The Russian maritime oil ban goes into effect on December 5th. Dr. Sal explains potential scenarios in the clip. It will affect everyone, traders, tankers, or just people buying gas.
There is a new trading map. Russia can still ship to Africa, South America, China and India. They’ll get Russian oil, launder it, and make a killing selling it.
The EU talked about price caps and embargoes but the damage to the economy from embargoes would be devastating.
Discussions about the price cap are held up by Poland because they want Russia to get a price lower than the going price for Euro crude. It would be a moving price cap and Dr. Sal said you can’t believe how complicated the mechanism for it is.
As another option, the EU is looking to use the indemnity insurance against Russia – prevent them from getting liability insurance. The Russians could self-insure or get insurance at a high cost. That might not work.
China has begun to refuse to accept ship owners’ insurance documents issued in Russia including by the Russian National Reinsurance Company. China said they will not accept Russia’s self-insured ships.
Russia might not be able to get their oil out. At the same time, if OPEC keeps their production down, fuel will spike.