The Brink of War?

[Dragonman]

Looks like your medias forgot to tell you 2 points:

2. It is discount to stock exchange prices what are on peak already almost year and forecast is "up to $200 per barrel till the end of the year".

Wrong on both counts.

I forgot to add:

(1) that the buying and selling physical oil is not an option for most investors, but liquid markets that track oil prices can be found via futures, options, ETFs, or oil company stocks (see, e.g., A Beginner's Guide to Investing in Oil Markets - Investopedia, https://www.investopedia.com/article...il-markets.asp). Most oil is bought through options contracts, which give the buyer or seller the option to trade oil on a future date. If they choose to buy futures or options directly in oil, they need to trade them on a commodities exchange, not a stock market.

(2) that the Turkish news agency Ankara reported that " US energy agency revises oil price forecast up for 2022. International benchmark Brent crude now estimated to average $107.37 per barrel in 2022 and $97.24 per barrel in 2023," Sibel Morrow, 08.06.2022, https://www.aa.com.tr/en/americas/us...r-2022/2608854). $107.27 per barrel for Brent crude for the rest of 2022 is a far cry from the figure in your posting, for which you do not give a source.

[Moses]

Imports of Russian oil rose by 55% from a year earlier to a record level in May, displacing Saudi Arabia as China's biggest provider.

China has ramped up purchases of Russian oil despite demand dampened by Covid curbs and a slowing economy.

https://www.bbc.com/news/business-61861849

[Dragonman]

Imports of Russian oil rose by 55% from a year earlier to a record level in May, displacing Saudi Arabia as China's biggest provider.

China has ramped up purchases of Russian oil despite demand dampened by Covid curbs and a slowing economy.

https://www.bbc.com/news/business-61861849

I have not disputed in any of my postings that Russia has replaced Saudi Arabia as PR China's main oil supplier, but China has been Russia's biggest market for crude oil since 2016, so what was the point you hoped to make?

I do not dispute that the BBC website stated that "China has ramped up purchases of Russian oil despite demand dampened by Covid curbs and a slowing economy." I note, however, that other sources cite different causes for the country's increased purchase of Russian oil. For example, "Discounted Russian oil shipments have created an opportunity for China to restock national strategic petroleum reserves" (https://www.washingtonpost.com/world...a-oil-exports/). And ""For now, it is just pure economics that Indian and Chinese refiners are importing more Russian-origin crude oil ... as such oil is cheap," said analyst Wei Cheong Ho" (https://www.voanews.com/a/sanctioned...-/6630543.html, June 23, 2022 4:04 PM).

However, you ought to be aware that "China has the second largest refining capacity in the world and is responsible for 16.2 percent of the world's refinery throughput, just after the U.S., which accounts for 20 percent. One of the reasons China has increased oil imports and refining capacity is to sell to other nations, particularly in Asia" (https://www.energypolicy.columbia.ed...re%20China.pdf).

The PRC will probably make more money from its import of Russian oil than Russia will by exporting it.

[Moses]

I have not disputed in any of my postings that Russia has replaced Saudi Arabia as PR China's main oil supplier, but China has been Russia's biggest market for crude oil since 2016

No, EU is still biggest market for Russian oil, it buys almost 2 times more than China. Still, despite of sanctions.

By the way, in May Russian oil took 18% of Indian oil import (comparing to 1% in February).

BRICS's meeting at past week shows: majority doesn't supports sanctions and doesn't want to follow US and EU in anti-Russian hysteria, Argentina and UAE declared intentions to join BRICS.

jfke-kopiya_2af.jpg

[Moses]

19 countries participated in BRICS meeting at past Friday, one of them - Thailand

7230ad041ca4636fd6d14762590847bf_XL.jpg

[Dragonman]

No, EU is still biggest market for Russian oil, it buys almost 2 times more than China. Still, despite of sanctions.

By the way, in May Russian oil took 18% of Indian oil import (comparing to 1% in February).

BRICS's meeting at past week shows: majority doesn't supports sanctions and doesn't want to follow US and EU in anti-Russian hysteria, Argentina and UAE declared intentions to join BRICS.

jfke-kopiya_2af.jpg

The World Economic Forum cites International Energy Agency data as saying, “Collectively, European nations take about two-thirds of Russia’s oil exports while a fifth go to China which is the biggest single buyer of Russian oil and oil products importing 1.6 million barrels a day during 2021” (https://www.weforum.org/agenda/2022/...pply-to-world/). However, "European nations collectively” refers to 44 nations (according to the UN), while the EU comprises only 27 nations, so what is the source for your information for EU Russian oil imports?

Given that, like the PRC, India exports refined petroleum products, I am not surprised that they are increasing their imports of highly discounted Russian crude oil. In 2020, India exported $25.3B in Refined Petroleum, making it the 5th largest exporter of Refined Petroleum in the world. In the same year, Refined Petroleum was the 1st most exported product in India (https://oec.world/en/profile/bilater...m/reporter/ind). They are, like the PRC, deeply appreciative of the cheap Russian oil imports from which they can profit.

Given that Russia, China and India comprise 3/5ths of the BRICS countries, their stance on sanctions is to be expected.

