Evading sanctions evolves into bootlegging, as Prohibition showed
Tom KirkmanIndependent Project Manager
Recall the alcohol Prohibition in the U.S. in the 1920s and the underground gin bars that flourished with the help of bribes to local government officials.
Alcohol bootleggers thrived.
Historically, evading sanctions evolves into a cottage industry.
The U.S. and EU playing whack-a-mole with sanctioned Russian oil will likely become amusing to watch as a spectator sport, as it becomes increasingly convoluted.
The harder the sanctions are tightened, the more the oil will find ways to evade the sanctions.
The harder one’s hand and fingers squeeze a sponge, the faster the water flows around one’s fingers.
● The world needs *more* oil & gas, not less.
Sanctions against oil & gas will simply cause more chaos in *global* oil & gas prices, as the sanctioned oil cottage industries evade the sanctions against oil from Russia (and Iran and Venezuela and whatever contrarian country is whacked next by Western leaders).
Guessing bootleg alcohol was cheaper than usual in the 1920s, because there was no government tax or quality control. “Bathtub gin” was all the rage.
Meanwhile, the “American Temperance Society” raged against alcohol.
When I was living in Borneo a couple decades ago, smuggled beer was openly and widely available in outdoor restaurants and was dirt cheap – because no government tax.
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“The new world created by Vladimir Putin’s invasion of Ukraine has spawned a new oil trading hub: the town of Ceuta – a tiny Spanish enclave that sticks out of Morocco into the Mediterranean Sea like a thumb.
There, in calm seas away from prying eyes, Russia is swapping oil tankers, a technique that allows it to reduce shipping costs, get around restrictions and smooth logistics for its remaining customers.
The result? Russian oil is still flowing into the global market in great quantities, barely down from prewar levels despite US and European Union sanctions.
… The route goes as follows:
—> Russia loads crude into small-sized tankers called Aframaxes at its Baltic Sea export terminals, such as Primorsk and Ust-Luga.
—> The vessels, reinforced to break through Arctic ice during the winter, ferry the crude toward Ceuta.
—> Near the town, the Aframaxes, which carry about 700,000 barrels, wait until a giant so-called very large crude carrier, or VLCC, arrives.
—> The Aframaxes approach the VLCC and transfer the cargo ship-to-ship. Normally, up to three of those operations are needed to load up one VLCC, which can transport at least 2 million barrels.
—> After that, the VLCC begins its journey toward Asia, going around Africa.
Since December, six VLCCs have done exactly that, taking crude from more than 15 Aframaxes.
Some of them are veterans of the black market in oil, having in the past shipped Iranian and Venezuelan crude, according to Vortexa Ltd., a consultancy that tracks tankers.
And Russia and China appear to be lining up more swapping stops in Ceuta. …”