VON DER LEYEN’S SANCTION SHOW AGAINST RUSSIA

Despite 11 years of sanctions, Moscow manages to sell crude oil at high prices, trade with the world, and wage war with a neighboring country. Through Ursula Von der Leyen, the European Commission announces today new sanctions against Russia as part of an 18th sanctions package. Four measures stand out: (a.) the reduction of the price cap on Russian oil, (b.) the addition of oil tankers to the blacklist, and (c.) a ban on refined products based on Russian crude oil.(d.) Russian banks were previously denied access to the SWIFT system, and this is now being extended to a total trade ban. Particular... especially when one assesses the effectiveness of the past 17 waves of sanctions. This is what 'Standard & Poors Global' published in April of this year,

"Seaborne trade of Russian crude oil increased by more than 50%, reaching a 13 month high. In particular tankers from Western countries have been actively involved in transportation."

In April of this year, an average of 1.3 million barrels of Russian Ural were shipped and insured daily by shipping companies from the G7. The Western companies that transport and trade Russian crude are not on the European or American sanctions list, unlike the operators of the 'Russian Shadow Fleet'. The main regular shipping companies sail under the Chinese flag, the Seychelles, UAE, or Hong Kong and have access to service providers (insurance) from the G7. In short... China buys the Russian Ural Crude and refines it somewhere in Asia. The $60 per barrel sanction cap on Urals has been above the market price for some time, and the discount on Urals has been barely $2.40 per barrel during that period. Totally negligible because with that, Russian crude is being traded at the smallest discount since January 2023. They know that in Brussels too. Especially now that some OPEC countries are increasing production, the ceiling of $60 per barrel makes no impression at all. Months ago, experts and analysts predicted the following: "Additional sanctions or a further reduction of the price cap on Russian crude will only further expand the Russian shadow fleet, trade will shift even more towards Asia, and the development of new routes will be accelerated." Both measures promise to have no impact, except that the European consumer and entrepreneur will pay even more for energy."

And that is exactly what Ursula Von der Leyen is now putting on the table, and what is about to happen again. At the same time, we see how BRICS and SCO countries are building a framework through which Russian crude is traded, shipped, and insured at market price, far beyond the reach of the EU and the US.This further fragments the trade in Ural Crude and shifts it to more gray and opaque trading zones.Ural Crude destined for the EU will be shipped up to the border of European jurisdiction, from where that same 'washed' Russian oil will find its way to Rotterdam, Antwerp, Gdansk, or Marseille.A report from almost 2 years ago now, In addition, since the first quarter of 2022, when the Russian-Ukrainian conflict started, increased oil exports from Russia has been observed, mainly to India and mainland China. These two countries take advantage of the fact that most Western countries have imposed an embargo on oil imports from Russia. It is also observed that Azerbaijan started to buy oil from Russia from the beginning of the conflict, while oil from Azerbaijan is mainly bought by European countries such as Italy, Israel, Spain, India, Czech Republic, Germany, Turkey and Greece.

Krzysztof Ziolkowski Sr, S&P Global, 12 september 2023

And not just crude oil or refined fuels. Also, the import and export flows of all other goods are being redirected with this. SWIFT and the dollar have long since lost their grip on global trade. The evidence of this is shadow banks in Hong Kong that facilitate dollar trade using Stable Coins, without the involvement of American banks and clearing houses. In 2024, stable coins processed more than $27.6 trillion in dollar-denominated trade transactions. That amount is just as large as the entire U.S. economy ($27.710 trillion).

In other words, the global trading volume in stable coins is as large as the trade volume of the United States. Whatever sanctions the EU imposes, whatever show von der Leyen puts on...traders, petrostates, bankers, shipping companies, and 'the biggest money in the world' repeatedly demonstrate how flexible and creative they are in circumventing meaningless symbolic politics. And Ursula von der Leyen knows this too. Sanctions like these have no impact on world trade or President Putin's approval rating. These sanctions are symbolic and solely aimed at reinforcing an image of the enemy, a logic of war, and a sense of insecurity among the average European. With this 18th round of sanctions, Russia further integrates and merges with the rapidly strengthening group of BRICS countries, ASEAN, BRI, and SCO. The average European watches it and will once again pay the price.