Crippling Russia with an oil embargo would send U.S. gas prices soaring. In Europe, it could lead to death

[beijingwalker]

Crippling Russia with an oil embargo would send U.S. gas prices soaring. In Europe, it could lead to death​

BY SOPHIE MELLOR
March 4, 2022 3:11 AM GMT+8

As the West tries to quit all things Russian, oil seems to be the hardest thing to wean itself from.

In the U.S., President Joe Biden has so far resisted calls from Democrats and Republicans to ban Russian oil imports, as Russian President Vladimir Putin continues to mount his brutal war on Ukraine.

Germany and other European nations have signaled similar opposition, with German Economy Minister Robert Habeck telling reporters on Thursday, “I wouldn’t support an embargo on imports of fossil fuels from Russia.”

He added, “I would even speak out against it, because we would threaten the social peace in the republic with that.”

But for the U.S. and Europe, an oil embargo means two completely different things. For the U.S., which sources only 5% of its crude oil and petroleum from Russia, sanctioning Russian fossil fuels would result in extremely high oil prices and worsening inflationary pressures.

But for countries like Germany, which source half their gas from Russia, “the worst case is that people start dying because they can’t heat their homes,” Adam Pankratz, a professor at the University of British Columbia’s Sauder School of Business, told Fortune.

“It means freezing and possibly dead Germans,” he said.

The safe U.S. position​

Russia exports 5 million barrels of crude oil a day, representing around 12% of global trade and making it the world’s largest exporter. It’s the world’s third-largest oil producer.

However, around 60% of Russia’s oil exports go to Europe and another 20% to China. The U.S. imports 670,000 barrels of crude oil and petroleum products each day from Russia, according to the U.S. Energy Information Administration, which only accounts for 5% of its crude imports.

But despite the U.S.’s minor reliance on Russian oil, public opposition to the import is mounting. Democrats and Republicans on the Senate Energy Committee floated a bill on Thursday that would end the import of Russian crude oil and liquefied natural gas. West Virginia’s Democratic Sen. Joe Manchin, who is leading the bill, told reporters, “We should stop buying over 600,000 barrels [of Russian oil] a day in America. Can you believe that? No one knew that. No one paid attention to it. And that has to stop.”

Pankratz told Fortune that if there is an embargo of Russian oil, the U.S. won’t be running out of oil. “If it really goes drastic, the U.S. has a strategic petroleum reserve,” he said.

He notes the real concern is if all countries stopped importing oil from Russia, available supply would tighten, and “the price of oil would go through the roof,” which would add inflationary pressure, making heating homes and driving cars more expensive in the West.

Fearing a rise in the price of gas at the pump, White House press secretary Jen Psaki said on CNN on Wednesday that what Biden “does not want to do is topple the global oil markets or the global marketplace, or impact the American people more with higher energy and gas prices.”

Europe’s pain​

Europe is facing a different story.

Although winter is winding down and the need to heat homes won’t be as great, Western European nations are vacillating on sanctioning the country’s oil.

Neither Gazprombank nor Sberbank were on the list of seven institutions Brussels banned from the SWIFT messaging system, as they both act as the main channels for payments for Russian oil and gas.

Despite understanding the need to end its dependency on Russian fossil fuels, European Union officials also have not considered sanctions on energy because of the damage it would do to the region’s economy.

“For Europe, the situation is much more dramatic,” says Pankratz, who notes that the region “is in such an energy dependent situation on Russia, there is not a lot they can do to drop the hammer.”

Self-sanctioning​

But even if sanctions are not put in place, gas traders are steering clear of Russian oil, despite its being traded at an alluring $18 a barrel discount to Brent.

A number of European refiners, including Finland’s Neste and Sweden’s Preem, have shunned Russian oil and are looking for supplies elsewhere. The FT reported on Wednesday that Russian oil producer Surgutneftegas had failed to sell Urals crude in its March tenders.

According to S&P Global, traders said the public perception of Western firms and a lack of credit stopped them from buying up the assets at an incredibly cheap price. Many do not want to be seen as funding the invasion of Ukraine.

“Russia’s oil has effectively become toxic,” one banker told the FT.

Whether a direct line can be drawn to buying oil from Russia and funding its war in Ukraine is murky, Pankratz notes.

