Author: BlackMask Financial

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Iraqi Oil Production Sinks Far Below Quota In March

  • Iraq produced just 4.15 million bpd in March.
  • Iraq’s crude oil production was down by 112,000 bpd last month.
  • Most OPEC members continue to underperform in reaching their agreed-upon targets.
OPEC’s second-largest producer, Iraq, produced just 4.15 million barrels per day (bpd) of crude oil in March, well below its quota under the OPEC+ agreement, according to data from Iraqi state oil marketing firm SOMO seen by Reuters.

Iraq’s crude oil production was down by 112,000 bpd last month compared to the previous month, the data seen by Reuters on Tuesday showed. As part of the OPEC+ deal, OPEC’s second-biggest oil producer after Saudi Arabia was allowed to pump as much as 4.370 million bpd in March. Iraq’s production, however, per SOMO data, was more than 220,000 bpd short of that target, signaling that a growing number of members of the OPEC+ alliance are struggling and will be struggling to pump to quotas as the group lifts its nominal production targets each month by 400,000 bpd. Last week, the OPEC+ meeting concluded that no change in production plans was needed, agreeing to lift the group’s production by another 432,000 barrels per day starting in May. The 32,000 bpd above the originally agreed to 400,000 bpd is due to shifting baselines of five of its members. Saudi Arabia’s production quota has been lifted to 10.549 million bpd, with Russia’s quota raised to the same amount. The UAE’s quota is 3.04 million bpd, Kuwait’s is 2,694 million bpd, while Iraq’s is 4.461 million bpd. The extension of the agreement as-is was a largely expected move by the market.

Yet, the latest data showed that most OPEC members continue to underperform in reaching their agreed-upon targets, leaving a much wider supply gap in the market than many estimates had forecast.

In March, for yet another month, OPEC failed to achieve all the planned increase for the cartel as part of the OPEC+ agreement. OPEC’s oil production averaged 28.54 million bpd last month, just 90,000 bpd higher than in February, compared to the 253,000 bpd monthly increase allowed in the OPEC+ deal, the monthly Reuters survey found last week. NN

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Russia Sees Steep Oil Production Decline

Russian oil production fell in the first week of April by 4.5 percent compared to the March average—the steepest decline in output since May 2020, according to Russia’s energy ministry data seen by Bloomberg. Between April 1 and 6, Russia pumped the equivalent of 10.52 million barrels per day (bpd) of oil, per Bloomberg calculations based on energy ministry data in tons. That’s some 500,000 bpd below the average Russian production for the whole month of March. If the trend continues throughout April, Russia could see its biggest monthly drop in oil production since May 2020, when it started voluntarily slashing its output as part of the OPEC+ deal.   Buyers in the West continue to steer clear of Russian oil cargoes, and many analysts say it is a matter of time before at least some Russian supply comes off the market, despite the fact that signs are emerging that most of Asia is still buying Russian crude, at hefty discounts. Russia’s production in March had already declined from February, albeit by a small margin. Russia pumped the equivalent of 11.01 million bpd of crude oil and condensate in March, according to Bloomberg calculations based on a report by Russian news agency Interfax. That’s 0.6 percent lower than the production in February. The decline in March was the first such drop since August 2021, when a fire at a Gazprom processing plant in West Siberia held back some condensate production.A report from last week also suggested that Russian oil production inched down in March from February, signaling that OPEC’s key partner in the OPEC+ deal has failed to take advantage of its some 100,000-bpd monthly increase allowed under the agreement. In another sign that Russia could be struggling to sell all of its cargoes, Transneft, the Russian oil pipeline operator, has informed local oil companies that it would be capping the intake of yet-to-be-sold crude because of full storage, Reuters reported last week, quoting sources with knowledge of the plan. NN: Demand increasing as we enter summer time flying and driving season. And production is falling from the worlds lagrest oil explorer…. Its pretty simple to see what is about to happen. A supply crunch and soaring oil prices…. Soon the FUN starts.

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Russia Sidesteps Sanctions to Supply Energy to Willing World

 

As Europe prepares to join the U.S. in hitting the Kremlin with tighter sanctions for its war on Ukraine, there are plenty of signs that Russia is finding ways to prop up its economy. Cargoes of Russian Sokol crude from the Far East have sold out for next month, and several Chinese firms used local currency to buy Russian coal in March. Gas flows from Russia to Europe have, if anything, increased since the invasion on Feb. 24. None of these are the subject of restrictions.

