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Beefeater

@Beefeater_Fella

Apr 17

Lithuania is buying Russian Grain, possibly stolen from Ukraine.

It is becoming increasingly clear that large quantities of Russian grain are entering the EU through both Latvia and Lithuania. It is likely that some of this grain has been seized from Ukrainian territory occupied by Russia.

Therefore, if this transit of grain through the EU under control, it will bolster Russia’s economy and its war against Ukraine. The quality of this grain is not being checked, and its possible mixing with Lithuanian grain – known for its high quality – will damage the reputation of Lithuanian grain producers.

In addition, the aforementioned entry of Russian grain onto the market has likely caused a significant drop in Lithuanian grain prices, while grain elevators are still full. At the end of 2023, the price of triticale was about 46%, rye about 37% and wheat about 33% lower than in 2022. In other words, grain prices in Lithuania have fallen by a third.

Lithuania has resumed grain purchases from Russia after a break of six months. In February, 12,2 thousand tons worth 1,95 million euros were imported. At the same time, Riga increased imports, which at the end of winter bought 58,8 thousand tons of grain from Moscow for 10 million euros compared to 52,6 thousand tons for 8,7 million euros a month earlier. In general, EU countries purchased 92,6 thousand tons of Russian grain worth 16,9 million euros in February. At the same time, in March Latvia banned the import of these Russian products, and the EU published a proposal to introduce protective duties on them.

Background:

Since 18 March, Lithuania has implemented stricter controls on grain imported into the country from Russia, other states’ regions under Russian occupation, and Belarus. At least three dry cargo ships were captured on video by Russian propaganda while loading grain in Mariupol. Journalists have identified several grain trading companies mentioned in documents related to the loading of grain onto these ships.

Latvia, which had previously stated the need to boycott Russian goods, has also increased supplies from the Russian Federation, thereby supporting Poland’s initiative to ban the import of agricultural products from the Russian Federation and Belarus.

It was previously reported that Russian components that are equipped with Lithuanian gas pipelines must be replaced. Relevant requirement Ministry of Energy of Lithuania directed to the contractor Alvora. The document proposes measures to replace components in the shortest possible time.

The main argument of the Lithuanian Ministry of Energy in this dispute is the fact that Alvora did not provide the relevant documents for the parts, and they turned out to be manufactured in the Russian Federation.

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Next 👉 The EU is dithering over penalty tariffs while Europeans fund the war with Russian imports.

The EU is mulling over tariffs on Russian and Belarusian imports.

The European Union is proposing to increase tariffs on imports of various food products from Russia and Belarus in order, as European Commission president Ursula von der Leyen put it, to “mitigate the growing risk to our markets and our farmers” and “reduce Russia’s capacity to exploit the EU for the benefit of its war machine”.

A duty of either 50% or €95/t (£81/t) could be introduced, which is forecast to result in 5m tonnes less grain being imported by the EU from Russia and Belarus each year. By comparison, the UK has a 35% tariff on imported Russian grains, which has been in place since 1 June 2022.

The proposal, announced by the European commission president, Ursula von der Leyen, follows a plea to EU leaders by the Ukrainian president, Volodymyr Zelenskiy, to do something about grain “stolen” by the Russians from occupied territories.

She said: “We propose the imposition of tariffs on these Russian imports to mitigate the growing risk to our markets and our farmers. They will reduce Russia’s capacity to exploit the EU for the benefit of its war machine.”

The measure is intended principally to head off a potential illegal dumping of grain as the Kremlin seeks to weaponise as much as it can in its war against Ukraine. The increased duties will apply to imports of cereals, oilseeds and related products from Russia and Belarus. But they are designed to allow unhindered passage through EU countries.

As an EU press release put it: “Importantly, the proposed tariffs will … not affect global food security, particularly for developing countries. On the contrary, they are expected to create an incentive for Russia to export to non-EU destination markets, including developing countries.”

Globally, Russia’s abundant provision of grains has done what an excess supply of a product tends to do, according to basic economic theory: crash prices. Reuters reported recently that prices of US and European wheat have “dropped to their lowest in about 3.5 years, weighed down by Russian grain flows which have prompted China to cancel recent purchases from the United States”.

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Next 👉 Farmers Protests - the connection

Farmers’ protests: why the EU wants to increase tariffs on Russian imports but won’t impose sanctions

Why tariffs and not sanctions?

Importantly, sanctions may not be universally supported. Despite Russia’s aggression against Ukraine, many countries continue normal trade relations with the Russian Federation, including the likes of Brazil, South Africa and India – not insignificant players in global trade terms.

Secondly, World Trade Organization (WTO) rules – including on agricultural products under article 4.2 of the Agreement on Agriculture – prohibit outright bans and restrictions, so sanctions may be seen as illegal. The only items that still face bans and restrictions are those items that might threaten health, environmental protection or national security interests under the WTO’s General Agreement on Tariffs and Trade (GATT) 1994.

The first two exceptions obviously do not apply, and Russia’s export of foodstuffs through EU supply chains cannot be claimed as detrimental to national security interests.

