Russian oil to Turkey

Discounted Urals crude finds growing outlet in Turkey…
Russia’s flagship Urals crude has been shunned by its previously top customers, many of whom have committed to reduce dependence on the country’s oil. However, with hefty discounts on offer, the grade has been redirected to other markets and has found a growing outlet in Turkey, according to Urals traders and ship-tracking data.

According to Urals traders, three key buyers have become the main focus of the seaborne market since Russia’s invasion of Ukraine – China, India and, increasingly, Turkey…

Still, it was not the case that the historically largest buyers of Urals crude had completely cut their purchases. The same shipping data showed that a couple of April-loading cargoes were bound for Repsol’s Cartagena refinery in Spain and one was headed to Neste’s Porvoo refinery in Finland.


I don’t know if there will be enough discounted oil to matter, but if one set of economies can buy oil cheaper than other set, it would seem that the one with the lower cost energy input would have an advantage over the other. If the economies were both relatively healthy, then the ones with the lower energy cost would out perform.

There are a lot of ifs, but with China at about the same GDP as the USA and (prior to Covid) growing faster, then one might expect that the time to China having a larger gdp than the USA may be accelerated. Further, if the sanctions destroy the reserve status of the dollar, the it could be a sudden move from second to first.


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Further, if the sanctions destroy the reserve status of the dollar, the it could be a sudden move from second to first.

According to Paul Krugman, this is unlikely because of one of the classic propositions in international economics known as the “impossible trinity.”

Paul Krugman April
Wonking Out: The Curious Case of the Recovering Ruble

The impossible trinity says that you can’t have it all, that you have to choose two out of three. You can, like Britain, have open capital markets and independent monetary policy, but that means allowing the value of the pound to fluctuate. You can, like countries that have adopted the euro, have free movement of capital and currency stability, but only by giving up monetary independence. Or you can, like China, have a stable currency and your own monetary policy, but only by maintaining capital controls. (Those controls, by the way, are one main reason the renminbi isn’t going to rival the dollar as a global currency for the foreseeable future.)