Bloomberg Economics expects Russia will earn about $320 billion from energy exports this year, up by more than a third from 2021. The ruble has already rebounded to its pre-war price against the dollar.

While Russia’s oil output is declining this month, its ability to keep the energy money flowing and boost its currency are frustrating western leaders. That resilience is also is handing President Vladimir Putin a win at home, even with the country increasingly isolated and the Russian military pulling back from swathes of Ukraine. “There is no doubt that the financial and other sanctions have weakened the Russian economy,” Patrick Honohan, a senior fellow at the Peterson Institute in Washington and former European Central Bank policy maker, wrote in a blog post on Wednesday. “But the sanctions fall short of crippling the economy, as long as they do not interrupt the flow of revenue from exports.” European Union ambassadors are meeting in Brussels on Thursday to agree on a fifth round of sanctions, with proposals to phase out Russian coal as the first step in addressing energy imports. The European Commission, the EU’s executive, is also aiming to ban most Russian trucks and ships from entering the bloc, with exceptions for agricultural products, humanitarian aid and energy. With Russia regrouping for a fresh offensive in eastern Ukraine, China is preparing to receive the first commodity shipments from Moscow paid for in yuan since several Russian banks were cut off from the international financial system. Russian crude that would normally end up in refineries in Europe or the U.S. is heading for Asia, where buyers, particularly in India, are taking advantage of steep discounts. Shipments from the Black Sea and Russia’s Baltic Sea ports of Primorsk and Ust-Luga started heading to India in March, following earlier cargoes from the same terminals to China. Russia’s natural gas supplies, which like oil have yet to be sanctioned by the EU, continue to flow freely as Europe faces an energy cost crunch that’s prompting governments to think twice before taking any action that might see prices rise further. Europe relies on Russia for about 40% of its gas needs, with a third of those supplies traveling through pipelines crossing Ukraine. As the war started, the jump in prices meant it was cheaper for European utilities to order more Russian supplies under long-term contracts than to buy it at the continent’s hubs. As a result, Europe’s request for Russian gas increased, helping state-run exporter Gazprom PJSC to boost its daily sales to key foreign markets by 17% in March from a month earlier. The export earnings are what “Russia’s military machine requires” to continue its war against Ukraine, according to Ukraine’s foreign Ministry, singling out Hungary for its willingness to accede to Russia and pay for energy in rubles. Russia’s oil output dropped by the most in almost two years in early April as some buyers looked elsewhere, based on data from the Energy Ministry’s CDU-TEK unit that were seen by Bloomberg. Revelations of more atrocities are likely to cause countries to harden their resolve and move to cut energy imports even at the risk to their own economies, according to Elina Ribakova and Benjamin Hilgenstock, economists at the Institute of International Finance. NN: Sanctions are the dumbest thing i ever heard of. Putin is evil not stupid. He knows he would be sanctioned. And he is dancing a jig became NATO is not bellying up to the bar. Reality is the Ukraine has been hung out to dry. Little UN ditties are not going to stop him. Remember Putin waited for ten years to get Europe addicted to his gas and oil. Their is not stopping him except mitairley and Europe has no stomach for armed conflict.

 

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Europe Buys $38B in Russian Energy Since Invasion; 30% of the Gas Comes Via Pipelines in Ukraine

Over a month into Russia’s war in Ukraine and after multiple countries imposed sanctions on Russian fossil fuels, Ukraine’s pipelines are still carrying Russian gas into Europe. Ukrainian climate activist Svitlana Romanko says Ukraine cannot shut off the gas flow if EU governments refuse to implement an embargo on Russian imports. “There should be a collaboration on both sides of this supply chain,” says Romanko. A natural solution would be to urgently transition Europe to renewable energy sources, as “Vladimir Putin can’t embargo the sun” and “can’t interdict the wind,” adds Bill McKibben, environmentalist and founder of 350.org. NN: Putin cannot embark the sun and for another ten years renewables WILL NOT be able to supply Europe’s energy needs. What a fucked up world. Ukraine begs for cash donations, advanced weapons and more and more sanctions. And they demand Europe stop buying Russian oil and gas. At the same time they supply for a fee 30% of the gas flowing into Europe from Russia. If they were serious they would permanently shut down the gas flow of Russian oil through the Ukraine… What a crazy world

