# Does Russia have the rest of the world over a barrel (of oil)? **URL:** \ **Category:** In My Humble Opinion\ **Tags:** ukraine-invasion\ **Created:** [March 1, 2022, 5:31pm UTC](https://boards.straightdope.com/t/does-russia-have-the-rest-of-the-world-over-a-barrel-of-oil/960291 "2022-03-01T17:31:59Z")\ **Posts on this page:** 18\ **Page:** 2
**Author:** ![Precambrianmollusc](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/precambrianmollusc/32/63_2.png) [@Precambrianmollusc](https://boards.straightdope.com/u/Precambrianmollusc)\ **Post date:** [March 4, 2022, 2:41am UTC](https://boards.straightdope.com/t/does-russia-have-the-rest-of-the-world-over-a-barrel-of-oil/960291/21 "2022-03-04T02:41:08Z")
Well Exxon is pulling out of the Sahkalin island projects , which are getting a bit long in the tooth anyway. I wonder if it makes for a convenient exit so they can push more capital to the Guyana projects, which have just reached 1st oil production for the Liza production facility. They could also divert capital to XTO , Exxons US land unconventional subsidiary that produces a lot of natural gas, and LNG exports are doing well right now. Shell also had some interests up their as well, and has also said it is bailing. Again I would imagine the current situation has poisoned future revenues and , given the cost of doing business there and what they have already gotten back on their investments , they figured to cut and run and redeploy their cash. BP is similar , old alliance projects , now needing a continuous flow of cash to still produce good returns, but the house is sort paid off, so again cut and run and redeploy the cash clear of any obligations. Total is still neck deep in some of the far northern Siberian LNG stuff (Yamal) that needs a big fleet of ice breakers , well less now so yay for global warming (sarcasm) , to get out. They are freshly invested and the projects have not paid back so it would be a heavy hit if they bailed, and so far they have not, other than to say no new investment, which is not the same as saying 'not suppling cash and expertise for committed ongoing development " Anyway just my take on what those guys are doing. In my humble opion none of those pullouts are an indication of the good intentions and willing to take a serious cash financial hit for the cause, but serendipitous for them on projects that were in the decline anyway. Those speedy exit decisions were because they were looking for an exit anyway and the decline in revenue tipped it , well probably need a bigger word than ‘tipped’ ---
**Author:** ![EddyTeddyFreddy](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/eddyteddyfreddy/32/18796_2.png) [@EddyTeddyFreddy](https://boards.straightdope.com/u/EddyTeddyFreddy)\ **Post date:** [March 4, 2022, 5:06am UTC](https://boards.straightdope.com/t/does-russia-have-the-rest-of-the-world-over-a-barrel-of-oil/960291/22 "2022-03-04T05:06:49Z")
This just in: the New York Times among other news sources is reporting that the Lukoil board of directors has issued a statement calling for an immediate cessation of hostilities in Ukraine. Is Putin losing the oil oligarchs’ support? ---
**Author:** ![Precambrianmollusc](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/precambrianmollusc/32/63_2.png) [@Precambrianmollusc](https://boards.straightdope.com/u/Precambrianmollusc)\ **Post date:** [March 4, 2022, 7:39pm UTC](https://boards.straightdope.com/t/does-russia-have-the-rest-of-the-world-over-a-barrel-of-oil/960291/23 "2022-03-04T19:39:02Z")
I predict a board of directors is about to be arrested for corruption. ---
**Author:** ![XT](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/xt/32/456_2.png) [@XT](https://boards.straightdope.com/u/XT)\ **Post date:** [March 4, 2022, 7:47pm UTC](https://boards.straightdope.com/t/does-russia-have-the-rest-of-the-world-over-a-barrel-of-oil/960291/24 "2022-03-04T19:47:06Z")
> [@Leaper](#): > > If Russia turns off its energy exports to the rest of the world, how will it impact the rest of said world? How long would it take to result in shortages and inflationary spirals so bad that Europe and China would have to give in (resulting in what seems to me to be a major victory for Russia and a major blow to the West’s