Western price cap on Russian oil likely to be another spectacular failure
By Ahmed Adel | December 6, 2022
The price cap imposed by the West on oil from Russia will actually have negative consequences in the long term as it once again reaffirmed to the international community that Western-centric banking and shipping insurance schemes cannot be trusted as reliable partners.
Western oil sanctions went into effect on December 5, with the European Union stopping all shipments of Russian oil arriving by sea. In addition, the EU, as well as G7 countries and Australia, imposed a limit on the price of oil transported by sea at $60/barrel. The West expects that this will cripple the Russian economy and force Moscow to end its special military operation in Ukraine.
However, this will spectacularly fail.
Sanctions have not instigated an end to the military operation, and in fact they have forced financial mechanisms independent of western institutions to be established. Although the world economic system was already slowly heading towards de-Dollarisation, the anti-Russia sanctions have only sped up the process as important economic players like China, India and Egypt have found methods to bypass western sanctions.
It is recalled that Russia had previously introduced the Mir card system as an alternative to Western financial systems, despite there being a lot of scepticism about it. Now, Mir is being adopted all over the world, and the same can certainly be done in the shipping and shipping insurance industry.
The imposition of an oil price cap has made non-Western countries think about how to break free from Western payment systems and shipping channels. Many countries are already pre-emptively establishing these mechanisms to avoid the same teething problems that Russia has experienced since February 2022.
Washington warned the EU on December 1 that the $52 cited recently for Urals crude oil may not reflect the overall level at which Russian oil has been trading. An unnamed US official has said that Urals has been trading at a $17-$23 discount to crude, which would make it higher than the $52 cited by some media. It is for this reason that the EU set the oil price cap $8 above that cited figure.
For their part, Poland, Estonia, and Lithuania have all voiced their opinion that the price cap on Russian crude oil insured and shipped by Western companies should be set at Russia’s production cost – $20-$30 per barrel. Those levels were dismissed as having very little chance of being supported by other EU members.
The introduction of a price cap on Russian seaborne oil at $60 per barrel is already a risky strategy to begin with and has uncertain results. Therefore, the Polish-Baltic proposal was never going to be approved. Oil market participants were already fearing a $60 cap to begin with, forcing Biden administration officials trying to reassure that the newly agreed cap will not lead to supply disruptions and volatility in the price after it went into effect.
None-the-less, experts fear that “over-compliance” on the restrictions could affect pricing.
“One of the big potential issues is going to be over-compliance, intermediaries deciding that the risk is too great and not engaging,” said Adam M. Smith, a partner at Gibson, Dunn and Crutcher and a former adviser at Treasury’s Office of Foreign Assets Control, which oversees sanctions. “Banks have historically been very risk-averse — as they should be — in the sanctions space and I think over-compliance in that context can be expected.”
Due to the price cap, many countries may stop any action for a while so that they can analyse all the risks, including decisions which could lead to sanctions from Western countries.
“That’s a real risk,” said Hunter Kornfeind, an oil market analyst at Rapidan Energy Group. “There could be a multi-week lull when some buyers are reluctant to move barrels as they wait and see. It’s not going to be like the whole trade shuts down, but there could be some who take a step back.”
Russian Deputy Prime Minister Alexander Novak pointed out that Russia will not export oil to countries that set price caps. According to him, such restrictions mean that by interfering with the market, Moscow will only interact with buyers willing to work under normal market conditions.
For his part, Russian President Vladimir Putin has stated that Moscow will not deliver anything abroad if it is against its interests. He warned that the introduction of oil price caps could have “grave consequences for global energy markets.”
Although the full impact of what the price cap is not yet known, the attempts to further financially and economically isolate Russia are likely to be another spectacular failure.
Ahmed Adel is a Cairo-based geopolitics and political economy researcher.
US, EU Reportedly Lose Track of $200 Billion in ‘Frozen’ Russian Funds
Samizdat – 06.12.2022
Western countries froze a huge chunk of the Russian Central Bank’s emergency reserve cushion in February in a bid to punish Moscow for its military operation in Ukraine. Officials in Washington and Brussels have since vacillated as to whether these funds can be seized outright and given to Kiev as “reparations.”
The United States and its European allies are having trouble actually locating two thirds or more of the Russian assets they froze earlier this year “because they do not know where exactly they are,” Charles Lichfield, a senior finance expert at the Atlantic Council, has indicated.
Speaking to Estonian media, Lichfield, the deputy director of the Washington-based think tank’s GeoEconomics Center, and expert on Russia’s central banking system, said Western countries actually seized closer to $80-$100 billion, not $300 billion, as has been widely reported.
