Sanctions on Russian crude oil have ‘failed completely,’ oil analyst says
The G-7, the EU and Australia implemented on Dec. 5 a cap on Russian oil prices.
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Sanctions imposed on Russian crude oil have so far “failed completely” and new price caps could prove immaterial as well, analysts told CNBC.
The European Union is planning to ban imports of refined petroleum products from Russia, including diesel and jet fuel, from Sunday.
The 27-member bloc has already banned the purchase and import of sea-borne Russian crude oil since December.
In addition, the bloc — along with its allies in the Group of 7 and Australia — has set a price cap on Russian seaborne crude oil, which bars the use of Western-supplied maritime insurance, finance and other services unless they are sold below $60 per barrel.
They are part of global efforts to curb Moscow’s ability to raise funds for its war in Ukraine.
The price cap “was invented by bureaucrats with finance degrees. None of them really understand oil markets,” Paul Sankey, president and lead analyst at Sankey Research, told CNBC’s “Street Signs Asia” on Thursday.
“Its been a total bomb, it has failed completely.”
Sankey underlined it has been tough for oil markets because Russian oil supply hasn’t really been interrupted and “they’ve sustained exports at high levels.”
“I heard it from a great source that the Saudis have been asking around as to how come Russian oil is still flowing,” he said.
“That brings the question of what will happen with the sanctions coming up on products, because it just doesn’t seem to work.”
Even though volume has remained robust, the price of Russia’s Urals oil blend has fallen since before the war. Average price for Russia’s Urals oil blend was $49.48 per barrel in January this year, according to Reuters which quoted the finance ministry. That’s below the price cap of $60 set by the EU and G-7, and down 42% from January last year, according to Reuters.
Ahead of the proposed price caps on Russia’s refined products on Feb. 5, member states had yet to agree on a price cap, according to Reuters. It is hoped that a deal can be reached by Friday.
Price cap on refined oil products
Still, Vandana Hari, founder of analytics firm Vanda Insights, said she too was skeptical about the upcoming restrictions on Russian refined oil products.
“The crude price cap was pretty inconsequential,” Hari told CNBC’s “Squawk Box Asia” on Thursday.
“I think the refined product caps that they’re planning — about a $100 [per barrel] for diesel and clean products and perhaps around $45 for dirty fuels like fuel oil — are probably going to be immaterial as well.”
Russian oil will find its way into the markets that are “still welcoming it” like China and India, according to Hari.
“China and India have benefited quite a big deal last year from heavily discounted Russian crude prices and the same’s going to happen to Russian refined products,” Hari noted, although it could be more complicated for Moscow to find markets for such products, she added.
Both China and India have increased their purchases of Russian oil in the wake of Moscow’s invasion of Ukraine, benefiting from discounted rates.
Sankey further noted “oil friendships are greasy” and there’s a lot of different ways to move Russian oil around the world bypassing the price caps.
“One of the things people have highlighted is look at Malaysian oil. Its crude oil exports to China is at 1.5 million barrels a day,” said Sankey. “Malaysia only produces 400,000 barrels a day. I don’t think that’s Malaysian crude. So there’s plenty of stuff moving around outside these … theoretical caps. “
China reopening
Separately, Hari said China’s sudden reopening is unlikely to move the needle on oil prices in the near term.
Hari highlighted she does not believe oil prices will hit $100 per barrel anytime soon as a result of China’s reopening, but it could happen more gradually.
There’s still a high degree of uncertainty around China’s oil demand, she added.
“The initial boost in Chinese demand is obvious. We are seeing a lot of travel happening domestically, internationally… that’s positive for jet fuel. But when does the Chinese economy actually pick up momentum again? I think that’s a big question.”
— CNBC’s Sam Meredith contributed to this article
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Feast your eyes on this salad slinging, coleslaw cruising, tuber taxiing produce chariot!
I think this electric vegetable trike might finally scratch the itch long felt by many of my readers. It seems every time I cover an electric trike, even the really cool ones, I always get commenters poo-poo-ing it for having two wheels in the rear instead of two wheels in the front. Well, here you go, folks!
Designed with two front wheels for maximum stability, this trike keeps your cucumbers in check through every corner. Because trust me, you don’t want to hit a pothole and suddenly be juggling peaches like you’re in Cirque du Soleil: Farmers Market Edition.
To avoid the extra cost of designing a linked steering system for a pair of front wheels, the engineers who brought this salad shuttle to life simply side-stepped that complexity altogether by steering the entire fixed front end. I’ve got articulating electric tractors that steer like this, and so if it works for a several-ton work machine, it should work for a couple hundred pounds of cargo bike.
Featuring a giant cargo bed up front with four cascading fruit baskets set up for roadside sales, this cargo bike is something of a blank slate. Sure, you could monetize grandma’s vegetable garden, or you could fill it with your own ideas and concoctions. Our exceedingly talented graphics wizard sees it as the perfect coffee and pastry e-bike for my new startup, The Handlebarista, and I’m not one to argue. Basically, the sky is the limit with a blank slate bike like this!
Sure, the quality doesn’t quite match something like a fancy Tern cargo bike. The rim brakes aren’t exactly confidence-inspiring, but at least there are three of them. And if they should all give out, or just not quite slow you down enough to avoid that quickly approaching brick wall, then at least you’ve got a couple hundred pounds of tomatoes as a tasty crumple zone.
The electrical system does seem a bit underpowered. With a 36V battery and a 250W motor, I don’t know if one-third of a horsepower is enough to haul a full load to the local farmer’s market. But I guess if the weight is a bit much for the little motor, you could always do some snacking along the way. On the other hand, all the pictures seem to show a non-electric version. So if this cart is presumably mobile on pedal power alone, then that extra motor assist, however small, is going to feel like a very welcome guest.
The $950 price is presumably for the electric version, since that’s what’s in the title of the listing, though I wouldn’t get too excited just yet. I’ve bought a LOT of stuff on Alibaba, including many electric vehicles, and the too-good-to-be-true price is always exactly that. In my experience, you can multiply the Alibaba price by 3-4x to get the actual landed price for things like these. Even so, $3,000-$4,000 wouldn’t be a terrible price, considering a lot of electric trikes stateside already cost that much and don’t even come with a quad-set of vegetable baskets on board!
I should also put my normal caveat in here about not actually buying one of these. Please, please don’t try to buy one of these awesome cargo e-trikes. This is a silly, tongue-in-cheek weekend column where I scour the ever-entertaining underbelly of China’s massive e-commerce site Alibaba in search of fun, quirky, and just plain awesomely weird electric vehicles. While I’ve successfully bought several fun things on the platform, I’ve also gotten scammed more than once, so this is not for the timid or the tight-budgeted among us.
That isn’t to say that some of my more stubborn readers haven’t followed in my footsteps before, ignoring my advice and setting out on their own wild journey. But please don’t be the one who risks it all and gets nothing in return. Don’t say I didn’t warn you; this is the warning.
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In the Electrek Podcast, we discuss the most popular news in the world of sustainable transport and energy. In this week’s episode, we discuss Trump’s Big Beautiful bill becoming law and going after EVs and solar, Tesla, Ford, and GM EV sales, Electrek Formula Sun, and more
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Here are a few of the articles that we will discuss during the podcast:
- Electrek FSGP 2025: New teams, new cars, same solar spirit
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- Xpeng launches G7, a new Tesla Model Y competitor for just $27,000
Here’s the live stream for today’s episode starting at 4:00 p.m. ET (or the video after 5 p.m. ET:
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