Russia's Declining Oil Capacity and the Deeper Problems of Cartel Politics

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At the beginning of March, Russia announced that it would be cutting oil output as a part of a broader OPEC+ plan to reduce raise global prices. However, there are two reasons that this may be happening. First, as a consequence of the war, it could be that Russia has lost the capacity to produce the same level of oil. Second, it could be that Russia is taking steps to ensure that the cartel pricing scheme does not fall apart. This video examines the evidence for both, using some deep cuts into bargaining theory to help us understand what is happening.
0:00 Russia's Oil Cuts
2:11 Recent Oil Politics
4:31 Is Russia Losing Its Oil Capacity?
9:58 The Case for Voluntary Russian Cuts
13:24 Why Impatience Is a Virtue in Cartel Collusion
17:45 The Meta Problem with Uncertain Capacity
19:23 The Main Implications for the War
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[@benestantial3367]

I am always amazed at how William Spaniel manages to put lines on maps, even if the subject doesn't require it. We love you mr Lines on Maps guy

[@scoldingwhisper]

its like Joe Rogan talking about bears... i think its a troll at this point

[@williamcase426]

Lines must go on maps. 🗺

[@gideonmele1556]

There are always lines on maps, we just don’t always see it

[@hackhenk]

​@@gideonmele1556There's always bears in the woods, we just don't always see them

[@george2113]

​@@hackhenkoccasionally there's a Pope in the woods

[@robertandromo]

Grew up in the oil industry and can say that seeing how Russia is putting out these fires tells you all you need to know. They are short on expertise and resources. Their oil industry is experiencing death by a thousand cuts. Ukraine is hitting the exact weak spots now and making it difficult to a) put out the fires, and b) get the capacity back on line. Looking at 2 years of this war minimum, infrastructure damage will reduce output by at least 30%-40%.

[@TonyHobbs]

Redadare must be laughing 😊

[@zibbitybibbitybop]

Perun agrees with this point, he noted that the fire at the major facility near St. Petersburg took way longer to put out and did more damage than it should have, most likely because of a lack of competent oil techs on site. This will only keep happening, there's nothing to stop Ukraine from inflicting more such paper cuts.

[@fukuu7998]

People dont see how this is going to fuck the world economy like the 70s.

[@hugoguerreiro1078]

​@@fukuu7998people see it but there isn't much that they can do about it.

[@S1551]

​@@zibbitybibbitybop Which video was that? Gotta rewatch that part

[@carlfromtheoc1788]

With any cartel, there is always an incentive to cheat, which eventually destroys the cartel’s scheme to restrict supply.

[@andrewallen9993]

As universal as the law of supply and demand 😁

[@puraLusa]

​@@worldoftancraftsometimes yes, in usa there are known anti-trust was enacted. Sometimes it's just how market works and the cartel ends up splitting by itself. It depends very much on the tipe of industry and market.

[@carlfromtheoc1788]

@@worldoftancraft A cartel is not a monopoly. Monopolies can be broken up, but it takes good laws, and dynamic administration to bust up monopolies.

[@davidc2838]

@@carlfromtheoc1788 Yes, it's a Cartel...just like the name implies...however a Cartel can behave monopolistically if they all agree...of course that rarely happens in the long run.

[@HatBilly2008]

Oil,production, takes a lot of maintenance, if you don’t do it the production will show down, the oil well need to run, if the oil pipes in the ground is not moving the pipes will be subject to scale growth and erosion because of the oil holes up acid , salt out of the ground. This is a nightmare for Russia. Just look at Venezuela oil production.

[@u2beuser714]

Depends of what material the pipe is made of for example there are russian pipes which has "suhlon" inserts which are very anti corrusion more than gold actually and they are perfect for insulation from acidic materials its mind blowing

[@HatBilly2008]

@@u2beuser714 yes, scale growth is another problem. The pipes quality we know soon enough about them. Drilling same well twice is very expensive.