Lichfield explained that the “freeze” on Russian assets obligated foreign banks not to allow for their transfer back to Russia, on penalty of losing their ability to transact in dollars and euros. However, some Asian and African banks may not have felt the need to respond to requests for information from Western authorities regarding transactions involving Russia, he said.
The US Treasury triumphantly announced in June that Washington and its allies had blocked or frozen some $300 billion in Russian state assets, plus $30 billion worth of assets of sanctioned individuals, including Russian tycoons.
Last week, European Commission chief Ursula von der Leyen proposed creating a special structure to manage the assets and “invest them.”
However, EU officials specified to media that Brussels couldn’t simply seize the Russian assets to use them in Ukraine because the bloc adheres to the principle of state immunity.
In the US, officials have expressed similar hesitation. Last month, lawmakers proposed a provision in the 2023 National Defense Authorization Act bill to allow for the transfer Russian assets to Ukraine, but the idea was met with opposition amid fears that the idea had not been “fully litigated.”
Russian officials have slammed the asset freeze as a form of “theft.”
The West’s actions have also prompted Chinese regulators and banks to brainstorm ways to keep their own assets stashed abroad safe if the US and its allies move against them in the way they have against Russia.
Russia’s frozen assets were previously estimated to constitute close to half of the country’s $640 billion reserve cushion. According to the Central Bank’s year-end report for 2021, the largest portion of its foreign currency and gold was stored in China (16.8 percent), followed by France (9.9 percent), Japan (9.3 percent), the United States (6.4 percent) Britain (5.1 percent), Canada (2.7 percent) and Australia (2.5 percent), with more than 51 percent thus located in states which have slapped sanctions on Moscow.
Parent groups revolt over French power outage plan
RT | December 3, 2022
Closing schools to combat the energy crisis in France is unacceptable, French parents’ groups announced this week, after the government instructed regional authorities to brace for potential localized power outages.
Schools were not prioritized by planners in the event of limits to the energy supply network during the winter.
“Parents do not want school closures. We have seen the impact of closures on students,” Valerie Desouche, Deputy Secretary of the National Union of Autonomous Parents’ Associations (UNAAPE), told BFM TV on Thursday, referring to the lockdowns during the Covid-19 pandemic.
She added that it was “unthinkable” not to treat schools as a priority during the energy crisis.
“We want schools to be open at all costs,” Desouche said. “We can’t put children’s education second.”
Vice President of the Federation of Parents for Public Education (PEEP) Laurent Zameczkowski also urged that schools be prioritized, saying “During the health crisis, we did everything to keep the schools open, and now the energy crisis will be the reason [to shut them down]?”
The group released a statement on Wednesday, arguing that “energy austerity cannot be done at the expense of the health and the future of students.”
According to France Info radio, the government plan entails potential outages between 8am and 1pm and between 6pm and 8pm that could last for up to two hours. Priority sites include hospitals, police stations and fire stations, but not schools, which could be forced to cancel some lessons.
“We are not saying that there are going to be power cuts, but that it is not impossible,” government spokesman Olivier Veran said on Thursday. France, together with many other European countries, has been looking for ways to conserve energy and been bracing for possible outages as Western states try to curb Russian oil and gas exports as part of sanctions over the Ukraine conflict.
OSCE nothing more than a branch of NATO
By Ahmed Adel | December 2, 2022
The West is attempting to turn the Organization for Security and Co-operation in Europe (OSCE) into a subsidiary organisation of NATO, which is paradoxical because it is meant to be concentrated on peacebuilding, unlike the Atlantic Alliance which fosters tensions to justify its existence in a post-Soviet world. It is for this reason, among others, why Poland refused to grant a visa to Russian Foreign Minister Sergei Lavrov, thus barring him from attending the OSCE meeting held on December 1 and 2 in Lodz.
Poland claims it refused to grant Lavrov a visa because he is on the list of people who have been sanctioned. However, this does not explain why many from the Russian delegation were also denied visas despite not being on a sanctions list.
This weak excuse is to justify Warsaw’s consistent policy of provocation against Moscow, especially in the context of the current war in Ukraine. Poland and the West are hoping that by humiliating Russia, the country will withdraw from the OSCE. The West are desperate for Russia to withdraw so as to be able to implement and impose whatever it wants on the OSCE.
It is recalled that Moscow very effectively blocked the 2022 OSCE budget. Without a Russian withdrawal, the West will not be able to put the OSCE under its complete control, something that should be avoided as it would undermine the very foundation of the organisation – serving as a platform where Western and Eastern Europe could discuss and resolve issues.
Rather, the OSCE today has turned into a political tool of the West and effectively has no meaning or role anymore. With the OSCE descending into childlike behaviour by barring Russian delegates and top diplomats, it does seem that the organisation has become redundant as it is appearing more like a Euro-focussed political wing of NATO.