And finally, sanctions may not be even unanimous within the EU. According to the Financial Times, the EU’s trade commissioner, Valdis Dombrovskis, is “likely to opt for tariffs rather than sanctions since it would not require unanimous approval from capitals, as is the case with sanctions”.

In contrast, tariffs are less politically controversial. The GATT agreement allows for “duties, taxes or other charges” on imports that can be applied, among other reasons, to enforce government measures to “remove a temporary surplus”. On this basis, the EU has decided to introduce restrictions with a view to reducing the access of Russian grain to its internal market.

The surplus of Ukrainian grain in the EU market, enabled by the lifting of EU trade restrictions on Ukraine at the start of the war, that lies at the heart of farmers’ protests across Europe, and EU officials’ concerns.

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Quality research threads, work and time dedicated - is not free and not sustainable, without support or publishing my content behind a paywall, to ensure the whole operation is funded.

👇 👇 👇 👇 👇 👇 👇 👇 👇 👇 👇 👇 👇 👇 👇

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Beefeater

@Beefeater_Fella

Apr 16

https://x.com/beefeater_fella/status/1775078400652189769?s=61

The rise of Private Military Companies (PMC’s) - in Russia.

Private military companies are coming back into existence now, the Duma has approved the application by the LNG producer Novatech, to build its own private army. Private military companies are big business, reportedly paid up to $100 Billion a year.

As I set out in my thread on the effects of drone strikes (see here for the thread ), Putin has been left with two choices to defend Russian critical infrastructure. 1.) Move air defence equipment away from the front line or 2.) Subcontractor the defence of key oil refineries and infrastructure to their owners and private military companies.

Moscow’s use of PMCs has exploded in recent years, reflecting lessons learned from earlier deployments, a growing expansionist mindset, and a desire for economic, geopolitical, and military gains. Ukraine served as one of the first proving grounds for PMCs, beginning in 2014. The Russians then refined the model as these private mercenaries worked with local forces in countries such as Syria and Libya. Over time, Moscow expanded the use of PMCs to sub-Saharan Africa, Latin America, and other regions—including countries such as Sudan, the Central African Republic, Mozambique, Madagascar, and Venezuela. PMCs now fill various roles to undermine U.S. influence and support Russia’s expanding geopolitical, military, and economic interests.

With operations suspected or proven in as many as 30 countries across 4 continents and an increasingly refined and adaptable operational model, PMCs are likely to play a significant role in Russian strategic competition for the foreseeable future.

PMCs play key roles executing Moscow’s policy objectives and advancing Russian national security interests across the globe. Even though PMCs are technically illegal under Article 13.5 of the Russian Constitution, some of President Vladimir Putin’s closest allies—such as Yevgeny Prigozhin—head Russian PMCs. A core component of Russia’s "hybrid warfare" strategy, PMCs provide the Kremlin a quasi-deniable means through which to pursue Russian objectives, complementing or substituting for more traditional, overt forms of statecraft.

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Next 👉 PMC spheres of influence

https://x.com/beefeater_fella/status/1775078400652189769?s=61

PMC spheres of influence:

✅ Foreign Policy:
PMCs provide the Kremlin with a tool to expand Russian influence across the globe. Through the use of PMCs, Moscow can support state and non-state partners, extract resources, influence foreign leaders, and engage in other activities that further Russian foreign policy goals.

✅ Military:
With military skills and capabilities, PMCs enable Moscow to project limited power, strengthen partners, establish new military footholds, and alter the balance of power in out-of-area conflicts toward preferred outcomes while maintaining a degree of plausible deniability for the Kremlin. PMC contractors are also more expendable and less risky than Russian soldiers, particularly if they are killed during combat or training missions.

✅ Intelligence:
Often recruited from Russian military and security forces, PMC operatives build intelligence networks in key theaters to collect insights for Kremlin decisionmakers and conduct intelligence operations, including political influence, covert action, and other clandestine activities.

✅ Economic:
PMCs and associated energy, mining, security, and logistics firms provide Moscow a means to expand trade and economic influence in the developing world and build new revenue streams, particularly from oil, gas, and mineral extraction, to reduce the impact of sanctions.

✅ Political:
Typically run by Kremlin-linked oligarchs, PMCs and the lucrative benefits that can accrue from deployments give the Kremlin a lever for balancing competing political and financial interests among oligarchs and exploiting PMCs’ quasi-legal status to ensure loyalty to Putin.

✅ Informational:
Moscow leverages even small-scale deployments to enhance global perceptions of Russian power and global influence while propagating pro-Russian narratives in foreign operating environments through PMC-linked media and disinformation outlets.

✅ Ideological:
PMCs serve as a tool to expand Russian soft power, including themes of "Russian patriotism" and Slavic identity among ideologically minded citizens in the former Soviet states and Balkans.

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Next 👉 PMC’s worldwide backstory

The backstory of Private Military Contractors around the world:

In 1989 the United Nations International Convention against the Recruitment, Use, Financing and Training of Mercenaries - made the use of private companies in warfare illegal. Only 35 countries were signatories (The United Kingdom and the USA were not signatories).

Now before being critical of Russian private military companies, you need to know that other countries use them as well - and sometimes during wars too!

There are currently many Private Military Contractors, both in the UK and the USA today, mostly focussed on defence and security.