[@misterqiu-zic3d162]

but the Americans have much more problem with their fragmentation system to get their oil out...and the access price ,, the problem....you will have to pay much more for your gasoline for your car and commercial transport, Biden has already warned the Clown of Ukraine to be careful,,, what's more, Russia can last almost 2 years of war without producing no weapons in its factories...and Russia produces as much ammunition in one month as the USA and Europe in 1 year...NATO is the mafia, they create insecurity to sell security....They create threats to sell protection....NATO and Europe are warmongers at the beck and call of the USA....BRICS+ is the best for the world

[@dave7830]

With the loss of external engineering and production experts, Russian employees have had to step into new rolls. Even if they knew how to do the job, I'm sure the ever pervasive corruption in Russian society has moved in without the foreign oversight. Money allocated for preventive maintenance goes into somebodies pocket - "if it it isn't broke, don't spend money to fix it"

[@HatBilly2008]

@@dave7830 , the tools, chemicals, electrical equipment, they can not buy this stuff, it is tracked. The oil tool companies lease this to Russia. My point is many things Russia will have to change things back to old parts, meaning lower production

[@almarn]

Cutting diesel export was really a bad sign. Infrastructures maintenance problems, enormous usage for the war, problems to keep the price in Russia low...for transportation, farming and so on. There is secondary sanctions also and they are really starting to bite. All of India's refineries are rejecting Russian crude that was shipped on Sovcomflot tankers, Bloomberg reported. The state-run shipping firm has been the target of a number of US sanctions since December. Previously Sovcomflot accounted for around 15% of Urals crude shipped to India. India has switched to Saudi Arabia and Gulf countries again. Russia has also now too much crude to sold easily to nobody and buyers can not use the US dollar also. China is using the yuan, after refusing to use the rubble and India was using UAE dirham....after Moscow refused the rupee...

[@jaypatelz]

shipping problems will be solved and they have alredy new companies with uae insurance, your cope is surreal, bloomerg reports with unnamed sources lol. they also said india won't breach procecap lol how did that turned out also notice how g7 never sanction china!!!!, very afraid

[@MrRedsjack]

The dhiram Is effectively US dollar. 😂 It's completely pegged at a fixed US dollars rate.

[@jaypatelz]

@@MrRedsjack we're not talking about currency here, uae is also a tax haven & hosts russian bank, nice place for them to bust these phony sanctions

[@corbeau-_-]

@@MrRedsjacksssh

[@stephenthomas3085]

@@MrRedsjack Not much good if you're not buying anything..!!

[@Prometheus-Unbound]

Couple of points: 1. the need to distinguish production (and crude export) and refining (and refined product/distribution). From the information I have seen Ukrainian strikes have been on the later (St. Petersburg LNG export facility excepted). So crude production and export shouldn't have been affected by Ukrainian action. 2. Nature of Russian crude production - there are a lot of old fields which usually means enhanced recover methods to extract crude. The machinery and chemical necessary for this are probably very vulnerable to sanctions (and depleted technical staff). Many fields are in very harsh conditions requiring technologically superior equipment - again sanction may well have curtailed new wells and well maintenance necessary to maintain and/or expand production. I suspect the inability of Russia to produce or import western equipment is a key factor in declining production (and no, China doesn't make this sort of stuff). Another excellent analysis!

[@almarn]

Good point fro China..heavily dependent also on western technologies. China is always an argument with the people telling us..sanctions are NOTHING...China is here..well NO.

[@macmcleod1188]

The reason that loss of the refineries affects raw production is that storage is already full. This means when refining capacity is lost there's no place to put produced oil. And turning off oil production results in oil freezing in the pipes and pumps. It takes a lot of effort and time to restore production after a stoppage like that. In some cases production is never restored. The nice thing is when gasoline prices rise $1, they give a 1000.00 annual savings to every Electric car that drives 15,000 mi per year. And as other petrochemical products increase in price, the encourage the development of Alternatives and the reduction of Reliance on oil by-products. The Russian invasion of Ukraine has put us three years ahead of schedule for dealing with climate change. It's still not enough and anyone under 50 is going to see misery and hard times but we are still 3 years ahead.

[@u2beuser714]

Whats your proof that china couldnt make such technology? Its not hi-tech by any means

[@u2beuser714]

Whats your proof that china cant produce the machines necessary for russia? We know china can produce 7nm chips so why not this which is far less hi tech ?

[@u2beuser714]

China can produce 7nm chip why cant they make an easy equipment such as the ones you are referring to?

[@Garcea_linking]

So India can buy OPEC oil but not Russian oil. Demand for Russian oil drops. Most countries want dollars for oil, certainly not Rubles. If no one is buying Russian oil there is no dollar input flow. Russia wants to buy technical contraband but sellers want dollars. Russia has a dollar crunch. Perhaps this is all about dollars rather than selling oil. Anyone that takes Rubles or Yuans for oil will get stuck with worthless money

[@Iamwolf134]

I heard one particular case where India forced Russia to sell its oil, not for Rubles, or Dollars, or even in Yuan, but in Indian Rupees.