Ukraine seeks stronger sanctions as Russia drops more missle on cities

Ukraine wants sanctions crippling enough to force Russia to end its war after accusing some countries of putting economic wellbeing above punishment for civilian killings that the West condemns as war crimes. The democratic world must stop buying Russian oil and completely block Russian banks from the international finance system, President Volodymyr Zelenskiy said in his daily video address early on Thursday. “Some politicians are still unable to decide how to limit the flow of petrodollars and oil euros to Russia so as not to put their own economies at risk,” Zelenskiy said. NN: this is some crazy shit! As he demands “The democratic world must stop buying Russian oil” He is supplying more Russian gas to Europe then ever.

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Rouble rallies on Moscow Exchange, stocks up after new sanctions

April 7 (Reuters) – The Russian rouble firmed sharply in Moscow trade on Thursday to levels last seen before Russia sent tens of thousands of soliders to Ukraine, while stocks indexes jumped higher, shrugging off a new round of sweeping western sanctions. At 0724 GMT, the rouble was 5.8% higher at 75.30 against the dollar after briefly touching 74.2625, its strongest level since Feb. 11. “Even though the rouble looks overheated from a technical point of view, its strengthening can remain in place today,” Promsvyazbank analysts said in a note. Moves in the rouble were jittery and trading volumes on the Moscow Exchange were small compared with levels seen before Russia started what it calls “a special military operation” in Ukraine on Feb. 24. The rouble recently has been steered by mandatory conversion of dollar and euro revenues by export-focused companies, while demand for forex has been limited by capital controls that the central bank imposed as the rouble crashed to record lows in March. Against the euro, the rouble firmed more than 5% to 82.29 after touching its strongest level since October of 80.8375. On the interbank market the rouble was weaker, trading at around 80 to the dollar , while banks offered to sell euros at 89.40 roubles and were ready to buy them at 83.94 roubles . The Russian currency also shrugged off fears that Russia was edging closer to a potential default on its international debt as it paid dollar bondholders in roubles and said it would continue to do so as long as its foreign exchange reserves were blocked by sanctions. On the stock market, the rouble-based MOEX Russian index climbed 0.8% higher at 2,631.8 (.IMOEX) after falling the day before when shares took a hit from new sanctions. The United States on Wednesday announced a new round of penalties targeting Russian financial institutions, as well as Kremlin officials and their family members. The dollar-denominated RTS rose 5.2% to 1,088.9 points, its highest since Feb. 22. NN: The cold hard truth is the fact that sanctions are a dismal failure. If they really cared about the Ukrainian people NATO troops would roll in  defend them. The failure of not  engaging Russia militarily will expand the war. The reality is by not Using Nato and supplying Ukraine with sophisticated high caliper weapons brings more attack by Russia on other countries  in the future..

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Mocked as ‘Rubble’ by Biden, Russia’s Ruble Comes Roaring Back

  • Currency recovers to pre-war levels even as sanctions pile up
  • Foreign oil and gas buyers offer Putin’s government a lifeline

In the days after the Ukraine war began, the ruble’s collapse was a potent symbol of Russia’s newfound financial isolation. International sanctions on Vladimir Putin’s regime sank it to a record low of 121.5 rubles per dollar, triggering memories of the battering it took during the 1998 Russian financial crisis.

Things looked dire enough that U.S. President Joe Biden said the ruble had been reduced to “rubble.”

Now, though, it sure hasn’t. The ruble has surged all the way back to where it was before Putin invaded Ukraine, extending its recent rally to trade as strong as 74.2625 per dollar in early Moscow trade on Thursday. What’s become clear is that despite an incredibly wide-ranging package of sanctions on the Russian government and its oligarchs, and an exodus of foreign businesses, the actions are largely toothless if foreigners keep guzzling Russian oil and natural gas — supporting the ruble by stocking Putin’s coffers.

