Ukraine Strike on Burning Russian Oil Depot Threatens 'Unparalleled' Blast; Fire approaches kerosene reservoirs; 500 firefighters mobilized

No wonder crude prices went up today.

Laodicean60 said:

No wonder crude prices went up today.

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Oil prices usually go up at the end of summer.

Nithavela said:

Oil prices usually go up at the end of summer.

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Oil has been tracking lower since the YoY jobs revision data but the general trend has been downward since Apr. because of weak demand.

Laodicean60 said:

Oil has been tracking lower since the YoY jobs revision data but the general trend has been downward since Apr. because of weak demand.

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I just filled my tank for the lowest price in the last few months, so I'm not overly worried about oil prices.

Yes, it looks like the war is literally "heating up."

This "war" is modern but certainly not a classic war as yet. What war in the past had allies buying oil at a reduced price from the enemy or forbid that their aid would strike the enemy in the heart? What war in the past allowed shipments of grain because of some mutual agreement between the warring parties? The time of appeasement looks to be ending. When the war first started, wheat and some other commodities shot up. Now wheat is at multiyear lows and oil has drifted nowhere as well. I guess it is "war complacency." Is inflation beat if this becomes a real war? (I say that somewhat sarcastically, because Ukraine and Russia know it is real)

Richard T said:

What war in the past allowed shipments of grain because of some mutual agreement between the warring parties?

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Plenty of wars in the past saw trade between enemies. War isn't a total "on and off" switch in other relations between states.

Nithavela said:

Plenty of wars in the past saw trade between enemies. War isn't a total "on and off" switch in other relations between states.

https://direct.mit.edu/isec/article/46/1/9/102856/Wartime-Commercial-Policy-and-Trade-between

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Yes, you are right that history abounds with warring nations trading with each other. I was wrong to generalize so much without cites. I was mostly trying to poke at NATO allies lowering the price of oil instead of an embargo. So while I was not wrong with bi-lateral trade between Russia and Ukraine, I was wrong with NATO trade with Russia, as it is far more reduced than I thought.
Figures for Russia trade with Ukraine dropped from 26 billion in 2011 to a paltry 6 million in 2023. Ukraine: value of goods imported from Russia 2023 | Statista
It was NATO trading with Russia that I was trying to poke at. Nato seems to be in unison against Russia with trade (Turkey excluded). The slack in Russia trade with NATO though has been picked up by China and non-nato nations like India. It escaped me that Russia and Belarus are now column 2 nations in the USA, a designation that saw them suspended from normal trade relations. While Russia has done well with their new partners, Ukraine has just done poor with all partners, I presume because they simply are not producing as much for export.

The two opposing blocs are showing a high amount of restraint in trading with each other though in 2023 China and USA trade were down 17% so there is still a lot of room to drop. U.S. investment flows though are ramping up to other Asian nations, so I imagine the decline might be fairly permanent and worsening.

The trading within blocs between NATO and certain allies versus China/Russia and certain allies is looking more like WWII flows. All allies basically withdrew trade with Germany. Some neutral countries did not, and Germany got some imports from occupied lands. What goods did Germany trade during World War II, and with whom?
Meanwhile the divergence of bloc trading is growing. Just two days ago Belarus and China inked a trade deal. https://www.reuters.com/world/china-belarus-agree-strengthen-cooperation-trade-security-2024-08-23/ At the same time the USA and Pacific allies are shoring up Taiwan and the Philippines. Additionally, China is stockpiling commodities. Why Is China Stockpiling Key Resources?

So many thanks for the article that inspired more study. It seems now that modern wars are more all out, including allies and older wars are less encompassing, with a few exceptions. Many blessings!

Richard T said:

Yes, it looks like the war is literally "heating up."

This "war" is modern but certainly not a classic war as yet. What war in the past had allies buying oil at a reduced price from the enemy or forbid that their aid would strike the enemy in the heart? What war in the past allowed shipments of grain because of some mutual agreement between the warring parties? The time of appeasement looks to be ending. When the war first started, wheat and some other commodities shot up. Now wheat is at multiyear lows and oil has drifted nowhere as well. I guess it is "war complacency." Is inflation beat if this becomes a real war? (I say that somewhat sarcastically, because Ukraine and Russia know it is real)

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It is lunacy! We imposed sanctions to harm their economy and still support it. It was a smart move by Ukraine to bomb the Nord Stream pipeline to hurt Russia's economy but it also hurt the EU's economy. The EU is still getting its energy from other Russian pipelines.

If the war escalates even more I think there will be disruptions and all of nato may embargo Russia. The EU has reduced their dependence already on Russia but yes they are still buying some crude and lng.

I find it interesting that the ships being used to sell oil outside of the sanctions, most of those boats are substandard. Even worse, some have no insurance at all. There’s a shadow fleet sneaking Russian oil around the world. It’s an ecological disaster waiting to happen.. Sounds like an excuse to crack down, but a welcome one to me except the more the two sides are separate the risk of war increases.

I know your smart in finance and econ stuff from reading some of your posts. I too remember the market swoon from 9/11 and it was an overreaction in hindsight. If the USA goes hot against China or Russia (or both God forbid) I can't even imagine the dislocation, debt load and inflation. Feel free to comment anytime, God bless!

Richard T said:

I find it interesting that the ships being used to sell oil outside of the sanctions, most of those boats are substandard. Even worse, some have no insurance at all. There’s a shadow fleet sneaking Russian oil around the world. It’s an ecological disaster waiting to happen.. Sounds like an excuse to crack down, but a welcome one to me except the more the two sides are separate the risk of war increases.

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That is how Russia has to do its shadow fleet. Many countries also buy Russian oil from countries like India and China.

Richard T said:

If the USA goes hot against China or Russia (or both God forbid)

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I second that!

Richard T said:

I too remember the market swoon from 9/11 and it was an overreaction in hindsight.

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You have been in the economic game longer than I have. I just started to look at the world around me since Covid. Before that, I was beating my drum blaming Democrats for all our problems.

essentialsaltes said:

Ukraine has launched another drone strike on an oil depot that has already been burning for six days in Russia's Rostov region, and Russians fear the blaze could reach nearby kerosene reservoirs, triggering a much larger explosion.

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This will undoubtedly affect Russian fuel supply to the military. Even more powerfully the attack shows Russians that the 'special operation' is not going very well.

For Putin it is another humiliation and for Ukraine a great solace after the war crimes the population has suffered.

Laodicean60 said:

That is how Russia has to do its shadow fleet. Many countries also buy Russian oil from countries like India and China.

I second that!

You have been in the economic game longer than I have. I just started to look at the world around me since Covid. Before that, I was beating my drum blaming Democrats for all our problems.

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Its good you see other sources of problems than just the democratic party. I guess all we can do for many is keep our eyes on Jesus since it likely is going to get worse.