"Biggest Commodity Trading Houses In The West Continue To Buy Russian Oil And Gas" by Zero Hedge - (Important article)

[Tom Nolan + 2,443]

EXCERPT: Trafigura, Vitol and Glencore have all loaded cargos of oil products on to tankers in Russian ports this week, even as Russia’s attacks on Ukraine intensified, shipping data shows. The commodities traders have come under less scrutiny over their ties with Russia than the oil majors and have not made any commitments to stop buying Russian oil....

https://www.zerohedge.com/markets/biggest-commodity-trading-houses-west-continue-buy-russian-oil-and-gas

Biggest Commodity Trading Houses In The West Continue To Buy Russian Oil And Gas

by Tyler Durden

Saturday, Mar 12, 2022 - 02:00 PM

Despite headline-grabbing maneuvers by the big western oil giants (Shell, BP, Exxon-Mobil etc.) to simply walk away from certain Russian projects, commodity traders like Trafigura, Vitol and Glencore have all loaded cargos of oil, gas and fuel onto tankers at Russian ports, which is just the latest evidence that the west can't simply go without Russia's commodity wealth (as Chinese analysts have explained, Russia is one of the richest countries in the world when it comes to natural commodity wealth). And it's not just industrial commodities: the Middle East and Africa depend on exports of Russian wheat.

This commodity might is why Credit Suisse's Zoltan Poszar proclaimed this week that the new international financial order, which he called "Bretton Woods III" will be based around commodities and the currencies of the countries that export them.

It's also why the big commodities trading houses that we mentioned above have no plans to stop buying Russian oil or gas, as the Times of London explains.

Trafigura, Vitol and Glencore have all loaded cargos of oil products on to tankers in Russian ports this week, even as Russia’s attacks on Ukraine intensified, shipping data shows.

The commodities traders have come under less scrutiny over their ties with Russia than the oil majors and have not made any commitments to stop buying Russian oil.

And even Shell, BP and the majors will continue to buy commodities from Russia, as they have already promised.

Shell is contracted to buy liquefied natural gas from Russian projects until 2035 and has given no timescale for its planned “phased withdrawal” from this. BP has pledged to quit its stake in Rosneft, the Kremlin-backed oil company, but is contracted to buy fuel from Rosneft in Germany and has said only that it is “reviewing” its commitments.

This might seem like a contradiction after the Biden Administration announced on Tuesday that Americans would face an immediate ban on new contracts for Russian oil, with a 45-day grace period for buyers to see out existing deals. The UK has made similar assurances as Ukraine has called for a global embargo on buyers of Russian oil and gas.

But the big commodity trading houses likely have contracts to continue buying Russian oil and gas for years, or even decades, hence. There's plenty of data to show that their Russian business has continued uninterrupted.

Many western companies have stopped buying oil and oil products from Russia voluntarily, but analysis of shipping data by SourceMaterial, an investigative journalism organisation, shows that commodities trading houses are still doing business there.

On Wednesday, an Indian-registered tanker, the JAG Laxmi, was docked at Taman in Russia on the Black Sea to take on a cargo of vacuum gas oil, a petroleum by-product. The tanker is understood to have been chartered by Trafigura and the cargo supplied by Rosneft.

At another Russian Black Sea port, Tuapse, Glencore was due this week to load a charter vessel, the Gulf Coral, with 60,000 tonnes of naphtha, the raw material for solvents, also from Rosneft. A similar Glencore cargo left Tuapse earlier in the week.

To be sure, there's no evidence to suggest that the three commodity trading houses have violated any sanctions.

SourceMaterial’s data also shows that since the February 24 invasion Vitol loaded or was due to load seven cargos of oil products including diesel, naphtha and liquid petroleum gas, some of them from Rosneft. Vitol’s cargos alone are estimated to be worth nearly $100 million.

There is no suggestion that the three traders have broken sanctions, but the disclosures highlight the extent of continued energy trade with Russia even as many companies in other sectors make immediate moves to cut ties.

Spokespeople for all three firms told the Times that they weren't in violation of any sanctions, and that they were continuing to abide by contracts signed long before the invasion of Ukraine began.