Even as Russia remains mostly cut off otherwise from the global economy, Bloomberg Economics expects the country will earn nearly $321 billion from energy exports this year, up more than a third from 2021. The rapid ruble recovery gives Putin a major victory back in Russia, where many people fixate on the currency’s ups and downs, even as his military gets bogged down in Ukraine and outrage mounts across the globe over atrocities it’s committed. “For the politicians, it is a good PR tool by saying that sanctions don’t have any impact. And it will help to limit the inflation impact,” said Guillaume Tresca, a senior emerging-market strategist at Generali Insurance Asset Management. In Russia’s post-Soviet history, the ruble-dollar exchange rate has arguably been the economic indicator Russians care most about. The rate was broadcast by the exchange kiosks that sprung up in every town and city, flagging the currency’s collapse as hyperinflation erupted in the early 1990s. The ruble dived again after Russia defaulted in 1998. In response to this year’s sanctions, Russia has enacted capital controls that also appear to be supporting the ruble. That includes freezing the assets held by nonresident investors, and telling Russian companies to convert 80% of the foreign currencies they hold into rubles. Still, it’s hard to ignore the lifeline other nations are tossing Putin by purchasing his country’s oil and gas. Doing so gives Russia a current-account surplus — economics jargon for exporting more than you import, which tends to lift a the country’s currency — and undermines the attempt to pummel Russia with sanctions.

“A current-account surplus should actually be another source of stability for the ruble,” said Brendan McKenna, a strategist at Wells Fargo Securities LLC. “If energy prices remain high and major importers of Russian energy and commodities continue to purchase, the current account should stay in surplus.”

Russia has been able to stabilize local markets and even stave off a messy foreign default — at least for now. This means that if the coalition of governments who oppose Putin want to hurt the ruble again, they’ll likely have to change tack. Just this week, the U.S. Treasury barred dollar debt payments from Russian accounts at U.S. banks, an attempt to make Russia drain its domestic dollar reserves or default.

“As Russia’s economy and financial sector adapt to a new equilibrium of capital controls, managed prices, and economic autarky, it is not surprising that some of the domestic markets stabilize,” said Elina Ribakova and Benjamin Hilgenstock, economists at the Institute of International Finance. “Sanctions have become a moving target and will require adjustments over time to remain effective.”

They pointed to the likelihood of more tightening of financial sanctions, perhaps even disconnecting additional Russian institutions from SWIFT, the communications system banks use to move money around the world.

Putin has been forced to change his war strategy in Ukraine, shifting troops away from Kyiv after failing to conquer the capital. Research firm Tellimer Ltd. is warning against trusting market rallies amid negotiations to potentially end the war in Ukraine.

“Don’t buy the peace rallies,” said Paul Domjan, a senior contributing analyst at Tellimer. “Investors should be very cautious about market rallies following news about peace talks. There will be plenty of false dawns as the world valiantly seeks to end this war.” NN: How do you sanction someone who you are hopelessness dependent upon for 50% of your energy needs? Answer you don’t. And as you fuck with them all you do is piss them off. This shit does not work against a billion dollar drug cartels. An its not going to work against a multi trillion dollar oil cartel.

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Rumors Of A Coordinated Oil Res IEA countries to tap 60 million barrels of oil on top of U.S. release…Oil turns to losses, drops over 2.5% after US data

WASHINGTONG (Reuters) – Member countries of the International Energy Agency besides the United States have agreed to release 60 million barrels of oil from storage, an official from the U.S. government and an IEA member country official told Reuters. The amount will be matched by the United States as part of Washington’s pledge last week to tap 180 million barrels of oil from storage, they added. The massive releases are aimed at cooling prices and easing supply concerns as sanctions and buyer aversion disrupts Russian oil supplies in the wake of its invasion of Ukraine. “After around the clock diplomacy by the U.S. and of course our allies and partners, the IEA countries have agreed to release an additional 60 million barrels,” a U.S. official said. “This will be the largest release from both the U.S. and other countries in IEA history. This will supplement our 1 million barrels per day for six months and of course will serve as a bridge until the end of the year when domestic production ramps up.” The move by the U.S.-allied IEA countries, which represent 31 mostly industrialized countries but not Russia, would be their second coordinated release in a month and would be the fifth in the agency’s history to confront oil market outages.

