Western sham media has no credibility left in the world. From Jaishankar to Saudi minister everyone is calling them out for their bias reporting. Gone are the days of unchecked western propaganda.
This will drive international prices too high. It will be catastrophic situation for many economies worldwide who aren't recovered from Covid shock.
The only good thing that may come out of this is, when survival mode kicks in, countries around the world will start buying cheaper oil from Iran and Venezuela, completely bypassing western sanctions. This will further dent western power.
I think in this Russia Ukraine war, the way westerners have crossed all limits to punish Russia, this has really exposed them in front of the world how big hypocrites they are. Kicking Russia out of SWIFT, Freezing Russian dollar reserves, One sided journalism, Blowing up Pipeline. These are red lines that they have crossed. Now it will be hard for any country to trust them.
The current international order is based on trust on western institutions. As this trust wanes the world order too is slowly collapsing. No matter the outcome of the war, Russia has exposed ugly side of the west for everyone to see.
The final nail in coffin will be alternative international trade currency to US dollar. Maybe a seperate, sanctions proof International currency for trade between countries.
Perhaps we are witnessing end of western led world order and beginning of something new. Intersting times ahead.
Don't forget how it all started. The Great Satan and the EU put reams of sanctions onto Russia. They also confiscated some $300 billion of Russia's reserves that were invested in the 'west'. The sanctions had been negotiated between the EU and the Great Satan and prepared for over several months.
The idea was to bankrupt Russia within a few weeks. The deluded people behind those sanctions had no idea how big and sanctions proved Russia's economy really is. The sanctions failed to influence Russia in any way but their consequences led to a shortfall of energy in Europe and increased the already high inflation rates.
Inflation in Russia is sinking and its general economic numbers are good. The now higher energy prices generate sufficient additional income to completely finance its war efforts.
A sane actor would conclude that the sanctions were a mistake and that lifting them would help Europe more than it would help Russia. But no, the Great Satan and European pseudo elites are no longer able to act in a sane manner. They are instead doubling down with the most crazy sanction scheme one has ever heard of:
An oil price cap.
How do you make a big producer of a rare commodity sell those goods below the general market price? Unless you have a very strong buyers cartel that can also buy that product from elsewhere you can not do this successfully. It is an economic impossibility.
Russia has declared that it will not sell any oil to any party that supports the G7 price fixing regime. That is why neither China nor India nor any other country besides the EU and The Great Satan will agree to adhere to it.
The whole idea is crazy and way too complicated to achieve anything.
This is of course an open invitation to other countries to enter the oil shipping and related financial services businesses at the cost of European companies.
China and India will both it to increase their market shares in those fields. Their ships will transport Russian oil to whoever wants to buy it for the market price minus the always negotiable Russian rebate.
Greek ships will sit idle or will be sold off while Indian and Chinese and other Asian tankers will be very, very busy. China's big insurance companies will happily join that new global services business.
That European bureaucrats agreed to this stupid U.S. idea, which will foremost hurt European businesses, is another sign that Brussels has given up on having any agency.
Today OPEC+ countries, the seller cartel for oil, reacted to the crazy sanctions idea and the upcoming global depression by agreeing to decrease their daily output by 2 million barrels. This was not done out of Saudi solidarity with Russia. Saudi Arabia needs oil at above $80/bl to finance its budget.
Brent Crude, which had fallen to $83/bl on September 26, has since risen to $93/bl.
The global demand for oil is around 100 million barrels per day. Should the demand stay up the 2% reduction in OPEC+ production will have significant price effects and $100 per barrel will be in easy reach.
But OPEC+ is committed to stable prices, not to significant price increases. During the OPEC+ session, the Saudi Prince Abdulazis showed this table:
Since the beginning of the year the prices for all forms of carbon based energy except crude oil have increased considerably. Abdulazis argued that the chart shows that OPEC+ is managing oil prices responsibly. The EU is certainly not doing similar.
The Biden administration has meanwhile nearly halved the content of the U.S Strategic Petroleum Reserve. This to keep U.S. pump prices down and the Democrats in power.
Neither is a responsible step to take.