👉 Examples based in the US include:

Academi - Consulting. Formerly known as Blackwater and Xe and it is part of the Constellis Group.

Vinnell Corporation - active in Turkey, Saudi Arabia, Iraq.

👉 Examples from the UK include:

Aegis Defence Services - owned by GardaWorld International Protective Services, (Contracted by the US during the Iraq war)

Erinys International (Based in Dubai, a collaboration between British and South Africans)

G4S

Rubicon International Services (Ex commonwealth SF. Acquired by Aegis Defence Services on 28 October 2005.)

👉 Other European examples include:

GEOS - French

Asgard - German

SSTEP - Gibraltar (mostly ex South African National Defence Force)

European Security Academy - Polish

UC Global - Spanish

👉 Southern Hemisphere:

Executive Outcomes, (ceased operations on January 1, 1999; apparently restarted operations in November 2020)

Paladin Group (security company) - from Australia

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Next 👉 Russian PMC’s

Read 9 tweets

Beefeater

@Beefeater_Fella

Apr 10

Drone attacks of refineries - understand Russia’s refined oil production and markets:

In October 2023, Russia saw diesel and gasoline prices soar, and a severe deficit of petrol products in some regions. In an attempt to deal with the situation, the government banned the export of all petroleum products. Although the first ban was eased after a few weeks, the crisis and the frantic response to it revealed accumulating problems in Russian economy and governance.

The development of Russia’s oil refining industry has long been focused on exports. Russia produces up to 15 percent more gasoline than the country needs, while 56 percent of the diesel produced in Russia is sold abroad. Refineries tend to have a fixed slate of output with limited space for maneuver between various oil products.

Russia has only operational storage capacity for fuels, serving as buffers in the supply chain, but no strategic storage. The latter problem has only gotten worse in recent years as oil companies seek efficiency savings by moving to the just-in-time operating model and closing unneeded storage facilities.

How is it possible for an oil-producing giant like Russia to suffer from a lack of fuel?

It’s partly the result of efforts to protect domestic fuel prices from the vagaries of the market, and partly a consequence of government infighting. It’s also a stark demonstration of how the stresses of the war in Ukraine are revealing themselves in unexpected places.

For many years, Russia has attempted to both preserve an ostensibly free market for petroleum products and regulate prices in such a way as to ensure they are independent of the global economy. The aim is to prevent gasoline prices from shooting up and to keep Russian consumers happy.

Artificially low prices, however, have caused energy consumption to remain high and are increasingly difficult and expensive to maintain and would potentially make the economy vulnerable to fuel price fluctuations, when the government would have to abandon the price controls.

Market forces have tested this system several times, obliging the authorities to seek quick fixes. In 2022, the system survived currency volatility and sky-high global oil prices because Western sanctions meant Russian oil companies were having difficulties exporting. The government’s decision to calculate the mineral extraction tax in line with official oil price quotations that bore little relation to reality also helped.

By the summer of 2023, however, oil companies had found new buyers and come up with new ways to transport oil and oil products and collect payments, allowing them to mitigate Western sanctions and resume exports, and the government had modified the price quotations it used for calculating the mineral extraction tax.

At the same time, global prices jumped (petroleum product prices rose even faster than those for crude) and the ruble weakened. All this meant that there was an ever-greater difference between the recommended domestic price and the global market price.

The refiners chose to export their products rather than supply the domestic market at cheaper prices, with less profit. This then led to sever market shortages in refined products including petrol, diesel and lubricants. This is turn saw shortages manifesting in the military, with the army being forced to commandeer the little supplies that were coming to market at gas stations.

Petroleum product consumption dynamics in Russia also changed. There was a boom in demand in southwestern Russia due to military requirements amid the war in Ukraine, and along north-south transport routes leading to holiday destinations in the Caucasus and Russia-occupied Crimea (destinations made more popular by Russia’s international isolation).

In addition, Russia’s grain harvest ripened earlier than usual, and repairs at several oil refineries took longer than anticipated, likely as a result of Western sanctions making it difficult to obtain spare parts and consumables.

The result was a severe regional deficit of petroleum products and price hikes. Railroads that could have been used to bring in supplies from regions without shortages were overloaded (again, likely due to military requirements). The spreading news of a deficit led to price rises across the country.

At the same time, the Finance Ministry—under pressure to raise revenue to fund ballooning military spending—decided to slash so-called “dampener payments” designed to compensate oil companies for selling fuel on the domestic market. Inevitably, this led to a situation in which companies could only supply the domestic market at a loss: both compared with exports, and in absolute terms. The cuts to “dampener payments” began in September, but they were announced in July and the market effect was immediate.

The shortage of petroleum products quickly became a serious issue for the authorities. As well as causing economic problems, particularly in the transportation and agricultural sectors, it showed that officials had lost control of the situation.

Efforts to persuade oil companies to operate at a loss fell on deaf ears. Nor was the Finance Ministry amenable to returning “dampener payments” to their previous level. Indeed, the Finance Ministry blamed the Energy Ministry for the crisis. In the end, the government decided to play its trump card and ban all exports of diesel and gasoline.