Oil turns to losses, drops over 2.5% after US data

Crude oil stockpiles in the United States rose by 2.4 million to 412.4 million barrels in the week ending April 1, the US Energy Information Administration revealed in its weekly report published on Wednesday. Total commercial petroleum inventories went up by 5.2 million barrels in comparison to the week before. Crude oil refinery inputs averaged 15.9 million barrels per day, up by 35,000 barrels per day in contrast with the past week’s average. Refineries operated at 92.5% of their capacity. Meanwhile, gasoline production improved and averaged 9.1 million barrels per day. Crude oil imports averaged 6.3 million barrels per day, a rise of 41,000 barrels per day compared to the previous week. Adding to the worries, the number of coronavirus cases in China’s city of Shanghai rose by a record 17,077 during the last day, reheating worries about the demand for crude from one of the world’s largest oil consumers. NN: reality is these releases are a sick joke. we are in the slowest time of the year for oil demand. Heating season is over and driving season has not started yet. But in a warning to what is coming jet fuel inventories are running very low. And we could see shortages.. Now they are flying soon they will be driving and demand will soar. Chinese lock downs will end in a matter of weeks

 

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U.K. Covid Cases at Highest Level as Immunity Wanes, Study Finds

Bloomberg) — Covid-19 infections in England reached their highest level in March since the pandemic began, driven by the omicron subvariant BA.2 and waning immunity among older adults, according to a new study.  The overall Covid prevalence rate more than doubled last month from February when infection rates were falling from the omicron-led January peak, the React-1 study led by Imperial College London found. Since then the emergence of BA.2 — a more-transmissible version of omicron- has accelerated new infections and become the dominant strain in England, accounting for about 90% of the samples that tested positive.  The higher infection rates may result in an increase in hospitalizations despite the higher levels of vaccination among the population, said Paul Elliott, director of the React program, and chair in Epidemiology and Public Health Medicine, Imperial College London. Rates of Covid-19 are growing among adults over 55 years driven by higher mobility and waning immunity given that they received their booster shots earlier compared to other age groups, the study said.  The latest results are the 19th round of the React-1 study and will be the last as the program comes to an end at the same time the U.K. cuts back on free coronavirus tests. The Imperial College researchers raised concerns that it will become more difficult to detect emerging variants as the government scales back testing.  “There are a lot of variants out there and it’s looking at the patterns that helps to identify variants of concerns and make sure that people see what’s coming,” said Christl Donnelly, a professor of statistical epidemiology at Imperial.  NN: The scientific evidence is clear. It ain’t over. These studies prove the most effective tool we have is vaccination. And they need to be updated every 4 to 5 months.

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Top US general: Potential for significant international conflict is increasing

The top US military officer told lawmakers Tuesday that the world is becoming more unstable and the “potential for significant international conflict is increasing, not decreasing.” Chairman of the Joint Chiefs Gen. Mark Milley and Defense Secretary Lloyd Austin appeared before the House Armed Services Committee in their first testimony before Congress since Russia’s invasion of Ukraine. The two Pentagon leaders said the threats from both Russia and China remain significant, while they defended the US approach to the war and the flow of arms the US is sending to Ukraine. Milley said that Russia’s invasion of Ukraine is “the greatest threat to peace and security of Europe and perhaps the world” in his 42 years serving in the US military, but added it was “heartening” to see the world rally around Ukraine. “The Russian invasion of Ukraine is threatening to undermine not only European peace and stability but global peace and stability that my parents and a generation of Americans fought so hard to defend,” Milley said.

“We are now facing two global powers: China and Russia, each with significant military capabilities both who intend to fundamentally change the rules based current global order,” Milley added. “We are entering a world that is becoming more unstable and the potential for significant international conflict is increasing, not decreasing.”

Lawmakers in both parties focused at the hearing on the weapons that were being provided to Ukraine, asking whether more could be done as Ukraine has continued to ask for additional capabilities. “One of the biggest questions we’re going to have in this committee is, ‘How can we do more?'” House Armed Services Chairman Adam Smith, a Washington state Democrat, said at the top of the hearing. “How can we make sure we’re doing absolutely everything we can to help them?” Austin said that NATO was still discussing how it should bolster its permanent presence in eastern Europe. “If NATO deems that it’s appropriate to change its footprint, then certainly we’ll be a part of that,” Austin said. “Candidly, short of the commitment of US military forces into Ukraine proper, I’m not sure he was deterrable. This has been a long-term objective of his that goes back years,” Milley said. “I think the idea of deterring Putin from invading Ukraine, deterring him by the United States, would have required the commitment of US military forces, and I think that would have risked armed conflict with Russia, which I certainly wouldn’t have advised.”