 

 

[Tom Nolan + 2,443]

https://www.zerohedge.com/geopolitical/putin-warns-attempts-prevent-russian-exports-fertilizers-oil-gas-will-have-serious

Putin Warns Attempts To Prevent Russian Exports Of Fertilizers, Oil, Gas Will Have 'Serious Consequences'

by Tyler Durden

Sunday, Mar 13, 2022 - 01:15 PM

Authored by Katabella Roberts via The Epoch Times (emphasis ours),

Russian President Vladimir Putin has warned that any attempts to prevent exports of fertilizers, oil, gas, and metals will have “serious consequences on this segment of the world market and for food in general.”

Russian President Vladimir Putin chairs a meeting with members of the Russian government in Moscow on March 10, 2022. (Mikhail Klimentyev/Sputnik/AFP via Getty Images)

Putin made the comments at a meeting with government members this week, according to the Russian state-run news agency TASS.

The president also doubled down on his support for comments made by Russia’s Industry and Trade Minister, Denis Manturov, who previously said that Russia would redirect exports to other countries that were not hostile to Russia if problems with “logistics” were to continue after claiming that European carriers are not loading Russian products on their ships.

Unfriendly countries to Russia include the United States, Canada, and member states of the European Union, among others.

“This obstruction of supplies concerns energy carriers, oil. Of course, it concerns gas, including liquefied gas. This also concerns fertilizers and some other goods, metals, and so on, chemical products in the broad sense of the word. As for fertilizers, then, of course, if this continues further, it will have serious consequences for this segment of the world market and for food in general,” Putin said, according to TASS.

Putin added that any attempts to interfere with the supply of Russian products will also negatively impact the global economy.

“It will also affect macroeconomic indicators because inflation is inevitable in this case,” Putin said.

On Thursday Russian Industry Minister Denis Manturov announced that Russia has temporarily banned fertilizer exports to countries it deems hostile to Moscow, according to Firstsquawk.

The Epoch Times has been unable to verify if Russia has banned fertilizer exports and has contacted the Minister of Trade and Industry for comment.

Russia’s ministry previously recommended that the country’s fertilizer producers halt exports, citing uncertainty as to whether these exports would reach foreign markets.

“Taking into account the current situation with the work of foreign logistics operators and the risks associated with it, the Ministry of Industry and Trade of Russia was forced to recommend to Russian manufacturers to temporarily suspend the shipment of Russian fertilizers for export until the carriers resume rhythmic work and provide guarantees for the fulfillment of export deliveries of Russian fertilizers in full,” the ministry said in a statement.

Russia produces 50 million tons of fertilizers every year, accounting for 13 percent of the world’s total, according to Reuters.

An agricultural worker drives a tractor spreading fertilizers to a field of winter wheat near the village of Husachivka in the Kyiv region, Ukraine, on April 17, 2020.(Valentyn /Reuters/Ogirenko) GreenCoast Hydroponics, a warehouse store popular with cannabis growers, reported inflated prices for fertilizer and other growing equipment, in Sun Valley, Calif., on Feb. 23, 2022. (Jill McLaughlin/The Epoch Times)

The country is also a major producer of potash, phosphate, and nitrogen-containing fertilizers which serve as major crop and soil nutrients.

Amid Russia’s invasion of Ukraine, the cost of fertilizer has already risen significantly across the globe and is expected to further impact the cost of goods and push food prices higher.

However, even before the invasion, fertilizer prices had risen drastically in part due to the rising gas costs which are needed to ship fertilizers across countries and continents.

On top of this, a reduced amount of natural gas, which is a key ingredient in making nitrogen-based fertilizers, forced some producers to reduce production and in some worse cases, completely halt it.

Peter Zeihan, a geopolitical analyst and author, told FOX Business that the world was on the verge of “the worst fertilizer situation in modern history in terms of supply” before the invasion of Ukraine.

“All three source materials that go into fertilizer (phosphate, nitrogen, potash) are subject to abject shortage. And even if the war were to stop tomorrow, it’s already too late. It’s too late for the planting season for the Northern Hemisphere this year,” Zeihan said, adding that the crisis could potentially hit Brazil, Africa, the Middle East, and South Asia the hardest.

These nations, he said, would likely not see enough yields that are “necessary to support the global population.”

“And as food prices rise, as they’ve been for the last two weeks—and pretty sharply—farmers will do what farmers do. They will plant what they think that they can grow for the greatest bang for their buck,” Zeihan said. “So, I can see (the United States) increasing our production and our exports by a small amount. But the scale of what we’re talking about here is insufficient food for hundreds of millions of people.”

