Putting Shadow Fleet is building and Russian oil is still flowing and the Problem with sanctions is that they Usually backfire and unless you embargo The whole world it won't really work now For months now the G7 planners they have Been slapping Rush with oil sanctions But yet oil revenues are still coming in In fact Russia has a current account Surplus of 227 billion in 2022 and while It's falling in Q3 Q4 it's still higher Than in the previous years so what is Really going on the G7 price cap of 60 Dollars is not low enough and Russian Oil companies still have the financial Bandwidth right to ship Dr cargo to Asia And in fact we can see Russia's oil Output has rebounded even after all the Sanctions and price caps so the oil is Definitely still flowing and ships are Still transporting it around and Remember that the main aim of the West Is to squeeze Russian revenues to the Point where Putin doesn't have enough Money he's bankrupt to fight on but at The same time day one Russian oil to Still enter the markets to prevent a Price spike so you have to choose one You can have both and you quickly see How Russia could easily flip the Situation once their Shadow Fleet is Strong enough and let's quickly recall The oil price kept on Russia right Because the economics are important here
The devil is in the details now the G7 Coalition slap a 60 price kept on Russian oil and that indeed caused the Price of Euros to drop and hover around 55.56 Dollars around there and this Means Russia can still shipped their oil To tankers using Western Insurance Shipping companies can still transport Rational without violating any sanctions Right and in some parts the price of Euros oils has dropped as low as 40 Dollars and this obviously means Russian Revenues are dropping but they aren't Completely eliminated so let's set a Baseline here according to many reports The cost of production of Russian oil on The low end is around 20 to 30 dollars So anything above that amount is still Profitable for Russia Putin still needs To sell his oil to ships because the Pipelines to China aren't enough but Let's understand what really runs the Oil markets it's not sanctions but Incentives and profit and as long as There's money to be made Russia will be Able to find Outlets to sell to and Ships to transport the all Health life Will find a way and according to the Reports Russia is offering deep Discounts to China and India selling Dr Crude at a 15 to 20 discount from the Price of brand crude which is around 85 Dollars and in order to ship the oil They are paying shipping companies a
Huge Bounty of 15 to 20 dollars per Barrel as well and this means Russia is Subsidizing the cost of cheap oil to Asia and that's why the price of Euros Is well below 60 dollars now shipping Companies they are breaking in big money Thanks to the price cap we have routers Reporting that one shipper made that Insane 10 million dollar profit to take 700 000 barrels of oil in an affirmative Ship from the baltics to India right so A president has been said guys there's No breach of sanctions yet because the Oil loaded onto the ships is well below The 60 price cap well what if the price Of brand crude starts to climb 100 or Even 120 dollars will Russia still Subsidize the huge discounts to China And India because by then they might be Selling oil at half the price which is Literally insane now conversely what if The West decides to squeeze Russia Further and listen to zelinski what if They lower the price cap to 30 or even Below now Russia could be making a loss If they sell any oil and this is where Their Shadow Fleet really comes to play Russia has been suddenly building their Fleet of dark vessels that do not care About sanctions all they care about is Profit and to explain a shadow Fleet Situation we need to understand how Restricted the shipping industry truly Is when it comes to Russian oil Now
American and EU vessels aren't allowed To import Russian crude which includes Greece that has a ton of ships right in Fact great tankers can about 70 percent Of the world's crude oil so this is more Or less a total ban for Western ships But non-eu ships can still transport Russian oil below the price cap of 60 Dollars now the big problem for Putin Comes when the price cap is dropped say 30 or the price of bread crude fries to Around maybe 100 if he just relies on Conventional ships he will either make a Loss out of his oil or miss out on big Profits and this is where a shadow Fleet Comes in just think of them as Professional or Smugglers right now it's A much simpler term to understand now The Shadow or dark vessels do not answer To the Western powers and the whole Russian insurance which are accepted in Many Chinese and Indian ports right they Don't care about any price cap they only Care about how much money they can make So just imagine you own a shadow vessel Russian oil suppliers will pay you 10 Million dollars in profit to ship oil to India and avoid actually takes you four To six weeks now that is a lot of money For such little time right now multiply This by hundreds of vessels making Non-stop trips between Russia China and India suddenly guys you have a billion Dollar industry smuggling Russian oil
Right so Putin gets to transport his oil To India and China no matter how low the Price cap is he will pay the shadow Fleet millions in profit to keep Russian Oil flowing so even if the G7 price cap Is revised down to 30 Russia can still Sell above that cap as long as they pay The oil Smugglers their money and guess What guys business is booming we have The oil trading giant traffic Guru Telling us that Russia's Shadow Fleet of Tankers has grown to 600 ships there are Now 400 crude vessels and 200 product Ships moving into the dark Fleet to Transport Russian oil just for crude Tankers alone that is around 20 of the World's Global Fleet which is allowing Russian crude to flow rather Uninterrupted to the rest of the world So it's just a matter of price now now All these ships are coming at least the Majority of it from Iran's own goals Hamada because Russian suppliers are Offering premium rates at least 50 Percent above the market and we can see That almost 10 million barrels of Russian oil were transported by the Iranian ghost Fleet in jetery alone Right that is a lot of oil and this is Only going to continue to grow Especially with a global economic Slowdown everyone is scrambling for more Money and according to traffic grower we Are building a deep inefficiency into an
