Image composite from WSJ video below
Mish Talk: Hoot of the Day: Russian Oil Gets to US Via Sanction Loophole
I describe the round-trip process in which Russian oil refined in Italy makes its way to to the US. It's a real hoot.
Sanction Avoidance Process
* US sanctions are on crude oil, not refined products.
* Lukoil, Russia's second largest oil and gas company was not sanctioned by the US.
* Lukoil's refinery in Sicily is the second largest in Italy and fifth largest in Europe.
* A Lukoil refinery in Italy once processed crude from multiple countries. Now it inputs are 93 percent from Russia.
* After refining, the country of origin is Italy, not Russia. This is due to longstanding practice of changing the country of origin to where oil is refined.
Read more ....
WNU editor: The Wall Street Journal has an interesting video that describes how Russian crude avoids sanctions and ends up in the US (link here).
1 comment:
A child could understand this. Oil is a commodity. We still need it.
Yet some are still dreaming of a price cap which just adds another arrow onto that loophole map, and another 50% price hike along the way.
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