analogbear5 said:Also, let's not forget the most critical link in this whole chain that people on this forum always seem to overlook: someone actually has to move the oil.
Basically, Russia sends its oil to Europe using Aframax and Suezmax tankers with capacities up to 600,000 barrels—that's about a week's trip there and a week back.
Those tankers just aren't efficient enough for long-haul voyages. To get oil over to China, you'd need VLCC tankers—they have over 70 of them, but since those massive ships can't fit through the Suez, you'd be looking at a month-long trip each way. Plus, all 800-ish VLCCs currently in existence are already running at full tilt.
Besides, if the Chinese decide to buy Russian oil—which would make shipping costs skyrocket—it would free up a massive amount of Arab oil that could head to Europe instead of China.
Ever since this whole invasion kicked off, there’s been this non-stop, relentless noise about the Russian oil business, and honestly, we've heard it all before... it's pretty much been chewed over a thousand times now, but it remains an undeniable fact that they are looking at some massive, uphill struggles if a full-scale embargo on their oil exports actually gets put into motion...
I haven't really seen much discussion or even any real debate popping up anywhere regarding what all of this actually implies for our own country...
When you talk about that portion of oil moving via tankers, you're suggesting it's "only" inefficient, implying it’s still a viable option for now... but we really have to consider the segment being moved through pipelines, because rerouting that kind of infrastructure to a different market is just completely impossible within any reasonable timeframe. It's also worth remembering that there's another side to this equation involving derivatives, so it isn't just crude oil sitting on the table... there are so many other moving parts at play here...
What I’m really sitting here wondering is whether this same logic applies when you flip the whole thing around... and if it doesn't, then how exactly are we prepared to handle the fallout?...
Let’s start by looking at the pipeline traffic... As far as I can gather, if those pipelines ever run dry, our only real move for bringing in extra crude would be via tanker shipments. It makes me wonder, though—do we actually have enough breathing room at our coastal terminals to handle the influx of large vessels and manage the unloading process needed to make up for whatever isn't flowing through the pipes? And beyond that, once that oil hits the docks, is there even enough transport capacity or the logistical flexibility to actually get it moved out to the refineries that are sitting idle because the pipeline supply dropped off...
Well, that naturally brings up some interesting questions regarding tanker transport logistics... I suspect that the Russian shipping traffic you mentioned, specifically involving those smaller tankers, is primarily focused on routes connecting the Baltic Sea to the North Sea, or perhaps moving between the Black Sea and the Mediterranean... It leads me to believe that the Russian fleet might be better equipped with those smaller vessels specifically tailored for those shorter hauls, whereas the more frequent and standard shipments heading out toward the Far East are likely handled by the larger tankers within their fleet...
So, here’s what I’ve been chewing on lately... if we were to actually implement an embargo on Russian oil and start essentially "intercepting" shipments destined for the East, would there even be enough tankers floating around near the Suez Canal to make that work? Or would we find ourselves in a situation where the only vessels available are the ones already committed to those specific Eastern routes, effectively leaving us with nothing to work with once the oil shipments depart... I suppose my gut feeling is that the Arab suppliers would be the very first ones to feel the heat from such a move, though I guess whether they pass through the Suez wouldn't even matter for the others...
That brings up another interesting point... I wonder if our refineries could actually handle that specific type of crude if it ever made its way to them, and honestly, just how massive of an undertaking would it be to overhaul their systems? I can only imagine the sheer scale of the work required and the astronomical costs involved in retrofitting a refinery to process a completely different grade of oil... it's quite a daunting thought, really...
Furthermore, since nobody seems to have announced anything or even shown much interest in ramping up production just to satisfy what Europe wants, I can't help but wonder... at what price point are these bidding wars for available shipments actually happening, and honestly, what does it really cost to successfully reroute something that was already sold off a while ago?...
And I was just wondering about one thing... if we actually manage to intercept oil that was originally destined for somewhere else, do they start looking for replacement supplies? Like, do they go searching for whatever oil is left floating around the global market once the Russian stuff is off the table...
And then, just as we’re reaching the final stretch, I can't help but wonder about one last thing... if it all turns out to be true and nobody is actually willing to ramp up production while demand stays pretty much where it is, I have to ask... will Russia end up selling their oil regardless, simply because the sheer friction in the global market makes every single barrel of oil everywhere else become more expensive by some kind of multiplier effect...
I know, I have plenty of questions myself... 😁
Looking at what the IEA says on their website, they point out that we’re covering about 20% of our crude oil needs through pipelines coming from Russia, and honestly, that doesn't strike me as something that can be swapped out overnight... They also mention we import about 10% of our refined products from Russia, which is quite a significant amount too, likely arriving via rail, whereas the alternatives would either require everything to be produced right here on American soil—given our own uncertain raw material supplies and refinery capacities—or being shipped in by sea, which brings its own set of questionable port capacity issues...