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EU achieved independence from Russian fossil fuels

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Re: EU achieved independence from Russian fossil fuels

#101

Post by unmole »

kstenerud wrote: post #70

There seems to be a lot of confusion about what's going on with price caps and what "independence" means, so here's an explanation: The price cap on Russian gas effectively sets a maximum price that those enforcing the cap will pay. This means that Russia can't sell at full price because even those not enforcing the cap aren't willing to pay full price for it (why should they, when Russia's choices of customers are s…

> This means that Russia can't sell at full price because even those not enforcing the cap aren't willing to pay full price for it

India and China have been paying well above the price cap: https://www.reuters.com/business/energy/india-china-snap-up-...

Re: EU achieved independence from Russian fossil fuels

#102

Post by Kbelicius »

yogthos wrote: post #52
belltaco wrote: post #49

Earlier quoted context omitted.

> but the Russians are too stupid to understand it Who said they don't understand it? What can they do about it? Nothing.

What they can and have done about it is to redirect their trade towards non western countries that constitute the majority of the world. Plenty of recent articles clearly show that the sanctions have been an utter failure in practice. The only entity that's being severely hurt here is Europe. https://archive.is/2023.02.23-211202/https://www.nytimes.com... https://archive.ph/Niqwh https://nationalinterest.org/feature/…

> Plenty of recent articles clearly show that the sanctions have been an utter failure in practice.

None of your links actually say that. What they do say is that sanctions did not have the short term impact that some hoped/predicted. What all of them say is that in the long term Russia is most likely fucked. Your claim that the sanctions have been an utter failure is divorced from logic if we go by the links that you provided.

Re: EU achieved independence from Russian fossil fuels

#103

Post by Kbelicius »

Animatronio wrote: post #93
lostlogin wrote: post #89

Earlier quoted context omitted.

Elsewhere here this link was given as proof that Russia was back where it started and hadn’t suffered loss of oil revenue. It shows export volumes pretty steady, but revenue loss of 43%. That would seem likely to have hit profits pretty hard. https://edition.cnn.com/2023/04/14/energy/russia-oil-exports...

Some would disagree with this take: https://www.cnbc.com/2023/05/24/ukraine-the-wests-oil-war-ag... Analysis published Wednesday by the Centre for Research on Energy and Clean Air, an independent Finnish think tank, found that Russia’s revenues from oil exports have recovered from levels reached in January and February. The findings show that Moscow has been able to successfully claw back earnings from fossil fuel ex…

> Some would disagree with this take:

No they would not. From the link you provided:

> “Russia’s export revenue in April was down substantially year-on-year, mainly due to the impact of the EU import ban and lower oil prices. This means that Russia’s budget will likely stay in deficit, constraining military expenses,” said Lauri Myllyvirta, lead analyst at CREA and co-author of the report.

Re: EU achieved independence from Russian fossil fuels

#104

Post by roundandround »

reducesuffering wrote: post #77
ajsnigrutin wrote: post #59

Earlier quoted context omitted.

Ukraine was preparing a war to take back donbas, and there was no "calming down". The problem is, that the media changed their stories after the start of war. https://www.reuters.com/world/europe/osce-reports-surge-numb... > MOSCOW, Feb 19 (Reuters) - Two regions in eastern Ukraine where government and separatist forces have been fighting since 2014 were hit by more than 1,400 explosions on Friday, monitors for the O…

> MOSCOW, Feb 19 (Reuters) - Two regions in eastern Ukraine where government and separatist forces have been fighting since 2014 were hit by more than 1,400 explosions on Friday How convenient. Russia had been moving soldiers and military equipment for months into position, scheduled a joint exercise with Belarus placing their soldiers in spitting distance of Kyiv, and then suddenly there are explosions "forcing" Rus…

> Wow, it sure worked out fortunately that half of their military was already there.

I'll say, if the whole military had been there the Ukraine would be sixteen times larger today!

Re: EU achieved independence from Russian fossil fuels

#105

Post by kstenerud »

radiator wrote: post #96
kstenerud wrote: post #70

There seems to be a lot of confusion about what's going on with price caps and what "independence" means, so here's an explanation: The price cap on Russian gas effectively sets a maximum price that those enforcing the cap will pay. This means that Russia can't sell at full price because even those not enforcing the cap aren't willing to pay full price for it (why should they, when Russia's choices of customers are s…

In your rather long post, you did not mention the fact that Russia refuses to sell oil to any country which applies the price cap. I wonder, is this really not relevant for your analysis?