Milley noted that sanctions “have a very poor track record of deterring aggression,” but said they have succeeded in imposing significant costs to Russia for its aggression.

“The objective of the sanctions is to impose significant costs if he invaded, those significant costs, the sanctions in combination with the export controls, are breaking the back of the Russian economy as we speak,” he said. Gaetz charged that the Pentagon “got it wrong” by predicting that Russia would overrun Ukraine within days and that the Taliban would not take control of Afghanistan last year. “You totally blew those calls and maybe we would be better at them if the National Defense University actually worked a little more on strategy and a little less on wokeism,” Gaetz said. NN: Putin never had any intention of overrunning the Ukraine. He just wants to strike fear and terror in the populations of all former Soviet states. He is going to bomb the Ukraine into the dark ages and leave Europe to clean up the mess.   

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U.S, EU to Hit Russian Investments With New Round of Sanction

(Bloomberg) — The U.S., European Union and Group of Seven are coordinating on a fresh round of sanctions on Russia, including a U.S. ban on investment in the country and an EU ban on coal imports, following the discovery of civilian murders and other atrocities in Ukrainian towns abandoned by retreating Russian forces. The governments plan to increase penalties on Russian financial institutions and state-owned enterprises and will sanction unspecified Russian officials and their family members, said White House Press Secretary Jen Psaki. “You can expect that they will target Russian government officials, their family members, Russian-owned financial institutions, also state-owned enterprises. It’s a part of the continuation of our efforts to put consequences in place, hold Russian officials accountable,” Psaki told reporters Tuesday, adding that an announcement would come Wednesday. The ruble weakened against the dollar on news of the new penalties. The discovery of atrocities in Bucha, a town outside Kyiv where Russian forces pulled back in recent days under pressure from the Ukrainian military, has horrified the world anew as the Kremlin refocuses its offensive on securing the separatist Donbas and Luhansk regions. Ukrainian authorities, backed by U.S. and European governments, allege Russian forces murdered scores of civilians after they occupied the region, and they have released evidence, including photographs, of men whose wrists appear to have been bound before they were shot. The Kremlin has denied responsibility, claiming without evidence that the Kyiv government staged the incidents. Earlier Tuesday, European Commission President Ursula von der Leyen said the EU is proposing to ban most Russian ships and trucks from entering the bloc, as well as Russian coal imports. The EU will also push ahead with a debate on targeting Russian oil, she said — a sensitive issue in Europe, where many countries are dependent on Russian fuel imports. The EU also is discussing sanctioning Russian President Vladimir Putin’s daughters, according to people familiar with the matter. Putin’s daughters are part of a proposed list of sanctions targets that also includes political figures, tycoons and their family members, and several propagandists, the people said. “These atrocities cannot and will not be left unanswered,” von der Leyen said. She will travel to Kyiv this week to meet with Ukrainian President Volodymyr Zelenskiy, who continues to press the U.S. and Europe to supply his country with more weaponry to repel the invasion. NATO foreign ministers will meet in Brussels beginning Wednesday to discuss the crisis. An American official said the U.S. would largely match EU actions on coal, Putin’s daughters and some banks. The EU sanctions proposed Tuesday include expanding export controls on technologies used in the Russian defense sector and other key industries, as well as restrictions on sales of equipment that can be used to liquefy natural gas. They also propose sanctioning more entities, including banks such as VTB Bank PJSC, that have been cut off from the SWIFT global payments messaging system but are not yet fully sanctioned. The new penalties are intended to degrade key instruments of Russian state power and impose acute and immediate economic harm on Russia, a U.S. official with direct knowledge of the matter said, while holding accountable what the official called a “kleptocracy” that funds and supports the war. The U.S., Europe, and allied nations in Asia have together already imposed sweeping sanctions on Russia, including on its central bank, in response to the Ukraine invasion. The U.S. official said Russia’s economy is forecast to contract by 15% or more in 2022, and that inflation in the country has already soared above 15%. NN: Russia commits war crimes… When has it not. The US and EU are moving closer to being dragged into the Ukraine Russian conflict. What does NATO get if it wins…  And more important what do they  if they? what Ukraine……. At what price. An if NATO loses can it stand war breaking out over the former Soviet states. Is anyone doing a risk assessment?