Russia/Ukraine conflict

[wdolson]

The US doesn't have that kind of control over world oil production. And it sometimes works to drive prices up, just look at Biden's first 100 days.

Since the 1980s it's been fairly consistent that when the US thinks Russia/the USSR is misbehaving, US allied oil producing countries increase production and prices drop. When Russia is behaving, those countries cut back production and prices rise to hurt China.

In 2013 many in the oil market prediction community were scratching their head because oil prices should have been dropping with all the Bakkan crude coming online, but the prices remained high. A few weeks after Russia started messing with Ukraine, prices suddenly dropped. In 2013 on another forum I predicted that oil prices would remain high until Russia did something the US didn't like.

That's the quid pro quo the US has with countries like Saudi Arabia, the UAE, and Kuwait. The US stays mostly silent about some of their more draconian laws and policies, the US keeps them well armed, and in return, they adjust the oil spigots to the needs of US foreign policy.

I don't think Trump was ever told about it or he would have likely talked about it, or done something crazy on the world oil market.

The pandemic messed things up too. Demand crashed early in the pandemic and then came roaring back faster than anticipated in early 2021. That upset the market beyond any manipulation could manage. Saudi Arabia is also seeing declining production so they have less ability to manipulate the markets than they once did.

I agree Iran and Venezuela would make a difference. The reasons behind their sanctions haven't gone away, simply ignoring them would be very political in the US. And VZ is a dumpster fire, production fell steadily under Chavez and then Maduro, so it's not clear how much they could help.

The US was talking to Venezuela early in the war, but I haven't heard anything since. It may be that the Biden administration figured that it would likely take years of rehab to bring their production back.

True, as I said. But 150-200/bbl is also political suicide. So the politicians pretend to act while letting Russian oil continue to flow. I just want people to call out the politicians (and journalists) for paying lip service while doing nothing.


Not really. Dallas Fed expected a 3m bpd reduction, but saw "leaks" even in mid-March:

What changed is that much of the Russian oil that continues to be exported from Baltic and Black Sea ports at steep discounts is not delivered to refiners, as is customary. Instead, trading houses are purchasing the oil and keeping it in commercial storage in Europe, from where it may be potentially resold, bypassing financial sanctions. Buying oil for storage is not prohibited under current sanctions.

Politicians know a true embargo means unbearable prices or rationing. So they allow leaks, while uselessly posturing.

There is a loophole to plug.

 

[bkp_duke]

Venezuela would take years to ramp up production. The western oil servicing companies left years ago, and their oil wells are all in disarray. I'm sure they could turn the tap up somewhat if sanctions were lifted, but nothing like what they were producing pre-sanctions.

 

[Tiger]

Was Azov left alone on purpose?

https://twitter.com/x/status/1513796486823354369

It seems strange that if Ukraine had a population of 45 million, 5 million refugees, 25% of remaining population men in defending age bracket, that's 10 million, where are they?

 

[TheTalkingMule]

Politicians know a true embargo means unbearable prices or rationing. So they allow leaks, while uselessly posturing.

This is precisely what you want. Russian supply still flows, but at dramatically lower profit.

This should be the long term(forever) goal IMO. It'll be like buying India and China 2% of their crude, but better to save them money than hand it to Putin.

 

[mars_or_bust]

Ukraine conflict: 'Russian soldiers raped me and killed my husband'

The BBC has uncovered first-hand evidence of Russian soldiers raping and killing civilians in a village west of Kyiv.

www.bbc.com

"About 25 girls and women aged 14 to 24 were systematically raped during the occupation in the basement of one house in Bucha. Nine of them are pregnant," she said. "Russian soldiers told them they would rape them to the point where they wouldn't want sexual contact with any man, to prevent them from having Ukrainian children."

No wonder Ukrainians refer to the Russian soldiers as Orcs. Fully justified.

 

[TheTalkingMule]

Venezuela would take years to ramp up production. The western oil servicing companies left years ago, and their oil wells are all in disarray. I'm sure they could turn the tap up somewhat if sanctions were lifted, but nothing like what they were producing pre-sanctions.

A long while back in the shorting oil thread we discussed China moving in and buying up Venezuelan capacity. I wonder if that ever came to fruition? Certainly China building out infrastructure would speed a reopening of exports.

I say don't bother with all these things. So long as Russian crude still flows, these Biden SPR releases and frackers coming back online will crash crude pricing any day now.

