As the global cleaving begins taking shape based on the new western energy system, the Build Back Better agenda, Russian energy exports are worth a lot more money. As a result, the Russian economy has gained more wealth than before the western sanctions regime was triggered. As noted by the Wall Street Journal:
(Via WSJ) – […] Demand from some of the world’s largest economies has given Russian President Vladimir Putin the upper hand in the energy battle that shadows the war in Ukraine, and has confounded the West’s bid to cripple Russia’s economy with sanctions.
Sales are booming in Russia’s export market, the world’s largest in crude and refined fuels. And new trade arrangements have given Mr. Putin cover to use natural gas exports as an economic weapon against Ukraine’s European allies. Before the war, Russia supplied Europe with 40% of its gas. It has since throttled flows through the Nord Stream pipeline to Germany and other conduits, driving prices higher and putting pressure on European households and businesses.
Oil revenue more than makes up the difference. “Russia is swimming in cash,” said Elina Ribakova, deputy chief economist at the Institute of International Finance. Moscow earned $97 billion from oil and gas sales through July this year, about $74 billion of that from oil, she said.
[…] Russian energy sales have flourished by finding new buyers, new means of payment, new traders and new ways of financing exports, according to oil traders, former Russian industry executives and shipping officials.
“There came a realization that the world needs oil, and nobody’s brave enough to embargo 7.5 million barrels a day of Russian oil and oil products,” said Sergey Vakulenko, an analyst and former Russian energy executive.
After buyers in the U.S., the European Union and their Pacific allies cut back their Russian oil imports, much of it went to nations in Asia that have declined to take sides in the conflict.
An unexpected market has been the Middle East. Exports of Russian fuel oil, a lightly refined version of crude, now go to Saudi Arabia and the United Arab Emirates, often stopping in Egypt en route.
The Russian oil is either burned in Saudi power stations or exported from Fujairah, a U.A.E. port and hot spot for blending Russian and Iranian oils to conceal their provenance. This is oil that before the war was shipped to U.S. refiners.
The Russian imports, purchased at a discount, free state giant Saudi Arabian Oil Co. to export its crude at market prices. “The Saudis are happy to take their oil and sell it rather than burning it,” said Carole Nakhle, chief executive at consulting firm Crystol Energy.
The arrangement adds supply to the global oil market, helping put a lid on prices. “This is a win-win situation for the Russians and even, I would say, for the Europeans and the U.S.,” Ms. Nakhle said. (read more)