Oil Market that spent decades becoming Incredibly efficient meaning the Physical price of oil will diverge more From the paper price thanks to all these Sanctions we all might be paying more For energy in the future so with the Shadow Fleet right Putin can still sell The Seven Seas but Russian oil still Needs buyers and this is one area where The price cap has failed now Russia Still has many friends in the world Especially China India Africa from the Brics Nations the they are far from Isolated and can still get their oil to Many destinations so back a week ago we Had Ukraine demanding the United States Sanction China and India for buying Russian oil they believe that a Sanctions should be applied across the Board no matter how big the country is But we have the assistant Secretary of State coming to say that the United States will not sanction India saying we Are not looking to sanction India our Partnership with India is one of our Most consequential relationships and This tells us that America is at least Sober enough to understand the Fallout Of sanctioning a big economic power like India and this probably extends to China As well right so Russian oil is still Going to flow to India and China at a Discount and if you combine this with The shadow Fleet that's essentially a
Floating pipeline from Russia to Asia They have both the end buyers and the Transportation secured Russian oil is Becoming more sanction-proof as potent Shadow Fleet grows and I want us to Focus on Sergey lavrov's visit to the African continent Russia is trying to Find ways and means to ship its oil to Other destinations besides China and India right after all how much can they Sell there and according to analysts African countries are expected to Receive at least 6 million barrels of Diesel from Russia approximately one Quarter of what the EU used to get from Putin so the G7 price came on Russian Oil products will be dented as well it Might lower Russian revenues but it Won't cut it off and as long as Russia Still makes a profit on their oil sales Their wall funding isn't going to end Anytime soon Russia still has many Friends and they are willing to take in Russian oil and enjoy deep discounts and Here's the 3D dollar question are the Price caps working yes and no right it Is working in the sense of dampening Russian revenues it is affecting Putin's Profit margin but it's not able to Completely choke off Russian oil flows To the world especially to Asia right And if the G7 decides to lower the price Cap 30 dollars it might backfire further Because Russia can just cut production
To push Global oil prices higher right And they have cut production by five Percent and you just use their Shadow Fleet to still transport their oil at a Profit right the price cap doesn't just Hurt Russia but also boomerangs back to The West in the terms of higher Inflation and this is going to hit Europe the worst because they are going To suddenly face a big shortfall on Diesel after the latest oil products ban On Russian oil so let's understand this Not only is the price cap on diesel set At 100 per barrel the EU has banned Themselves on importing Russian Diesel And we can see that in 2022 the majority Of Russian diesel went to Europe with Over 650 000 barrels sent there in a day But now this is going to drop to zero in 2023 and Russia has already begun to Reroute the majority of the supplies to The rest of the world especially Asia Africa and even turkey and once Europe's Diesel stocks are drained they will feel The pain they have to import expensive Diesel from the rest of the world so They will compete with other importance To buy American and Middle Eastern even Chinese diesel which will push prices up For them and this is the problem with Sanctions money doesn't disappear it Just flows away to other countries to Other counterparties the price caps are Making India and China richer because
They can buy cheap Russian oil to either Use themselves or to re-export to the Rest of the world right and we can see An incredible Spike of Russian oil Flowing to India and China ever since The war started and until the war ends We can expect both countries to still Get subsidized energy from Putin and in The west the oil embargo is forcing the EU to import oil and gas from America And Norway so those two countries are The biggest winners on the NATO side but Let's realize that Russian revenues are Not going to stop guys because Putin has Two things secure there's a long line of Countries tired of listening to the west And they'll be ready to buy Russian oil Especially at a discount and secondly Putting Shadow Fleet is growing and that Is forming a Smuggler's wound right he Essentially has a virtual floating Pipeline from Russia to China and India But the sanctions also going to force Russia to build up their own Fleet they Have their own state run silver complete Which is totally covered by Russian Insurance and if this Fleet grows and They build more vessels in the future The oil sanctions that revolve around Marine insurance and shipping will be Less and less effective right and just Recently Putin also called oil Production by half a million barrels a Day which could increase the oil price
Above the price cap of 60 dollars and This means he is confident that the Shadow Fleet can help circumvent Sanctions and transport his oil in Sufficient quantities and I don't think Russian revenues are going to collapse Anytime soon oil will still flow around And the price that we have to pay is Higher energy inflation so strap Yourselves in and realize Russia's wall Funding is far from over so let me know What you think in the comments below Other oil sanctions finally over will Russia Shadow Fleet keep their them Afloat let me know in the comments below Stay safe be sure to smash the like Button and subscribe as we navigate Through this insane times