“A direct line is always tough to draw, but it is, in a lot of ways, an energy war—and if Russia couldn’t sell its energy at all, it would be in much more serious trouble than it already is,” he said.

Crippling Russia with an oil embargo would send U.S. gas prices soaring. In Europe, it could lead to death.

An oil embargo means two completely different things for the U.S. and Europe

fortune.com

 

[beijingwalker]

But for the U.S. and Europe, an oil embargo means two completely different things. For the U.S., which sources only 5% of its crude oil and petroleum from Russia, sanctioning Russian fossil fuels would result in extremely high oil prices and worsening inflationary pressures.

But for countries like Germany, which source half their gas from Russia, “the worst case is that people start dying because they can’t heat their homes,” Adam Pankratz, a professor at the University of British Columbia’s Sauder School of Business, told Fortune.

“It means freezing and possibly dead Germans,” he said.

Why every time when a country allies with US for a joint action in the end always finds out they are on the receiving end of harsh punishment.

 

[Hamartia Antidote]

Trump warns NATO leaders in 2018: 'Do not buy Russian oil and gas'

Why every time when a country allies with US for a joint action in the end always finds out they are on the receiving end of harsh punishment.

Ukraine is in Europe not North America. They are the ones now doing the sanctioning..after not listening to US warnings.

Jan 27th

Germany does a complete 180 on Feb 26th after reality sets in of not listening to the US.

Germany's Merkel calls Russian invasion 'turning point' for Europe

German former chancellor Angela Merkel, whose conciliatory policies toward the Kremlin while in office have come under fire, on Friday condemned Russia's invasion of Ukraine.

www.thelocal.de

Germany’s Merkel calls Russian invasion ‘turning point’ for Europe​

Next up the EU has a turning point with China...

 

[beijingwalker]

Trump warns NATO leaders in 2018: 'Do not buy Russian oil and gas'

Ukraine is in Europe not North America. They are the ones now doing the sanctioning..after not listening to US warnings.

Jan 27th

Germany does a complete 180 on Feb 26th after reality sets in of not listening to the US.

Germany's Merkel calls Russian invasion 'turning point' for Europe

German former chancellor Angela Merkel, whose conciliatory policies toward the Kremlin while in office have come under fire, on Friday condemned Russia's invasion of Ukraine.

www.thelocal.de

Germany’s Merkel calls Russian invasion ‘turning point’ for Europe​

Next up the EU has a turning point with China...

They are killing themselves siding with US. Next time? hopefully they can still have a next time after this, this whole continent is going bankrupt.

 

[Hamartia Antidote]

They are killing themselves siding with US. Next time? hopefully they can still have a next time after this, this whole continent is going bankrupt.

LOL! Germany has NOT been siding with the US for years..

Now that they see Putin actually did invade Ukraine and the warnings for the last few years by the US that Putin is an active military threat are very real...Germany did a 180.

Thank you Putin ...now convincing the EU that China is not their friend (by abstaining on Ukraine) will be easy. They may rethink their 5G.

 

[beijingwalker]

LOL! Germany has NOT been siding with the US for years..

Now that they see Putin actually did invade Ukraine and the warnings for the last few years by the US that Putin is an active military threat are very real...Germany did a 180.

Thank you Putin ...now convincing the EU that China is not their friend (by abstaining on Ukraine) will be easy. They may rethink their 5G.

German foreign policy is highly influenced by US, this puts the country in collision course with China and Russia, without US, Germany can be a very good development partner.

 

[Beast]

While oil will remain cheap in China becos Russian and Iran has no choice but to sell undervalue Russian / Iran oil to China.

US and EU both will suffer high inflation while China is relatively stable....

 

[beijingwalker]

Europe now is in a bind

 

[beijingwalker]

Not every EU member wants to die with EU, so probably in the near future more countries will leave EU like UK

 

[Viet]

They are killing themselves siding with US. Next time? hopefully they can still have a next time after this, this whole continent is going bankrupt.

Putin is 20 y in power. He has done little to nothing to develop the economy.
He turns Russia into a giant gas station with nuclear bombs.

Crippling Russia with an oil embargo would send U.S. gas prices soaring. In Europe, it could lead to death​

BY SOPHIE MELLOR
March 4, 2022 3:11 AM GMT+8

As the West tries to quit all things Russian, oil seems to be the hardest thing to wean itself from.