After fifteen days, the government partially lifted restrictions on diesel exports for volumes arriving to the ports via pipelines for companies supplying at least half of their produced diesel to the domestic market. Restrictions on gasoline exports, as well as on diesel delivered to ports via railway, remain in force. Yet no matter how short-lived the full ban, it was a draconian step with long-term ramifications.

Using the nuclear option of an export ban was a sign of desperation. Government officials were trying to show ordinary Russians, as well as their bosses in the Kremlin, that they were taking decisive action. But it was also an attempt to seize the initiative in negotiations with oil companies. When there was a deficit, officials pleaded with oil companies to make concessions—whereas the ban had turned the tables on the companies, forcing them to petition the government and come up with possible solutions.

Historical Exports:

In 2022, Russia exported $67.4B in Refined Petroleum. The main destinations of Russia exports on Refined Petroleum were Turkey ($6.51B), France ($6.46B), Germany ($5.19B), United States ($4.73B), and India ($4.05B).

In 2022, Russia imported $1.37B in Refined Petroleum, mainly from Turkey ($289M), South Korea ($233M), Germany ($124M), Finland ($110M), and China ($96.5M).

Historical Imports:

In 2022, Russia imported $1.37B in Refined Petroleum, mainly from Turkey ($289M), South Korea ($233M), Germany ($124M), Finland ($110M), and China ($96.5M).

See graphic for 2021 data.

The invasion of Ukraine - how markets reacted and the impact of restrictions on the Russian supply to the world markets:

An invasion into the Ukraine by Russian troops on 24 February 2022 has as of yet not resulted in a loss of oil supply to the market. Prices nevertheless surged because of exogenous shock (market sentiment/fear), by USD 8/bbl to USD 105/bbl following the news, on expectations that sanctions against Russia would cripple energy exports.

Russia is the world’s third largest oil producer behind the United States and Saudi Arabia. In January 2022, Russia’s total oil production was 11.3 mb/d, of which 10 mb/d was crude oil, 960 kb/d condensates and 340 kb/d NGLs. By comparison, US total oil production was 17.6 mb/d while Saudi Arabia produced 12 mb/d.

Russia is the world’s largest exporter of oil to global markets and the second largest crude oil exporter behind Saudi Arabia. In December 2021, it exported 7.8 mb/d, of which crude and condensate accounted for 5 mb/d, or 64%. Oil product exports totalled 2.85 mb/d, of which 1.1 mb/d of gasoil, 650 kb/d of fuel oil and 500 kb/d of naphtha and 280 kb/d of vacuum gas oil (VGO). Gasoline, LPG, jet fuel and petroleum coke made up the remaining 350 kb/d.

The Russian oil market in 2024.

Russian oil product exports in January slipped 7% month on month in January, according to tanker tracking data, as poor weather and a surge in Ukrainian attacks on key Russian energy targets took their toll on Moscow's key trade flows. Fuel and feedstock exports from Russian ports averaged 2.4 million b/d during the first month of 2024, with the biggest falls seen in fuel oil, vacuum gasoil and naphtha from the Baltic Sea, according to S&P Global Commodities at Sea data.

Crude and product exports from Russia's major Baltic Sea port of Ust-Luga saw the biggest slide overall, with product flows down 150,000 b/d and crude loadings 90,000 b/d lower month on month, the data shows. Novatek's Ust-Luga condensate processing terminal was damaged in a Jan. 21 strike from a suspected Ukrainian drone. Although loadings have since resumed at the plant's terminal, it remains unclear how much capacity remains offline due to the attack.

Exports from the Black Sea port of Tuapse, however, rose by almost 30,000 b/d month on month to average 226,000 b/d, despite a Jan. 25 drone attack on Rosneft's 240,000 b/d Tuapse refinery that damaged the plant's vacuum distillation unit.

Poor weather also hampered oil loadings at Russia's biggest Back Sea oil port of Novorossiisk, with crude and product exports down 25,000 b/d and 45,000 b/d, respectively, month on month, according to the data.

Fuel exports to Brazil, which absorbed record flows of 281,000 b/d of Russian fuels in December, fell sharply in January. At the same time, offshore ship-to-ship transfers of fuels -- which often end up with Russia's main oil-buying customers in Asia and Turkey -- rose sharply month on month to 340,000 b/d, a significant rebound from a recent slump to 82,000 b/d in November, when the US and EU tightened enforcement on sanctions-dodging tankers.

The data shows that Russian diesel exports also continued to rebound in January following the lifting of a temporary export ban and plant maintenance. Russian diesel exports rose 42,000 b/d on the month to a 10-month high of 957,000 b/d, the data shows.

The cost of shipping Russian crude remained relatively stable in January, down from a recent spike due to tougher enforcement of the G7's "price cap" on Russian oil exports, pricing data suggests. The discount for Russia's key Urals export crude loading from Primorsk versus the Mediterranean Dated Strip stood at minus $17.5/b on Feb. 1, from minus $12/b in late October when Platts assessed it at its tightest margin since Russia invaded Ukraine.

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Beefeater

@Beefeater_Fella

Apr 8

Russian Ministry of Finance data release for Oil and Gas revenue - January and February 2024.