The OSCE meeting in Poland was essentially a two-day event for speakers to bash Russia.
None-the-less, Moscow is unlikely to be deterred by these provocations and will remain committed to its responsibilities as an OSCE member. This is likely to ensure that paths of reconciliation are always open despite Western attempts to close them.
The Kremlin might also believe that the OSCE’s uptick in provocations is because Poland is the current chairman. Russian policymakers might also believe that tensions will relax when North Macedonia takes over the chairmanship in 2023. It could be for this reason that Lavrov called out Poland by highlighting that its “anti-chairmanship” was taking the OSCE to its “most miserable place ever in this organisation’s history.”
It can be argued though that the OSCE has always been geopolitically against Moscow. It is recalled that the American establishment boasted that they had inserted a Trojan horse into the Eastern Bloc with the signing of the Helsinki Accords in 1975, the roots of today’s OSCE.
The Helsinki Accords stresses the respect for human rights and equal rights, a result of Western insistence because the Soviets were instead mostly interested in finalising Germany’s borders. The West is not interested in human rights though, and rather their main interest is ideological, economic and military hegemony all over the world, with human rights only being weaponised as one vehicle of achieving this goal.
Effectively, it can be argued that the OSCE was born as a trap for Moscow. When “security”, “cooperation” and “Europe” are in the name of the OSCE but it turns into an organisation completely dominated by promoting US interests, the argument is made that the organisation now resembles something like a branch of NATO.
Playing its own role in serving Western interests, Ukraine continues to call for Russia to be kicked out of the OSCE entirely, with Foreign Minister Dmytro Kuleba claiming in a tweet that the “OSCE is on a highway to hell because Russia abuses its rules and principles.”
“Everything has been tried in regards to Russia: to please, to appease, to be nice, to be neutral, to engage, not to call a spade a spade. The bottom line: It would be better for OSCE to carry on without Russia,” he added.
However, this is once again an example of Kiev’s classic projection of portraying their own illiberal values as that of Russia. In fact, it is Europe’s own unwillingness to “call a spade a spade,” such as whitewashing Ukraine’s fascistic policies and pretending it was a Western-styled liberal country, which ultimately led to war.
Proving that the OSCE is now nothing more than a branch of NATO, US Under Secretary of State Victoria Nuland said, when speaking in Lodz, that Russia had “failed demonstrably to break the OSCE.”
If the OSCE is anything other than a branch of NATO, it must be questioned why the US Under Secretary of State was an honoured guest at a Europe-focussed and Europe-based organisation, which was initially established to connect Western and Eastern Europe together, while Russia’s top diplomat and other officials were barred.
Ahmed Adel is a Cairo-based geopolitics and political economy researcher.
Trump Says Justice Department is ‘Corrupt’
Samizdat – 27.11.2022
WASHINGTON – Former US President Donald Trump has accused the US Department of Justice (DOJ) of corruption and of making false allegations against him.
“The ‘Justice’ Department is CORRUPT. Offered Christopher Steele $1,000,000 to lie about me, paid Russian a fortune to ‘get Trump,’ told Facebook not to mention the Hunter Biden Laptop before the Election, ‘it was Russian disinformation,’ when they KNEW it was not,” Trump wrote on his Truth Social platform on Sunday.
Last month, Trump said that the decision by a US jury to acquit Russian national Igor Danchenko on charges of lying to the US Federal Bureau of Investigation (FBI) regarding the Trump-Russia collusion probe shows the disgraceful nature of the US justice system.
The case against Danchenko started last November, when he pleaded not guilty to charges of lying to the FBI about his role in the discredited “Steele Dossier” used to allege collusion between Trump and the Kremlin during the 2018 US presidential election.
The prosecution contended that Danchenko lied to the authorities about the sources of information given to former British spy Christopher Steele for the dossier on purported contacts between Trump and Russian officials. The indictment against Danchenko accused him of fabricating the information.
A Special Counsel investigation did not find any proof of collusion between Trump and Russia.
Senior FBI intelligence analyst Brian Auten testified in court in October that the FBI had offered $1 million to Steele to provide evidence to back his allegations.
Milan Prosecutor Approves Extradition of Russian Governor’s Son to US
Samizdat – 26.11.2022
ROME – Milan prosecutor’s office submitted to the court a positive decision on the extradition of the son of Russian Krasnoyarsk Territory’s governor, Artem Uss, to the United States, the Il Giorno newspaper reported on Friday.
Artem Uss was arrested in Italy on a US warrant on October 17. Alongside four other Russian citizens, he was accused of money laundering and evasion of sanctions. The 40-year-old has denied any wrongdoings and rejected voluntary extradition to the United States.
