Latest news with #Urals
Yahoo
21 hours ago
- Business
- Yahoo
Key to Russia's potential defeat lies in its economy
As the war in Ukraine grinds on, attention remains fixed on the battlefield. But Russia's most vulnerable flank is not in the trenches — it's in the treasury. The West, and especially the United States, holds economic levers that could push Vladimir Putin toward serious negotiations or even collapse his ability to sustain the war altogether. Recent developments signal a shift in Washington's posture. Military aid to Ukraine has resumed, and a landmark U.S.-Ukraine resource agreement was signed on April 30. More significantly, senators — led by Republican Lindsey Graham — are advocating sanctions that would impose 500% tariffs on Russian oil and commodity exports. Moscow has reacted with alarm, calling this initiative a 'counteroffensive from the American deep state.' It's no bluff. The Kremlin is right to be worried. What truly threatens Putin's war machine is energy revenue — or rather, the loss of it. The Russian economy is deeply dependent on oil and gas exports, with the 2025 federal budget based on an oil price of $70 per barrel. But Russian Urals crude is now priced around $60, and could fall further. Saudi Arabia, frustrated by non-compliance within OPEC+, is allowing oil prices to drop, potentially triggering a price war. Riyadh has openly stated it can withstand a prolonged period of low prices — a veiled threat aimed at Moscow and other OPEC+ defectors. Read also: Exclusive: Russia's ballistic missile production up at least 66% over past year, according to Ukrainian intel figures The effects are already visible. Russia has slashed its oil revenue forecast for 2025 by 24%, with the Finance Ministry predicting a drop from 11 trillion to 8.3 trillion rubles. The country's oil production could decline by up to 50% by 2030, largely because newer reserves are technically difficult and capital-intensive to extract. That's why Moscow is quietly seeking Western — specifically U.S. — expertise to develop these fields. A coordinated, firm sanctions regime from Washington and Brussels could shut that door completely. Simultaneously, the U.S. and Saudi Arabia are deepening their energy partnership, particularly in liquefied natural gas (LNG). Saudi Aramco has reportedly signed memoranda of understanding with American LNG exporters like NextDecade and Sempra. The latter already holds a major supply contract with Poland's Orlen, and the U.S. is now poised to become a key alternative gas supplier to Central and Eastern Europe. These investments will expand global LNG capacity and bring prices closer to the U.S. Henry Hub benchmark — lowering Europe's dependence on Russian gas. Poland and Ukraine are moving to capitalize on this trend. Warsaw has announced plans for a second floating LNG terminal, which could eventually supply Slovakia and Hungary — two nations historically reliant on Russian gas. Ukraine, meanwhile, is gaining investor interest now that the U.S. has committed to a joint Reconstruction and Investment Fund, funded through future resource extraction projects. For the first time since the full-scale invasion began, Western business sees a path forward in Ukraine's energy sector. The implications for Russia are grave. Military spending has ballooned to 6.3% of GDP — its highest level since the Cold War — while the budget deficit continues to rise. To fund its war, the Kremlin is raiding reserves, raising taxes, and cutting social programs. Absent war spending, Russia might already be in recession. The regime increasingly relies on military conflict to justify domestic hardship and consolidate power. Read also: Inside Russia, calls for peace come with conditions — and Kremlin talking points But the geopolitical landscape is shifting. The combination of low oil prices, expanding LNG competition, and targeted U.S. sanctions could inflict sustained economic damage on Russia without risking American or European lives. Energy diplomacy, not just weaponry, could determine the outcome of this war. The next steps are critical. The White House must maintain pressure — not just by providing Ukraine with military aid, but by deepening its energy cooperation with allies and enforcing robust sanctions. The message to Moscow should be clear: the price of continuing the war will be economic asphyxiation. If the United States can coordinate its economic tools with allies in Europe and the Middle East, Russia may find itself unable to afford the very war it insists on waging. Submit an Opinion Editor's Note: The opinions expressed in the op-ed section are those of the authors and do not necessarily reflect the views of the Kyiv Independent. We've been working hard to bring you independent, locally-sourced news from Ukraine. Consider supporting the Kyiv Independent.
Euronews
3 days ago
- Business
- Euronews
Can the EU lower the cap on Russian oil without the US?
