August 24, 2022

Six months after the war in Ukraine started, the US led economic sanctions against Russia with a focus on cutting off Russian energy revenue, backfired on Europe badly. While military actions over Ukraine are stalled, Europe suffers an energy crisis that will impact global economy, but Russian energy revenue is very strong, some data show that Russian has been doing better because of the sanctions. No wonder Europe is starring down at a cold winter because there is no financial reason for Russia to stop the war.

Data further shows that Europe is almost paying Russian to keep the war going. So much for the leadership for the design/implementation of the sanction strategy!

The demand of Russian oil from Asia continues to drop might be due to competitive pricing from OPEC and USA. But if the demand drop signifies a major economic slowdown, it would be very bad. Because it suggests a global economic slowdown meaning a “destruction of demand of oil” has started and a global recession may be inevitable.

On the other hand, China’s spending on Russian energy for the six months valued at US$35 Billion sounded like a big deal as it amounts to US$1.5 Billion per week. Because Russian took in US$138 Million per week for exporting oil alone to Europe. However, previous public data showed Europe has been paying for Russian gas alone at US$1 billion per day.

A major downside effect of announcing any sanction or embargo is pushing up the price even before the sanction is executed. It will be interesting to watch the global oil price when Europe is ready to (really) stop importing Russian oil by December, if the Ukraine war does not end then.

What happened in the first six-month of the war in Ukraine is unfortunate: there is no winner. But no one is working on ending this war…

Russian oil exports to Europe hit 4-month high as embargo looms while demand from Asia continues to drop

Brian Evans Mon, August 22, 2022 at 9:16 AM

• Shipments of Russian crude to Europe soared last week to their level since April, Bloomberg data shows.
• Flows hit 3.41 million barrels per day for the tracking period ending August 19.
• Meanwhile, Asian countries are continuing to dial back Russia-sourced oil.

Russian seaborne crude exports to Europe reached their highest level since April last week, according to tracking data from Bloomberg.

Europe imported 3.41 million barrels per day for the week ending Aug. 19, the data shows, which covers a four-week moving average for flows. Europe imported 3.24 million bpd during the previous tracking period.

The majority of the customers last week were in the Black Sea, Mediterranean and northern regions of Europe.

Russian flows are still a mainstay in Europe, despite the Kremlin’s invasion of Ukraine. The increase in imports comes as the European Union’s partial embargo on Russian crude will go into effect in early December.

Meanwhile, Asia’s appetite for Russian crude has steadily declined in recent weeks, and previously hit their lowest level since March. During the same four week period, Russian crude headed for Asia fell to 1.71 million bpd compared to 2.1 million bpd in April and May.

India has recently been more keen on crude from Saudi Arabia, and dropped its imports of Russian crude by 7.3% in July. Still, India and China are the top importers of Russian-sourced crude.

Russian oil exports provide the Kremlin with an important stream of cash as Western sanctions block its access to global financial markets. Russia took in $138 million in weekly revenue, up 26% compared to the previous tracking period, Bloomberg data showed.

China’s spending on Russian energy imports shoots up to $35 billion since the outbreak of the Ukraine war

George Glover Mon, August 22, 2022 at 4:04 AM

• China’s spending on Russian energy imports totals $35 billion since war broke out in Ukraine, per media reports.
• Beijing is increasingly turning to Russian oil, gas and coal, after Moscow offered some supplies at a discount.
• Russia is now the top supplier of coal to China after Western countries imposed sanctions and Indonesia raised prices.

China’s spending on energy imports from Russia has hit $35 billion for the months since the Ukraine war started, as the Asian powerhouse turns to Moscow for fuel.

That outlay on Russian energy from March to July is a big jump on the $20 billion booked a year before, according to a Bloomberg report Monday.

In July alone, Chinese buyers laid out a combined $7.2 billion on imports of oil, natural gas and coal, according to customs data cited by Bloomberg. That’s a rise of 53% from the $4.7 billion booked in the same month in 2021.

Energy prices soared after Russian invaded Ukraine, and that will have inflated China’s spending figures. But the country has also imported higher volumes of Russian crude oil, natural gas, and coal since the war began, according to China’s General Administration of Customs.

China has stepped up its spending as western countries impose sanctions against Putin and Russia. The US has vowed to phase out Russian oil imports, while the EU will introduce an embargo on Russian crude in December.

Moscow has offered its oil exports at a discount to buyers in Asia, as it searches for customers in the face of Western sanctions. China’s state and independent refineries have jumped on the opportunity to snap up cheap crude, with Russian Urals oil trading at a 22% discount to the global Brent benchmark.

Seaborne imports to China of liquefied natural gas have risen 20% over the past year, with Russia sending 410,000 tons by tanker in July, according to Bloomberg.

Meanwhile, imports of Russian coal surged 14% year-on-year to hit a new record high of 7.4 million tons in July. Russia has now overtaken Indonesia as China’s top source for the fuel imports.

Russian Energy Export Revenue To Rise By ‘Almost $100 Billion’ This Year

The jump in revenues, if it materializes, will help shore up Russia’s economy in the face of sweeping Western sanctions that are crippling some of its industries.

Russia forecasts energy export revenues to rise this year by nearly $100 billion as higher commodity prices offset a decrease in volumes, Reuters reports, citing government documents.

Russia’s Economy Ministry now expects energy export revenue to reach $338 billion in 2022, up more than a third from $244 billion last year.

US oil exports to China and India jump as American crude heads overseas at a record pace

Phil Rosen

Mon, August 22, 2022 at 6:00 AM

The UK and EU have agreed to ban insurance for Russian oil cargoes, reports said.VCG/Getty Images

• US crude flows have seen an uptick in deliveries to Asia, Bloomberg data shows.
• Buyers in China, India and South Korea have scooped up more than 20 million barrels this month, per the report.
• The increase in American crude heading to Asia has dragged down spot premiums for Persian Gulf barrels.

The US is sending an increasing volume of crude to Asia, as the world’s top fuel-consuming region ramps up long-haul orders of supplies, according to a Bloomberg report.

For November deliveries, data shows an uptick of over 20 million barrels coming out of the US to China, India, and South Korea.

President Joe Biden’s releases from the Strategic Petroleum Reserve has led to crude flowing out of the country at a record clip, Bloomberg reports.

US crude exports hit 5 million barrels per day, Energy Department data showed last week, as it trades at a steep discount to Brent. On Monday, West Texas Intermediate dipped 0.3% to $90.53 per barrel, and Brent eased 0.3% to $96.47.

To be sure, Russian crude, which has seen a steep increase in flows to Asia since the war in Ukraine began, continues to flow to Asia as well and the nation’s production has beat expectations, according to the IEA.