Last week, quotes of Russian Urals oil at the moment exceeded $ 42.4 per barrel and reached the level laid down in the budget of the Russian Federation for the current 2020: the situation literally two months ago was inconceivable and unimaginable. And there is no need to invent anything: we all remember too well how the Saudis, who, as it later turns out, made a strategic mistake, were extremely hard dumped in European markets, trying to win them back from their competitors.
And (let's say objectively) undermine the position, first of all, of our OPEC + partners from Russia, including offering raw materials $ 10.25 lower than the stock quotes of the Mediterranean Brent variety. And the quotes of our Urals did drop to $ 12 per barrel at the moment - what’s there, excuse me, please, I still need to talk.
And - such an unexpected, seemingly, a reversal.
But is he so unexpected? As it turns out, this is, to put it mildly, a bit not quite right.
However, let's take it in order.
At the operational level, the Russian oil industry, of course, if it didn’t save (apparently, it didn’t particularly need to be saved), it was greatly simplified by the very intricate configuration prevailing in the US oil refining markets. Moreover, without any crisis related to both the COVID-19 pandemic and the Arab offended, we are walking around. But the late Venezuelan leader Hugo Chavez over this kind of configuration would have sincerely laughed.
Everything is simple here.
After the heavy Venezuelan oil was pushed out from the American markets by severe sanctions, one very interesting scum turned up there: virtual politics and financial interests, when they come into conflict with clean technologies, with iron, with real markets are forced to either retreat or look for some workarounds.
Here, after all, what kind of story happened: the largest American oil refineries, it turns out (so historically), cannot work only on light oil, extracted in West Texas and on American shale deposits. These plants were originally even designed for mixtures, which without fail contained heavy sulfur varieties. Therefore, WTI light oil (also known as Texas light sweet and shale grades close to it) must be mixed at these refineries with heavy oil, which was previously purchased in Venezuela itself.
And now what?
And now we are witnessing a truly phantasmagoric picture: ten (!) Aframax class tankers, approaching the eastern coast of the United States of America, forced to close their own wells, right now, at the height of the overproduction crisis in American production, are approaching, according to the navigation portals Marinetraffic and Vesselfinder, with a capacity of 900 thousand barrels each of Ust-Luga and Novorossiysk. Which are melancholy transporting Russian heavy oil to American refineries. Instead of the Venezuelan, of course: that’s why Commander Hugo (wherever he is now), as we assume, would be especially funny.
All in all - in a tightly overstocked market, for a second! - In the current month, in June, American refineries will receive about 9 million barrels of Russian oil.
This, by the way, is almost twice as much as in the pre-crisis March.
Otherwise, it doesn’t work - otherwise, excuse me, the collapse is not only in production, but also in processing.
And this American oil refining industry - obviously one of the most advanced in the world and structure-forming from the point of view of the national economy - is simply not allowed to be allowed at all. And no dogmatic political Russophobia, as well as the cynical economic policy of American protectionism, can prevent this wonderful process.
And now, let's just imagine what, let us say, with the eyes of Saudi dumping in a similar situation two months ago, those representatives of already European oil refining, which were also originally ground for politically incorrect Russian and sanctioned Iranian varieties?
With some pity and regret, for some reason I think so.
For they, of course, would love to buy high-quality light Arab oil at a low price, but what now, to completely or completely demolish their own refineries ?!
And such things, in general, were easily considered from the very beginning, which is why both Russian President Putin and even American President Trump looked with such surprise at this Saudi dumping hysteria.
And here we must pay tribute to the big players: the problems of dumping and unfair competition in falling markets, in principle, due to an informal transaction, which was almost officially designated as OPEC ++, were solved at least for some time. Together with Saudi Arabia, by the way. And what we are now observing, including “carpet purchases” by China of cheap Arab oil, are just the consequences of not very reasonable dumping, which are localized due to a new deal and will soon come to naught.
But that’s all - it’s all the same, so to speak, the operational level, where both local successes and local failures are possible. However, for all this, the following is quite obvious: the operational situation in Russia, of course, is favorable, but the upward trend in the industry is not locally-operational, but clearly strategic and global. And applies to all oil producing countries.
And just a series of successfully developing external and internal circumstances for the Russian Federation, this obvious and global trend, with all the desire, cannot be explained.
Oil markets are not just slowly recovering. They are restored in a completely controlled and regulated manner, including in terms of price.
Moreover, faster than it could be (but at the same time, of course, a little slower than all the high contracting parties would like), and this is also an obvious and real-time observed industry market trend.
And the events of the recent past are not very interesting to us now: yes, it so happened that the raging world crisis, vital for the Russian economy of the domestic oil industry, of course, dealt a very strong blow, it would be foolish to deny it. But at the same time, the industry managed, let's be quite frank, to suffer the smallest possible damage at the peak of the crisis. At least, many analysts predicted a much more difficult scenario - and, unfortunately, there is still an opportunity to return it.
But such a scenario no longer belongs to the category of the most probable, so - pah-pah-pah.
And, apparently, the forecasts of our oil generals about the fact that by the new year a barrel of Russian oil will fluctuate in value in the range of $ 60- $ 65 were nevertheless more adequate than the opinions of “democratic experts” who laughed so contagiously at these estimates. Well, actually, now it’s all: laughed - and okay.
Now it's time to work seriously.
For now the main question in the medium-term historical perspective will not be the one that sounds like “Who will lose and how much?” Now it’s most curious who and what will benefit from this crisis.
The author’s point of view may not coincide with the position of the publisher.