The United States, under Trump, MAGA, and the fossil fuel oligarchs, has chosen to separate from the energy transition that the rest of the world is pursuing, and which will be dominating in the new century. We are already seeing the sad results unfold, particularly in the US auto industry.
But what might be the world’s purest Petro-power, Russia, following its own vision of warlike “energy dominance” based on hydrocarbons, has put itself in position to fall, further, faster, than just about anyone else.
Watch this space.
Dozens of tankers filled with Russian oil are floating at sea without buyers. Western powers are seizing the aging ships the country relies upon. Buyers of Russian oil are demanding the steepest discount to global oil prices since the early months of the war in Ukraine.
It all spells crunchtime from Moscow’s most important economic engine.
The West has tried to squeeze Russia’s oil industry since President Vladimir Putininvaded Ukraine in 2022. Russia successfully evaded sanctions, rebuilt its own shadow shipping fleet and found new buyers for its crude.
But a fresh wave of pressure, a combination of European sanctions against specific ships, dramatic military ship seizures on the high seas, and President Trump’s efforts to put a wedge between Russia and India, have left Moscow’s most important industry in a precarious state.
Russia’s main grade of crude, known as Urals, trades for around $45 a barrel, a record $27 below the international benchmark Brent, according to commodities-data firm Argus Media
That is already well below the $59 a barrel needed for Russia’s fiscal budget to balance in 2026. And it is inching toward the production break-even price, below which Russian oil companies lose money. Analysts estimate this to be between $20 and $25 a barrel. In January, Russia’s oil and gas revenue was the lowest since July 2020.
“The vulnerability on the budget side is quite significant, and this is happening at a time when the economy is also slowing or almost stagnating,” said Benjamin Hilgenstock, director of the Center for Geoeconomics and Resilience at the Kyiv School of Economics Institute.
In January, the International Monetary Fund downgraded its growth forecasts for Russia to just 0.6% in 2025 and 0.8% in 2026. Other than the pandemic years, it would be the weakest growth since the country annexed Crimea in 2014.
In a sign of Russia’s difficulties in selling oil, some 143 million barrels are floating on the water as of Feb. 10, waiting for buyers, according to ship-tracking company Vortexa. That is around half a month of Russian production based on the country’s 2025 production levels.
Most of these barrels are near ports in Russia, India and China, or around ship-to-ship transfer zones along major trading routes, such as open waters near Malaysia, said Emma Li, lead China oil-market analyst at Vortexa.
Traders are at a loss to find buyers for all these idle barrels, especially given the ample supply of oil in global markets.
Traditional buyers such as Indian and Chinese state refineries are staying cautious. To attract private buyers in China, floating Russian cargoes increasingly need to lower prices to compete with Iranian grades, which are typically sold at a steeper discount.
“The timing of when these barrels are absorbed will largely depend on the level of discounts available to potential buyers,” Li said.
If the volume of oil on water doesn’t decrease, Russia will eventually have to slow production as it runs out of space to store oil, analysts said.
There are signs that China’s so-called teapot refineries, independent outfits that often operate without links to Western finance and insurance, are working through some of the glut, according to Natasha Kaneva, head of global commodities strategy at JPMorgan.
In January, the world’s second-largest economy imported a record 1.73 million barrels a day of Russian crude, nearly 50% above the 2025 average of 1.16 million barrels a day, according to KSE Institute analysis based on data from ship-tracking service Kpler. Analysts say there have been further purchases in the start of February.
But teapot refineries, clustered in China’s Shandong, a province sitting on the lower reaches of the Yellow River, are likely to drive a hard bargain. “When oil is sitting on a tanker off the coast, hoping for a buyer, the seller is not in a good negotiating position,” said Ronald Smith, founding partner of Texas-based Emerging Markets Oil and Gas Consulting Partners.
I thought Jared Kushner and Steve Witkoff had everything under control (or are they they American oligarchs just getting another seat at the table). On a different note, if Trump and the Republicans were successful business people, you would think that they would force Cuba to purchase American oil to Cuba after blockading oil from the rest of the world. But they did not.
Who publishes stuff like this first biased video? Russia (pop: 144 million) is clearly winning this war of attrition with Ukraine (pop: 38 million) where the larger army almost always wins. Remember that the American pro-war consultants to MSM predicted that Russia would be pushed out of Ukraine after the first 5-6 weeks of battle n 2022, but that was 4 years ago. I’m no fan of Trump, but he was correct in saying that Ukraine is Biden’s war. Biden is now gone and Trump has limited future USA support. So IMHO, Putin will be awarded the Donbas region (where a civil war had be raging between 2014 and 2022 but people in the West mostly ignored)