[@u2beuser714]

​@@Iamwolf134 But you probably never heard of tje fact that the rupees are fonverted in indian banks and sold back in rubles to russia , right?

[@TheRezro]

@@u2beuser714 And how it make even sense? Ruble have low value. What you say, mean that India clean its stacks of worthless Russian money.

[@tedstewart114]

India's oil purchases from Russia have risen sharply, despite efforts by Ukraine and its allies to persuade countries around the world to distance themselves from Russia. BBC , the Indians have gone from 2% to buying 20% of their oil from Russia, China also gets 800,000 barrels a day Seaborne imports of Russian oil Urals and ESP crude, millions of barrels per-day, this doesn't include the millions of barrels that escape sanctions by going through 3rd parties. and dont forget Europe is still importing large quantities of Russian gas.

[@TheRezro]

@@tedstewart114 You are aware that India work with the West? Whole game is not about closing Russian supply, but cutting them from profits. West simply wait for Russian oil industry to fail, doe to lack of maintenance.

[@larrygj4764]

Missing in this otherwise excellent discussion is the fact that the principal demand for Russian oil and derivative products is from India and China, both of which will not be in a position to continue buying Russian gas and oil for much longer. India, because it fears sanctions from the US, and China, because its economy is imploding. Without demand for Russian oil, the Russians are going to be stuck with having to dramatically reduce production because they have no storage facilities great enough to hold all that unsold oil.

[@u2beuser714]

Why would india be sanctioned ? The last thing they want is an alienated india no? And even if thats the case, why wouldnt they sanction india from the beginning?

[@u2beuser714]

I dont see the connection here if chinas economy is imploding wouldnt they need MORE energy from russia not less? Im struggling to see the connection here

[@u2beuser714]

So you are telling me the west is willing to burn its bridges with india yet agein? What makes the west assume that india wont double down on its alliance with russia?

[@u2beuser714]

Please stop the peter zaihan esque "doomsday" predictions he said germany would totally collapse economically which turned out to be completely and utterly wrong

[@davidgraham4807]

@@u2beuser714 Simple economics. Keep up.

[@marcdc6809]

Putin is like a cat that just fell off a table and now looks at you with this 'I meant to do that' look of disdain...

[@wazaagbreak-head6039]

This is a solid analogy

[@sunkntreasure]

Cats usually land on their feet though - not their face

[@marcdc6809]

@@sunkntreasure to us here it looks like he fell on his face, but back there in Russia he managed to blame his own failures on sabotage from the west, I do hope people in Europe realise that even if the US is no long paying the bill somebody needs to pick it up and keep Russian ambitions in check...

[@signoguns8501]

According to putin, this is all going to plan lol.

[@whiskizyo2067]

r/oddlyspecific

[@Urgelt]

Peter Zeihan predicted that Russia would be unable to sustain its oil output. Its reliance on foreign companies ended when those companies left in 2022. Especially in Siberian fields on permafrost, expertise is critical to operate those fields. Zeihan observes that even before the USSR collapsed, technical schools in Russia closed. Qualified native workers are growing scarce, and the specialized equipment from Western companies can't be maintained without support from those companies. I expect more cuts from Russia, even if Ukraine mounts no further attacks. But of course Ukraine will mount more attacks if they can.

[@mjl1966y]

With the ability to launch drones up to 1000 km, Ukraine can maintain these attacks indefinitely. Drones are cheap. The air defense against them is not.

[@TheRezro]

@@mjl1966y It is not exactly true. But it is one of those cases where Russian size work against them.

[@Gjudxdkjyzddhjnr7091]

@@mjl1966y Or until Ukraine is defeated on the battlefield...

[@enriqueperezarce5485]

@@Gjudxdkjyzddhjnr7091Highly unlikely in the short term or for the seeable long term. Ukraine is going to make this into their own Great Patriotic War, like it’s the 1940s again

[@SLOWLYdoesit1]

@@mjl1966ylast night a Ukrainian drone traveled 1300+km!

[@Badco1948]

One unacknowledged player (by the video) in the global oil market. USA is producing 14 MBD of light, sweet crude. The Saudi's aggressively moved to shut American shale production in during 2014, by flooding the market. They may be itching to do it again, which would bury Russia's production.