In the U.S., President Joe Biden has so far resisted calls from Democrats and Republicans to ban Russian oil imports, as Russian President Vladimir Putin continues to mount his brutal war on Ukraine.

Germany and other European nations have signaled similar opposition, with German Economy Minister Robert Habeck telling reporters on Thursday, “I wouldn’t support an embargo on imports of fossil fuels from Russia.”

He added, “I would even speak out against it, because we would threaten the social peace in the republic with that.”

But for the U.S. and Europe, an oil embargo means two completely different things. For the U.S., which sources only 5% of its crude oil and petroleum from Russia, sanctioning Russian fossil fuels would result in extremely high oil prices and worsening inflationary pressures.

But for countries like Germany, which source half their gas from Russia, “the worst case is that people start dying because they can’t heat their homes,” Adam Pankratz, a professor at the University of British Columbia’s Sauder School of Business, told Fortune.

“It means freezing and possibly dead Germans,” he said.

The safe U.S. position​

Russia exports 5 million barrels of crude oil a day, representing around 12% of global trade and making it the world’s largest exporter. It’s the world’s third-largest oil producer.

However, around 60% of Russia’s oil exports go to Europe and another 20% to China. The U.S. imports 670,000 barrels of crude oil and petroleum products each day from Russia, according to the U.S. Energy Information Administration, which only accounts for 5% of its crude imports.

But despite the U.S.’s minor reliance on Russian oil, public opposition to the import is mounting. Democrats and Republicans on the Senate Energy Committee floated a bill on Thursday that would end the import of Russian crude oil and liquefied natural gas. West Virginia’s Democratic Sen. Joe Manchin, who is leading the bill, told reporters, “We should stop buying over 600,000 barrels [of Russian oil] a day in America. Can you believe that? No one knew that. No one paid attention to it. And that has to stop.”

Pankratz told Fortune that if there is an embargo of Russian oil, the U.S. won’t be running out of oil. “If it really goes drastic, the U.S. has a strategic petroleum reserve,” he said.

He notes the real concern is if all countries stopped importing oil from Russia, available supply would tighten, and “the price of oil would go through the roof,” which would add inflationary pressure, making heating homes and driving cars more expensive in the West.

Fearing a rise in the price of gas at the pump, White House press secretary Jen Psaki said on CNN on Wednesday that what Biden “does not want to do is topple the global oil markets or the global marketplace, or impact the American people more with higher energy and gas prices.”

Europe’s pain​

Europe is facing a different story.

Although winter is winding down and the need to heat homes won’t be as great, Western European nations are vacillating on sanctioning the country’s oil.

Neither Gazprombank nor Sberbank were on the list of seven institutions Brussels banned from the SWIFT messaging system, as they both act as the main channels for payments for Russian oil and gas.

Despite understanding the need to end its dependency on Russian fossil fuels, European Union officials also have not considered sanctions on energy because of the damage it would do to the region’s economy.

“For Europe, the situation is much more dramatic,” says Pankratz, who notes that the region “is in such an energy dependent situation on Russia, there is not a lot they can do to drop the hammer.”

Self-sanctioning​

But even if sanctions are not put in place, gas traders are steering clear of Russian oil, despite its being traded at an alluring $18 a barrel discount to Brent.

A number of European refiners, including Finland’s Neste and Sweden’s Preem, have shunned Russian oil and are looking for supplies elsewhere. The FT reported on Wednesday that Russian oil producer Surgutneftegas had failed to sell Urals crude in its March tenders.

According to S&P Global, traders said the public perception of Western firms and a lack of credit stopped them from buying up the assets at an incredibly cheap price. Many do not want to be seen as funding the invasion of Ukraine.

“Russia’s oil has effectively become toxic,” one banker told the FT.

Whether a direct line can be drawn to buying oil from Russia and funding its war in Ukraine is murky, Pankratz notes.

“A direct line is always tough to draw, but it is, in a lot of ways, an energy war—and if Russia couldn’t sell its energy at all, it would be in much more serious trouble than it already is,” he said.

Crippling Russia with an oil embargo would send U.S. gas prices soaring. In Europe, it could lead to death.