According to the media, Uss during Friday’s hearing stated that he had never been to New York and his last visit to the US had occurred 25 years ago, when he was 14 years old, adding that information provided by the US Department of Justice was false.
The prosecutor’s office also reportedly rejected appeal of Uss’s lawyers to put him under house arrest in Milan.
Uss’s lawyer Vinicio Nardo refused to give Sputnik his comments on the case.
On October 28, Moscow court issued a warrant in absentia for the arrest of Uss for money laundering and put him on the Russian interior ministry’s register of wanted persons.
Western-led ‘international’ organizations have no future
By Drago Bosnic | November 21, 2022
On November 18, the Polish foreign ministry stated that it will not allow a Russian delegation to attend the OSCE (Organization for Security and Co-operation in Europe) summit next month. OSCE is one of the most prominent regional security organizations in the world and its stated goal is to establish a viable security framework that would prevent conflicts in Europe and beyond. However, the reality is a bit different from the organization’s publicly altruistic intentions. The Associated Press asked the Polish foreign ministry if Russia would be denied entry to the OSCE’s December conference and Spokesman Lukasz Jasina responded that it would.
Russia, one of the most important members of the organization, as well as a key player in European security, is being denied entry due to politics. The very fact that this is even possible calls into question the purpose of OSCE or any similar organization dominated by the political West. This year, Poland is chairing the 57-nation organization, with the annual ministerial conference scheduled to be held in the city of Lodz on December 1-2. When asked if Russian Foreign Minister Sergei Lavrov would be attending the conference, Jasina responded, “We are not expecting a visit by minister Lavrov to Lodz.”
“Delegations should be adjusted to the current EU regulations and not include persons that are sanctioned by the European Union,” according to an announcement by the Polish OSCE Chairmanship. “…a number of Russian nationals were added to the list of sanctioned individuals, including Minister Lavrov,” it added.
OSCE should be excluded from EU regulations, as the very purpose of the organization is to be a forum for security dialogue between European and other countries and prevent any escalation or spillover of local conflicts. By denying Russia the opportunity to attend the December 1-2 confidence in Lodz, precisely this security dialogue is being prevented, eliminating the need for OSCE altogether. However, in recent months, certain events have led many to believe the organization is hardly a neutral one, as its actions have often been used to aid one side in a particular conflict.
For instance, the war in Donbass, which has been going on for nearly a decade, and which has taken the lives of around 15,000 local men, women and children by early 2022, pushed the role of OSCE into more of a gray area. Its mission in Donbass, which the organization itself claims to be “arms control, promotion of human rights, early warning, conflict prevention, crisis management” failed back in April. In fact, it has continually been failing for over 8 years, as the Kiev regime’s shelling of the people of Donbass never stopped. Worse yet, it turned out that OSCE didn’t just fail to prevent the conflict, but it might have even done certain things to facilitate it.
In a rather disturbing revelation by war correspondent Alexander Sladkov, the organization was using high-resolution cameras, originally placed to conduct ceasefire monitoring, to relay DNR and LNR positions to the Kiev regime forces which then used the provided data to target or correct their artillery fire. The OSCE mission provided their observation data, captured by cameras and other monitoring equipment they installed over the years. In essence, OSCE was spying and effectively waging war on the side of the Neo-Nazi junta. To make matters worse, the provided monitoring data also included the movement of regular Russian military personnel in the early days of the special military operation.
The report was heavily censored by the mainstream propaganda machine, making it virtually impossible for most people in Europe to see how a supposedly impartial international organization effectively became a party to the conflict which could not only undermine security in Europe, but the world as well. To make matters worse, these issues aren’t only limited to the OSCE, but many other apparently “international” organizations, including the United Nations. Back in February, twelve Russian UN diplomats were ordered to leave the US after being accused of being “intelligence operatives engaged in espionage.” The same pretext could be used to expel virtually anyone deemed a “security challenge” by the US, which would affect entire nations or groups of nations the ability to defend their interests at the UN.
The latest G20 summit held in Bali was also a clear indicator that the world is moving away from Western-led “international” organizations. While most members were trying to focus on actual global issues, the G7 members within the G20 were effectively trying to hijack the summit and make it entirely Ukraine-focused, which failed for the most part. All of this is happening at a time when BRICS is expanding across the world, with approximately a dozen major nations showing direct interest in joining the organization. The BRICS+ framework allows countries to maintain their sovereignty while becoming members of the world’s largest truly international organization.
Drago Bosnic is an independent geopolitical and military analyst.
Hungary reveals cost of sanctions on Russia
RT | November 18, 2022
The Hungarian economy is losing billions of dollars due to Western sanctions on Russia, Prime Minister Viktor Orban said on Friday.