[@duckduckgoismuchbetter]

I agree, except for the fact that OPEC can no longer do that. American fracking costs per barrel are far too low now for that to ever work again. And getting lower by the year. The newest fields are below $30 per barrel. We're getting close to the Saudi actual production cost, and will be there, and below it, in a number of years. Meanwhile, every OPEC nation is absolutely dependent, for the cost of their own bloated governments and social services, on the price of oil being at least ~$70 to ~$90. And although some are trying to cut this cost a bit, they won't succeed in cutting it by much, due to their systemic inefficiency and systemic corruption. So they are ABSOLUTELY stuck...and we are not. Our fracking costs will continue to go down every cycle, while theirs either stays the same (or maybe drops a little, temporarily, from time to time), but mainly goes up. Oil is here to stay. At least for decades. Wind and solar are permanently FAR more expensive than hydrocarbon energy sources. No amount of technology will ever improve their costs versus conventional power. Eventually, something else WILL come along (nuclear fusion/thorium/improved fission, and who knows what else) to replace hydrocarbon energy. But it isn't, and never will be, solar or wind. Slava Ukraini and MAGA Forever!

[@javanava8925]

@@duckduckgoismuchbetter Slava Ukraini and MAGA don't go together. Trump's closest friend is that sociopath Putler. Vote for Trump is vote for Russia. Ukraine will be in deeper shit than now if Trump wins. I wish Trump would support Ukraine, in that case I would probably support him publicly, I can't vote, I'm not US citizen.

[@darex0827]

OPEC cuts, degrading infrastructure that is difficult to repair (sanctions / loss of skilled labor) and Ukrainian strikes are causing tremendous difficulties for the Russia state. I see this continuing for the foreseeable future.

[@luisg.ontoriaalvarez2334]

I keep reading this very same headlines every few months, oil is a problem for Russia. What about reality?

[@SnorriTheLlama]

@@luisg.ontoriaalvarez2334My hot take is that most of these could be overcome, apart from exploding oil infrastructure which would be expected to have a significant effect.

[@skywillfindyou]

Infrustructure isn't fegrading. EU signals they're getting problem in this filed without Russian tech, cause Russia invested much in it's advancement. Most results of strikes are being repaired in several days. Vastly it is almost unnoticable. It could have been more impactful if there were much more strikes, which Kiev plans to do. But US tells them not to, as to strike is rather easy, then to defend, and all sides could do this. Meaning Russian will strike such american infrustructure in Africa and Middle East. Which will skyrocket oil price. Which is key weakness for states.

[@u2beuser714]

Loss of skilled labour ? As far as i know the oil rig workers didnt flee russia since the demand for them is high so saying "loss of skilled labour" is blatantly false

[@biomerl]

​@@skywillfindyoulol, go home shill.

[@MrScientifictutor]

Hard to believe Russia is cutting voluntary.

[@niklasnorberg5071]

If the raise in prize is bigger then the cut it is a brilliant idea. Anything they don`t sell now is left in the earth for the future.😉

[@IIII-vz6yc]

what does it look like? 1.salaries and prices in Russia in rubles 2.the more rubles a dollar costs, the cheaper it is to pay for the “war” 3.the “civilized” West trades with the shadow fleet(the US buys oil and sells it to Europe with a markup of 350-400%) 4.before each large exchange, the ruble depreciates

[@Sir_Godz]

protesting production with fingers crossed

[@cubiss1273]

​@@niklasnorberg5071 This would make sense if the cuts were coordinated with the rest of OPEC. Otherwise you're just cutting production without significant raise in prices. Keeping oil in ground might not be desirable if projected oil consumption stops before you run out of oil. This could or could not be a thing depending on the "green deal".

[@niklasnorberg5071]

@@cubiss1273 Them and Saudi together have effect. And the hits on refineries does most damage to the once bying wich incudes the west.

[@keith2366]

Shale oil production in the US is expected to continue to increase for at least the next 20 years. OPEC better plan on making cuts every year to keep the price of oil up.

[@puraLusa]

There is a wisper in the air that saudi wants that, cause their easy to drill oil is ending and thus selling less is their intended goal. Don't forget that a) countries like uae have invested in alrlternative energy stocks and b) have had too good of a relationship with refining corporation (research lead refining case study to understand how dangerous they are) and c) arabian peninsula countries depend on usa for security, they play on an uneven position.