Putin declared economic data a state secret back in 2022, and stopped reporting a comprehensive and auditable range of economic information to the World Bank and International Monetary Fund (which they are obliged to report on as a condition of membership of those organisations), back in December 2022.

In spite of the severe restrictions on economic data reporting by Putin, the Finance Ministry do release a carefully selected set of highlights which they have chosen to represent Russia as a thriving and successful economy, while withholding the substance and details of many key indicators and revenue streams.

The information they have since released on a monthly basis to paint the regime as a success - must be viewed as propaganda and they should not be relied on as a statement of truth. In any event, in their attempt to weaponise and propagandise economic data - they do betray some information that shows that things are a lot worse than they would have you believe. (The monthly figures have historically never been accurate and all are “revised to a worse position, normally annually in January or early Feb for the previous year).

The link to the Russian Ministry of Finance report is provided in the links - these are their own declarations.

From the “released data, it appears that Russia is losing its dependence on Oil and Gas revenues - for decades their economy has been mainly built around revenue from its fossil fuels. They now have “other revenue” that has overtaken the size of revenue streams from oil and gas. Understanding what “other revenue” is, provide a clue to the darker side of their economics and worldwide subversive operations which drive revenue.

Oil and Gas revenue:

The oil and gas revenue continues to fall year on year.

2024: January and February revenues total 1.621 Trillion Rubles ($17.5 Billion)
2023: January and February revenues total 947 Billion Rubles (
2022: January and February revenues total 1.766 Trillion Rubles
2021: January and February revenues total 2.756 Trillion Rubles ($36.7 Billion)

Summary:

2024: For the first two months of the year, comparing it’s revenue from the same pre-war period in 2021, Russia has seen a dramatic -41% fall in revenues (when converting to USD this is over 50% with the devaluation of the Ruble).

When comparing its 2024 to last year (2023’s) revenue, there has been a big increase in revenue. The reason for this increase is the oil price rise in 2024.

In the same two month period last year, Russian oil was trading for $59 (below the price cap of $60).

This year Russian oil is trading well above the price cap at $77 per barrel. This strengthens the argument for the G7, the EU and Norway owned / registered / insured seaborne oil carriers, to reduce the price cap from $60 per barrel to $30 per barrel - which is still 100% above the cost price of producing a barrel of Urals.

“Other Revenue”

2024: January and February revenues total = 3.405 Trillion Rubles
2023: January and February revenues total = 2.217 Trillion Rubles
2022: January and February revenues total = 2.439 Trillion Rubles
2021: January and February revenues total = 1.036 Trillion Rubles

2021 saw non oil and gas revenue at it’s lowest, and this revenue has grown steadily year on year since the invasion of Ukraine. It’s other revenue in the first two months of 2024 ( 3.405 Trillion Rubles ), is more than double its revenue from oil and gas in the first two months of this year. The key point here is that Russia is making 66% of all its revenues from non oil and gas revenue in 2024.

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Next 👉 What is “Other Revenue”?

What is other revenue?

Joe Bloggs suggests that the primary reason is that the Russian economy has transformed into a war time economy, with businesses being compelled to produce equipment for the military, which the regime is funding and is reflected as turnover for businesses and hence counted as revenue in these figures.

However, as this turnover is essentially funded by the state, and a corresponding increase in state expenditure is realised - this is a false economy, as value is not being derived without a corresponding cost to the state coffers and expenditure.

I will also suggest that a sizeable (hidden and un-declared) chunk of other revenue, is also being derived from operations across Africa in what was estimated at a Trillion Ruble gold and mineral revenue stream, established by the Wagner group and now continued by the Russian Afrika Corp.

Once the war ends, this inflated view of “other revenue” would disappear over night and the true decline in total revenues would be catastrophic for Russia.

Bear this in mind when reading from press outlets such as Associated Press who recently said that in the “estimate” of the Economic Development Ministry, in February 2024 GDP exceeded last year's level by 7.7% after 4.6% year-on-year [growth] in January. Seasonally adjusted, GDP growth in February amounted to 0.2% month-on-month.

Industrial production growth accelerated to 8.5% year-on-year in February from 4.6% in January. "Seasonally adjusted, production rose by 1.3%. Compared to the level two years ago, there was acceleration to 6.3% after 1.6% a month earlier," the report said.

These growth figures are artificial in a war economy, as it measures growth by an inflated and false economy.

This artificial strength in the war economy though, does have a positive impact on other sectors (providing the war continues and people continue to have jobs).

"Consumer activity is demonstrating confident growth of all components," the ministry said. The combined turnover of retail sales, the food services industry and consumer services grew by 10.6% year-on-year in real terms in February after increasing by 8.1% in January, and was up by 4.7% compared to February 2022, the report said.

Retail sales growth accelerated to 12.3% year-on-year in real terms from 9.1% in January, and growth amounted to 2.5% compared to February 2022. Consumer services grew by 6.4% year-on-year in February, the same as the previous month, and were up by 9.1% from February 2022.

The food services sector saw the strongest acceleration of growth, to 8.9% year-on-year in February from 2.1% a month earlier, and was up 17.6% from two years earlier.