The European Union is readying a new round of sanctions against Russia to pile extra pressure on the Kremlin and pressure it to agree to a 30-day unconditional ceasefire in Ukraine, a step that Western allies consider indispensable for serious peace negotiations. Ursula von der Leyen has already provided an outline of what that package, the 18th since February 2022, is supposed to target: Russia's financial sector, the "shadow fleet" and the Nord Stream pipelines, which are currently non-operational. On top of that, the president of the European Commission has pitched a downward revision of the price cap on Russian oil to further squeeze profits from worldwide sales, a crucial cash flow to sustain the full-scale invasion of Ukraine. "We need a real ceasefire, we need Russia at the negotiating table, and we need to end this war. Pressure works, as the Kremlin understands nothing else," von der Leyen said earlier this week after meeting with US Senator Lindsey Graham. But there's a catch: unlike other sanctions the bloc has imposed on Russia, such as the multiple export and import bans, the price cap has a political and practical dimension that exceeds the institutional sphere of Brussels and stretches across the ocean. More specifically, to Washington, DC. The price cap on Russian oil was introduced in December 2022 by the Group of Seven (G7) under the initiative of the Joe Biden administration. It was hailed as an ingenious, ground-breaking mechanism to mobilise the collective power of Western allies and cripple Russia's high-intensity war machine. As part of the plan, the G7, together with Australia, passed laws prohibiting their domestic companies from providing services, such as insurance, financing and flagging, to Russian tankers that sold seaborne crude oil above a predetermined price. The secret lay in market power: for decades, Western firms, particularly British ones, have dominated the sector of Protection and Indemnity (P&I), a type of insurance that gives shipowners broad protection and allows them to cover potentially huge costs from any accidental harm caused to the crew, their property or the environment. Due to the inherent risks of moving oil in high waters, P&I is today considered the norm in maritime trade and a must-have to be accepted in a foreign port. By leveraging their leading firms, the G7 intended to create an extraterritorial effect that would cap the price of Russian oil not only within their jurisdictions but all around the world. Following intense behind-the-scenes talks, the cap was set at $60 per barrel, a compromise between hard-line and cautious member states. The strategy only worked up to a point however. Although the price of Russian Urals oil gradually decreased, it consistently remained above the $60 mark, often exceeding the $70 threshold. The blatant circumvention was attributed to the "shadow fleet" that Russia deployed at high sea. These tankers are so old and poorly kept that they fall outside P&I standards and rely on alternative, obscure insurance systems that escape G7 surveillance. By the time the cap entered into force, Moscow "had spent months building a 'shadow fleet' of tankers, finding new buyers like India and China, and creating new payment systems, to the point that its oil does not need to be greatly discounted to sell," Luis Caricano, a professor at the London School of Economics, wrote in a recent analysis. "What should have been a blow became a manageable problem," Caricano said. With few sectors in the Russian economy left to sanction, Brussels has turned its sight to the cap as a means to tighten the screws on the Kremlin and secure a ceasefire in Ukraine. The Commission has reportedly pitched a revision between $50 and $45 per barrel, which the UK and Canada are believed to support. However, the US has so far refrained from endorsing a lower price cap, raising the stakes ahead of crunch talks at the G7 summit in Alberta, scheduled for mid-June. Now, a tough question emerges: Can the EU dare, and afford, to go it alone? In the strictest legalistic sense, the EU could, indeed, establish a lower price cap on its own. After all, the G7, as an organisation, lacks regulatory powers: each ally amends its laws individually to fulfil a collective mission. In this case, the EU introduced new legislation to prohibit EU companies – rather than, say, American or British companies – from servicing Russian tankers that bypassed the $60-per-barrel cap. Similarly, the bloc could now change the text to adjust that prohibition to a tighter price without waiting for other allies to reciprocate. Here appears the first roadblock: any change to sanctions must be approved by a unanimous vote among member states. It is highly unlikely that all 27 countries would choose to move forward with a lower cap without having an explicit guarantee that Washington will follow suit. Hungary, in particular, has fully aligned itself with the Trump administration and could veto any proposal opposed by the White House. Even if the bloc managed to overcome internal differences and agreed to a lower cap on its own, more formidable obstacles could impede its success. The bloc's revised cap would have to co-exist with America's existing cap. This means that one side of the Atlantic Ocean would apply a $50-per-barrel limit while the other side would apply a $60-per-barrel limit, creating a cacophony for all actors involved. "Different price caps across G7 countries could confuse maritime service providers and weaken overall enforcement," Petras Katinas, an energy analyst at the Centre for Research on Energy and Clean Air (CREA), told Euronews. "A solo move by the EU could cause friction within the Price Cap Coalition, damaging trust and coordination, both of which are crucial for keeping pressure on Russian oil revenues," Katinas