Meanwhile, Ryan Jacobsen, Chief Executive Officer at Fresno County Farm Bureau, has warned that there’s a strong possibility that there is simply “not going to be enough on the worldwide market.”

“Let alone with the prices, you just won’t be able to find it,” Jacobsen told ABC30. “We are early in the season,” Jacobsen added. “There is still a lot of growing to come, so we are expecting this to compound as we go farther on.”

The fertilizer ban comes after the West levied heavy sanctions on Russia in recent weeks in response to what Putin calls a “special military operation” in Ukraine.

[Tomasz + 1,608]

I cant really forbid anyone to do this.

The world may at any time give up 8 million barrels of Russian oil and oil products and about 250 billion m3 of gas annually.

You can from Monday resign from russian aluminum, titanium wheat palad etc

 Also a  whole bunch of industrial metals and more importantly huge number of  rare earth metals.

I am not able to prohibit anyone from imposing a total export embargo on the largest exporter of all raw materials around the world and also probably holder of largest reserves of this commodities because to be honest to this day Russian are not totally aware what the really have in some not very well searched wild parts of Syberia or Arctic. Bazhenov Formation just for example.

Putin also has nothing to say and you can try.

At most, in the vast majority of countries of the world, mass anti-government protests are about to begin in short time and the world economy will experience the greatest inflation since time immemorial, but I cannot physically forbid you to try this experiment.

The only problem is rather that Russia and Ukraine are nowadays the largest exporters of wheat in the world.

And what is even worse, Russia and Belarus are also almost the largest fertilizer exporters in the world. And as you know there is also a ban on Russian gas, and about 75% of the cost of producing fertilizers is the cost of natural gas.

You still have also a ban on Russian crude oil and the most significant cost of agricultural production is the cost of diesel fuel.

Means, where and wherever it seems, there could be local hunger catastrophes in short time but its going to be a life and death struggle with Putin?

Edited March 13, 2022 by Tomasz

[Tomasz + 1,608]

But if we talk about microchips

Im not going to say something stupid like Russia or Ukraine is most technically sophisticated producer of microchips in the world because its not

But world is rather more complex

In order to produce microchips you need a rare gas called neonium currently produced most in eastern Ukraine under Russian control. Its not that Ukraine is world technical superpower its just largest world producer of neonium

There is also sorry I forget the name some needed simple element to produce microchips. Its not really a rocket science but whole problem is that Russia is by whole largest world producer of this simple element to produce microchips.

Just like that world is rather more complicated that it seems at first notice

Edited March 13, 2022 by Tomasz

[Tom Nolan + 2,443]

18 hours ago, Tomasz said:

the world economy will experience the greatest inflation since time immemorial,

So true.

[nsdp + 449]

12 hours ago, Tom Nolan said:

So true.

How much have oil prices dropped in the last week?  25%.  George Mitchell once said : "there is no cure for high oil prices like high oil prices."  and if you don't know who George Mitchell was , you  are not competent to post here.

[Andrei Moutchkine + 828]

On 3/14/2022 at 12:00 AM, Tomasz said:

But if we talk about microchips

Im not going to say something stupid like Russia or Ukraine is most technically sophisticated producer of microchips in the world because its not

But world is rather more complex

In order to produce microchips you need a rare gas called neonium currently produced most in eastern Ukraine under Russian control. Its not that Ukraine is world technical superpower its just largest world producer of neonium

There is also sorry I forget the name some needed simple element to produce microchips. Its not really a rocket science but whole problem is that Russia is by whole largest world producer of this simple element to produce microchips.

Just like that world is rather more complicated that it seems at first notice

Neon. It is not really rare, but nobody else has bothered to produce it in a purity grade required for lasers. Another big one is Russian artificial sapphire (corundum) Production of powerful LEDs, iPhone zoom lenses and possibly the latest CPUs too, is not really possible without it.

[Andrei Moutchkine + 828]

On 3/15/2022 at 6:45 AM, nsdp said:

How much have oil prices dropped in the last week?  25%.  George Mitchell once said : "there is no cure for high oil prices like high oil prices."  and if you don't know who George Mitchell was , you  are not competent to post here.

There has been a release from US strategic reserve, that's why.

[Tomasz + 1,608]

 Yeap it looks whole world is lead by US example. But wait a moment

It looks like someone would like eat a cake and still have it.