Just to remind you - these are figures carefully manicured by the Russian regime and filtered through propaganda to paint a rosy picture of a buoyant economy in Russia. To make that point, take the regimes “official” inflation rate numbers, they declare that the current inflation rate is 7.5%, when all sectors are reporting double digit increases in cost prices across the economy.

Some sectors including airline, automotive, retail and housing are reporting inflationary increases of between 25 and 70% year on year - yet Putin and his propaganda have carefully published unverified headline numbers suggesting the inflation rate is just 7.5%

The published figures are part of a disinformation campaign to boost support for the regime, the indicted war criminal who has appointed himself as a tsar for a 5th time and to encourage world-wide support for it’s illegal invasion of Ukraine.

For a full analysis of the income, expenditure and economic collapse, please use the provided links - where a lot more information is analysed by the likes of Joe Bloggs and the original publications link to the Ministry of Finance report is provided too.

If you enjoy my threads, please consider supporting my work on Patreon or BuymeACoffee!

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Next 👉 Read my other threads on Economic disinformation:

https://twitter.com/beefeater_fella/status/1743378183364210866

Read my warning thread on trusting data published by a regime led by an indicted war criminal 👇

https://twitter.com/beefeater_fella/status/1743378183364210866

Read 5 tweets

Beefeater

@Beefeater_Fella

Apr 6

Introducing Murmansk: Putin’s lost hope for replacing lost EU Gas Pipeline Revenue.

Murmansk is the seaport and center of Murmansk oblast (region), northwestern Russia, lying 125 miles (200 km) north of the Arctic Circle, and on the eastern shore of Kola Bay, 30 miles (48 km) from the ice-free Barents Sea.

Murmansk Commercial Seaport is a seaport located on the eastern shore of the Kola Bay of the Barents Sea in the city of Murmansk. The port ranks fourth in Russia in terms of processed goods and is the second-largest port in northwest Russia (after the port of St. Petersburg). Murmansk seaport is one of the largest ice-free ports in Russia and forms the backbone of the economy of the city.

Murmansk Port consists of three parts: the Fishing port, the commercial port and the passengers port. In recent years, there has been a trend of repression of all other trading ports because of an increase in exports of coal and a number of other mineral resources, which only Murmansk has the necessary reception and storage infrastructure. Intake of fish was also significantly reduced, as it became more profitable to export, rather than sell inside the country.

In 2022 it was reported that the Russian state-owned energy company Rosatom along with UAE-based DP World are co-developing new ports at Murmansk and Vladivostok on either end of the route. They’re being specially designed to transfer cargo off ice-class ships and onto ordinary vessels. The UAE isn’t the only country to see the opportunity of investing in Russia’s infrastructure. South Korea and China are both eager for new ports and trade routes too.

In 2018 China declared it would cooperate with Russia on an “Arctic Silk Road”, signing 20 bilateral cooperative documents and agreeing to invest in the region. As part of this, Beijing will build several Chinese docks across Russia’s north in ports that are currently underdeveloped and unable to handle massive volumes of shipping. A number of new railways are also being built to service these ports. Construction is underway on a 500-kilometre line to link Perm in the Ural Mountains with several northern port cities. Russia is also dependent on foreign investment to fund much of this new infrastructure, relying on other countries who would greatly benefit from an alternative to the Suez Canal.

Russia has been focusing on developing global sales of seaborne LNG to make up for a drop in pipeline gas exports to Europe.

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Next 👉 LNG Gas is not sanctioned (yet) !

EU, G7 and Norway Sanctions on Russia do not apply to LNG

Despite the EU sanctions exempting Russian LNG exports, restrictions on LNG and drilling technology exports to Russia remain in place. This has spurred Russia’s efforts to bolster its LNG capabilities, aiming for independence from Western technology and open the global LNG market for massive volumes of Russian natural gas.

Imagery intelligence indicates that Russia has constructed an LNG facility in Belokamenka near Murmansk, situated in the Barents Sea. This facility is intended for the production of indigenous LNG trains. Both optical and SAR satellite imagery provide insights into the development and departure of the first LNG train from the facility during the summer of 2023. This ongoing monitoring offers valuable intelligence on Russia’s advancements in LNG production, with implications for the global energy landscape.

At the Arctic-2 LNG terminal situated on the Gydan Peninsula, Russia is constructing its largest LNG export facility. While open-source intelligence suggests that Russians plan for three LNG trains, SpaceKnow’s imagery-intelligence analysis uncovers an additional fourth berth, potentially indicating preparations for a fourth LNG train. This revelation underscores Russia’s ambitious expansion plans for LNG production at the Arctic-2 terminal, signifying its commitment to capitalize on the region’s vast natural resources and strategic location for global energy exports.

As the Arctic-2 LNG terminal aims to become Russia’s primary LNG export hub to the global market, addressing the challenge of shipping LNG to customers is crucial. The Northern Sea Route (NSR) remains ice-free only for a few months during the summer, presenting logistical hurdles for most of the year due to thick ice. Icebreakers are essential to lead convoys of ships through the Arctic Ocean.