added, warning the project could be rendered "largely symbolic". The legislative chaos would immediately benefit the Kremlin, which has long sought to exploit loopholes to evade and undermine international sanctions. Moscow, though, would also face hurdles: the continued crackdown on "shadow fleet" vessels has forced the country to increase its reliance on G7 insurance, which, in theory, could make it easier for the EU to apply the revised measure. "If the EU alone decides to tighten the screws on the cap, it's an additional constraint on Russia's oil exports but not as tight as with a whole of G7 approach," said Elisabetta Cornago, a senior researcher at the Centre for European Reform (CER). Besides practical snags and legal matters, there is geopolitics to consider. One of the reasons why the G7 initiative has fallen short of expectations is that, as the name suggests, it has remained a G7-exclusive plan. Countries in Asia, Latin America and Africa have refused to play along and join the coalition. China and India openly buy Russian crude oil, sometimes to refine it and resell it under a different label. Having the EU and the US go separate ways would further destabilise the Western alliance and create the impression of a transatlantic break-up. But for many, that is already a reality: the "Coalition of the Willing", born after Donald Trump unilaterally launched negotiations with Vladimir Putin, bears testament to the political divide. "The price cap was a G7 + EU initiative, and so in its current form, I do not see any pathway in which the EU could adjust the cap without the support of the broader coalition, including the US," said Ben McWilliams, an affiliate fellow with Bruegel. "That said, the EU is free to implement whatever measures it wants on its own domestic ships and insurance companies, which it could likely encourage the UK to join," McWilliams added. "So the EU can still move ahead – it would just need to be under a different institutional format than currently exists." This week we are joined by Mika Aaltola, a Finnish MEP representing the centre-right European People's Party, Dorota Bawolek, a seasoned EU correspondent for Polish broadcaster TVP and Ian Lesser, Vice President of the German Marshall Fund, the transatlantic think tank. US President Donald Trump's renewed trade offensive has left Brussels rather stressed with sweeping tariffs hitting European steel, aluminium, and car exports — and threats of more to come. European Trade Commissioner Maroš Šefčovič is trying to defuse the crisis, warning that retaliatory EU measures could kick in as early as July 14. MEP Mika Aaltola blasted the US approach as 'unfair treatment'. The OECD also warned this week that Trump's tariffs are dragging global growth to its weakest levels since the COVID-19 pandemic. In a very tight presidential race, Poland elected conservative Karol Nawrocki, a nationalist and eurosceptic, narrowly defeating pro-EU candidate and Warsaw mayor Rafał Trzaskowski. The result marks a blow for Prime Minister Donald Tusk who has called for a vote of confidence in his government early next week. Nawrocki's rhetoric — emphasizing national sovereignty, anti-migrant policies, and a rejection of 'Brussels diktats' — has alarmed Europhiles. However, his nationalist platform resonated with a rather divided electorate. "He's not very presidential", Dorota Bawolek told the panel adding that history shows Poles prefer an 'ordinary guy'. Finally, the panel discuss the Spanish Prime Minister Pedro Sánchez' diplomatic setback after the EU Council rejected his proposal to make Catalan, Basque, and Galician official EU languages. The move, promised to Catalan separatists in exchange for political support, was rejected by member states over fears of a domino effect involving other regional languages. Watch the full episode in the player above.
Business Recorder
4 days ago
- Business
- Business Recorder
Russian Urals oil to India sells at narrowest discounts since 2022, traders say
MOSCOW/NEW DELHI: Discounts for Russian flagship Urals crude oil for delivery to Indian ports in July hit their narrowest levels since 2022 as spot supplies have tightened, four traders involved in the market said on Friday. Narrowing discounts and tight spot supplies are nudging Indian refiners to scout for alternatives through buying tenders. Spot discounts for Urals crude narrowed to $2.25 per barrel on average for cargoes arriving in India in July, from $2.70 to $3.10 per barrel to dated Brent on delivery ex-ship (DES) basis in the previous month, the sources said. That is the narrowest discount for Urals oil cargoes sold to India since the Ukraine war broke out in 2022. India became the largest buyer of Russian seaborne crude after Moscow diverted its energy supply away from the European Union which imposed a ban. India's GAIL sells LNG cargo as early monsoons cause weak power demand, say sources Some Indian refiners which do not have long-term supply agreements with Russian oil companies are not getting enough Urals oil in July, the sources said. India's largest private refiner, Reliance Industries, locked in a term supply contract with Russian oil giant Rosneft last year, which reduced the availability of Urals in the spot market, they said. Russian oil traders cited higher demand for the grade from refiners in Turkey, which has recently increased buying, boosting competition with Indian refiners over the supply. Turkey's largest oil refiner, Tupras, resumed buying Urals in April after stopping earlier this year, because of tougher U.S. sanctions on Moscow. Two of the traders also said improving refining margins globally also helped boost Russian oil demand as refiners are eager to increase crude runs. India remains the biggest buyer of Russian Urals oil by sea, with imports hitting a 10-month high in May.
