MigraineCall wrote: Putin presently enjoys a very high approval rating in Russia.
This is largely due to his 'special operation' being justified on the pretext of protecting mother Russia from Ukrainian Nazi and NATO expansionism threats. This is presented to the public through one sided news reports and controlled access of western media, and other sources like social networks. Some of it true.
We in the west are being manipulated to the same extent, by not being allowed to see the full picture, hearing both sides, and we are also spoon things that support the narrative in the same way.
There have been horrible things going on, and terrible civilian attacks committed by both sides, yet only one side makes it through the filter and appears on the news.
From my view and opinion from everything I have read in terms of the war coming to an end for whatever reason, we would still be left with severely damaged Russian/western economic ties and sanctions. There is now a permanent loss of many western businesses, but more importantly, the western technical support to the Russian oil industry. Also, sanctions are not easy and quick to unwind, and they will drag on for years.
Due to Europe's critical gas level situation, gas supply would be the first to return and increase via pipeline, but oil is different. Oil won't suddenly start to be shipped to the EU overnight, however there will be short term price fluctuations in the market. India and China 's war discount would shrink, and both would end up returning to paying closer to world prices longer term.
Russia has significant reserves. Yet Russia faces challenges of significant reservoir damage due to decades of Soviet mismanagement. The recent production level advances over the last years have been significantly due to western technical assistance and specialized expertise coming in to coax oil out of these damaged reservoirs, by companies which have all now left the country. As they are still realizing the benefits from this assistance, there will be a bit of a lag before we see a production drop, then production will accellerate to the downside, but it is coming. Shutting in wells now that are under life support will result in permanent damage, so Russia is trying to avoid this and will sell and ship at any price to maintain the flow.
Furthermore, as with most producers in the rest of the world, they are not spending the capital needed now to develop new greenfields in the future. Incremental production increases would be not enough to offset the decline in existing damaged wells. This is the reality they face.
Overall, with this structural supply issue in the Russian oilpatch, I thiink the outlook is still bullish for prices, whoever is in power.
I think the real lurking threat that could derail the entire globe is China's ambitions and long game strategy in Taiwan and the South China Sea. By Chinese law, they are required and obligated to take it back. They have been bulking up with arms and military hardware, and are now loaded full of cheap crude, have restricted oil product exports, and are becoming more and more independent and self sustaining, which is now accellerating more and more after the Trump snub. While the US drains their SPR in a feeble attempt to lower US fuel prices before an election, China builds. In fact, some SPR sour crude being released now is actually being sold to China. If hostilities break out, watch the fingerpointing begin to see who could have allowed this to happen.
With an alliance with Russia, and Iran, they would have access to the energy they need, but their markets are a fraction of those of the west. Presently they still need the western and global markets for exports, and are saddled with their own crushing real estate debt, but a war in Taiwan would draw the west and the world into a drawn out and bloody WW3. We have a powerful military, but as a society, we have never been so soft, fat, offended, and unprepared.
Although once upon a time, the Alaska Highway was built in 8 months and 12 days to defend NA against a Japanese invasion, times are different now, and even an environmental review takes much longer than that. North America could have had the security of our own strategic oil supply network by pushing forward more with the development of the Canadian Oil Sands, but unfortunately now we have incredible insurmountable challenges like frogs, moss, anthills, and a darned woodpecker nest in the way that brings construction to a screeching halt.
I'm only about 100kms from the Chinese border, so unless the West grows a set soon, I'd better learn some Mandarin to please my new masters.