 

[bkp_duke]

A long while back in the shorting oil thread we discussed China moving in and buying up Venezuelan capacity. I wonder if that ever came to fruition? Certainly China building out infrastructure would speed a reopening of exports.

I say don't bother with all these things. So long as Russian crude still flows, these Biden SPR releases and frackers coming back online will crash crude pricing any day now.

China didn't touch VZ because of the sanctions that most western countries placed VZ under.

Basically, slightly cheaper oil wasn't enough of an enticement for China to piss off everyone that they sell stuff to. Wasn't worth the risk to them.

 

[SwedishAdvocate]

If this is true then some Russian soldiers are finally quitting this war.

The SSU [The Security Service of Ukraine] intercepted a new phone call conversation! Pretty interesting one! A Russian soldier tells his mother he decided to quit no matter what! Very adequate soldier, I must say! I wish everyone was like this one!

 

[petit_bateau]

Polish T72 MBTs on their way to Ukraine

https://twitter.com/x/status/1513804123145003017

And it appears a railway bridge in Russia between Belgorod and Ukraine has suffered a nasty accident, no apparent reason, how unfortunate

https://twitter.com/x/status/1513804402603274247

 

[samppa]

Was Azov left alone on purpose?

https://twitter.com/x/status/1513796486823354369

It seems strange that if Ukraine had a population of 45 million, 5 million refugees, 25% of remaining population men in defending age bracket, that's 10 million, where are they?

Fake news, apparently Azovs facebook page was hacked and these claims were posted.

At least that seems to be the current rumour..
Also Mariupol has been sieged from the beginning of war and very hard to get anything in/out.

 

[Doggydogworld]

China didn't touch VZ because of the sanctions that most western countries placed VZ under.

China imports from VZ and Iran grew 53% in 2021 to 0.9m bpd.

China is thought to have purchased a total of 324 million barrels from Iran and Venezuela in 2021, an increase of 53 percent on 2020, the highest quantity since 2018. It has achieved this level of imports through several means. Firstly, sanctioned oil often arrives on old ships that are set for the scrapyard. Secondly, oil comes in tankers that have gone dark – their transponders are turned off to avoid detection. And, thirdly, oil cargoes are transferred at sea from tanker to tanker to avoid knowledge of where the oil came from. Much of the oil is rebranded to make international authorities believe it came from Oman and Malaysia, with imports from these countries increasing significantly since 2020.

This is precisely what you want. Russian supply still flows, but at dramatically lower profit.

Those discounts will narrow to a few bucks per barrel. Markets don't adjust to sudden disruptions overnight, but they inevitably adjust.

OPEC refuses to boost output. Iran could add ~1m bpd if we abandon sanctions, but the others would probably cut back to offset that. VZ could maybe add ~0.5m bpd if we abandon sanctions. But Russia exports 5m bpd to the west (plus 2.5m to China, etc.). There is no 5m of spare supply out there. This leaves only two options:

1. Reduce western net demand by 5m bpd (via rationing)
2. Keep funding Putin

If we don't do the first the second is automatic. That 5m bpd of Russian oil will find its way to market. It's just arithmetic. All talk to the contrary is useless prattle or outright dishonesty. Don't buy the lies.

 

[kbM3]

From my angle sending US made jet fighters to Ukraine is off the table for various reasons:

1 Ukrainians are not trained in utilizing American made jets. It would take years to train Ukrainians to operate them efficiently. Even high tech surface to air missile systems like the Patriot will take a ton of time to train, and once out on the field takes a lot of time for the system to read the terrain and set up. The system itself will need a ton of military support and to defend, it’s not as simple as putting the mechanics on the field and calling it a day, these systems work in coordination with other systems and our military personnel put hundreds of hours in training to operating/maintaining them. Additionally, when you put these systems into the hands of Ukrainians, you run the risk of their military being overrun and put into Russian hands.

2 Right now all high powered military weapon should be utilize to protect NATO borders, simply put Ukraine isn’t a part of NATO, they don’t get the good stuff when other NATO countries want them. You want to know why Poland was so eager to hand over those migs to Ukraine? It’s because those migs needed a lot of parts to repair, and Poland wants our F-15s in exchange.

3 There are red lines drawn on both sides (US/Russia), that neither side dares to cross in fear that it would lead to a world war. Sending US made jets will give Putin more ammunition to sell this war to his people and up the state propaganda.