Yahoo
4 days ago
- Business
- Yahoo
Russian Urals oil to India sells at narrowest discounts since 2022, traders say
MOSCOW/NEW DELHI (Reuters) -Discounts for Russian flagship Urals crude oil for delivery to Indian ports in July hit their narrowest levels since 2022 as spot supplies have tightened, four traders involved in the market said on Friday. Narrowing discounts and tight spot supplies are nudging Indian refiners to scout for alternatives through buying tenders. Spot discounts for Urals crude narrowed to $2.25 per barrel on average for cargoes arriving in India in July, from $2.70 to $3.10 per barrel to dated Brent on delivery ex-ship (DES) basis in the previous month, the sources said. That is the narrowest discount for Urals oil cargoes sold to India since the Ukraine war broke out in 2022. India became the largest buyer of Russian seaborne crude after Moscow diverted its energy supply away from the European Union which imposed a ban. Some Indian refiners which do not have long-term supply agreements with Russian oil companies are not getting enough Urals oil in July, the sources said. India's largest private refiner, Reliance Industries, locked in a term supply contract with Russian oil giant Rosneft last year, which reduced the availability of Urals in the spot market, they said. Russian oil traders cited higher demand for the grade from refiners in Turkey, which has recently increased buying, boosting competition with Indian refiners over the supply. Turkey's largest oil refiner, Tupras, resumed buying Urals in April after stopping earlier this year, because of tougher U.S. sanctions on Moscow. Two of the traders also said improving refining margins globally also helped boost Russian oil demand as refiners are eager to increase crude runs. India remains the biggest buyer of Russian Urals oil by sea, with imports hitting a 10-month high in May. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
See - Sada Elbalad
5 days ago
- Business
- See - Sada Elbalad
Russia's Oil Revenues at Two-year Low
Taarek Refaat Russia's revenues from oil fell last month to their lowest level since June 2023 amid the global oil price slump. Oil-related tax revenues fell 32% year-on-year last month to 430.4 billion rubles ($5.5 billion), according to Bloomberg estimates based on data released by the Finance Ministry on Wednesday. Total oil and gas revenues amounted to 512.7 billion rubles, a decline of more than 35%. Crude prices fell as US President Donald Trump's tariff policy threatened to slow the global economy, while the OPEC+ alliance accelerated production increases in an already oversupplied market. The alliance's decision to increase production, led primarily by Saudi Arabia, drew opposition from a group led by Russia at a meeting over the weekend. Oil and gas are the backbone of Russian state finances, accounting for about a third of tax revenue. Amid the decline in oil prices, the government revised its budget forecast and tripled its fiscal deficit target. Oil revenues fell by more than half in May compared to the previous month, according to Bloomberg estimates. This reflects the fact that one of Russia's main oil taxes—which is levied on profits—is paid four times a year: in March, April, July, and October. The Finance Ministry estimated oil taxes based on an average price of Urals crude at $54.76 per barrel in April, a drop of more than a quarter compared to the same period last year. The price remained below the $60 per barrel ceiling imposed by the Group of Seven nations to squeeze Russia's revenues for the second consecutive month, according to historical data. The rouble's strength has also impacted the price of crude oil in Russia. The rouble's strength has also contributed to lower revenues from the oil sector, with the currency rising 10% during the tax period compared to the same period last year, to 83.317 rubles to the dollar. read more CBE: Deposits in Local Currency Hit EGP 5.25 Trillion Morocco Plans to Spend $1 Billion to Mitigate Drought Effect Gov't Approves Final Version of State Ownership Policy Document Egypt's Economy Expected to Grow 5% by the end of 2022/23- Minister Qatar Agrees to Supply Germany with LNG for 15 Years Business Oil Prices Descend amid Anticipation of Additional US Strategic Petroleum Reserves Business Suez Canal Records $704 Million, Historically Highest Monthly Revenue Business Egypt's Stock Exchange Earns EGP 4.9 Billion on Tuesday Business Wheat delivery season commences on April 15 News China Launches Largest Ever Aircraft Carrier Sports Former Al Zamalek Player Ibrahim Shika Passes away after Long Battle with Cancer Sports Neymar Announced for Brazil's Preliminary List for 2026 FIFA World Cup Qualifiers News Prime Minister Moustafa Madbouly Inaugurates Two Indian Companies Arts & Culture New Archaeological Discovery from 26th Dynasty Uncovered in Karnak Temple Business Fear & Greed Index Plummets to Lowest Level Ever Recorded amid Global Trade War Arts & Culture Zahi Hawass: Claims of Columns Beneath the Pyramid of Khafre Are Lies News Flights suspended at Port Sudan Airport after Drone Attacks News Shell Unveils Cost-Cutting, LNG Growth Plan Videos & Features Video: Trending Lifestyle TikToker Valeria Márquez Shot Dead during Live Stream
