New Western measures aim to turn up the heat on Putin’s oil revenues. Analysts are underwhelmed
Freight wagons carrying oil and fuel at a petroleum products terminal in Riga, Latvia, on Feb. 2, 2023.
Bloomberg | Bloomberg | Getty Images
The West’s latest attempt to ramp up its oil war against Russia may cause some market dislocation, but some energy analysts remain far from convinced that the restrictions will constitute a “transformative event.”
An EU ban on Russian oil product imports came into effect on Feb. 5, following similar restrictions on EU crude oil intake, implemented on Dec. 5. The Group of Seven wealthy countries, the European Union and Australia on Friday on Friday set a ceiling for the price at which nations outside of the coalition may purchase seaborne Russian diesel and other refined petroleum products and still benefit from Western shipping and financial facilities.
The price cap coalition, which is composed of Australia, Canada, the EU, Japan, the U.K. and the U.S., seeks to deplete Russian President Vladimir Putin‘s war chest amid Moscow’s ongoing hostilities in Ukraine.
The EU and its G-7 allies said last week that it had set two price caps for Russian petroleum products — one is a $100 per barrel cap on products that trade at a premium to crude, like diesel, and the other is a $45 cap for petroleum products that trade at a discount to the same basis.
Some analysts warned that the measures could cause “significant market dislocations” and that the EU embargo was more complex and more disruptive than what had come before.
Not everyone shares this assessment.
“There is an overwhelming assumption that this will be a huge disruption to everything. I don’t really think this will be a transformative event,” Viktor Katona, lead crude analyst at Kpler, told CNBC’s “Squawk Box Europe” on Monday.
“I don’t really think that this will have the impact that a lot of people can imagine, and the main driver for this will be actually human creativity — and the constant search for a new solution, for a new supply chain or for a new route,” Katona said.
“This will bring us basically into the same story that we had with the oil price cap back in December. People expected a lot of things. In the end, it never really happened,” he added.
‘Russia may struggle to compensate fully’
As part of the sixth EU package of sanctions against Russia that was adopted in June last year, the 27-member bloc imposed a ban on the purchase, import or transfer of seaborne crude oil and petroleum products from Russia. The restrictions applied in early December and February, respectively.
Russian President Vladimir Putin chairs a meeting with members of the Security Council via a video conference on Feb. 3, 2023.
Pavel Byrkin | Afp | Getty Images
Asked whether those predicting significant market disruption because of the measures targeting Russia’s refined oil products were likely to be wide of the mark, Katona replied, “I think they are. I would say that the main development of the past two weeks when it comes to Russian diesel has been happening not in Europe, but in North Africa.”
Katona said North African countries were expected to receive at least 6 million barrels of ultra-low sulfur diesel from Russia, estimating that this was roughly one-quarter of what the European Union used to purchase from Moscow.
He explained that a “substantial transformation clause” remains under question because North African countries are not members of the price cap coalition.
“Basically, you drip one droplet of something else into a cargo of Russian diesel and it is already Moroccan, it is already Algerian, it is already Tunisian,” Katona said. “All of these countries have seen quite a substantial uptick in Russian diesel flows. And our expectation is that Feb. 5 kicks in, and there will be a lot of flows from North Africa, basically Russian in all but name.”
Ahead of the Western ban on its oil supplies, the Kremlin reaffirmed its opposition to the measures and warned that it would cause further market imbalances.
“It will lead to further imbalances on the international energy markets,” Kremlin spokesman Dmitry Peskov told reporters Friday, according to Russian news agency Tass. “Naturally, we are taking precautions to protect our interests from the risks associated with it.”
Energy analysts at political risk consultancy Eurasia Group said that the latest wave of Western sanctions was likely to dislocate flows rather than cause a severe disruption of supplies, noting that oil-product markets have had several months of advance notice to prepare for the restrictions.
“Still, while flows are readjusting, some disruption is possible, especially in the middle distillate market, which was already tight before the latest sanctions,” analysts at Eurasia Group said in a research note.