“The policy of sanctions,” which has led to a drastic surge in energy prices across the EU, will cost his country’s economy $10 billion a year, he stated.
Orban explained that the pressure on the Hungarian budget will result in cuts to social spending, adding that from this perspective, Hungary’s stance against the sanctions “doesn’t seem to be excessive.”
Earlier this week, speaking with local media, he said that “the policy of sanctions is a way to war,” and stressed that the main goal for Budapest is to avoid a Europe-wide recession.
The Hungarian leader is a vocal critic of the EU’s approach towards the conflict in Ukraine, and has repeatedly said that the sanctions imposed on Moscow are hurting the EU more than they hurt Russia.
Hungary’s economy heavily relies on Russian energy, and the government has resisted EU plans to completely ban oil and gas imports from the country. After tense negotiations, Budapest received several exemptions from the bloc-wide restrictions on purchases of Russian fossil fuels.
The press are completely crazy and they are going to get us all killed
The heedless jingoistic war rhetoric of the German media
eugyppius: a plague chronicle | November 16, 2022
Yesterday, at around 3.40 in the afternoon, a rocket exploded in the Polish village of Przewodów. Two people died. Ukrainian president Volodymyr Zelensky immediately blamed Russia, later going so far as to characterise the alleged attack as a message from Putin to the G20 summit. Then the Associated Press reported that they had heard from “a senior U.S. intelligence official” claiming that “Russian missiles” were responsible for the attack, and thereafter the worst German journalistic actors embarked upon an evening of dark speculation about the proper NATO response to a Russian attack on Poland. Higher brow outlets, like ZDF, merely ran inflammatory headlines about Russian rockets, with the crucial information – that the rockets were Russian-made, while their immediate origins were unclear – buried in the body of the piece. Bild, on the other hand, went all-in, with this incredible rant from chief editor Johannes Boie:
The Russian army has bombed Poland, the AP news agency reports, citing a US intelligence official.
Two people are dead, murdered!
Accidental or not – this is an armed attack on NATO territory!
The two most likely possibilities are, first, that Putin’s soldiers hit Poland by mistake. They are often poorly trained and drunk. In this case, the tyrant must apologise formally, beg for forgiveness on bended knee, so to speak, while armed NATO fighter jets fly around his country.
He is not used to that. When his troops shot down a passenger plane in 2014, killing 298 people, there were no consequences.
Or alternatively, Putin attacked NATO on purpose. In this case, the alliance must hit back hard, because NATO cannot simply let its territory be bombed or let its citizens die in a hail of Russian bombs. Putin will only respond to force.
Should the unlikely third possibility be true, that the explosion was the result of Ukrainian air defence, then – indeed – the Russians are also to blame. For they are playing with fire on the NATO border.
The mad tyrant is bringing us ever closer to World War 3.
This morning, Boie’s paper carried a front-page headline screaming “Putin fires rockets at Poland.”
Now that both Poland and the Americans have clarified that the explosion was likely caused by a stray Ukrainian air defence missile, the story has disappeared entirely from the top of Bild.de. I guess they’re not so interested in extracting apologies from a kneeling Zelensky. Meanwhile, that other major Axel Springer organ, Welt, are running damage-control pieces, like this one from obnoxious mediocrity Clemens Wergin, claiming that “Without Russia’s war crimes, it never would’ve come to the accident in Poland.”
There are a few observations to make about this little storm in a teacup. The first is that, despite appearances, not all of the American government and not all of NATO have completely lost their minds. Scholz, Macron and others called for caution and avoided open statements of blame, and today we’ve seen a clearly coordinated campaign to shift direct responsibility away from Russia. The second is that there are, however, plenty of powerful people, in NATO and elsewhere, who are indeed totally, stratospherically crazy. These include very probably that anonymous senior intelligence official who spoke to the Associated Press, and also a great part of the media, who have made a habit out of printing reheated Ukrainian press releases as news, and who have never quite recovered their senses since they lost them in the great Corona panic.
It must be fun to rage about the tyrannical evils of Russia and the democratic virtues of the NATO countries, most of which have spent the last three years denying their allegedly free citizens all manner of basic rights and freedoms. It’s also incredibly, incredibly dangerous. A direct NATO attack on Russia would be a catastrophe for Europe. Maybe somebody should try to rein in the press and wean them from their crisis addiction before they happen upon another pretence to invoke Article 5. There’s no guarantee the next one will be clarified so quickly.
RT sends request to UN over rape allegations
RT | November 15, 2022
RT has reached out to the UN special representative on sexual violence, Pramila Patten, to request a correction or retraction of a statement in which she accused the Russian Armed Forces of employing a deliberate “rape strategy” as part of its military campaign in Ukraine. Patten made the claim in October in an interview with the AFP only to admit she did not have any solid evidence to substantiate it a month later.
