Dennis Price said:Demand for Russian oil is actually dropping. 😅 They're going to have to cut prices just to move it.
What you're saying might apply elsewhere, but it's not quite right here. Oil isn't expensive just because Russia wants it to be. If anything, they'd drop the price in a heartbeat if it meant keeping the West interested. Prices are high because a huge chunk of buyers are intentionally looking elsewhere.
I'm struggling to see where these "alternative sources" are coming from, especially when we're seeing a deficit of roughly one million barrels per day right now, even with Russia delivering its contracted amounts to the market.
It feels like Joe Biden has been running himself ragged trying to convince Middle Eastern leaders and Nicolás Maduro to ramp up production, but they aren't biting.
The price hikes are being driven by speculators who jump at every little bit of volatility to push rates higher.
Meanwhile, oil continues to flow through long-term contracts at agreed-upon volumes and specific price points dictated by those very agreements.
I remember back when Stern was heading up ExxonMobil, delivery contracts were typically structured for five years, with annual meetings held to adjust terms if circumstances shifted.
And please, don't go trying to label Stern a communist just because he understood how supply chains work.🙄