“Russia may struggle to compensate fully for the loss of EU buyers, especially if a recovering China stops exporting so much surplus fuel and instead starts to import significant quantities again,” they added.
‘Shipments will take longer’
“This is a very substantial disruption to really a key industrial field across much of the euro zone,” Edward Bell, commodities analyst at Emirates NBD, told CNBC’s “Capital Connection” on Monday.
“Russia was the dominant external supplier of diesel to euro zone economies, so the fact that this embargo is now in place means that there will be a little bit of a readjustment and scrambling to get those additional barrels.”
Bell said it appears as though Russia has so far been able to find new markets or expand diesel exports to historical markets, such as to Turkey and partners in North Africa and Asia. “All this means those shipments will take longer,” he added.
“This is not a positive indicator in terms of the direction for prices going downward and easing the burden of energy prices on consumers but in terms of actually disrupting supply it doesn’t like we are in any kind of panic stations just yet.”
Bell suggested Saudi Arabia’s diesel exports to Europe could be set for a “big uptick,” following the West’s embargo on Russian petroleum products.
Xpeng has officially launched its new G7 electric SUV in China, entering the fiercely competitive electric crossover market with a starting price of just 195,800 yuan ($27,325 USD). The G7 is positioned squarely to compete with the Tesla Model Y and the newly unveiled Xiaomi YU7.
It is priced significantly more aggressively than the YU7, which shook up the industry just last week.
The G7, Xpeng’s seventh model, offers an attractive balance of performance, technology, and value, with an emphasis on the latter.
Like Lei Jun with the launch of the YU7 last week, He Xiaopeng was not shy about positioning the G7 against the best-selling Tesla Model Y.
He compared the specs and pricing with the leading premium crossover. Like Jun, he brought up Tesla’s comparison challenge against the new Model Y:
The G7 is powered by a single rear-wheel-drive electric motor producing 292 horsepower (218 kW), it achieves a 0-100 km/h acceleration in 6.5 seconds. Impressively, the G7 can cover between 602 km and 702 km (374-436 miles) based on China’s generous CLTC standard, depending on the battery option and wheel size.
Two battery options are available, both using lithium iron phosphate (LFP) technology: a 68.5 kWh and a larger 80.8 kWh pack. With Xpeng’s advanced 5C charging technology, drivers can recharge up to 436 km (271 miles) of range in just 10 minutes.
Additionally, the G7 supports Vehicle-to-Load (V2L) functionality, providing up to 6 kW of external power, like the YU7 announced last week.
On the design front, the Xpeng G7 adopts the company’s second-generation “X Face” styling, featuring sleek running lights connected by a continuous LED strip, a closed front end for aerodynamic efficiency, and a distinctive “Star Ring” rear taillight design. Xpeng emphasizes the vehicle’s aerodynamics with a drag coefficient of just 0.238 Cd, slightly higher than the Model Y’s 0.230 Cd.
Inside, the G7 embraces minimalism, replacing conventional buttons with a large 15.6-inch central touchscreen powered by Qualcomm’s Snapdragon 8295 chipset. A standout interior feature is the expansive 87-inch augmented reality head-up display (AR-HUD), developed in collaboration with Huawei, that significantly enhances navigation and driving assistance.
Practicality is emphasized with ample cargo space: an 819-liter trunk that expands to 2,277 liters with the seats folded, plus an additional 120-liter compartment beneath the trunk floor and a modest 42-liter front trunk (frunk).
Xpeng is touting an adaptive AI-driven suspension system that actively adjusts to road conditions within milliseconds, allegedly surpassing comfort benchmarks set by the Mercedes-Benz GLE and Tesla Model Y. Cabin quietness also ranks high on Xpeng’s list of priorities.
Luxury and convenience features include dual 50W wireless phone chargers, a 20-speaker premium audio system, and a panoramic sunroof. Passengers in the second row enjoy premium touches like an 8-inch control screen, individual climate settings, a foldable table, and wireless charging.
The top-tier “Ultra” variant employs two proprietary Turing AI chips capable of delivering a massive 2,250 TOPS of computing power, enabling advanced Level 3 autonomous driving capabilities set to become active via an OTA update by December 2025, pending regulatory approval. Standard versions use dual Nvidia Orin-X chips with 508 TOPS.