You want to ban russian oil but you also still want to produce diesel economically from light shale oil.

So you dont have too many options- Iran Russia Venezuela because you still need to blend some heavy oil with light sweet crude.

Quote

 

The US has been vocal about restricting Russian oil imports, but sources say an actual ban is unlikely as it would further propel gasoline prices, which are already record high.

On March 8, President Joe Biden announced his administration was banning Russian oil, natural gas and coal imports to the US as part of a sanctions package in response to Russia’s military operation in Ukraine. Two days later, the House of Representatives passed a bill to ban Russian energy imports. The media, which speculated how long it would take for sanctions to turn toward energy carriers, quickly picked up the news, with some Western experts saying the US move could be followed by other countries.

However, according to CNN, US Senate sources are now saying it’s unlikely their chamber will move on the bill to turn it into law. The sources explain that the move by the Senate is considered unnecessary after the president took executive action to ban the imports. Also, according to Senator Joe Manchin, who chairs the Senate Energy Committee, the House bill is weaker than Biden’s executive action, so the Senate is reluctant to move on the measure.

If the Senate does not approve the bill, the import ban won’t turn into law, and US importers can continue buying Russian energy.

According to official data, Russia supplied 8% of US imports of crude oil and petroleum products last year. With gasoline prices in the country hitting record highs this month, any disruption could push prices higher.

At the same time, the loss of the US market would barely impact Russia’s oil earnings, because the country has much bigger importers across the globe. To be effective, individual country bans would need to be mirrored by a number of states to actually affect the Russian energy export sector. Some analysts say that may be the reason Washington decided to introduce the ban in the first place – as a symbolic gesture to raise pressure on other countries and oil companies to follow suit and cease energy purchases from Russia.

However, widely banning supplies from the globe’s second-biggest crude producer would hurt Western countries as much as Russia. Higher oil prices would inevitably lead to higher levels of inflation and be a strain on consumer budgets. And this, in turn, could lower the readiness of voters to support the sanctions policy.

 

 

[Tomasz + 1,608]

Looks like OPEC+ is real cartel. Musketeers! Salute! One for all all for one!

 

Quote

 

UK fails to secure promise of more oil from Saudi Arabia, UAE

Boris Johnson ended his trip to Riyadh and Abu Dhabi without securing pledges to increase crude supplies

UK Prime Minister Boris Johnson’s bid to secure the assistance of Middle East oil exporters in pressuring President Vladimir Putin to end Moscow’s military offensive in Ukraine has come up empty, failing to win any immediate pledges from Saudi Arabia and the UAE to increase crude production.

Johnson ended his trip to the Arabian Peninsula on Wednesday after meetings with Crown Prince Mohammed bin Salman in Riyadh and Crown Prince Mohammed bin Zayed in Abu Dhabi. He came away without persuading the kingdoms to announce any ramp-up of oil supplies as the UK, US and their allies try to persuade the world to cut off their imports from Russia to punish Putin.

Asked by a reporter whether Saudi Arabia would boost output, he replied, “I think you need to talk to the Saudis about that. But I think there was an understanding of the need to ensure stability in global oil markets and gas markets and the need to avoid damaging price spikes.”

International crude prices soared to a 13-year high earlier this month as the Ukraine crisis escalated. While Johnson’s attempt at oil diplomacy brought no immediate results, he at least was able to get an audience with the Saudi and UAE leaders. The White House was reportedly unable to even arrange phone calls for President Joe Biden with the two crown princes.

Johnson faced some criticism for meeting with bin Salman after Saudi Arabia executed 81 convicted criminals last weekend. The UK prime minister assured reporters that he would lecture the two OPEC titans about human rights, but those talks apparently went over no better than his efforts to secure more oil supplies. Saudi Arabia reportedly executed three more people during the short time Johnson was in Riyadh.

 

 

Edited March 18, 2022 by Tomasz

[Tomasz + 1,608]

Those Russians treat us unfair as we murder people in Yemen?

So why should we care when they, in turn, murder some people in some Ukraine?

What do we Arabs should care about Ukraine?

It looks not a fair reason to disband OPEC+.

No 1986 repeat on the cards this time.

Looks more rather as end of petrodolar this time.

There is an old french tradition - A king is dead. Long live new king

This time. Petrodollar is dead. Long live petrojuan.

 

Edited March 18, 2022 by Tomasz