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.”
Sustainable construction experts McKinstry have teamed up with leading BESS developers Viridi and the Denver Public Library to deploy a first-of-its-kind solar and battery storage system that sets a new standard for fire safety.
The Denver Public Library sought a battery energy storage system (BESS) that could deliver cost savings without compromising safety for staff, visitors, or the architecturally significant, Michael Graves–designed structure itself. That required a battery backup solution that not only met the city’s fire safety standards, but also addressed public fears about the risk of lithium-ion battery fires.
That unique set of project priorities led the library to Viridi, makers of the RPSLinkEX battery solution that’s equipped with a unique, “passive Fail-Safe thermal management and anti-propagation technology” designed to prevent the sort of thermal runaway that leads to li-ion battery fires.
“Public facilities like the Denver Public Library are at the forefront of demonstrating that energy resilience and safety can go hand in hand,” said Jon M. Williams, CEO at Viridi. “This installation highlights how fail-safe battery storage can empower communities to maximize renewable energy, reduce costs, and maintain reliability – all without compromise.”
Keeping it safe
Viridi doesn’t talk too much about how its passive Fail-Safe thermal management system works, but if you’re picturing heat-dissipating layers, fire-resistant insulation, and strategically-placed phase change materials (or PCMs) limiting the transfer of heat from one cell to another if it begins to overheat, you’ve probably cracked it.
These passive safety features enable safer deployment scenarios in occupied buildings or near critical infrastructure by reducing dependence on active fire suppression systems like sprinklers or fire extinguishers, and convinced the City of Denver to move forward with the project, which is the city’s first-ever solar + battery storage system.
“The entire McKinstry team is very excited about developing and constructing the first Solar + BESS project for the City and County of Denver,” said Jon Ensley, Sr. Construction Project Engineer at McKinstry. “We are appreciative of all our partners and stakeholders who helped to achieve this goal. We value Viridi’s expertise in deploying this technology and the whole team has been great to work with.”
McKinstry says this latest solar project sets, “a new benchmark for how cities can combine renewable energy and battery storage without compromising safety.” And, with solutions like the RPSLinkEX building systems that meet city planners and politicians where they are, instead of trying to educated them about the objective, proven safety of li-ion batteries, Viridi is helping communities adopt cleaner, more resilient clean energy solutions sooner rather than later.
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SOURCE | IMAGES: Viridi, via PV Magazine; Michael Graves.
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China’s Dongfang Electric has installed a 26-megawatt offshore wind turbine, snatching the title of world’s most powerful from Siemens Gamesa’s 21.5 turbine in Denmark.
The Chinese state-owned manufacturer announced today that it has installed the world’s most powerful wind turbine prototype at a testing and certification base. This turbine, the world’s largest for capacity and size, boasts a blade wheel diameter of more than 310 meters (1,107 feet) and a hub height of 185 meters (607 feet). Dongfang shipped the turbine’s nacelle earlier this month – the world’s heaviest – along with three blades.
This offshore wind turbine is designed for areas with wind speeds of 8 meters per second and above. With average winds of 10 meters per second, just one of these giants can generate 100 GWh of power annually, which is enough to power 55,000 homes. That’s enough to cut standard coal consumption by 30,000 tons and reduce CO2 emissions by 80,000 tons. Dongfang says it’s wind resistant up to 17 (200 km/h) on the extended Beaufort scale.
In May, Dongfang said it had completed static load testing on the turbine’s blades, and the turbine is now undergoing fatigue testing, which could take up to a year before the turbine is fully certified.
Read more: Trump just killed all offshore wind zones as US power needs surge
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The autonomous ag equipment experts behind the GUSS robotic sprayers have been developing their AI tech as part of a JV with John Deere for years — and now, that marriage is official. John Deere has acquired 100% of GUSS, and has big plans to pick up that tech and run with it like a … well, you know.
The latest battery-powered GUSS autonomous sprayer made its debut at the 2024 World Ag Expo show in Tulare, California, last summer, where executives from Deere called it, “the world’s first and only fully electric autonomous herbicide orchard sprayer.”
Since then, interest in automated ag equipment has only grown — fueled not just by rising demand for affordable food and produce, but by a national labor shortage made worse by the Trump Administration’s tough anti-immigration policies as well. It’s specifically those challenges around labor availability, input costs, and crop protection that GUSS and John Deere have been spending millions to address.
“Fully integrating GUSS into the John Deere portfolio is a continuation of our dedication to serving high-value crop customers with advanced, scalable technologies to help them do more with less,” explains Julien Le Vely, director, Production Systems, High Value & Small Acre Crops, at John Deere. “GUSS brings a proven solution to a fast-growing segment of agriculture, and its team has a deep understanding of customer needs in orchards and vineyards. We’re excited to have them fully part of the John Deere team.”
About GUSS
The GUSS electric sprayer is powered by a Kreisel Battery Pack 63 (KBP63), which has a nominal energy capacity of 63 kWh, enabling the machine to operate for 10-12 continuous hours between overnight (L2) charges.
The GUSS electric sprayers feature the Smart Apply weed detection system that measures chlorophyll in the various plants it encounters, identifying weeds embedded among the crops, and only sprays where weeds are detected. The company claims its weed detecting tech significantly reduces the amount of chemicals being sprayed onto farmers’ crops, resulting in “up to 90% savings” in sprayed material.
John Deere’s deep pockets will support GUSS as it continues to expand its global reach, and help the group to accelerate Smart Apply’s innovation and integration with other John Deere precision agriculture technologies.
“Joining John Deere enables us to tap into their unmatched innovative capabilities in precision agriculture technologies to bring our solutions to more growers around the world,” says Gary Thompson, GUSS’ COO. “Our team is passionate about helping high-value crop growers increase their efficiency and productivity in their operations, and together with John Deere, we will have the ability to have an even greater impact.”
GUSS-brand autonomous sprayers will be sold and serviced exclusively through John Deere dealers, and the GUSS business will retain its name, branding, employees, and independent manufacturing facility in Kingsburg, California.
More than 250 GUSS machines have been deployed globally, having sprayed more than 2.6 million acres over 500,000 autonomous hours of operation.
Electrek’s Take
Population growth, while slowing, is still very much a thing – and fewer and fewer people seem to be willing to do the work of growing the food that more and more people need to eat and live. This autonomous tech multiplies the efforts of the farmers that do show up for work every day, and the fact that it’s more sustainable from both a fuel perspective and a toxic chemical perspective makes GUSS a winner.
SOURCE I IMAGES: John Deere.
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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