Russia is selling their oil for more than they were before the war started. Initially they were providing India with a 30% discount on oil but now it is more like 10%. Check the oil price ticker for Sokol. That is likely the sale price of the oil they used to send to Europe at this time.The key thing that most people don't consider is that while Russia is selling crude at a discount, the various sanctions and embargos have raised the prices of crude roughly 25-28% since February. This means both Russia and Iran might actually be grossing more overall with their energy sales than before. i.e. oil went from 65 to 90, but Russia is selling at a "discount" of 80, they still come out ahead.
ESPO oil price, from Eastern Siberia which is sold to the Far East including China, is going down though.
Well Iran hasn't collapsed despite being sanctioned since the 1970s has it?Why do Iran and Russia need to export oil and gas in the first place? I thought they are decently developed countries with diversified industries and advanced technological base.
Was it sheer Iranian and Russian propaganda then? What else would explain the extreme reliance on hydrocarbon exports for these two countries?
And Russia is more self-sufficient than most economies. But in the globalized modern economy even that has its limits.
I expect some Russian infrastructure which depends on Western supplies to slowly degrade. The gas turbine power plants will likely be one example. Another might be some of the petrochemical processing industry like making plastics and the like. The EU expected Russia to stop making diesel because Russia used to import all its catalyst on their refineries. Well it isn't that bad, since Rosneft has been able to produce its own catalyst for two years and is already using it. There are several examples of other inputs like this. Russia used to import bleaching agent for office paper production from Finland, that got sanctioned, so now they are selling yellowish office paper. There are smaller Russian enterprises which have their own complete production chain and they sell bleached white office paper, but their production isn't enough to meet market demand. Lots of little things like that. But I expect most of those issues to be fixed in 6 months as alternative supplies get found. Others might take 2 years as new production facilities inside Russia might need to be built.
Another example. PCB manufacturers in Russia stopped production as supplies of fiber from Europe got cut, they switched to Chinese suppliers, and now production restarted. And yes it likely will be cheaper to import a minute amount of fiber to make motherboards for a market with 150 million people, from a market over 10x the size with exports, than to make their own fiber.
Another case, one of the largest producers of butter in Russia was a Finnish company with a factory in Russia. Well they closed down production for weeks. The Russian government gave companies a time limit to either restart their operations, to sell their business, or get foreclosed and auctioned by the government. So they basically stopped production for a month, now sold the factory for peanuts, eventually it will restart since it was producing butter with Russian milk in the first place. Guess who will be the biggest loser?
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