The longer this war drags out, the lower troop morale Russians will face, which reduces Putin’s options to attack other NATO countries and triggering WW3. If you think 400 innocent women and children dying in Ukraine is bad, ask yourself how would 30-50 million lives lost in a WW3 scenario feel like, this is if nukes aren’t used. Both Russia and the US has enough nukes to destroy and extinct this planet 10 times over, are you willing to take that risk by sending jets to Ukraine? Ukraine’s military is doing fine with the current ammunition we’re providing them, as this war drags on, NATO will continue to push more support and technology into Ukraine, but at this point, I doubt any jets will be sent in from the West as they’re being put on standby along the NATO borders in case Putin decides to cross that line.

If we‘ve learned anything, it’s that a non-nuclear war between NATO and Russia, would be over very rapidly, and I highly doubt we’d need to kill more than 30M - 50M Russians as you claim to win that war in that short of a period.

 

[bkp_duke]

China imports from VZ and Iran grew 53% in 2021 to 0.9m bpd.

China is thought to have purchased a total of 324 million barrels from Iran and Venezuela in 2021, an increase of 53 percent on 2020, the highest quantity since 2018. It has achieved this level of imports through several means. Firstly, sanctioned oil often arrives on old ships that are set for the scrapyard. Secondly, oil comes in tankers that have gone dark – their transponders are turned off to avoid detection. And, thirdly, oil cargoes are transferred at sea from tanker to tanker to avoid knowledge of where the oil came from. Much of the oil is rebranded to make international authorities believe it came from Oman and Malaysia, with imports from these countries increasing significantly since 2020.


Those discounts will narrow to a few bucks per barrel. Markets don't adjust to sudden disruptions overnight, but they inevitably adjust.

OPEC refuses to boost output. Iran could add ~1m bpd if we abandon sanctions, but the others would probably cut back to offset that. VZ could maybe add ~0.5m bpd if we abandon sanctions. But Russia exports 5m bpd to the west (plus 2.5m to China, etc.). There is no 5m of spare supply out there. This leaves only two options:

1. Reduce western net demand by 5m bpd (via rationing)
2. Keep funding Putin

If we don't do the first the second is automatic. That 5m bpd of Russian oil will find its way to market. It's just arithmetic. All talk to the contrary is useless prattle or outright dishonesty. Don't buy the lies.

0.9m bpd is not that much historically for VZ. It is NOW, b/c their production is dropping of a cliff due to inability to service the wells and pipelines.
Venezuela Crude Oil Production - March 2022 Data - 1973-2021 Historical (click on the 25y chart for perspective).

Sure, it's an increase for China, b/c they are "testing the waters", but it's not even a 10% source relative to their daily consumption.

China: oil consumption 2022 | Statista

Oil consumption in China amounted to 14.3 million barrels per day in 2022, down from 14.9 million barrels daily in the prior year.

www.statista.com

 

[MontyFloyd]

Russians are starting to feel some pain regarding their lost ones:

Russians express outrage online over Putin’s war and loss of troops sent to die

It is the first time Russians have openly expressed their outrage over Vladimir Putin's war with people asking: “How many more will die before this war is over?"

www.mirror.co.uk

Will take time for the looses to percolate out to the population.
For certain the Russians have more killed in 1 month than 9 months in Afghanistan.
In about 2.5 to 3 moths the losses will be more than USA had in 14 years of Vietnam.

The cost will be staggering, however. Likely over $100 billion spent by Russia already, and will only escalate.

 

[MontyFloyd]

what Russia means [with de-Nazify] is that Ukrainians who don’t want to be a part of Russia, who don’t want to speak Russian, who wants to be a part of EU[read Germany], who adops western values are nazis. And by denazify they mean kill the democratically elected leaders and replace them with Russian leaders, forcibly move women and children to concentration[filtration] camps, kill the 18-60 year old men etc.

This is interesting explanation, and makes sense when looking at history of conflict from Napoleon times.

Napoleon, Western support of White Russians against the Red Bolshevik Communist Russians, Germany invasion of USSR, any wonder why Russia feels so insecure about another western invasion? Russia has no trust of UN and EU.

 

[SwedishAdvocate]

This is interesting explanation, and makes sense when looking at history of conflict from Napoleon times.

Napoleon, Western support of White Russians against the Red Bolshevik Communist Russians, Germany invasion of USSR, any wonder why Russia feels so insecure about another western invasion? Russia has no trust of UN and EU.

Sounds like Putin's propaganda to me.

I've posted this before – but it's obviously time once again:

Before Putin’s full scale invasion of Ukraine – who would even think of attacking Russia? Who? Russia has NUCLEAR WEAPONS (as we all know and are VERY, VERY, VERY aware of)!