reputation)? Is it sufficiently short time for Putin to get his claws into Ukraine? Like, completely turns off its exports? I’m not sure that’s even possible, even from just a production standpoint. And I don’t think Russia could survive this even in the short term. Putin definitely laid in a nest egg for Russia in reserves, but it’s my understanding that at least half of those reserves were in dollars, Euros, Yen, and other western currencies…and those are all frozen right now. Even with that money (close to a trillion, IIRC) that’s not enough for Russia to function for very long…certainly not long enough for the rest of the world to meltdown and Russia wins in Ukraine by default. As to the effect, I think Russia produces like 5% of the world’s oil. Gas-wise, and from memory, they produce like 30% of Europe’s gas, which is a real issue. Both are already driving up prices, and a complete cut-off would probably rocket them up much further. I don’t see it causing a total meltdown, except the issue of Russian gas and Europe which is definitely going to be a lot of short-term pain. But this would be, at least as far as I can tell (and, granted, I’m not even well informed on this, let alone an expert) it would be like Russia cutting off its head to spite its foot…it would be completely fatal to Russia to stop all energy exports (that’s like 70% of their economy…and the rest is already under pressure). Even in this less extreme current case, Russia is hurting badly. I’ve heard about lines at ATMs in Russia of folks trying to get their cash out. ---
**Author:** ![Dewey\_Finn](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dewey_finn/32/4222_2.png) [@Dewey\_Finn](https://boards.straightdope.com/u/Dewey_Finn)\ **Post date:** [March 4, 2022, 8:51pm UTC](https://boards.straightdope.com/t/does-russia-have-the-rest-of-the-world-over-a-barrel-of-oil/960291/25 "2022-03-04T20:51:04Z")
CNBC had an analyst today who claimed that shutting down Russian production would result in $200 per barrel for oil ---
**Author:** ![Precambrianmollusc](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/precambrianmollusc/32/63_2.png) [@Precambrianmollusc](https://boards.straightdope.com/u/Precambrianmollusc)\ **Post date:** [March 4, 2022, 10:36pm UTC](https://boards.straightdope.com/t/does-russia-have-the-rest-of-the-world-over-a-barrel-of-oil/960291/26 "2022-03-04T22:36:57Z")
XT makes a good point that oil and ges exports need to be considered independently. If he shuts down natural gas exports, like the Turkmenistan example , he will have serious issues with cash. I doubt people in Europe will cave. Prices will rise, strategic stores of gas will be dug into to stabilize prices, more LNG will be routed into Europe, coal fired and oil fired power stations may get reactivated to allow gas for heating rather than electricity generation, and a lot of marginal wells slated for permanent abandonment may get a reactivation. Not a simple thing like opening a valve, but doable over a few months. On the backside of that, as others have mentioned , I would expect to see major investment into reducing reliance on Russian gas long term which will really screw Russia, and Ukraine as they make some revenue off the transmission costs for the pipelines that go through there. Those would likely be non fossil fuel sources of power , so a net plus. Oil is a little more fungible than nat gas. For sure we could see spikes on some futures to crazy high prices. I dont think the actual price across the vast swath of the oil being actually physically traded is going there. ---
**Author:** ![Precambrianmollusc](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/precambrianmollusc/32/63_2.png) [@Precambrianmollusc](https://boards.straightdope.com/u/Precambrianmollusc)\ **Post date:** [March 5, 2022, 4:06pm UTC](https://boards.straightdope.com/t/does-russia-have-the-rest-of-the-world-over-a-barrel-of-oil/960291/27 "2022-03-05T16:06:21Z")
A story making the rounds is that Shell just bought a 100,000 metric tonnes (+/- 750,000 barrels) of Urals crude from Russia So Shell bought it from Trafigura,who are a large trading company who basically are the selling agents for the russian oil. It did sell at a 28 dollar/bbl discount , and although