“The allegations Ms. Patten has brought forward are of a very serious nature, which have the power to shape public discourse around the events in Ukraine,” RT said in a statement, adding that her words were then “widely distributed amongst media outlets and social media, to create a misleading, if not entirely false, narrative.”
In October, Patten told the AFP that when “you hear women testify about Russian soldiers equipped with Viagra, it’s clearly a military strategy.” Less than a month later, the UN official admitted that her words were based solely on some unverified reports disclosed to her in the presence of two Ukrainian officials. Speaking to Russian prank artists Vladimir Kuznetsov and Alexey Stolyarov, also known as Vovan and Lexus, she recently said that it was “not her job” to conduct investigations anyway.
No evidence has since been provided to corroborate these claims. In its statement, RT asked Patten whether she “intends to issue a retraction – or at least a correction – of her original, misleading statement.”
“As a person holding such a public role with enormous responsibility, one would hope that Ms Patten seek to provide a true, verified testimony of her organization’s work,” the statement added.
RT also asked Patten’s office to provide some evidence to support her allegations in case the UN special representative believes a retraction would be “improper.” Neither Patten nor her office has commented on the request so far.
Moscow has previously denied the accusations made by Patten. Russian Foreign Ministry spokeswoman Maria Zakharova blasted the UN official’s claims as going “beyond the reach of reason.”
Washington Attempts To Bully India Into Cutting Ties With Russia
By Conor Gallagher | naked capitalism | November 13, 2022
For months the US has repeatedly tried to coerce India into cutting ties with Russia, thereby abandoning its national interests. New Delhi, however, continues to spurn American attempts to subject its economy to Washington’s dictates.
The latest fuss concerns the G7 price cap on Russian oil and EU and UK bans on shipping and related services for Russian crude. India continues to have no interest in joining the US-led initiative as it gets a steep discount on oil from Russia and wants to maintain the relationship with a long-time strategic partner. Indian Foreign Affairs Minister Subrahmanyam Jaishankar was just in Moscow on Nov. 8 to discuss continued sales of oil. From the South China Morning Post :
India’s foreign minister hailed New Delhi’s “strong and steady” relationship with Moscow on Tuesday, during his first visit there since Russia invaded Ukraine in February.
Subrahmanyam Jaishankar also declared India’s intention to continue to buy Russian oil, again disregarding the US appeal to allies and partners to isolate Russia from the global markets.
The G-7 plans are likely to send oil prices higher (despite US Treasury Secretary Janet Yellen claiming the opposite) and reduce tanker availability, both of which will threaten India’s energy security and hurt its economy as India is the third-largest consumer and importer of oil worldwide.
Russia has said it will not sell to any countries that participate in the price cap scheme, and Jaishankar has repeatedly stated that India cannot afford to buy oil at high prices – at least not without undermining its economic growth, which is forecast to be 6.1 percent in 2023, the fastest-growing major economy in the world. According to Energy Intelligence :
Russia emerged as India’s top crude supplier in October, shipping over 900,000 barrels per day or roughly a fifth of India’s demand. The two countries’ biggest concern is ensuring that Russian oil continues to flow after the Dec. 5 EU and UK bans and related G7 price cap.
But despite Jaishankar’s bullish stance in Moscow, India’s state refiners have not placed orders for crude lifting beyond Dec. 5 due to uncertainties about whether shipping and insurance will be available, Energy Intelligence understands. And a recent attempt by an Indian buyer to use the price cap in negotiations with a Russian seller prompted the latter to abandon the deal, market sources said.
The ongoing lack of clarity on the G-7 could be by design. Russian oil exports have already begun to dip, and Bruce Paulsen, a sanctions expert and partner at law firm Seward & Kissel, told American Shipper, “ If guidance on [price cap] compliance doesn’t come soon, some industry players may sit on the sidelines until they can determine that shipments under the price cap are safe.”
The US, in a neat sleight of hand, quit pressuring India to adhere to the price cap, and Yellen now says Washington is “happy” for New Delhi to continue buying as much Russian oil as it wants, including at prices above a G7-imposed price cap. But there are just a few caveats: India wouldn’t be able to use western insurance, finance, or maritime services to transport the oil.
“Russia is going to find it very difficult to continue shipping as much oil as they have done when the EU stops buying Russian oil,” Yellen told Reuters on Friday. “They’re going to be heavily in search of buyers, and many buyers are reliant on Western services.”
More from Energy Intelligence on why this amounts to a de facto price cap:
Indian refiners have the capacity to soak up another 600,000 b/d of Russian crude, provided it outcompetes the staple Mideast grades that are the lifeline of the country’s 5 million b/d refining base. But the availability of shipping and insurance — and payment channels — is key. From Dec. 5, tankers and shipping insurance linked to EU and G7 countries — which dominate oil shipping globally — will be barred from trading Russian crude unless those volumes are sold under the price cap, as yet undetermined.
