EU sanctions make Europe uncompetitive and help China
Tom KirkmanIndependent Project Manager
EU political ‘leaders’ continue in their quest to make the EU uncompetitive while helping China gain political clout.
EU energy costs skyrocket.
China energy costs plummet.
Due to EU / U.S. sanctions against Russian energy.
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“There are many mistakes in the G7 agreement to put a cap on Russian oil.
The first one is that it does not hurt Russia at all.
The agreed cap, at $60 a barrel, is higher than the current Urals price, above the five-year average of the quoted price and higher than Rosneft’s average netback price.
… This means that China will be able to purchase more Russian oil at a large discount while the Russian state-owned oil giant will continue to make a very healthy 16% return on average capital employed (ROACE) and more than 8.8 billion roubles in revenues …
● This misguided cap is not only a subsidy to China and a price that still makes Rosneft enormously profitable and able to pay billions to the Russian state in taxes. It is a big mistake if we want to see lower oil prices. …
● China must be exceedingly happy. The Asian giant will secure a long-term supply at al attractive price from Russia and sell refined products globally at higher margins.
Sinopec and Petrochina will find enough opportunities in the global market to
● secure better margins for their refined products while guaranteeing affordable supply in a challenging economic situation. …”