NO-ONE WOULD EVER, EVER ATTACK RUSSIA!

IF Russia was a Democracy today this would be a COMPLETE NON-ISSUE!!!

 

[petit_bateau]

This article from 2017 on how a US unit should best handle a Russian BTG is likely to be of interest to many here.

https://www.benning.army.mil/armor/eARMOR/content/issues/2017/Spring/2Fiore17.pdf

 

[petit_bateau]

0.9m bpd is not that much historically for VZ. It is NOW, b/c their production is dropping of a cliff due to inability to service the wells and pipelines.
Venezuela Crude Oil Production - March 2022 Data - 1973-2021 Historical (click on the 25y chart for perspective).

Sure, it's an increase for China, b/c they are "testing the waters", but it's not even a 10% source relative to their daily consumption.

China: oil consumption 2022 | Statista

Oil consumption in China amounted to 14.3 million barrels per day in 2022, down from 14.9 million barrels daily in the prior year.

www.statista.com

It was a long time ago, but I've run O&G production on some reservoirs in Venezuela. Even a couple of decades ago they were in an absolute mess and getting worse. Since then things have gotten so much worse it is untrue. Most of their easy oil is over, long gone. This means that getting sustained large scale improvements in production will require very substantial long term external support. I'm not suggesting that support could only originate from North America or Europe, as I've seen very good field developments done of complex and difficult reservoirs by others, so the Venezuelans would have a range of options open to them for partners. However - and it is a big however - the scale and duration of the necessary effort is such that anybody in the O&G game globally would want to be assured that this was a stable long term endeavour of (say) 5-10 year duration (aka Apertura II).

Therefore, in the circumstances, I don't think we should hold our breath for large amounts of additional Venezuelan crude to hit the market. Some perhaps, and some more blind eyes being turned, but not huge amounts.

Iran on the other hand .... but there are other challenges there.

(imho of course)

 

[petit_bateau]

A question please for those with a better understanding of US legislation than I have.

Q1. I seem to recall that for Foreign Military Sales there is a Congressional FMS oversight and approval - am I right ? So the Biden administration can't fly solo, they have to get Congressional approval for anything significant ? Have I understood that correctly ? Is that a procedurally open process, i.e. can one monitor a FMS request moving through the approval system ? How quickly could something significant (e.g. F16s and their associated logistics and ordnance) get expedited through in the current circumstances ?

Q2. Are there any equivalent FMS restrictions on training ? So could (say) surplus Ukraine aviation ground and aircrew be trained in (say) the USA or other partner nation on (say the F16 packages) without needing to go through an open FMS approvals process ?

My suspicion is that the Ukraine has excess ground and aircrew in the aviation sector, with all the relevant domain expertise. Therefore it makes sense to be training them now, on the quiet, and only later to go public with the FMS sae of the kit itself. That way the "flash-to-bang" time is minimised. But going about things in this way would only be possible if the training packages could be delivered in advance. Hence my question, as I think we could be in for a long campaign and aviation is the biggest problem area for that timescale.

 

[bkp_duke]

A question please for those with a better understanding of US legislation than I have.

Q1. I seem to recall that for Foreign Military Sales there is a Congressional FMS oversight and approval - am I right ? So the Biden administration can't fly solo, they have to get Congressional approval for anything significant ? Have I understood that correctly ? Is that a procedurally open process, i.e. can one monitor a FMS request moving through the approval system ? How quickly could something significant (e.g. F16s and their associated logistics and ordnance) get expedited through in the current circumstances ?

Q2. Are there any equivalent FMS restrictions on training ? So could (say) surplus Ukraine aviation ground and aircrew be trained in (say) the USA or other partner nation on (say the F16 packages) without needing to go through an open FMS approvals process ?

My suspicion is that the Ukraine has excess ground and aircrew in the aviation sector, with all the relevant domain expertise. Therefore it makes sense to be training them now, on the quiet, and only later to go public with the FMS sae of the kit itself. That way the "flash-to-bang" time is minimised. But going about things in this way would only be possible if the training packages could be delivered in advance. Hence my question, as I think we could be in for a long campaign and aviation is the biggest problem area for that timescale.

Been a while since I looked but:
Q1 - I believe this is dependent upon equipment type. I.e. there is significant leeway for Biden to say send 5000 Javelins, but that's not the same as sending something with stricter export restrictions such as F-22 planes (not that we would do that, just picking an example a little more on the extreme end for illustration).