main revenue stream. But the price of oil won't be as high.The developing world can't compensate the loss of the Big Three.
Russia won't be under any real strain as long as they get oil markets elsewhere. Their per barrel production rate is less than $4. Anything above that is a profit. With China buying 2-3 million bpd and with India managing 1-1.5 million bpd, they got their market already. Their pre-sanctions crude export was 4.7 million bpd. And China could buy even more than 2-3 million. A few more countries are interested in buying Russian oil as well. To put that in perspective, Europe imported 2.2 million bpd of oil and 1.2 million bpd of petroleum in 2021.
Furthermore, China is already a major gas market and India is following suit. And it's gonna take a few years for Europe to give up Russian gas.
Europe won't block Indian petro imports. The blowback will be extremely severe in terms of market access. India does not need the EU and NA, the EU and NA need India. In any case, Europe needs India's refining capacity. Plus there's the Western desire to make India richer and stronger, which would allow for faster diversification away from oil, so it doesn't make sense to sanction India.
Why India is the big winner as EU's Russia oil ban redraws energy trade map
Europe's plan to wean itself off Russian oil and refined products is transforming India into a key player, says RBC Capital Markets.
Well, you've just argued that they can't compensate for the loss of the US and European transport markets. And in the short term that's true. You're confusing Russia with Saudi Arabia. $4 is typical for oil production in Saudi Arabia. In Russia it varies from $15-45.
High Oil Prices Make Russian Production More Profitable
Russian Deputy Energy Minister Pavel Sorokin said oil extraction costs in Russia were unacceptable at the current price of hydrocarbon. For the production cycle, they range from $15 to $45 per barrel, he said.
warsawinstitute.org
Russia isn't gaining any markets though, it still has to compete with other oil in Asia, like it always has done, so it has only lost two major oil consumers and probably Japan and South Korea too. Not to mention gas consumers.
For the record though, US, Europe, Japan and South Korea have a greater combined total than China and India. It's the same for natural gas too.
Trade Balance Statistics | World Crude Imports & Exports | Enerdata
Global Crude Oil trading detailed by region. The Enerdata interactive map provides updated crude Oil trade data by region with corresponding graphs. Figures provided by Enerdata can easily be extracted.
It has no choice if you're exporting Russian oil to them. It's nothing personal, just business. Dude, the EU does not need India. Their net exports to India are negligible.
Oh I know, they'd rather not sanction India, but once they can get the capacity from elsewhere, if you're still trying to pass on Russian oil, or Russian-based oil products to them, they'll have no choice. The public is mad that we can't cut Russian oil and gas even sooner than year's end as it is.
Ukraine NOW
⚡️ Оперативна інформація Генштабу станом на 18:00 2.07.2022 щодо російського вторгнення ▪️ На Волинському та Поліському напрямках ознак формування наступальних угруповань противника не виявлено. ▪️ На Донецькому напрямку противник, за результатами бойових дій, закріплюється в районі...
t.me
Not completely and not in the short-term but there are a lot of people in the developing world. So in the long term, non-transport uses could partially compensate for the loss of the main revenue stream. But the price of oil won't be as high.
Well, you've just argued that they can't compensate for the loss of the US and European transport markets. And in the short term that's true. You're confusing Russia with Saudi Arabia. $4 is typical for oil production in Saudi Arabia. In Russia it varies from $15-45.
High Oil Prices Make Russian Production More Profitable
Russian Deputy Energy Minister Pavel Sorokin said oil extraction costs in Russia were unacceptable at the current price of hydrocarbon. For the production cycle, they range from $15 to $45 per barrel, he said.
Russia isn't gaining any markets though, it still has to compete with other oil in Asia, like it always has done, so it has only lost two major oil consumers and probably Japan and South Korea too. Not to mention gas consumers.
For the record though, US, Europe, Japan and South Korea have a greater combined total than China and India. It's the same for natural gas too.
Trade Balance Statistics | World Crude Imports & Exports | Enerdata
Global Crude Oil trading detailed by region. The Enerdata interactive map provides updated crude Oil trade data by region with corresponding graphs. Figures provided by Enerdata can easily be extracted.yearbook.enerdata.net
It has no choice if you're exporting Russian oil to them. It's nothing personal, just business. Dude, the EU does not need India. Their net exports to India are negligible.
Oh I know, they'd rather not sanction India, but once they can get the capacity from elsewhere, if you're still trying to pass on Russian oil, or Russian-based oil products to them, they'll have no choice. The public is mad that we can't cut Russian oil and gas even sooner than year's end as it is.
Non-transport uses for oil are very low. Basically less than 30%. And even that's falling.
Russia has become the biggest supplier of the two largest growth markets for oil though. To them, it's a win.
Europe needs India. And not merely for trade. India is very crucial for the overall security of Europe, both physical and financial. Plus the fact that the global center of gravity is slowly moving back towards India.
