https://www.nytimes.com/2022/07/29/opinion/russia-oil-sanctions-biden.htmlmore money, according to the Center for Research on Energy and Clean Air, based in Finland. The sanctions have raised prices, more than offsetting the decline in exports. In May 2022, Russia earned 883 million euros per day from oil exports, up from 633
This NYTimes piece is prefaced by the following:
"The Editorial Board
The editorial board is a group of Opinion journalists whose views are informed by expertise, research, debate and certain longstanding values. It is separate from the newsroom."
But of course, the most important issue is not whether the opinion is separate from the newsroom, but whether it is separate from the reality.
"Nations seeking to help Ukraine are aiming at the wrong target. They have focused on reducing Russia’s energy exports instead of reducing Russia’s earnings from energy exports. Russia is exporting less oil but, in a perverse twist, it is earning
The situation is about to take a turn for the worse.price, sharply reducing the role of Western consumers in funding the Russian military.
...
The Biden administration has a plan that could avert this crisis. It would establish a buyer’s cartel — an agreement among Russia’s customers to put a price ceiling on Russian oil. That ceiling would be significantly lower than the current market
...increase pressure on Russia by allowing nations that are not participating to extract larger discounts, too."
Constructing a cartel is not easy. ... The buyers’ cartel would be strengthened if other big buyers of Russian oil, notably India and China, could be persuaded to participate. That seems unlikely. But U.S. officials argue the cartel could still
How realistic is this buyers' cartel at present? To answer the question, one needs to answer the following questions?
1) Is the oil market grossly overproduced before the sanction?
2) Was Russia playing a small role in world market?
Given that the pre-SMO price was on an up trend, the oil market is not overproduced.
According to a recent IEA article subtitled "Russia plays an outsized role in global oil markets", the answer to question 2) is also a "NO".
It is an opinion piece. But in the absence of analysis such as a rudimentary supply and demand model. It is no better than separate from reality wishful thinking.
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