Sanctions on Russian oil are having the ‘intended effect,’ IEA says
Russia announced that it would cut oil production by 500,000 barrels per day in March after the West slapped price caps on Russian oil and oil products.
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Bans and price caps targeting Russian oil are having the “intended effect” despite surprisingly resilient production and exports in recent months, according to Toril Bosoni from the International Energy Agency.
The European Union’s embargo on Russian oil products came into effect on Feb. 5, building on the $60 oil price cap implemented by the G-7 (Group of Seven) major economies on Dec. 5.
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Bosoni, who’s head of the oil industry and markets division at the IEA, told CNBC on Wednesday that Russian oil production and exports had held up “much better than expected” in recent months. This is because Moscow has been able to reroute much of the crude that previously went to Europe to new markets in Asia.
China, India and Turkey in particular ramped up purchases to partially offset the 400,000-barrel-per-day fall in Russian crude exports to Europe in January, according to the IEA’s oil market report published Wednesday. Some Russian oil is also still making its way to Europe through the Druzhba pipeline and Bulgaria, both of which are exempt from EU embargo.
As such, Russian net oil output fell by only 160,000 barrels a day from pre-war levels in January, with 8.2 million barrels of oil shipped to markets worldwide, the IEA said. The agency added that G-7 price caps may also be helping to bolster Russian exports to some extent, as Moscow is forced to sell its Urals oil at a lower price to those countries complying with the caps, which potentially makes it more attractive than other sources of crude.
Despite Russia’s substantial export volumes, Bosoni argued that this did not mean the sanctions had failed.
“The price cap was put in place to allow for Russian oil to continue to flow to market, but at the same time reducing Russian revenues. Even though Russian production is coming to market, we’re seeing that the revenues that Russia receives from its oil and gas have really come down,” Bosoni said.
“For instance in January, export revenues for Russia were about $13 billion, that’s down 36% from a year ago,” she said. “Russian fiscal receipts from the oil industry is down 48% in the year, so in that sense we can say that the price cap is having its intended effect.”
She also highlighted the growing discrepancy between Russian Urals crude prices and international benchmark Brent crude. The former averaged $49.48 per barrel in January, according to the Russian Finance Ministry, while Brent was trading above $85 a barrel on Thursday.
Importantly, Russia’s 2023 budget is based on a Urals price average of $70.10/bbl, so plunging fiscal revenues from oil operations year-on-year are leaving a substantial hole in public finances.
Bosoni also noted that the indications are that Moscow may not be able to reallocate the trade of oil products in the same way as it has crude exports, which is why the IEA expects exports and production to fall further in the coming months.
“We’re seeing now some reallocation of trade of the products but we haven’t seen the same shift as we saw for crude, which is why we’re expecting Russian exports to fall and production to fall,” she said.
Production cut
Russia announced last week that it would cut production by 500,000 barrels a day in March in response to the latest round of Western bans, amounting to around 5% of its latest crude output.
However, Bosoni said this was in line with the IEA’s expectations.
“This is included in our balances that still see the markets relatively well supplied through the first half of the year, so we’re not too concerned about this decline, we think there’s enough supply to meet demand for the coming months,” she said.
“The question will be when summer comes around, refinery activity picks up to meet summer driving and China rebound really takes off, this is when we can see the market tighten really through the rest of the year.”
In its report, the IEA suggested the production cut may be less about retaliation and more an attempt by Moscow to shore up pricing by curbing output rather than continuing to sell at a large discount to countries complying with the G-7 price caps.
Global oil demand
Global oil demand growth is expected to pick up in 2023 after a sharp slowdown in the second half of 2022, with China accounting for a substantial portion of the projected increase.
The IEA said a pronounced uptick in air traffic in recent weeks highlighted the central role of jet fuel deliveries in 2023 growth. Oil deliveries are expected to surge by 1.1 million barrels a day to hit 7.2 million barrels a day over the course of 2023, with total demand hitting a record 101.9 million barrels a day.
The effects of the West’s latest oil embargo and price cap will be a key factor in meeting that demand growth, the IEA report noted.
“So will Beijing’s stance on domestic refinery activity and product exports amid its reopening. New refineries in Africa and the Middle East as well as China are expected to step in to cater for the growth in refined product demand,” it said.
“If the price cap on products is half as successful as the crude cap, product markets may well weather the storm – but more crude supplies would be required to prevent renewed stock draws later in the year.”
Velotric has continued to regularly update its popular e-bike models, with the latest launch today bringing us the Nomad 2. This fat tire adventure bike carries a host of new features and components, offering a powerful yet comfortable ride on both city streets and off-road trails.
The Velotric Nomad 2 sports a 750W nominally-rated motor with a true 90 Nm of torque. In other words, it’s designed to eat hills for breakfast and lay down some real power when riders need it most. And with both throttle-activated control and 15 levels of responsive pedal assist, that power can be dialed in to the right level for each rider’s own taste. And with a maximum speed of 28 mph, the bike is fast enough to keep up with traffic… when riders aren’t enjoying a relaxing trail ride.
Speaking of pedal assist, Velotric offers what they call SensorSwap, a feature in the pedal assist system that uses both a cadence sensor and a torque sensor and allows riders to select which sensor is being used at any time. The former allows riders to pedal easily while still getting impressive power output from the motor, while the latter offers more intuitive riding that provides a more natural feeling akin to pedaling a bike with extra powerful legs.
Torque sensors are often considered superior for their more refined experience, but cadense sensors are still praised by riders who don’t want to put in the extra effort required by torque sensors. With a torque sensor, the rider’s pedaling effort is multiplied, but a cadense sensor lets riders feel like they’re pedaling without needing to actually provide as much of their own ‘oomph’.
