Russia is having trouble getting ocean-going tanker ships to carry their oil because of the tanker owners not wanting to carry Russian oil and banks not wanting to finance the shipments. That makes me think the insurance companies who insure ocean shipments could also be enlisted to refuse to insure ocean-going tankers carrying oil originating from Russia.
I recently posted that oil is a fungible commodity that loses its Russian once it is sold. Apparently, I spoke too soon. Apparently it does not lose its Russian identity until it crosses the ocean, which suggests they can only sell it overland, which is much more expensive than ocean tankers.
I did not understand this but the Wall Street Journal reported that the asking price of Russian oil dropped $18 a barrel and is still not finding buyers. Independent oil traders who bought Russian oil under long-term contracts cannot sell it because it is Russian.
A Finnish and a Swedish refiner have stopped buying Russian oil, Valero ended all purchases of Russian oil.
Russia supplies 7.5% of the world’s oil. SWIFT is the main way to pay for Russian oil. I am not sure of the current status of Russia in SWIFT but my sense is SWIFT is moving toward total banning of Russia which would affect not only oil and gas but all Russian exports.
An Indian company said it will now only buy Russian oil when it is delivered (CFR cost and freight) not before it is shipped (FOB freight on board).
Hooray for all those around the world who are honoring the sanctions.
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