Europe inports 96% of its oil and Russia by far the largest supplier. If you include Kazakhstan, 39% of imported came from or through Russia in 2018.
Reports are that western traders are refusing to buy Russian oil because of sanctions and the threat of sanctions. No one wants to get stuck with tanks or ships full of Russian oil that they can’t offload based on the whim of politicians.
Russia is seeing a huge immediate hit in oil revenue, but Europe will quickly exhaust its stores. The US and European governments are releasing oil from US reserves, but the amount is mainly symbolic. The release corresponds to about a week of imports from Russia.
Unless there is a sudden change of course, Europe is likely to see massive price spikes as they run dry of oil. Diverting tankers to Europe mean that oil prices will see big spikes in oil prices in North America as well.
What will the response be to $10/gallon gasoline in the US?
The sanctions are intended to punish Russia in the hope of achieving regime change. Will they achieve that goal, but in the governments in North America and Europe?
Are we heading towards a train wreck?
Perfect time to dust off Keystone XL project and open up the taps.
We need to increase oil production. Joes plan of depleting our oil reserves certainly is no answer.
I agree, but it would take years to before there would be much of a change.
The time scale for the supply crunch in oil is weeks.
He could at least thank Trump for filling them up at the height of the forced pandemic shutdown.
but the best trains run on coal…
All hands on deck.
There is dormant production in the tar sands that would make a quick dent in the supply deficit.
The pipeline will signal long term production commitment in those resources.
A lot of production shut down when the nonesssentials were shut down and travel was too dangerous.
Start blasting out the coal reserves too.
Abundant energy > Clean energy.
Yes, draining the reserve is not a good solution.
The US reserve has about 600 million barrels. We could drain it completely in a about month if we used it to make up for European oil inputs from Russia.
Yes, but train runs well when the engineer is asleep at the controls.
Sanctions are a double-edged sword. They punish consumers in the US and Europe in addition to punishing the Russian government.
Arguably the only big winner here will be China. They will be able buy Russian oil at bargain prices, while Americans pay through nose at the pump.
Will Hunter get a bonus?
All depends if OPEC raises the production quotas? Where are the OPEC nations on this Ukraine thing?
I am old enough to remember the OPEC oil embargos against the US in the 1970s. We almost went to war to secure the oil supplies. Now NATO governments are inflicting a similar embargo on their own citizens.
My cynical observation is that the quickest way for Putin to end the sanctions is for him to declare an oil embargo against NATO. The response would flip to calls to invade Russia to secure the vital oil flow.
What are Joe’s goals with sanctions? Stop Russia from invading Ukraine? That ship has kind of sailed.
There are no “taps” to open on the Keystone XL pipeline because what was halted in January 2021 was only 8% complete, and no construction had been done on it since 2015. It would not have been operational for years, and would not increase oil supply. It is only a short cut to the existing Keystone Pipeline, which is still operational. Furthermore, as everyone knows, this is Canadian tar sands oil, which is difficult and expensive to process into usable products, and the eventual products would not necessarily be available to the United States market; we would have to compete just like every other country.
Good thing China doesn’t have any oil production capacity.
They are in a tough spot in that respect. They have to tolerate Russia aggression.
The most immediate goal of the sanctions appears to be able to use Putin as the scapegoat for a return to Carter-style stagflation.
I expect Democrats to blame Putin for a long list of Biden-related problems.