The Xpeng G7 starts at 195,800 yuan ($27,325 USD) for the base “Max” variant with 602 km of range, stepping up to 205,800 yuan ($28,720 USD) for the longer-range “Max” (702 km) and topping out at 225,800 yuan ($31,510 USD) for the high-end “Ultra” trim.
Customers ordering the G7 Ultra before July 31 will receive complimentary upgrades including Nappa leather and power door handles.
G7 quickly demonstrated its popularity by securing 10,000 pre-orders in just 46 minutes.
Electrek’s Take
It’s not 200,000 orders within 3 minutes like the YU7, but Xpeng doesn’t have the brand power that Xiaomi has.
Nonetheless, it is pretty impressive.
The price is insane. The specs are competitive with the Model Y, which starts at 263,500 yuan and ranges up to 313,500 yuan ($36,770 – 43,750 USD), but the price starts at about $10,000 USD less.
Between this, the YU7 last week, and a few more models launching this month, the premium crossover segment is about to get crowded in China.
I think the Model Y is in serious trouble in China. We are about to see how it fares with real competition.
FTC: We use income earning auto affiliate links. More.
Tesla’s humanoid robot program, Optimus, is reportedly in disarray amid the departure of the senior vice president in charge, Milan Kovac.
Production has been delayed due to a new redesign, as the robot has yet to prove useful in Tesla’s factories.
Elon Musk has previously set a goal for Tesla to produce 5,000 to 10,000 Optimus humanoid robots this year.
The goal has reportedly been delayed as sources within the Chinese supply chain report Tesla informed suppliers of a 2-month halt on orders.
AI Invest first reported the news, and The Information later corroborated the report:
Two supplier sources said Tesla has not explicitly stated it will reduce robot parts orders but will wait until the Optimus design adjustments are completed before finalizing a new mass production plan and resuming procurement. The adjustments may take two months. Musk recently stated on social media that the new version of Optimus has seen significant improvements over the second-generation Optimus unveiled in 2023 and now includes voice interaction powered by Grok.
The news came after we learned that Milan Kovac, the head of the Optimus program left Tesla last month, just months after being promoted to senior vice-president by Musk.
The new reports confirm that Ashok Elluswamy, who was elevated to senior vice-president in charge of self-driving at the same time as Kovac, is taking over responsabilities.
AI Invest reported some concerns from Tesla about Optimus that reportedly trickled down to Chinese suppliers:
According to Tesla’s feedback to suppliers, Optimus still faces hardware challenges, including overheating in some joint motors, low load capacity in dexterous hands, short lifespan of transmission components, and limited battery life. Tesla is currently evaluating samples from multiple dexterous hand suppliers, testing at least three different technical approaches. On the software side, Tesla may use more synthetic data to train the robot model, improving Optimus’ autonomous operation capabilities and success rate in performing complex tasks.
According to the report, Tesla had secured parts to build over 1,000 Optimus robots earlier this year and built quite a few, but they are currently only used “for moving batteries in Tesla’s battery workshops, with efficiency less than half that of human workers.”
The redesign is expected to delay plans by at least two months and could push many of Tesla’s goals.
However, Tesla is expected to still move ahead with the prgroam and it is likely to unveil the new generation of Optimus robots at its shareholders meeting this year.
Electrek’s Take
As I previously stated, I’m actually quite hyped for humanoid robots, but I don’t think they will be nearly as big as Musk claims and I simply don’t see Tesla having a significant advantage over the competition, which is significant.
Companies like Unitree are already selling robots, Figure has made impressive progress and poached from Tesla, then there’s Boston Dynamics and dozens more.
Kovac leaving just as Tesla is supposed to ramp-up production to 50,000 units next and make this a “multi-trillion-dollar” product is a red flag.The engineer would have certainly received sweet stock option packages when he was elevated to SVP and would have likely made a fortune if he would have been able to deliver on Musk’s goals.
