Wednesday, June 01, 2022

Where there is demand.

"With billions of dollars in financial reserves and money still coming in from oil and gas exports, Russia has yet to feel the full impact of the barrage of Western sanctions imposed over its offensive in Ukraine," ET. "But Russia is heavily reliant on imports of everything from manufacturing equipment to consumer goods, and economists believe the worst effects of sanctions are still to come." Russia could buy what it needs from the same source that the US buys from - China. "China Exports to United States was US$577.13 billion during 2021, according to the United Nations COMTRADE database on international trade," Trading Economics, which included everything from machinery to electronics, toys, apparel and cosmetics. This is despite huge delays in shipping. "While before the coronavirus pandemic, goods shipped between China and the US via container ship took just over 40 days, hold-ups and delays have extended that time to upwards of 70 days in July, August and September of 2021," WEF. In April, "US Treasury Secretary Janet Yellen...said it was worth considering taking steps to lower US tariffs on Chinese goods given the 'desirable effects' such a move could have on lowering US inflation, which has hit 40-year highs this year," Reuters. Russia has a long land border with China. "Russian oil products are still reaching the US market because traders are obscuring their origin by blending crude and refining it elsewhere," BI. "According to Kpler data ..., a refinery owned by Indian conglomerate Reliance Industries bought seven times more Russian crude during May compared to before the war." If sanctions stop open, transparent trade, people will find other ways as long as there is demand. Despite spending billions of dollars to stop drug trafficking and blatantly capturing President Manuel Noriega of an independent nation, Panama, on drug related charges, BBC, drugs are still freely available in the US. In 2016, "Roughly 70% of all offenders (traffickers) were US citizens and almost half (49.4%) had little or no prior criminal history," DrugAbuse.com. The European Union is to reduce import of Russian oil. "By making a promise that the EU's embargo excludes the pipeline that landlocked Hungary relies on for Russian oil, the bloc aims to reduce Moscow's income to finance the war it launched three months ago in Ukraine," Nasdaq. If the EU reduces purchase from Russia it has to buy oil from somewhere which will stretch supplies and increase cost. "The oil ministers of Saudi Arabia and the United Arab Emirates warned that spare capacity is decreasing in all energy sectors, as products from crude to diesel and natural gas trade near record highs," yahoo. Russia should be quaking in fear but, "Russian gas producer Gazprom has cut off gas supplies to Denmark's Orsted and to Shell Energy for its contract to supply gas to Germany," and "has already halted supplies to Dutch gas trader GasTerra, as well as to Bulgaria, Poland and Finland after their refusal to pay for gas in Russian roubles," Reuters. Meanwhile, inflation in the Eurozone has already hit a record 8.1%, ET. Why cut your own nose? Incomprehensible.

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