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.”
For the last few weeks, we’ve been running a sidebar survey about how much Electrek readers think it would cost to add EV charging systems to their homes. After receiving over twenty-four hundred responses, here’s what you told us.
In our previous survey, we asked readers why they chose to install solar panels at home. In the recap, many of our commenters mentioned having their systems systems pull double duty — charging home backup batteries and topping off their electric cars. That got us thinking: as more and more first-time EV owners look into the many benefits of home charging, how much do they expect to pay for home charging?
Based on over 2,400 responses, this is what you told us.
What do you expect to pay for home charging?
The most positive surprise was that more than a third of Electrek readers who responded to the poll already had 240V outlets in their garage, so they expected to pay effectively $0 – their homes are EV ready now!
Of the remaining 64%, 44% were fairly evenly split between a relatively straightforward ~$500-1,000 wiring job with a few wiring or panel upgrades while only about 18% expected to spend over $1,000 due to having an older home, a detached garage, or for some other (apparently pricey and/or inconvenient) reason.
Navigating the questions
Just like you would for home solar, we’d recommend getting a quote from several installers before making a decision. One of our trusted partners, Qmerit, offers a quote-sourcing service called PowerHouse. The service scans pricing from thousands of completed electrification installations across North America to provide the best quotes that take regional variability into account and work with homeowners to “bundle” chargers, installation, and even batteries.
America has arrived at an inflection point in which all of the technical, policy and financial elements are in place to support a societal shift toward whole-home electrification. Now what’s needed is a comprehensive way to assemble these complex elements into a simple, financeable, home-energy retrofit that makes it easier to implement.
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Qmerit says its new bundling program can flag the potential for federal, state, and local utility incentives like the ones we’ve covered from Illinois utility ComEd and others that can reduce or even eliminate the upfront costs of home installations for many.
Original content from Electrek.
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Following a lawsuit brought against the California Air Resources Board (CARB) by major heavy truck manufacturers over California’s emissions requirements, CARB has struck back with fresh lawsuit of its own alleging that the manufacturers violated the terms of the 2023 Clean Truck Partnership agreement to sell cleaner vehicles.
Daimler Truck North America, International Motors, Paccar and Volvo Group North America sued the California Air Resources Board in federal court this past August, seeking to invalidate the Clean Truck Partnership emissions reduction deal they signed with the state in 2023 to move away from traditional trucks and toward zero-emission vehicles (ZEVs). The main point of the lawsuit was that, because the incoming Trump Administration rolled back Environmental Protection Agency (EPA) policies that had previously given individual states the right to set their own environmental and emissions laws, the truck makers shouldn’t have to honor the deals signed with individual states.
“Plaintiffs are caught in the crossfire: California demands that OEMs follow preempted laws; the United States maintains such laws are illegal and orders OEMs to disregard them,” the lawsuit reads. “Accordingly, Plaintiff OEMs file this lawsuit to clarify their legal obligations under federal and state law and to enjoin California from enforcing standards preempted by federal law.”
After several weeks of waiting for a response, we finally have one: CARB is suing the OEMs right back, claiming that the initial suit proves the signing manufacturers, “(have) unambiguously stated that they do not intend to comply.”
They want to sell Americans more diesel
In its lawsuit, CARB argues that monetary damages alone would not make the people of the State of California whole as far as damages are concerned, citing that the stated goal of the 2023 Clean Truck Partnership was, “to achieve emissions reductions that cannot be measured strictly in financial terms,” according to ACT-News.
The agency is asking the court to compel the truck companies to perform on their 2023 obligations or, failing that, to allow CARB to rescind the contract and recover its costs. A hearing on the truck makers’ request for a preliminary injunction was held Friday, with another court date set for November 21, when CARB will seek to dismiss the case brought forth by the truck brands. The outcome of these cases could shape how state and federal government agencies cooperation on emissions rules in the future.
You can read the full 22-page lawsuit, below, then let us know what you think of CARB’s response (and their chances of succeeding) in the comments.
