Sanctions on Russia

swiftjackal11 said:Back in July 2008, we saw crude hit a record high of $147 a barrel. Even then, gas was sitting at $9.75 and diesel was $3.25. Basically, oil was about 40 percent more expensive back then, yet fuel prices were actually 20 to 30 percent lower than they are now. What's the catch? Why is everything so pricey today?
And back then, there wasn't any conflict with Russia or Ukraine.

You gotta factor in inflation, man. That $147 back in 2008 is basically like having $199 in 2022.

swiftjackal11 said:Back in July 2008, we saw crude hit a record high of $147 a barrel. Even then, gas was sitting at $9.75 and diesel was $3.25. Basically, oil was about 40 percent more expensive back then, yet fuel prices were actually 20 to 30 percent lower than they are now. What's the catch? Why is everything so pricey today?
And back then, there wasn't any conflict with Russia or Ukraine.

Then you've got 2020, when a ton of refineries across Europe shut down and just stayed closed—that's where the bottleneck started.

Not to mention that these refineries rely on gas to keep things running. It's all part of fractional distillation.

swiftjackal11 said:Back in July 2008, we saw crude hit a record high of $147 a barrel. Even then, gas was sitting at $9.75 and diesel was $3.25. Basically, oil was about 40 percent more expensive back then, yet fuel prices were actually 20 to 30 percent lower than they are now. What's the catch? Why is everything so pricey today?
And back then, there wasn't any conflict with Russia or Ukraine.

Just take a look at the dollar exchange rate from back then compared to where it stands today...

The term "petrodollar" isn't just some empty phrase...

The birth of the petrodollar—which essentially set our monetary standard—happened in 1973, when the United States struck a deal with Saudi Arabia to trade every single barrel of oil in U.S. dollars from the Federal Reserve, in exchange for American weaponry and military protection for those oil fields...

That agreement was eventually expanded so that any nation looking to purchase this type of energy resource had to swap their own national currency for American dollars...

In reality, this system of trading oil for dollars created a massive, artificial demand for the dollar globally, and since there was always a need for more crude oil, the production of the American currency just kept climbing...

As a result, the United States became the sole architect of this new monetary model, allowing us to establish a level of dominance over the global economy that still holds strong today; that $6.5 trillion moved by oil every year represents about 10% of the global GDP and a staggering 40% of the entire U.S. GDP...
https://hr.economy-pedia.com/11039257-petrodollars

Occam's razor, my friend. It's way simpler than those biblical tales you're spinning.

analogbear5 said:Occam's razor, my friend. It's way simpler than those biblical tales you're spinning.

Clearly. 😉

Moving away from the main topic for a second.

What ever happened to that massive chip shortage we were dealing with right before things kicked off with Russia??? Over in Europe, you had car manufacturers basically forced to halt production because they couldn't get their hands on the chips needed to actually build the vehicles. I even wear hearing aids myself, and I noticed the hearing aid manufacturers were feeling the squeeze too—they couldn't get enough chips for chargers or those little Bluetooth components that let you stream sound.

So, here’s what I'm wondering about now. Since a huge chunk of car makers and tech companies pulled out of Russia, does that mean there's finally more chip supply available for everyone else left in the market??? Maybe those sanctions actually ended up helping the European Union and the rest of the world by freeing up those missing chips.

mellowdrifter80 said:The sanctions against Russia were hammered out by all 27 EU member states and backed by essentially unanimous resolutions from the European Parliament. Does it really seem plausible that every single one of them is simply too incompetent to grasp the situation, somehow requiring us to blindly take Putin and Zakharov at their word?

It looks like

https://www.nytimes.com/2022/06/21/w...l-embargo.html

unknown

Some of the oil products exported by India have been shipped to the United States, United Kingdom, France and Italy

Once the refiners turn oil into diesel or gasoline, no one can distinguish whether the fuels they ship to Europe and elsewhere come from Russian crude. That means unknown

Basically, the European Union shot itself in the foot.

swiftjackal11 said:I wonder how low the barrel price needs to drop before we see gas under $3.25🤷

That depends entirely on how much the government robs you.

In Poland, $100 a barrel equals $3.25 fuel.

In America, I suspect it needs to hit about $75. The government and ExxonMobil are seeing record profits from all this struggle at the pump...

A few things—mostly stuff made worse by the pandemic—have really messed with the supply and demand balance. Demand just keeps climbing because, let's face it, everyone needs chips for basically everything now. Meanwhile, supply has been lagging behind for a ton of reasons. Honestly, any dip in demand is a win at this point.

But look, the real goal should be some level of deglobalization—basically bringing chip manufacturing back to the US.

It’s a massive opportunity for America if we actually step up—launch a diplomatic blitz within the European Union, cook up a solid project, get the smartest minds on board, and use smart subsidies and tax breaks to pull a slice of that industry onto our shores.

Actually, hang on—that might be a bit much. 😁

Donna Harris11 said:It looks like

https://www.nytimes.com/2022/06/21/w...l-embargo.html

unknown

Some of the oil products exported by India have been shipped to the United States, United Kingdom, France and Italy

Once the refiners turn oil into diesel or gasoline, no one can distinguish whether the fuels they ship to Europe and elsewhere come from Russian crude. That means unknown

Basically, the European Union shot itself in the foot.