About 90% of India’s liquids trade is shipped by foreign tankers, presenting challenges, independent energy analyst Narendra Taneja said. Insurance does not appear as problematic, and analysts say that Russian and Chinese firms can handle it.
This could leave Russia reliant on a shadow fleet of older tankers with opaque ownership that do not transact in dollars. According to Freight Waves :
Brokerage Braemar reported that 33 tankers previously handling Iranian or Venezuelan exports have carried Russian exports since April, mostly to China and secondarily to India.
Braemar defined the dark fleet as tankers that have carried Iranian or Venezuelan crude at least once in the past year. It put the current total at 240 tankers, mostly smaller and midsized, with 74% 19 years or older. Eighty of those vessels are very large crude carriers (VLCCs, tankers that carry 2 million barrels) that won’t fit in Russian ports but could be used for ship-to-ship transfers for Russian cargoes.
If the entire dark fleet switched to Russian service and were as efficient as the “mainstream fleet,” it would be more than enough to keep Russian exports flowing, but “vessels engaged in illicit trading are highly inefficient,” Braemar emphasized.
At the same time Washington is pressuring New Delhi to comply with the price cap, it is importing from India more vacuum gasoil, which is mostly used at refineries to produce other products such as gasoline and diesel. From Reuters :
Russia used to be a key VGO supplier to U.S. refiners before the Ukraine war broke out.
“Given that the U.S. is not buying Russian oil, they are looking for any and all alternatives,” said Roslan Khasawneh, senior fuel oil analyst at Vortexa…
U.S. and EU sanctions do not apply to refined products produced from Russian crude exported from a third country as they are not of Russian origin. In India, refiners boosted imports of discounted Russian oil to 793,000 barrels per day between April and October, up from just 38,000 bpd in the same period a year ago, trade data showed.
India joins a list of countries – including Saudi Arabia, Serbia, and Turkey – that are causing heads to explode in Washington for refusing to be bullied into submission.
This all must be coming as a shock in Washington as its Indo-Pacific strategy in recent years has always included a “like-minded” India helping to counter China and do the US’ bidding in southeast Asia. The possibility that India might pursue its own national interests didn’t seem to factor into the strategy.
The tension over the Russian price cap is just the latest in a series of disagreements between New Delhi and Washington. US sanctions on Iran’s oil exports deprive India of cheap Iranian oil, and force it to buy more expensive US energy exports. India is now the largest oil export destination for the US.
Similar to the way Washington is arming Greece and Cyprus in an effort to bully Turkey into breaking off its friendly ties with Russia, the US is doing the same in Pakistan to pressure India. The US has begun to accommodate Pakistan again after the ouster of former Pakistani prime minister Imran Khan, who blames his loss of power in a no-confidence vote on the US.
In September, the U.S. State Department enraged India when it approved a $450 million deal to upgrade Pakistan’s F-16 fleet. Shortly after, the US ambassador to Pakistan created more tension during a visit to the Pakistani-held part of Kashmir, which he called by its Pakistani name instead of the United Nations-approved name “Pakistan-administered Kashmir.”
On Nov. 8 US State Department spokesman Ned Price lectured India on what are in its best interests:
We’ve also been clear that now is not the time for business as usual with Russia, and it’s incumbent on countries around the world to do what they can to lessen those economic ties with Russia. That’s something that’s in the collective interest, but it’s also in the bilateral interest of countries around the world to end and certainly over the course of time to wean their dependence on Russian energy. There have been a number of countries that have learned the hard way of the fact that Russia is not a reliable source of energy. Russia is not a reliable supplier of security assistance. Russia is far from reliable in any realm. So it is not only in the interest of Ukraine, it is not only in the interest of the region, of the collective interests that India decrease its dependence on Russia over time, but it’s also in India’s own bilateral interest, given what we’ve seen from Russia.
We’ll have to wait and see if the Indian people get the message because as of now the opposite is true. India’s Observer Research Foundation released poll results on Nov. 2 that showed that 43 percent of Indians regarded Russia as their country’s most reliable partner, which was far ahead of the US at 27 percent.
Washington would be hard pressed to explain how New Delhi scaling back its economic ties with Russia would be a good thing for India.
Fuelled by a surge in import of oil and fertilizers, India’s bilateral trade with Russia has soared to an all-time high of $18.2 billion over the April-August period of this financial year, according to the latest data available with the Department of Commerce. That makes Russia India’s seventh biggest trading partner — up from its 25th position last year. The US, China, UAE, Saudi Arabia, Iraq, and Indonesia remain ahead of Russia.