To overcome this obstacle, Russia seeks to develop icebreaking-capable LNG tanker vessels. These specialized vessels, exemplified by the Yamalmax class ships currently servicing the neighboring Yamal LNG terminal, are crucial for year-round operations. South Korean shipyard DSME has been instrumental in building these vessels.

To achieve self-sufficiency, Russia endeavors to acquire the technology to domestically produce these icebreaking-capable LNG tankers. SpaceKnow’s imagery analysis captures the construction of these vessels at the Zvezda Shipyard near Vladivostok in the Far East. This development underscores Russia’s strategic efforts to operate the Arctic-2 LNG terminal year-round, enhancing its position in the global LNG market.

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Next 👉 Update April 2024: The project has stalled, ending hopes it will replace the EU pipeline gas revenue

April 02, 2024 update: The project to replace pipeline gas sales to the EU has stalled, thanks to sanctions.

Reuters reports that Russia's largest producer of liquefied natural gas (LNG), has suspended production at its Arctic LNG 2 project due to sanctions and a shortage of gas tankers. The project had been hoping to start commercial deliveries in the first quarter of this year. But plans were complicated last year when it was included in Western sanctions over Russia's conflict in Ukraine, prompting foreign shareholders to freeze participation and Novatek to issue a force majeure.

Novatek began liquefied natural gas (LNG) production at Arctic LNG 2's first train in December, but has been behind schedule in supplying its first cargoes of super-cooled gas from the project amid shortages of ice-class gas carriers. Sources have said the conversion of methane into a liquid at a temperature of minus 163 Celsius (minus 261 Fahrenheit) has now been suspended at the plant.

Its second and third lines were due to begin operations in 2024 and 2026 respectively, with its second production train currently being built at a plant in Belokamenka in the Murmansk region. However, the third train could be used instead at the Murmansk LNG plant announced by Novatek last June. "An option is being considered is to send a second gravity platform for Arctic LNG-2 in the summer, and to use a third one for Murmansk LNG," a source familiar with the plans said. The head of Arctic LNG 2 stakeholder TotalEnergies (), opens new tab said in February that the project's third train had been put on hold but the second train was likely to be installed.

The possible scaling back of the Arctic LNG 2 plant in the Gydan peninsular would complicate Moscow's goal to boost its share of the global LNG market to a fifth by 2030-2035 from around 8% currently. The project had been due to become Russia's largest such plant with eventual output of 19.8 million metric tons per year of LNG and 1.6 million tons per year of stable gas condensate from three trains.

The decision to suspend converting natural gas to LNG is a blow to Russia's goal to capture a fifth of the global LNG market by 2030-2035. It is currently the world's fourth-largest LNG producer with annual exports of 32.6 million metric tons.

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Apr 4

What drives the price of oil?

The current oil price rise is attributable to geopolitical tensions rising in the Middle East, with tensions and conflict spanning from Iran’s retaliatory threats to Israels ongoing operations across its borders and in Gaza.

Also impacting the oil price is the looming OPEC+ cuts in production in the coming months. The price is not moving because of ongoing Ukrainian attacks on oil refineries, which is driving excess stocks of Urals crude which can not be refined - and not a shortage of crude or refined products resulting from the drone attacks.

The price of oil is broadly determined by the relationship between supply and demand. Here we look at seven of the key factors which affect these drivers, and how they affect the price of oil. There are 7 key factors that influence the price of oil:

✅ Supply factors

1. OPEC and OPEC+

The Organisation of Petroleum Exporting Countries, is a cartel made up of 14 countries who export petroleum. Cartel in this instance means that the countries within OPEC have come together to regulate the price of oil by controlling supply.

OPEC used to hold considerable influence over the price and supply of oil. This was evidenced in 1973, when the so-called ‘oil crisis’ saw global crude oil prices nearly quadruple as OPEC restricted supply to a number of countries.

More recently, however, OPEC has warned that the oil market could be heading towards a surplus as a result of the expansion of the American fracking industry. This expansion has led to OPEC's influence declining in the last decade or so.

The OPEC+ alliance in JUNE 2023 - chose to focus on a lower production target for 2024. As well as extending the group's existing supply cuts of 3.66 million bpd for another year, it agreed to reduce overall production targets from January 2024 by a further 1.4 million bpd versus current targets to a combined 40.46 million bpd. Including additional voluntary production cuts, which the nine partaking countries extended to the end of 2024, this results in an even lower target of 38.81 million bpd

The OPEC Secretariat noted the announcements of several OPEC+ countries extending additional voluntary cuts of 2.2 million barrels per day, aimed at supporting the stability and balance of oil markets.

These voluntary cuts are calculated from the 2024 required production level as per the 35th OPEC Ministerial Meeting held on June 4, 2023, and are in addition to the voluntary cuts previously announced in April 2023 and later extended until the end of 2024.

Russia's government has ordered oil companies to lower their output in the second quarter so that the country can meet its OPEC+ production target of 9 million barrels per day (bpd) by the end of June. Previously, Russian Deputy Prime Minister Alexander Novak announced that Russia would cut oil output and exports by an extra 471,000 barrels per day (bpd) in the second quarter, in tandem with production cuts by other OPEC+ members.