It doesn't help Russia. The end result is the same: A smaller pool of customers and an anchored price for the remaining customers.

In fact, Russia had to reduce their output because they refuse to sell it to countries that participate in the price cap and there isn't enough demand otherwise (also most of their flow goes west through the now mostly idle pipelines to Europe - It's MUCH harder to move oil east or south because the infrastructure in that direction isn't big enough to handle such a surge). So Russia's losing even MORE profits by refusing to sell to them. AND they still have to maintain the now idle pipelines to the West or else they'll break down over time and become useless.

Re: EU achieved independence from Russian fossil fuels

#106

Post by kstenerud »

unmole wrote: post #101
kstenerud wrote: post #70

There seems to be a lot of confusion about what's going on with price caps and what "independence" means, so here's an explanation: The price cap on Russian gas effectively sets a maximum price that those enforcing the cap will pay. This means that Russia can't sell at full price because even those not enforcing the cap aren't willing to pay full price for it (why should they, when Russia's choices of customers are s…

> This means that Russia can't sell at full price because even those not enforcing the cap aren't willing to pay full price for it India and China have been paying well above the price cap: https://www.reuters.com/business/energy/india-china-snap-up-...

They pay more than the price cap, but less than the market rate (because they don't have to pay market rate now that Russia doesn't have much choice of customers - supply and demand).

And that's really the whole point. We'd prefer for China and India to support the price cap because that would even further reduce Russia's customer base (and by extension the price that they can actually sell at). But even as things stand, Russia is losing profits hand over fist.

Re: EU achieved independence from Russian fossil fuels

#107

Post by kstenerud »

yunohn wrote: post #92
kstenerud wrote: post #70

There seems to be a lot of confusion about what's going on with price caps and what "independence" means, so here's an explanation: The price cap on Russian gas effectively sets a maximum price that those enforcing the cap will pay. This means that Russia can't sell at full price because even those not enforcing the cap aren't willing to pay full price for it (why should they, when Russia's choices of customers are s…

Your explanation of the situation sounds like the Byzantine corporate structures that multinationals use to evade taxes. I assume the goal is the same - to hoodwink and exploit the populace. Morally speaking, I’d expect to have zero imports of Russian fuel to declare “independence”.

The goal is to keep the gas supply relatively stable, while reducing Russia's share of the profits. It's a kind of price-fixing-in-reverse.

And you don't need zero imports to declare independence. You just need them low enough that Russia will gain no political leverage over you by threatening to shut down the supply to your region.

Re: EU achieved independence from Russian fossil fuels

#108

Post by Kbelicius »

yogthos wrote: post #67
onepointsixC wrote: post #64

Earlier quoted context omitted.

Sure, but before that gas was funding a self professed foe. It's much better to not fund your enemies.

That logic only works if Europe was the only trading partner available to Russia. What happened in practice is that Russia simply redirected trade to other countries while Europe now pays a huge markup buying from resellers.

Your logic only works if Russia could simply divert the flow of resources from Europe to somewhere else. They can't, not simply.

Re: EU achieved independence from Russian fossil fuels

#109

Post by Brian_K_White »

hunglee2 wrote: post #9

EU continues to important Russian oil, it has just been refined and rebadged by India, Saudi Arabia, China and others, so that a statement like this could be made. EU is basically paying a premium in order to stake a claim to moral high ground they don't hold

The indirection itself serves a perfectly valid purpose, which is to remove a lever of control from Russia.

They are paying a premium for independence. Any given barrel of oil may or may not still come originally from Russia, but Russia can not use it as a lever any more, because there is no single channel any more. Russia would have to stop selling to everyone in the world, or raise prices to everyone in the world.

This probably even drives prices down, which both helps everyone else and hurts Russia.

Re: EU achieved independence from Russian fossil fuels

#110

Post by Gibbon1 »

onepointsixC wrote: post #64
yogthos wrote: post #57

Earlier quoted context omitted.

Europe used to get pipeline gas at a fixed price, and now it's getting LNG at a much higher rate that fluctuates with the market.

Sure, but before that gas was funding a self professed foe. It's much better to not fund your enemies.

Long term investment is after Russia implodes the EU won't have to spend as much on weapons as they do now.
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