The Nomad 2’s design includes off-road features such as 26×4.0″ tires, a 100mm travel hydraulic suspension fork, and an included parallel linkage suspension seat post.
Combined with the powerful motor that offers 1,000 lb of towing capacity (plus 505 lb of payload), the 75 lb e-bike is built to handle just about anything, and that includes nearly any trail.
“Sometimes the road less traveled is the better one,” says Adam Zhang, the CEO of Velotric. “Nomad 2 speaks to those who love the journey, and the occasional detour! Whether you’re climbing trails, hauling heavy loads, or simply cruising, our latest bike gives you the freedom to ride further, faster, and more comfortably than ever before.”
And since off-road adventures often don’t have clear-cut end times, the bike offers 65 miles of maximum range thanks to the 48V and 14.7 Ah battery with 705 Wh of capacity. That battery is UL-listed and IPX7 waterproof, meaning you can dunk it in water. I’ve done exactly that with Velotric batteries before and they’ve survived for many more rides.
Rounding out the feature list includes a 3.5″ color display, Bluetooth connectivity, USB-C phone charger, 500 lumen headlight, tail light with turn signals, included rear rack with fenders, hydraulic disc brakes, an 8-speed Shimano transmission, and more.
The Velotric Nomad 2 is priced at $1,999 and went on sale today.
Riders can snag it in two sizes with four color options, and with a choice between a high-step and a step-through frame style.
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A Tesla store in New York City has been taken over by people protesting Elon Musk – disrupting the operations.
As we have reported over the last few weeks, there’s a growing movement called “Tesla Takedown,” under which grassroots protests are being organized at Tesla stores around the world.
There have been many more protests this weekend. Some of them had truly impressive turnouts.
For example, hundreds of people showed up to protest at Tesla’s Tuscon location (via Andy Flach):
These protests have been peaceful and legal, but there have been a few exceptions.
At Tesla’s Manhattan store in New York City today, some protestors managed to get inside the store and it started to cause problems.
Here’s a video (via Oliya Scootercaster ):
About 300 people showed up to the protests. Most of them stayed protesting peacefully outside, but a handful of people got in and Tesla employees had to close the stores as more tried to get in.
The police confirmed having arrested 9 people, but the charges are not clear as of now.
In videos of the aftermath, it looks like a few glass doors and windows were broken.
Similar protests have been reported in most major cities in the US and they are planned for the next few weeks.
Electrek’s Take
This is getting bigger and still gaining momentum. I’m honestly surprised by the response. I thought it would last weekend with a few dozen people at a few stores and that’s it.
But it looks like now thousands of people are getting active and it’s becoming a real problem for Tesla.
Enough to get the board to act and remove Elon Musk? I doubt it. Elon has done plenty of fireable offenses and they haven’t even blinked – because they are all in Elon’s pockets.
I think the stock price is the only thing that can really get things moving.
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Electrifying your commercial fleet is a tricky thing. Sure, you want to cut your fuel costs. You want to reduce your operating variables. Heck you you even want to help corporate meet their ESG goals – but where do you start? MAN Trucks is here to help fleet managers get answers.
As more and more heavy trucking fleets begin to deploy electric assets, they’re proving that operators’ range anxiety may be a myth on most routes. That’s true enough here in North America, and truer still in Europe where distances between cities are condensed and trucks like the Mercedes eActros and Renault E-Tech T semi roam.
MAN Trucks are also a popular choice in Europe, and their leadership – unlike most in the industry – have been especially vocal in their criticism of hydrogen, and have fully embraced battery-electric vehicles. As such, it’s no wonder that the company took to LinkedIn to announce its MAN electric commercial vehicles consultation team.
“It’s Full Power here with the MAN electric commercial vehicles consultation team,” writes Roger Turnbull, Head of EV Truck Consultation at MAN Truck. “After another busy week of meetings presenting to haulage and transport organizations of all sizes across the UK – you can feel the EV interest and enthusiasm growing.”
MAN Trucks’ consultation team helps commercial fleet operators in Europe and the UK fully understand the needs of their fleet, analyzes their fuel and maintenance costs, and helps them get a better understanding of what fleet assets are prime candidates for electrification, and what sort of charging solutions might work best for their operations – and that doesn’t always mean on-site charging.
With the capacity for onsite charging now becoming a reality for many plus proof that operators range anxiety maybe a myth on most routes, our industry is already stepping up a gear to find out more.
ROGER TURNBULL, MAN TRUCKS
Off-site charging solutions like those offered by Voltera and Zeem here in the US seem to be somewhat less common in Europe, but the electric trucking infrastructure as-a-whole seems to be a step or two ahead. That, combined with generally higher fuel costs compared to the US, make it a bit easier for fleets to electrify. And MAN will help them see that.
The best part? MAN’s consultation is free, and requires no obligation to buy. “Your MAN EV Consultation Team in the UK offer free information, advice and support,” offers Turnbull. “[Everything] from the basics to multi-vehicle using multiple site locations. Factually checked and honest.”
You can’t do much better than free, right?
Electrek’s Take
Fleet assessments and fleet asset audits are crucial steps on the path to successful fleet electrification. These comprehensive evaluations provide fleet operators with valuable insights into their current fleet operations, energy consumption patterns, and infrastructure needs. By carefully analyzing this data, fleet managers can make informed decisions about which vehicles to prioritize for electrification while minimizing the potential for “surprises” once the trucks are delivered and the funds are tied up.
If you’re a fleet manager reading this, you should get a fleet energy analysis set up soon – whether you’re planning to electrify or not.
SOURCE | PHOTOS: MAN Trucks.
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