The graph at the top of this post is from Joe Wallace and Anna Hirtenstein’s report at the Wall Street Journal. It pretty much says it all but note the upper right hand corner. The TL;DR version is that increases in South Asian and Middle Eastern imports are compensating for decreases in U. S. and European imports:
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.
The country exported 7.4 million barrels of crude and products such as diesel and gasoline each day in July, according to the International Energy Agency, down only about 600,000 barrels a day since the start of the year.
I presume that the increase in the price of oil means that the Russian can offer oil to Indian, Egyptian, etc. customers at a discount from market price.
If our strategy is to starve the Russian economy, it’s not working. It is, however, making the Europeans very nervous as winter draws near.
I thought the strategy was to make everyone happy.
American, Europeans and the Japanese get to say they aren’t funding Russia (directly).
The Russians get their money.
The middleman make a profit.
The weird thing is the current state of affairs incentivizes a whole bunch of countries to keep the conflict on a simmering boil. WSJ had stories in the last month on India, China and the Middle East all acting as middle-man in selling Russia-sourced fossil fuels.
I talked to my brother in Germany this week. He tells me there is a lot off anger about energy prices and fear about what will happen in the winter. Most of the anger is directed at energy companies who, in a familiar story, are perceived as exploiting the situation for their own profit.
He’s coming to visit in November with his family. I’ve told him he’s welcome to stay if things turn to shit.
Yes, they are cutting deals left and right that give the Global South cheap energy and Russia huge profits.
It is not possible to starve the Russian economy. They have the largest natural resource base in the world by a huge margin. They are number one or two in everything. Their industrial base is at least two-thirds the size of ours, and it is nearly autarkic. They produce everything they need incountry. Their total economy, including services is 40 to 50% of ours. They have the most modern, high tech military in the world. Their military naval construction capacity exceeds ours, and their commercial ship building capacity is third or fourth in the world, competing with Japan. We have zero commercial ship building capacity. (China and South Korea dwarf both.) They routinely build ships of 70,000 to 100,00 tonnes. They have a space program They still build nuclear reactors. The US EU hasn’t done so for years.
Combined with their ally China they dwarf us in nearly every category.
Did I mention they are winning in Ukraine?
Did I mention their military is honest, competent, and loyal?
Learn Russian, and convert to Russian Orthodoxy. At least get your children to the point they can emigrate to Russia, the Helm’s Deep of Western civilization and Christianity.
Europe will die this winter, literally.
“If our strategy is to starve the Russian economy, it’s not working. It is, however, making the Europeans very nervous as winter draws near.”
LOL Who in their right mind thought this would harm the guys with energy resources? Industry, food and prosperity run on energy. The ACE card.
Democrats, progressives, Euro progressives, whatever. Damned fool idiots to strategically misposition the West over Hysterical Green Crap. We have two here. A doc and Ho Chi Min.
The evidence and repercussions of lefty policies are coming home to roost. I’d say WTFU, but it seems a useless endeavor. Ideology trumps rationality.
They have also have inflation twice as bad as we have and IIRC food prices have been hit especially hard. They cant manufacture higher level electronics and other stuff so they will suffer some. Exports highly reliant upon extraction they will always be dependent upon other economies doing well. Sure you saw the recent report on CHna slowing down who would hurt them.
Steve
And yet Russian oil company executives are being thrown out windows.
Presumably to encourage the others.
The G7 is doubling down. They will now cap the price of Russian oil at $60.
We’ll find out if price caps work better here than in other situations.
One note — Putin with one decision has forcibly reoriented Russia towards East and South as much as Peter I oriented Russia West. An ironic contrast to America’s attempt to pivot to Asia for 15 years.