The Coming European Ban on Russian Crudes February 5th.
Currently, the G7 Core Industrialized countries are enforcing December’s $60 Bbl price Cap using Shipping seaborne insurance and access to voyage financing; virtually all of these services reside in Rule of Law G7 countries and appears to have been effective so far. Though buyers like India and China have been unwilling to pay even the $60 price, insisting on $20-$30 Bbl discounts.
On February 5 the Europeans ratchet up their ban on importing all Russian Crudes. We can expect some “Buy on Rumor, Sell on fact: activity in the oil markets as this ban goes into effect until the effects are better understood of this total embargo by the Europeans. One consideration to note is oil traveling from Russia to India or China, spends 3-4 times, respectively, as many days at sea, or off the market, then on the European voyage; and the same for the empty oil tankers making the return trip to load another shipment.
David Rewcastle of Darien, Connecticut, is an Equity and Fixed Income Analyst with a background in Finance and Middle East Studies