Does finding a single instance where someone from India allegedly bypassed sanctions really prove that the "European Union shot itself in the foot"? According to official Russian data, they are bracing for a GDP contraction of 7.8%,

https://www.business-standard.com/ar...1800198_1.html

whereas the estimate for the European Union is a GDP growth of 2.7%. For the US, we see a growth of 3.4%, which is essentially back to pre-pandemic levels.

https://ec.europa.eu/info/business-e...ic-forecast_en

Wasn't it just last week that Russia saw about a 15% drop?

Nathan Evans78 said:Wasn't it just last week that Russia saw about a 15% drop?

If you’re referring to this:

https://www.bloomberg.com/news/artic...conomic-growth

that is merely an estimate from certain economists back in March; the actual -7.8% figure comes directly from the Russian Department of Commerce.

analogbear5 said:A few things—mostly stuff made worse by the pandemic—have really messed with the supply and demand balance. Demand just keeps climbing because, let's face it, everyone needs chips for basically everything now. Meanwhile, supply has been lagging behind for a ton of reasons. Honestly, any dip in demand is a win at this point.

But look, the real goal should be some level of deglobalization—basically bringing chip manufacturing back to the US.

It’s a massive opportunity for America if we actually step up—launch a diplomatic blitz within the European Union, cook up a solid project, get the smartest minds on board, and use smart subsidies and tax breaks to pull a slice of that industry onto our shores.

Actually, hang on—that might be a bit much. 😁

Hold on, does that assume we actually have intelligent politicians who prioritize the progress of our nation over their own personal interests?
And let's be honest... that remains a total utopia. The same corrupt establishment keeps holding power, and the public just keeps letting them get away with it.
Sorry, getting off topic, but I had to say it.

Russia just scored a "halftime" win against sanctions

The Turkish unknown vessel was the first foreign ship to make its way through
The UN has been spending weeks in intense negotiations with Moscow, Kyiv, and Ankara to hammer out an agreement that would finally open up grain exports from Ukraine and establish reliable channels for getting Russian synthetic fertilizers back onto the global markets.

The whole saga regarding sanctions is never quite as dull as people make it out to be 😁:

unknown
https://www.wsj.com/articles/airbus-...um-11655817028

At first glance, you might think it's no big deal—you've got some stockpiles tucked away, and if you run low, you just pick up more from someone else, right? But as they’re pointing out over at Airbus, reality is a bit more complicated than that...

Part of the challenge for Airbus is the lengthy certification procedure for bringing on new suppliers and components, a process that can take between 18 and 24 months

And while we're at it, let's touch briefly on our favorite recurring topic—oil. Didn't we just have a massive discussion here a few weeks back about how you can't simply reroute entire rivers of oil toward China overnight?

China’s crude oil imports from Russia up 55% in May compared to a year earlier, displacing Saudi Arabia as top supplier.
https://www.aljazeera.com/economy/20...-surpass-saudi

Well, who knows, maybe oil prices actually might drop after all, because if what's coming from Saudi Arabia isn't heading to China, perhaps it will find its way over to Europe instead...

One of Putin's biggest critics, Hodorovsky, thinks the European Union is basically just shooting itself in the foot by sticking to these oil sanctions

https://www.politico.eu/article/mikh...taging-itself/

So why can Boeing manage without Russian titanium, while Airbus is stuck?

In the article:

“We’re heavily dependent on one specific supplier,” Mr. Fabro noted. “Changing the whole setup overnight just isn't easy.”

Europe—always living in the clouds, as usual.

analogbear5 said:So why can Boeing manage without Russian titanium, while Airbus is stuck?

In the article:

“We’re heavily dependent on one specific supplier,” Mr. Fabro noted. “Changing the whole setup overnight just isn't easy.”

Europe—always living in the clouds, as usual.

Well, companies like Boeing and General Electric actually started pivoting to handle these kinds of shifts way back in 2014.
Perhaps they just had a better sense of what was coming down the pike... 😁

brightheron64 said:The whole saga regarding sanctions is never quite as dull as people make it out to be 😁:

unknown
https://www.wsj.com/articles/airbus-...um-11655817028

At first glance, you might think it's no big deal—you've got some stockpiles tucked away, and if you run low, you just pick up more from someone else, right? But as they’re pointing out over at Airbus, reality is a bit more complicated than that...

Part of the challenge for Airbus is the lengthy certification procedure for bringing on new suppliers and components, a process that can take between 18 and 24 months

And while we're at it, let's touch briefly on our favorite recurring topic—oil. Didn't we just have a massive discussion here a few weeks back about how you can't simply reroute entire rivers of oil toward China overnight?

China’s crude oil imports from Russia up 55% in May compared to a year earlier, displacing Saudi Arabia as top supplier.
https://www.aljazeera.com/economy/20...-surpass-saudi

Well, who knows, maybe oil prices actually might drop after all, because if what's coming from Saudi Arabia isn't heading to China, perhaps it will find its way over to Europe instead...

If this were an American company, of course they’d just grant an exemption and call it a day, wouldn't they?

Ronald Chavez2 said:If this were an American company, of course they’d just grant an exemption and call it a day, wouldn't they?

But then again, Boeing actually has major operations right here in the States—just look at how they pitch their impact:

WE are a significant contributor to U.S. economic growth
Jobs:
275,000 total jobs, supported in 40+ U.S. states, 4,000 direct Boeing jobs.
Investment:
$48 billion in aircraft-related expenditures in the U.S. in the last three years, from 450 U.S. suppliers.
Manufacturing:
Boeing manufactures commercial aircraft, helicopters, and satellites in the United States.
https://airbusus.com/our-commitment/