there are no sanctions as yet on crude oil there is a big problem with getting ships to pick up cargos due to insurance problems, payment problems and no one wants to get stuck at sea with a million barrels if the sanctions change. These issues are also affecting Kahzak oil exported through the same route. It would obviously be better if no one bought any oil from Russia , but they are having to sell at a steep discount, and cut back production as the supply chain is backing up with no one taking deliveries. > **[Shell buys cargo of Russian crude loading mid-March from Trafigura](https://www.reuters.com/business/energy/shell-buys-cargo-russian-crude-loading-mid-march-trafigura-2022-03-04/)** > > Shell bought a cargo of Russian crude oil from Swiss trader Trafigura in S&P Global Platts window loading from Baltic ports at a record low of dated Brent minus $28.50 a barrel, traders said on Friday. ---
**Author:** ![filmstar-en](https://avatars.discourse-cdn.com/v4/letter/f/50afbb/32.png) [@filmstar-en](https://boards.straightdope.com/u/filmstar-en)\ **Post date:** [March 5, 2022, 8:24pm UTC](https://boards.straightdope.com/t/does-russia-have-the-rest-of-the-world-over-a-barrel-of-oil/960291/28 "2022-03-05T20:24:04Z")
An international embargo on Russian Oil and Gas exports is possible and would shut off a huge revenue stream going into the Russian economy. But it would also hurt the large European economies that are dependent on these imports. There may not be an official embargo yet, but buyers are reluctant to purchase Russian Oil and Gas transported by tanker to Oil and LNG terminals around the world. Unlike pipelines, which are associated with long term contracts, these tanker cargoes can change hands many times between source and destination and they can be redirected enroute. The workers in some UK ports are refusing to handle Russia cargoes. > **[British dockers refuse to unload tanker of Russian gas in Kent](https://www.independent.co.uk/news/uk/home-news/russian-gas-tanker-kent-ukraine-b2028491.html)** > > Vessel was carrying liquified natural gas destined for British Gas owner Centrica amid apparent loophole I guess this disruption and the financial sanctions that affect Russian Oil and Gas shipments indirectly will be causing a lot of worries about revenue streams for Russia that will be reported to Putin. It would not be difficult to ratchet up the pressure if it becomes possible to mitigate the effects on the big European economies as they search for alternative supplies or reduce consumption. Invading other countries is a costly business and there must be already significant pressure on Russia’s reserves. At some point Putin is going to run out of money. How long can he last? ---
**Author:** ![Leaper](https://avatars.discourse-cdn.com/v4/letter/l/4bbf92/32.png) [@Leaper](https://boards.straightdope.com/u/Leaper)\ **Post date:** [March 8, 2022, 1:18am UTC](https://boards.straightdope.com/t/does-russia-have-the-rest-of-the-world-over-a-barrel-of-oil/960291/29 "2022-03-08T01:18:06Z")
Russia is now threatening the supply of natural gas, but seems oddly reluctant to me to do so: > **[Russia warns it could cut gas supplies via Nord Stream 1](https://financialpost.com/pmn/business-pmn/russia-warns-it-could-cut-gas-supplies-via-nord-stream-1)** > > Russia could cut gas supplies via the Nord Stream 1 pipeline to Germany, but it has not made such a decision yet, Deputy Prime Minister Alexander Novak said on… OTOH: > **[EU to phase out Russian gas, oil, coal imports - leaders' draft](https://www.reuters.com/markets/rates-bonds/eu-phase-out-russian-gas-oil-coal-imports-leaders-draft-2022-03-07/)** > > European Union leaders will agree at a summit this week to phase out the EU's dependency on imports of Russian gas, oil and coal, a draft statement showed, marking a turning point in its policy towards Moscow prompted by Russia's invasion of Ukraine. ---
**Author:** ![DSeid](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dseid/32/20194_2.png) [@DSeid](https://boards.straightdope.com/u/DSeid)\ **Post date:** [March 8, 2022, 1:33am UTC](https://boards.straightdope.com/t/does-russia-have-the-rest-of-the-world-over-a-barrel-of-oil/960291/30 "2022-03-08T01:33:47Z")
Why does that reluctance seem odd to you? ---
