Replacing Russian Oil -- March 11, 2022

For oil bulls: the day-to-day white noise can be distressing, but think about this -- the big picture, except for Russian oil going to China, upwards of seven million bbls of oil has been taken off the global market. Just like that.

Having said that, the price of oil suggests that traders know Russia will be able to sell their oil. This will be fascinating to watch. Russia also needs significant western "help" (think Schlumberger) to produce at max capacity. 

But something doesn't add up: the price of oil can surge when "we" lose 400,000 bbls of Libyan oil but hardly moves when we lose seven million bbls of Russian oil.

Canada: considers ramping up oil exports to US. And just think: the long pole in the tent: lack of adequate pipeline. Rail merger between KSU an CP may or may not be on track (no pun intended); everything depends on regulators who are not particularly supportive of "bigger is better" philosophy.  Link to Charles Kennedy.

Russian oil shortfall: it will take five years, could take ten years to "build back better" -- the amount of time needed to replace all ten million bopd Russia is producing. -- Former Texas regulator. Link here.  Charles Kennedy. March 11, 2022. [

You know, that's an interesting observation. The former Texas regulator is suggesting that Russia will have trouble even producing enough oil for its own consumption when foreign companies, foreign technology departs. He may be on to something; I had not thought of that. Look what happened to Venezuela with sanctions. And those Russian tankers heading to China? How many does the US Navy have to take out before Putin gets the message?]