There were some earlier posts about sanctions imposed against Russia, listing some of the subsequent consequences (blow-back) emerging
e.g.
1-Shortages of raw materials / impact upon manufacturing operations
2-Shortages of oil and gas / impact upon consumer and business operations
3-Shortages of finished goods / Competition for resources / Inflationary impact upon prices
Prior to the start of the Russian LME in late February, I had noted (just for my own interest) some of the various goods and services that might be impacted if a more extensive EU sanctions programme was to come into effect.
Since that point in time, I have still been surprised by the extent of the sanctions programme that emerged:
i.e.
1-Sanctions over a much wider area than I had anticipated (e.g. automobiles - a significant part of the German export market; shipping - affecting delivery of both oil and grain);
2-Sanctions applied by some parties that I would have never envisaged (e.g. Swiss banking gnomes);
3-Actions that have rarely occurred in the past (e.g. freezing or confiscation of financial reserves).
This seemed to indicate that there was obviously much more at stake than just the existence of Ukraine as a political entity.
Oil and Gas
Ignoring both the political and military events for the moment, one particular aspect of the current circus intrigued me right from the get-go (i.e. the EU decision to abandon Russian oil
and gas). Let's just focus on crude oil alone.
Given all the political posturing that has accompanied it, I continue to be amazed by the statements and actions of various EU politicians - and have to question whether they
actually have any understanding of what might need to occur (in order to achieve the above outcome).
Recognising the
tight integration of Russian oil and gas within the EU economy, it was always going to be a very complex and difficult undertaking (even if they knew what they were doing, and they had formulated some half-feasible plans how to achieve it).
Regarding oil, it is not a case of replacing "Russian oil" with some crude oil from another source. It involves supplying an already
blended feedstock of
comparable complexity (similar to Urals oil), one which your own refineries are easily able to process (with minimal change required).
To me, the German politicians (like Scholz, Habeck, Baerbock) and others (like van der Leyen, Michel) seem to be clue-less as to what is involved. Or maybe just so strongly politically focused that technical complexity (and common sense) has been cast to the winds.
Note that this is not a "90 % is good enough" solution - it's 100% or not-at-all. Conversion / cutover has to be performed for
multiple plants in
parallel, while still continuing to supply / meet
existing industry and consumer needs at the same time.
The analog of "trying to change the oil in your car while still driving at 150km/hr on the autobahn" is a very simple and small scale one, but it helps illustrate the nature of the challenge. And even if you
could do it,
would you choose to do it (given the risk involved)?
Jorge Vilches posted two articles on the Saker blog:
https://thesaker.is/germans-schwedt-...r-russian-oil/
https://thesaker.is/herr-habeck-firehoses-oil-gas/
The first article is the shorter, and outlines the challenge for just
one refinery, the German Schwedt refinery in East Germany (which is their largest). The second article expanded upon the first, outlining all the component parts that need to be addressed - and which need to be aligned.
Each article is a few pages long, so some may choose not to read them. But for those that might be interested, it gives an outline of the individual challenges ahead. And maybe some measure how informed (or honest) are the EU politicians.
If the attempt is incomplete - or some components are converted incorrectly (or not in time), the economic consequences will be severe for the EU .
As always, you make up your own mind.
[Edit]
Meanwhile, some of the same political faces are all smiles at the latest G7 summit. I wonder whether they will still be smiling in 6 months time as Winter has descended upon the EU. I'm not so optimistic.
https://www.dw.com/en/g7-leaders-lau...nce/a-62264346
Originally Posted by george formby
Budget appropriation time?Interesting thought.
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