**Author:** ![Dr\_Paprika](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dr_paprika/32/3042_2.png) [@Dr\_Paprika](https://boards.straightdope.com/u/Dr_Paprika)\ **Post date:** [March 8, 2022, 1:34am UTC](https://boards.straightdope.com/t/does-russia-have-the-rest-of-the-world-over-a-barrel-of-oil/960291/31 "2022-03-08T01:34:37Z")
Europe will continue to need Russian energy in the future. Russia will need to sell it. This is part of the reason Putin’s escapade is confusing, even if previous inaction, unfortunately, made it seem like it would be straightforward. ---
**Author:** ![Leaper](https://avatars.discourse-cdn.com/v4/letter/l/4bbf92/32.png) [@Leaper](https://boards.straightdope.com/u/Leaper)\ **Post date:** [March 8, 2022, 1:36am UTC](https://boards.straightdope.com/t/does-russia-have-the-rest-of-the-world-over-a-barrel-of-oil/960291/32 "2022-03-08T01:36:16Z")
I guess my logic is that if Russia really thought that cutting off the gas would punish Europe for helping Ukraine, they’d do it, and that they must think it would, or they wouldn’t even make the threat. Making this kind of threat, and being so plainly reluctant to carry it out, is somewhat confusing to me. ---
**Author:** ![DSeid](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dseid/32/20194_2.png) [@DSeid](https://boards.straightdope.com/u/DSeid)\ **Post date:** [March 8, 2022, 1:47am UTC](https://boards.straightdope.com/t/does-russia-have-the-rest-of-the-world-over-a-barrel-of-oil/960291/33 "2022-03-08T01:47:53Z")
It would punish the EU. It would just punish themselves more. It would also have domino economic impacts that would fall to impacting China. China won’t let that happen. ---
**Author:** ![Horatius](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/horatius/32/3572_2.png) [@Horatius](https://boards.straightdope.com/u/Horatius)\ **Post date:** [March 8, 2022, 1:49am UTC](https://boards.straightdope.com/t/does-russia-have-the-rest-of-the-world-over-a-barrel-of-oil/960291/34 "2022-03-08T01:49:41Z")
> [@Leaper](#): > > I guess my logic is that if Russia really thought that cutting off the gas would punish Europe for helping Ukraine, they’d do it, and that they must think it would, or they wouldn’t even make the threat. Making this kind of threat, and being so plainly reluctant to carry it out, is somewhat confusing to me. I think he’s made the same mistake a lot of right-wing parties have made in the past few years: They actually believe their own propaganda. For years they’ve been portraying liberal democracies as weak and ineffectual, because we actually stop to think about the consequences of actions before they take them. The rightists have convinced themselves that this means left-wing, liberal types will never, ever take a stand on anything, if taking such a stand requires effort or sacrifice. But like bullies everywhere, they’ve mistaken thoughtfulness and politeness for weakness. And now, he’s pushed it too far. At some point, even after careful reflection, the best conclusion is, “It’s time to fuck someone _all the way up_”, and we’ve reached that point. And now it’s mindboggling to him that we’re not just rolling over for him. He simply can’t conceive of the notion that we’re serious about fucking him up now. ---
**Author:** ![JohnT](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/johnt/32/15048_2.png) [@JohnT](https://boards.straightdope.com/u/JohnT)\ **Post date:** [March 8, 2022, 2:24pm UTC](https://boards.straightdope.com/t/does-russia-have-the-rest-of-the-world-over-a-barrel-of-oil/960291/35 "2022-03-08T14:24:28Z")
Biden to announce a ban on Russian oil in about an hour. ---