"Declaring an intention to join BRICS'" is not the same as actually being admitted to the grouping. For example, whether Argentina does join the BRICS group will depend on the attitude of Brazil (https://www.financialexpress.com/def...brics/2570793/). Argentina’s possible accession to the BRICS has been on the table for more than a decade but "Beyond the invitation received by Argentina from China, I do not see the incorporation as a full member of the BRICS as feasible, because it would break the founding spirit of the bloc of having as representatives the most important emerging countries of each continent”, says the Director of the Sino-Argentine Observatory, Patricio Giusto" (https://www.financialexpress.com/def...brics/2570793/, June 23, 2022 6:33:59 pm). The same logic would apply to the accession of the UAE, given that it is not one of the most important emerging countries in Asia.

[Moses]

Given that Russia, China and India comprise 3/5ths of the BRICS countries, their stance on sanctions is to be expected.

Whatever. Sanctions are supported only by 20% of countries in World. It is not possible to exclude Russia from World economic. These who think opposite should enjoy inflation in their respective countries because of stupid political decisions of their governments.

All does sanctions now - increasing polarization of the World - East and West.

[Dragonman]

19 countries participated in BRICS meeting at past Friday, one of them - Thailand

7230ad041ca4636fd6d14762590847bf_XL.jpg

BRICS is an acronym for the grouping of the world's leading emerging market economies, namely Brazil, Russia, India, China and South Africa. Despite the membership of both Russia and China, the BRICS mechanism aims to promote peace, security, development and cooperation (https://www.business-standard.com/ar...2300037_1.html).

The meeting to which you refer was a meeting of what is known as "BRICS Plus." It was a virtual conference held as part of the main meeting, with ministers from countries such as the UAE, Saudi Arabia, Egypt, Kazakhstan, Indonesia, Argentina, Nigeria, Senegal, and Thailand, etc. (https://brics-plus.com/). BRICS Plus countries are not members of BRICS. The BRICS Plus website shows a map of the world with the five BRICS member countries in black and the rest of the world's countries in red, along with the words BRICS+186 COUNTRIES.

[Dragonman]

Whatever. Sanctions are supported only by 20% of countries in World. It is not possible to exclude Russia from World economic. These who think opposite should enjoy inflation in their respective countries because of stupid political decisions of their governments.

All does sanctions now - increasing polarization of the World - East and West.

I have addressed the issue of 20% of the world's countries supporting sanctions in an earlier posting and won't repeat my comments here.

TASS, on 23 June, 2022, headlined a report on the Russian situation as "Russia reports weekly deflation of 0.12%. In annual terms, inflation as of June 17, reached 16.42%" (https://tass.com/economy/1470033). The 16.42% figure was against 16.69% a week earlier.

In May 2022, the inflation rate in Russia reached 17.1% compared to the same month of the previous year. This figure marked a decrease from April 2022, when it stood at 17.8% (https://www.statista.com/statistics/...ate-in-russia/).

The OECD has projected an inflation rate of nearly 9% for its 38 member countries, according to William Horobin of Bloomberg (8 June 2022; https://www.aljazeera.com/economy/20...-on-global-eco).

In contrast, the annual inflation rate of Taiwan rose to 3.39% in May of this year from 3.38% in the previous month, the highest inflation rate since August of 2012. On a seasonally adjusted monthly basis, however, consumer prices rose 0.32%, slowing from a 0.39% advance in the previous month (Directorate-General of Budget, Accounting and Statistics, Taiwan; https://tradingeconomics.com/taiwan/inflation-cpi).

In an earlier posting, I referred to a view of the long-term Russian economy by the CEO of Sberbank, who forecast long-term deflation for the Russian economy as a result of sanctions. A report on Interfax on 17 Jun 2022 (https://interfax.com/newsroom/top-stories/80383/) was headlined "CBR sees no risks of deflation, Econ Ministry categorically disagrees: Russia already 'slipping' into it." In the long-term, deflation creates higher rates of unemployment and can eventually cause consumers to default on their debt obligations. The last time the world experienced an entrenched period of deflation that lasted for many years was the Great Depression.

So, according to Russia's own government ministries, Russia is currently experiencing higher inflation than OECD countries might expect, plus the prospect of prolonged deflation.

Perhaps you should consider this when reading that "These who think opposite should enjoy inflation in their respective countries because of stupid political decisions of their governments."

[Moses]

So, according to Russia's own government ministries, Russia is currently experiencing higher inflation than OECD countries might expect, plus the prospect of prolonged deflation.

Perhaps you should consider this when reading that "These who think opposite should enjoy inflation in their respective countries because of stupid political decisions of their governments."

Correct. Deflation for Russia means prices are going lower and that is good for people. And nobody cares here about unemployment rate since for many not years but centuries Russia has deficit of workforce. It is because of territory size. Even at most critical crisis like it was in 2008/2009 here never been unemployment rate higher than 9% - and this number was so high only because some cities are here "monocity" - i.e. city with one huge manufacturing plant where all citizens are working, at time of crisis unemployment rate in such cities may be even 20%. Typical unemployment rate in Moscow is around -2% (yes, minus).

Speaking about "higher inflation than OECD", we here know for what we are "paying" - for Russians in Ukraine, for safety of our relatives, for Crimea as a "whole Russia" resort, for elimination of Nazi, for additional territories which may join Russia. Also, crisis 2004, 2008, Crimean crisis 2014 were fixed quickly by Russian Central bank and govt within 1 year, so we know what to expect, we see already ruble is 25% stronger than year ago, import is cheaper 25% than year ago.

For what pay citizens of Western countries after stupid political decisions of their governments?