The Russian Oil Supply Shock of 2022 | Crypto Craft

  • The Russian Oil Supply Shock of 2022

    From dallasfed.org

    In the immediate aftermath of Russia’s invasion of Ukraine in late February, early estimates suggested that perhaps 3 million barrels a day (mb/d) of petroleum production—almost 3 percent of world production—had been effectively removed from the global oil market, constituting one of the largest supply shortfalls since the 1970s. Russia accounts for about 10 percent of global petroleum production. Its crude production exceeds 10 mb/d. It is also a major exporter to world markets, exporting about 5 mb/d of crude oil and close to 3 mb/d of petroleum products (Chart 1). Russia’s main customers include Belarus ... (full story)

Comment Options
yieldjunkie
Mar 22, 2022 4:47pm
Permalink
Quoting Arturke
It doesn't matter. It doesn't change anything. Biggest oil supplier remains Saudi Arabia for global economy anyhow no one's gonna change biggest and most important supply line, because Russia attack Ukraine.
It matters quite a bit. Marginal supply changes are the name of the game here - losing 10% of global supply, no matter where it comes from, directly influences price. We have already very clearly seen the market react.

The price of oil is related to the vast majority of consumer goods either directly, via petrochemical-derived products such as plastics, or indirectly via transportation. A sustained supply shock can wreak havoc on consumers through inflation and crush demand, which is part of what the Fed is implying here.

Also, Saudi Arabia alone only accounts for a ~1% larger share of oil exports than Russia. Considering only volume of exports, they are almost equally important.
Reply
yieldjunkie
Mar 22, 2022 1:36pm
Permalink
Quote
Third, if the bulk of Russian energy exports is off the market for the remainder of 2022, a global economic downturn seems unavoidable. This slowdown could be more protracted than that in 1991.
Yikes.
Reply
turnip15
Mar 23, 2022 8:02am
Permalink
Scientists (governments) will be galvanised by the Ukraine matter to seek alternatives to reliance on oil in manufacturing and product research. Politicians will learn not to drop their guard in case the wolf bites their arses.
Reply
Arturke
Mar 22, 2022 1:40pm
Permalink
It doesn't matter. It doesn't change anything. Biggest oil supplier remains Saudi Arabia for global economy anyhow no one's gonna change biggest and most important supply line, because Russia attack Ukraine.
Reply
Arturke
Mar 22, 2022 4:54pm
Permalink
Quoting yieldjunkie
{quote} It matters quite a bit. Marginal supply changes are the name of the game here - losing 10% of global supply, no matter where it comes from, directly influences price. We have already very clearly seen the market react. The price of oil is related to the vast majority of consumer goods either directly, via petrochemical-derived products such as plastics, or indirectly via transportation. A sustained supply shock can wreak havoc on consumers through inflation and crush demand, which is part of what the Fed is implying here. Also, Saudi Arabia...
Well, my friend for plastic forks and plates it will be enough stand alone oil supply from Saudi Arabia for the rest of the world.
Reply
yieldjunkie
Mar 22, 2022 5:07pm
Permalink
Quoting Arturke
{quote} Well, my friend for plastic forks and plates it will be enough stand alone oil supply from Saudi Arabia for the rest of the world.
we can certainly hope!
Reply
Arturke
Mar 22, 2022 5:31pm
Permalink
Quoting yieldjunkie
{quote} we can certainly hope!
Yes, indeed.
Reply
  • Story Stats