[@geofflepper3207]

And other western countries such as Canada, Brazil, Venezuela and Guyana are increasing production. It's not easy for Russia, Saudi Arabia and other OPEC countries to keep playing their game of curtailing oil supplies when western countries refuse to play by those rules. If OPEC keeps losing market share eventually some OPEC countries with a smaller share of the market might decide that it is not in their interest to stick to OPEC rules regarding curtailing their production. They may think that whether they stay in OPEC and follow its rules or not won't make much difference to what OPEC does or to the international price of oil.

[@stephenthomas3085]

Unfortunately shale oil is also the dirtiest, foulest and most polluting fossil fuel with the highest carbon footprint. In twenty years we could be 2 degrees above the pre industrial average - or significantly above this, this is quite possible now. I don't even want to think about the consequences I really don't.

[@ianrau6373]

Should’ve switched to nuclear when we had the chance. The public is scared about a failure in SOVIET nuclear technology, massively worsened by scientific and administrative incompetence. If we had gone ahead and done the logical thing, and built plants with modern technology, we wouldn’t be worrying about the environmental impact of oil or what OPEC gets up to.

[@puraLusa]

@@ianrau6373 only the regions/ places who aren't seismic which there aren't that many. Also, only the countries who can maintain security which some absolutely can't. So ur "we" is a very small "we".

[@skogsjarvenab7958]

Russian miscalculations invading Ukraine is mind-blowing.@William Spaniel: Your work makes international politics make sense, or not, thank you.

[@chadhaire1711]

miscalculations? Russia is winning Ukraine has lost--lost 4 million in Crimea who voted to join Russia, lost 8 million in Donbass who voted in a new government, and lost another 14 million who fled to E.U., and 700,000 military age men who refuse to report for the draft while 1.3 million Russian troops advance day after day.....this Spaniel has been wrong every day for 2 years and biggest liar out there..like fake news CNN or MSNBC.

[@TheRezro]

That itself would not be that bad. If Putin would actually do 5D chess move and pull from war with Ukraine agreeing on they demands. What actually almost did happen. Problem is that Putin clearly believe in own propaganda, with everyone lying to him about state of the war. As result they make mind blowing decision of unwinnable scenario.

[@headoverheels88]

I'm glad SOMEONE is finally talking about the technical expertise needed to run these crazy complicated machines. People focus so much on the "sexy" stuff, but the boring stuff... the boring stuff always come to bite you in the ass.

[@apurvd6177]

And to think the Russians don't have the technical expertise to run "these stuff" 😂😂

[@sababugs1125]

​@@apurvd6177well the cuts speak otherwise

[@dominicvg051]

The subtle Avatar reference was nice touch. Great video as always.

[@armintargaryen9216]

Haven't seen the video yet, I wonder whether it's about Avatar the good or Avatar the meh Edit: it was the good 🔥💦💨🪨

[@AlexandruVoda]

@@armintargaryen9216 I never get tired of that reference. It can so seamlessly be integrated.

[@h8GW]

Timestamps save lives

[@AlexandruVoda]

@@h8GW8:50

[@Kevin-mk6jo]

Kings and Generals and this channel... LEGIT!

[@williamcase426]

Well met fellow king. 👑

[@alexbarry5288]

You are a man of good taste sir

[@unoriginalname4321]

Don't forget Perun and Anders Puck Nielsen

[@ReichLife]

Given how mid both are, quite solid comparison.

[@allemagneproducer]

jake broe and william for the ukraine content serpentza and chris chappell for the china content !!♥

[@terjeoseberg990]

The more OPEC cuts, the more the United States increases production.

[@savvasgamingchannel5062]

US has depleted its reserves.

[@ValleysOfRain]

To a limit. The US does not want to deplete its reserves in response to an OPEC race to the bottom. It's not great for the US if it maxes out its capacity trying to depress fuel prices, because then the profit motive for its companies (which are not government controlled) disappears.

[@enriqueperezarce5485]

⁠@@ValleysOfRainThe US has a lot of oil my dude and the most recent discovery (shale revolution of the 2010s) just added to it. Trust the limit is super high that I won’t think they will reach it. Your right though they wouldn’t do that, their is a reason why the US is the top producer of oil but not the top exporter

[@Treklovful]

The crude oil export is not affected by Ukrainian drone attacks. It's the capacity to convert crude oil into diesel, kerosine and gasoline that's affected. Unless there's a pipeline constraint for crude oil exports (unlikely). The drone attacks at crude distillers therefore hardly drive the crude oil price up. But will lead to problems to provide these products for civilian purposes. I hope: rationing or extremely high prices for Russian civilians.