SOURCES: CARB; via ACT-News, Trucking Dive.
If you’re considering going solar, it’s always a good idea to get quotes from a few installers. To make sure you find a trusted, reliable solar installer near you that offers competitive pricing, check out EnergySage, a free service that makes it easy for you to go solar. It has hundreds of pre-vetted solar installers competing for your business, ensuring you get high-quality solutions and save 20-30% compared to going it alone. Plus, it’s free to use, and you won’t get sales calls until you select an installer and share your phone number with them.
Your personalized solar quotes are easy to compare online and you’ll get access to unbiased Energy Advisors to help you every step of the way. Get started here.
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Starting this month, parking lots in South Korea with more than 80 spaces will be required to install solar canopies and carports. But, unlike similar laws that have been proposed in the US, this new law doesn’t just apply to new construction – existing lots will have to comply as well!
South Korea’s Ministry of Trade, Industry and Energy announced in August that it has prepared an amendment to the Enforcement Decree of the Act on the Promotion of the Development, Use, and Diffusion of New and Renewable Energy to the effect that all publicly- and privately-owned parking lots in the Asian country with room for more than 80 vehicles will be compelled to add solar panels to their lots in a move designed to proactively expand renewable energy and create more solar and construction jobs.
In addition to creating jobs and working to stabilize the local grid with more renewable energy, the proposed solar canopies will offer a number of practical, day-to-day benefits for Korean drivers, as well.
The shaded structures will protect vehicles from heavy rain, snow, and the blistering summer sun — keeping interiors cooler, extending the life of plastics and upholstery, and even helping to preserve battery range in EVs and PHEVs by reducing their AC loads (and, of course, provide charging while the cars are parked).
To their credit, Ministry officials absolutely get it. “Through this mandatory installation,” one unnamed official told Asia Business Daily, “we expect to expand the distribution of eco-friendly renewable energy generation facilities while providing tangible benefits to the public. By utilizing idle land such as parking lots, we can maximize land use efficiency. In addition, installing canopy-type solar panels can provide shade underneath, offering noticeable comfort to people using parking lots during hot weather.”
The new rule was approved in late September, and is expected to go into effect later this month, with new installation projects set to begin immediately.
It could work here
South Korea is proving that an idea like is practical. Here in the US, we’re proving that out, too – the Northwest Fire District in Arizona partnered with Standard Solar to build a conceptually similar, 657 kW solar carport system across 12 parking lots (shown, above) that delivers more than 1.23 million kWh of clean, emissions-free power annually and offsets the equivalent of 185,000 vehicles’ worth of harmful carbon emissions.
That’s just Arizona. In New York, a new initiative to help expand solar into parking lots has more than doubled commercially zoned land where EV charging stations can be sited, “freeing up” an additional 400 million square feet of space throughout the city.
Sun-rich states like Texas, New Mexico, and Florida could also benefit, and even if we’re “just” adding fresh energy sources to municipal parking, dealer lots, and public schools, we could do a lot to reduce the cost of energy generation for the entire community. And, for what it’s worth, that seems to be right in line with the big reasons why people are choosing to add solar to their homes today.
What do you guys think – would something like this work in the US, or are we too far gone down the sophomoric, pseudo-libertarian rabbit hole to ever dig our way out? Let us know your take in the comments.
SOURCE | IMAGES: Asia Business Daily, via LinkedIn; Standard Solar.
If you’re considering going solar, it’s always a good idea to get quotes from a few installers. To make sure you find a trusted, reliable solar installer near you that offers competitive pricing, check out EnergySage, a free service that makes it easy for you to go solar. It has hundreds of pre-vetted solar installers competing for your business, ensuring you get high-quality solutions and save 20-30% compared to going it alone. Plus, it’s free to use, and you won’t get sales calls until you select an installer and share your phone number with them.
Your personalized solar quotes are easy to compare online and you’ll get access to unbiased Energy Advisors to help you every step of the way. Get started here.
FTC: We use income earning auto affiliate links. More.
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