But I think the real product at Tesla now is the stock – hence why they reportedly plan to unveil the next generation of the robot at the shareholders meeting and have it do another shady demostration, like it did at the ‘We, Robot’ event where the robots were remotely controlled by humans.
FTC: We use income earning auto affiliate links. More.
Honda is stepping up its electric scooter game with the launch of its second electric model for Europe, the CUV e:. Following Honda’s previous debut of the EM1 e:, a compact, city-focused moped, the CUV e: brings more power, more range, and more real-world usability to riders who want a practical electric alternative to a 125cc scooter.
Now finally ready for the spotlight, the CUV e: is built on an underbone-style frame and powered by a 6 kW side-mounted electric motor producing 22 Nm of torque. That puts it squarely in the 125cc-equivalent category, allowing it to reach a top speed of 83 km/h (52 mph).
It’s not built for the highway, but rather for urban and suburban riders who want to achieve speeds seen on the fastest of urban roads and keep up with just about any traffic in the city. For that role, it looks like a solid performer – more than capable of keeping up with city traffic or carrying a second passenger.
One of the most useful features, especially for urban residents and apartment dwellers, is its use of Honda’s Mobile Power Pack e: swappable battery system. The scooter carries two of these Gogoro-style removable battery units, each rated at 50 V and 1.3 kWh. Combined, they offer over 70 km (43 miles) of WMTC-rated range. Compared to the Honda EM1 e:’s single Mobile Power Pack battery, the dual batteries of the CUV e: give Honda the chance to pull twice as much power or offer twice the range.
Honda’s swappable battery standard is designed for portability and long life, with each pack weighing around 10 kg (22 lb) and rated for 2,500 full charge cycles. Honda has been slowly building a swappable battery ecosystem, and the CUV e: is clearly meant to be part of that larger infrastructure play.
Charging of the batteries is designed to be done easily off-board, either at home or at a battery station (where available). A full charge from 0 to 100% takes about six hours per pack, but Honda says 75% can be reached in just three hours. While fast charging would be nice, the swappable format means riders can keep an extra pair charged and ready if necessary, eliminating downtime altogether.
Honda didn’t skimp on features, either. The CUV e: offers three ride modes (Sport, Standard, and Econ), plus Reverse Assist for easier maneuvering. It includes a fairly spacious flat floorboard, under-seat storage, LED lighting, a USB-C port, and keyless ignition. Buyers can choose between a five-inch color TFT display or an upgraded seven-inch “RoadSync Duo” screen, which supports turn-by-turn navigation, music control, Bluetooth phone integration, and EV-specific ride data.
Positioned as a mid-range electric scooter, the CUV e: fills the space between low-speed mopeds and larger, premium e-motorcycles. It’s a key piece in Honda’s broader electrification strategy, which aims to introduce 10 or more electric motorcycle models globally by 2025 and reach full carbon neutrality in its motorcycle division by the 2040s.
With anticipated pricing starting at around €4,000 (approximately US $4,300), the CUV e: is expected to roll out in Europe first, with other global markets potentially following. Its combination of practical range, moderate speed, high build quality, and swappable batteries could make it an appealing option in cities where electric two-wheelers are on the rise.
If the EM1 e: was Honda dipping a toe into the electric waters, the CUV e: feels like a confident step forward. It’s not flashy, but it’s functional, well-designed, and undeniably useful, which is exactly the kind of machine that could help electric scooters go mainstream.
FTC: We use income earning auto affiliate links. More.
-
Sports3 years ago‘Storybook stuff’: Inside the night Bryce Harper sent the Phillies to the World Series
-
Sports1 year agoStory injured on diving stop, exits Red Sox game
-
Sports2 years agoGame 1 of WS least-watched in recorded history
-
Sports2 years agoMLB Rank 2023: Ranking baseball’s top 100 players
-
Sports4 years ago
Team Europe easily wins 4th straight Laver Cup
-
Environment2 years agoJapan and South Korea have a lot at stake in a free and open South China Sea
-
Sports2 years agoButton battles heat exhaustion in NASCAR debut
-
Environment2 years agoGame-changing Lectric XPedition launched as affordable electric cargo bike