**Author:** ![filmstar-en](https://avatars.discourse-cdn.com/v4/letter/f/50afbb/32.png) [@filmstar-en](https://boards.straightdope.com/u/filmstar-en)\ **Post date:** [March 8, 2022, 6:36pm UTC](https://boards.straightdope.com/t/does-russia-have-the-rest-of-the-world-over-a-barrel-of-oil/960291/36 "2022-03-08T18:36:53Z")
The UK is to phase out Russian Oil by the end of 2022. And is exploring options for phasing out gas. To add some perspective. [https://bit.ly/34pZ8A7](https://bit.ly/34pZ8A7) These are the imports, the UK has Oil and Gas fields operating in the North Sea and the production has been steadily declining. I expect the high prices may make the case for prolonging their life. Norway will also be looking at pumping out more Oil and Gas as well for its other European customers that are much more exposed to supply from Russia. Germany, Italy, Poland and others are much more exposed than the UK and the US. Suddenly the whole fossil fuel phasing out plan has gone into reverse, in the short term. Longer term, it is will be a dash for renewables. There are pretty extensive windfarms off shore in the shallow North Sea. I expect a lot more projects will get the green light and budget approval. But large scale energy projects tend to take five years or more to get completely. Easier, maybe, to cut consumption with some home insulation and double glazing…and electrifying transport. It requires a joined up strategy and the circumstances of each country is going to be different. Oil is an easier problem than Natural Gas dependency because there are more suppliers. The natural gas networks in Europe are interconnected, so it can be moved eastwards as well as westwards. Electricity grids are also connected, to a more limited extent. Surplus nuclear power from France, surplus wind power from UK and Denmark…there are lots of possibilities, but the capacity of these links is limited and would have to be improved. Again, not something you can do quickly. European energy policy was to use Natural Gas as a transition from Coal and Nukes towards large scale renewables power generation. That plan has just come very unstuck. Russia can no longer be trusted as a long term Oil and Gas supplier. This is a sudden energy crisis and all these changes are going to be very expensive and inflationary. A world free of a the curse of Oil will be a far better place. It has caused no end of wars, political corruption and damage to the environment. ---
**Author:** ![Riemann](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/riemann/32/3133_2.png) [@Riemann](https://boards.straightdope.com/u/Riemann)\ **Post date:** [March 8, 2022, 6:42pm UTC](https://boards.straightdope.com/t/does-russia-have-the-rest-of-the-world-over-a-barrel-of-oil/960291/37 "2022-03-08T18:42:04Z")
> [@RickJay](#): > > The sheer, overwhelming fury against Russia has taken everyone by surprise. I’m amazed as how unified most of the world is on this point. > > Remember, just eight years ago Russia invaded Ukraine and took part of it over and the world did nothing. I suspect that the strength of reaction may be partly COVID-related. The whole world is just starting to come out of two years of struggle with something that we had no choice but to deal with, and maybe things are just starting to get back to something resembling normal life… and you pull this shit _now_? ---
**Author:** ![Precambrianmollusc](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/precambrianmollusc/32/63_2.png) [@Precambrianmollusc](https://boards.straightdope.com/u/Precambrianmollusc)\ **Post date:** [March 27, 2022, 3:20am UTC](https://boards.straightdope.com/t/does-russia-have-the-rest-of-the-world-over-a-barrel-of-oil/960291/38 "2022-03-27T03:20:59Z")
And miraculously Shell finds 25Bilion to invest in other places after bailing out of JVs that they would have had to continue to inject capital into with uncertain or declining payback. But they pulled out for the right moral reasons… Some of the UK High Pressure High Temp fields can be very productive . There are some older field that need reentry using existing wellbores that are declinig or dead , the production topsides are very specialized and cant be moved. They were on the edge of what was possible when originally drilled and completed, so tough but doable to get redrilled and recompleted .They will come out ahead . > **[Shell to invest £25bn in UK after CUTTING ties with Russia in huge energy...](https://www.ogv.energy/news-item/shell-to-invest-25bn-in-uk-after-cutting-ties-with-russia-in-huge-energy-crisis-boost)** > > Shell has announced that it will slash its ties with Russia and instead inject up to £25billion into the UK's energy system - in a huge boost for Britain. [Previous page](https://boards.straightdope.com/t/does-russia-have-the-rest-of-the-world-over-a-barrel-of-oil/960291.md?page=1)