An oil embargo means two completely different things for the U.S. and Europe

fortune.com

good propaganda
One million Ukrainian refugees have fled to Europe, six million more coming lots of them are bombed to death by Russian bombers but you fear death in Europe because of cold weather?

 

[beijingwalker]

Putin is 20 y in power. He has done little to nothing to develop the economy.
He turns Russia into a giant gas station with nuclear bombs.

good propaganda
One million Ukrainian refugees have fled to Europe, six million more coming lots of them are bombed to death by Russian bombers but you fear death in Europe because of cold weather?

This war is avoidable, it's the west's stubborn anti Russia policy made this disaster happen.

 

[Indos]

While oil will remain cheap in China becos Russian and Iran has no choice but to sell undervalue Russian / Iran oil to China.

US and EU both will suffer high inflation while China is relatively stable....

Energy sector is still not part of US and EU sanction, the reason the oil price high is due to the supply from Russia stop and the European own effort to replace Russian gas and oil that is delivered using pipe. While LNG needs processing, so the Russian gas just stay idle unless Russia has enough capacity to process it into LNG.

The best thing to do is not to sanction the energy sector if Europe wants their economy competitive, even at this current situation the energy and commodity prices have already been jump.

Previous deal between Russia and China cannot be broken due to this situation, only Iran oil and gas that I think is sold to China under discounted price. This is the fool of Iranian Mullah regime not to struck the deal much earlier after Biden come to White House

 

[Beast]

Energy sector is still not part of US and EU sanction, the reason the oil price high is due to the supply from Russia stop and the European own effort to replace Russian gas and oil that is delivered using pipe. While LNG needs processing, so the Russian gas just stay idle unless Russia has enough capacity to process it into LNG.

The best thing to do is not to sanction the energy sector if Europe wants their economy competitive, even at this current situation the energy and commodity prices have already been jump.

Previous deal between Russia and China cannot be broken due to this situation, only Iran oil and gas that I think is sold to China under discounted price. This is the fool of Iranian Mullah regime not to struck the deal much earlier after Biden come to White House

Biden wants Iran to give up nuclear weapon which is impossible as we have seen Libya and Ukraine being attack and invaded once your nuclear weapon is non existent,

 

[Indos]

Biden wants Iran to give up nuclear weapon which is impossible as we have seen Libya and Ukraine being attack and invaded once your nuclear weapon is non existent,

If they do have nuclear weapon why dont just make a nuclear test, it is so fool Iranian has been sanction since 2009 and until now is still busy with enriching the uranium....

Just see how Pakistan and India made nuclear test in 1990's, after the test then the world will soon acknowledge them as nuclear power after some years of sanction

 

[mhosein]

Why every time when a country allies with US for a joint action in the end always finds out they are on the receiving end of harsh punishment.

America is a chip off the old block (British Empire). To understand America, one must study the British when use to be an imperial, colonial empire. The anglophile is one devoid of integrity or honor, yet the anglophile masquerades the world over pretending to be honorable and righteous.

The reality that eludes most, is the anglo-european "Mission to Civilize" the rest of humanity. The pretext to anglophile's colonization expansion.

What we see today, the so-called "American Exceptionalism" is not so much different from the 19th century "Mission to Civilize" of the British Empire. The old Anglo-European phrase, "White Man's Burden," by Kipling. Such is the arrogance and hubris of America and it's predecessors, Britain, France, Germany, Netherlands, Belgium, Portugal and Spain.

So when you ask such a question, do remember what their history is. America's attitude toward friend and foe alike is grounded in hubris and being self-centered. Europe will soon find out the price of "obeying" America and it's sidekick, Britain, when Europeans see their energy bills go through the roof. When Europeans cough out blood, paying for expensive American LNG.

They (America and Britain) were desperate to keep NATO alive. They made sure the found collaborators (Neo Nazis) in Ukraine to further their objectives. A Ukraine as a NATO member would have seen the West gain an enormous advantage. Ukraine would have afforded NATO over half a million square kilometers of strategic depth, right on Russia's doorstep. Ukraine being nearly twice the size of Germany and allowing the missile's flight cut dramatically short to Russia.

So to get Ukraine meant screwing over Europe, as in the words of former Under Secretary Victoria Nuland "#@*& Europe". Then of course you are correct in asking why allies of America end up being on the short end of the stick.