Oil Price Drops at the End of the Global Energy Cycle and an Increase in China’s Cosmic Intelligence: The Case of Russia, the UAE, and India
According to The Associated Press, Russia decided to reduce its output without consulting other producers like Saudi Arabia. OPEC+ decided in October to cut output by 2 million barrels per day and has not adjusted that stance since.
Futures prices for Brent crude, the global benchmark, jumped 2.7% on the news Friday morning to $86 a barrel as traders anticipated a tightening in global supply.
This past weekend, the European Union imposed sanctions on Sun Ship Management, a subsidiary of Sovcomflot, Russia’s largest shipping company. The EU said the Dubai-based firm, registered a decade ago, had been “operating as one of the key companies managing and operating the maritime transport of Russian oil,” and that the “Russian Federation is the ultimate beneficiary” of its business operations.
Russian Urals crude traded at a discount to Brent crude of $28 a barrel Friday morning. Over the past few months, India and China have snapped up cheap oil from Moscow, just as the EU — once Russia’s biggest customer for crude — has ended all imports.
A potential drop in global oil supply could come at a tricky time. China’s swift reopening of its economy in December after almost three years of strict coronavirus restrictions has pushed up estimates for global oil demand.
Last month, the International Energy Agency said it expected global demand to surge by 1.9 million barrels per day to reach an all-time high of 101.7 million barrels per day, with China accounting for nearly half of the increase.
Russian Shadow Fleet: Selling Old, Old, and Clunky Sailboats to Western Countries in the Last Three-Year Economic Crisis
Western sanctions — added to the grinding cost of war — are weighing on Russia’s economy. The country had a budget deficit that ballooned last year to 2.3% of GDP.
Who owns and operates many of these ships remains a puzzle. Western shippers stopped providing services due to the complexity of Russian oil trading over the past year. New, obscure players swooped in, and some of them were involved in shell companies. Some bought boats from Europeans, while others tapped old, creaking ships that might have otherwise ended up in the scrapyard.
A senior executive at an oil trading firm said that between 25 to 35 vessels a month are being sold into the shadow fleet. A quarter of oil tanker sales in the last couple of years have involved unknown buyers, according to Global Witness.
The order requires boats to be agreeable to the trip. Russia does not have enough vessels. The shadow fleet comes in.
“There is often some evidence that they have been disguising their activities by turning off their AIS transponder,” Wright said of the “dark” ships, referring to technology that helps identify and locate vessels.
Source: https://www.cnn.com/2023/03/01/business/russia-oil-shadow-fleet/index.html
The growth of the dark fleet around the world: risk, security, risks, and the arrival of their next generation of well-behaved ships
But the legal and reputational risks of failing to comply with the price caps loom large. Russia is wanting to stop working with Western companies. That has led to the development of a new cohort, whose makeup is murkier — and history more checkered.
“The dark fleet that has been around carrying Venezuelan and Iranian oil globally is something we all expected to grow, and it has,” said Janiv Shah, senior analyst at Rystad Energy, a consultancy.
A worry is safety. Mainstream oil companies typically retire vessels between the ages of 15 and 19 years, which is why the dark fleet has a large contingent of older vessels. Now, more of these boats are making trips across the globe.