These additional voluntary cuts are announced by the following OPEC+ countries : Saudi Arabia (1,000 thousand barrels per day); Iraq (220 thousand barrels per day); United Arab Emirates (163 thousand barrels per day); Kuwait (135 thousand barrels per day); Kazakhstan (82 thousand barrels per day); Algeria (51 thousand barrels per day); and Oman (42 thousand barrels per day) for the second quarter of 2024. Afterwards, in order to support market stability, these voluntary cuts will be returned gradually subject to market conditions.

World oil production is projected to fall by 870 kb/d in 1Q24 vs 4Q23 due to heavy weather-related shut-ins and new curbs from the OPEC+ bloc. From the second quarter, non-OPEC+ is set to dominate gains after some OPEC+ members announced they would extend extra voluntary cuts to support market stability. Global supply for 2024 is forecast to increase 800 kb/d to 102.9 mb/d, including a downward adjustment to OPEC+ output.

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Next 👉 Non-OPEC countries

2. Non-OPEC oil producing countries

In contrast to OPEC oil production, which is subject to central coordination, non-OPEC producers make independent decisions about oil production. Also, in contrast to OPEC, where oil production is mostly in the hands of national oil companies (NOCs), international or investor-owned oil companies (IOCs) perform most of the production activities in non-OPEC countries.

IOCs seek primarily to increase shareholder value and make investment decisions based on economic factors. While some NOCs operate in a similar manner as IOCs, many have additional objectives such as providing employment, infrastructure, or revenue that impact their country in a broader sense.

Led by the United States, non-OPEC+ production is forecast to rise by 1.6 mb/d in 2024 compared to 2.4 mb/d last year when global oil output climbed by 2 mb/d to 102 mb/d. Substantial gains will also come from Guyana, Brazil and Canada, all forecast to pump at record-highs this year.

3. Exogenous shocks

Events that economics cannot explain or control, such as natural disasters, war and geopolitical instability can all impact the price of oil. For example, when Hurricane Katrina hit the east coast of America in 2005, it damaged vital oil supply lines, causing an oil crisis in America. As a result, between 29 August and 5 September 2005, prices for fuel rose more than half a dollar in some parts of the country.

This was then exacerbated by a media frenzy in which it was said that supply of fuel would soon run out, which led to queues of people forming at petrol stations to fill up their tanks. The shortages were so severe that President George W. Bush released 30 million gallons of fuel from the American strategic reserves in an attempt to prevent fuel prices escalating further.

ICE Brent futures rose by $2/bbl during February 2024 as ongoing Houthi shipping attacks in the Red Sea kept a firm bid under crude prices. With oil tankers taking the longer route around Africa more oil was kept on water, further tightening the Atlantic Basin market and sending crude’s forward price structure deeper into backwardation.

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Next 👉 Demand factors

✅ Demand factors that affect oil prices

4. Global economic performance.

The main drivers of the demand market for oil are the USA, Europe and China. Combined, these three consume around 45 million barrels of crude oil per day. The strength of their economies – and global economic performance – can therefore affect the price of oil significantly.

The 2008 financial crash, for instance, brought about a slowdown in industry which in turn lowered the need for oil. Without a similar drop in oil supply, the price of Brent Crude declined by over $100 in a five-month period.

However, when industry recovers which it often does, the price of oil will start to recover. For instance, oil prices were back to over $100 per barrel three years after the 2008 crash.

5. Alternative energy sources

An increased awareness of the benefits of renewable energy sources such as solar and wind could see a decline in the world’s reliance on oil. Electric cars are also responsible, as are pledges by various governments to ban the production of new petrol and diesel cars in the years ahead.

This could see oil prices fall as supply may remain high. However, in the event of dwindling demand, it is also likely that OPEC and other oil-producing parts of the world will reduce their supply to keep prices at a profitable level.

Global oil demand is forecast to rise by a higher-than-expected 1.7 mb/d in 1Q24 on an improved outlook for the United States and increased bunkering. While 2024 growth has been revised up by 110 kb/d from last month’s Report, the pace of expansion is on track to slow from 2.3 mb/d in 2023 to 1.3 mb/d, as demand growth returns to its historical trend while efficiency gains and EVs reduce use.

6. Strength of the US dollar

Following the Bretton Woods conference in 1944, the US dollar was pegged to the price of gold and every other currency was pegged to the dollar. As a result, the dollar became the world’s reserve currency, and oil was bought and sold in US dollars. Even though the US scrapped the gold standard in 1971, oil is still exchanged in US dollars.

This means that the value of the dollar has a major impact on the price of oil. If the dollar becomes stronger, for instance, the price of oil will tend to drop – at least nominally – assuming that all other factors remain constant. Conversely, if the dollar is weak then prices of crude oil will tend to rise.

7. Market speculation

Oil prices are set on the futures markets, which means that market speculation about future events could impact oil’s price. For example, if China chose to build more nuclear power plants, demand for oil could drop substantially.

An increase in global fracking, on the other hand, could see oil supplies rise further and increased speculation in the oil market. However, with various world governments including France, Germany and Ireland having banned fracking, the expansion and development of the fracking industry as another source of oil is uncertain.

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Next 👉 Top producers and consumers - the gap is what matters!

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