India, Iran, and Russia have also spent the past twenty years developing the International North-South Transport Corridor to increase trade between the countries, and it took on increased importance with the western sanctions on Moscow. From The LoadStar :
RZD Logistics, a subsidiary of Russian railway monopoly RZD, has begun regular container train services from Moscow to Iran to serve growing trade with India by transloading.
This is aimed at maximizing use of the alternative International North South Transport Corridor (INSTC), a Central Asia cross-border multimodal freight network helping the two strategic partners work around supply chain challenges created by western sanctions on Russia.
The inland-ocean leg involves an estimated transit time of 35 days, compared with about 40 with previous traditional shipping, according to industry sources.
©Peter Hermes Furian
In much the same way that US heavy-handedness is backfiring elsewhere, the pressure applied on India seems to only be encouraging New Delhi to find a way around the dollar. The Loadstar adds that the Reserve Bank of India is also implementing new regulatory guidelines to help exporters settle shipments in rupees, instead of US dollars that had run into sanctions-related bottlenecks:
The Federation of Indian Export Organizations has also been pressing government leaders to extend the alternative currency method beyond Russian markets.
“While the Russia-Ukraine war is a setback to our exports in the short run, we are looking to increase our exports to Russia once the rupee payment mechanism gets operationalised,” FIEO noted.
While India has been benefitting from the discounted Russian crude, it also wants to maintain good ties with Moscow to avoid pushing Russia closer to China and potentially Pakistan, India’s biggest rivals in Asia.
Pakistan is also now asking the Russian Trade Ministry to introduce a currency swap arrangement to strengthen economic ties between the two countries.
Britain’s Liberal Technocratic Recession
BY NOAH CARL | THE DAILY SCEPTIC | NOVEMBER 13, 2022
On November 3rd, the Bank of England announced that Britain is facing its “longest recession since records began”, with unemployment forecast to nearly double by 2025.
How did we get here?
In most developed economies, recessions happen once or twice a decade (although Australia went without one for 30 years). So in some sense, they’re unavoidable. Yet the scale of the one we’re facing – the longest since records began – suggests some fundamental errors have been made.
The first was lockdown. For more than a year, we spent untold sums of money on daft furlough schemes and boondoggles like ‘Test and Trace’. Meanwhile, we allowed supply chains to break down through trade restrictions and lack of maintenance. We were spending more while producing less – which set us on course for inflation.
The second was letting dozens of oil refineries shut down without building any new ones. Such refineries became unprofitable during the pandemic, and firms didn’t bother to upgrade or replace them due to costly environmental regulations and the uncertainty surrounding ‘Net Zero’.
The third were the reckless sanctions against Russia. Rather than using the threat of sanctions as a bargaining chip, we immediately went pedal to the metal and tried to crush Russia’s economy. This backfired: while we have inflicted some long-term damage, we hamstrung our own economies in the process.
All three of these blunders stem from hubris on the part of liberal technocratic policymakers, who believe there are straightforward ‘solutions’ to problems like pandemics, climate change and interstate conflict. In reality, we’re always faced with trade-offs and unintended consequences.
The British economy is now grappling with general inflation (caused by lockdowns) and rising energy costs (caused by lack of refining capacity and sanctions against Russia).
The severity of these problems is laid bare in the ONS’s Business Insights and Conditions Survey – a fortnightly survey of around 10,000 businesses. Respondents were asked, “Which of the following, if any, will be the main concern for your business in November 2022?” Results are shown below.
Results from the ONS’s Business Insights and Conditions Survey
As you can see, by far the most frequently mentioned concerns were “inflation” and “energy prices”. Only around 7% of businesses mentioned “taxation” as their main concern, demonstrating how ill-conceived was Liz Truss’s economic program. (She thought we could tax-cut our way out of an energy crisis).
Policymakers need to get grips with the fact that not every problem has a liberal technocratic ‘solution’. Paying people not to work, shutting down refineries, and sanctioning other countries may feel good. But that doesn’t mean it’s the right thing to do.
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Jewish Guilt is the Discourse of The Goyim
By Gilad Atzmon | April 24, 2018
For quite some time the British have accepted that British Jewish organizations have hijacked the political discourse. As has happened in other Western countries, the British political establishment has engaged is a relentless rant against antisemitsm. Sometime the focus drifts for a day or two. An alleged ‘Russian nerve gas attack’ provided a 48 hour pause. Occasionally we bomb Arabs in the name of ‘human intervention’ only to realize a day or two later that we have, once again, followed a premeditated foreign agenda. But, somehow, we always return to the antisemitism debate, as if our media and politicians are a herd of flies gravitating to a pile of poop. … continue
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