[@puraLusa]

It pressures russia to export more crude to be able to buy it refined (increse cost and less eficient) but it also creates a botle neck as it increse the necessity of crude storage, this in turn affects the crude demand on site, something u can't stop, only delay, cause the wells need to keep on pumping no matter what or they break.

[@TheRezro]

Cruse drop is most likely related to collapse of infrastructure, rather then Ukrainian attacks.

[@bencesipos1142]

Those avatar jokes in an otherwise serious topic... Nice touch!

[@xelaxander]

WTF is this Baldy the eagle allegory!? „Russia is closer to Baldies daddy“ - I really needed that sentence in my life.

[@TonyHobbs]

Perfect humour 😅

[@Revenge221]

Ah, the ATLA/Fire Nation reference. Brief, but got a chuckle out of me. Good stuff.

[@karolykiszely300]

There's a mistake with the iron curtain at 6:52. Yugoslavia was bot a part of the easter block in the seventies, and therefore wasn't behind the iron curtain

[@nospamallowed4890]

Why are any western nations objecting to strikes on Russian oil? Since OPEC Plus has excess capacity, aren't the other countries simply raise production and smile all the way to the bank?

[@advancetotabletop5328]

Because, in the end there are no allies, just common interests. Western countries are more interested in their domestic problems than Ukraine.

[@joeyjojojrshabadoo7462]

@@advancetotabletop5328 Quite frankly if they keep if up we should start refocusing our interests and threats.

[@nicolasolton]

​@@joeyjojojrshabadoo7462what do u mean?

[@contentsdiffer5958]

OPEC cut their production, you silly goose. They have extended and re-extended those cuts. It's almost as though OPEC work together to pressure other countries. Wow.

[@barryfleming8488]

But I gotta get re-elected

[@markb8468]

Excellent info and analysis as always. Thanks!

[@KapitainZino]

Great video as always on a hot topic! Great job William. This thread is precious in getting insider information on the topic! Keep the good work going!

[@fdk7014]

Ukraine needs to continue to 'improve' Russian oil refineries.

[@13lueBomber]

Russian population: “The West wants our resources!” Putin: “Yeah, that’s true!” 😉

[@juriteller3688]

The output reduction is generally to keep the prices high, because non OPEC states massively increase their own output. Especially african and south american countries need the money and therefore try everything to get as much oil out as possible. And the US had an immense increase in production over the last 10 years also. In short, OPEC is losing it status as a monopoly.

[@puraLusa]

It's the factor called guyana. This is why maduro (venezuela dictator) is menacing to invade guyana.

[@nicolasolton]

Great news👍

[@jorgecaballerocastillo2435]

Thanks for the lines on map

[@user-hv7kt9zc3m]

Well done Ukraine after 2 years of Sanctions nothing you attack there oil within a few weeks and it makes a massive difference keep it up the usa has been withholding funds dont listen to them

[@AppendixVermiformis]

hehe drones go brrrrrr

[@staticfanatic]

vatnik

[@TheRezro]

What you say don't even make logical sense.

[@nusub2222]

By attacking Russian oil production or refining the Ukrainians may be shooting themselves in the foot. By increasing the price of gas they are decreasing the chances of Biden getting reelected. A Trump presidency would be a disaster for everyone - everyone, that is, except Russia and fossil fuel producers in general, but especially disastrous for Ukraine.

[@mebibyte9347]

The avatar bit got me so good. I had to watch it twice. 😂❤

[@luminyam6145]

That was fascinating, thank you.

[@3punctero]

Russia is closer to Baldy's daddy. 😂😂😂 10 / 10, I absolutely died.

[@nathanhoffman20000]

Outstanding thought exercise

[@victoriahigman6802]

Thanks

[@Gametheory101]

Thank you!

[@Alexandragon1]

Thx for the video!

[@jacklu8752]

Professor Spaniel is the best.

[@morganmccauley1687]

Good show 🎉

[@kevinsips3658]

“Damage”, aka lower gas prices? Love the Avatar references btw.

[@W_Bin]

This is the best you have done.

[@pappafritto]

Great job! Thank you I enjoyed the video

[@philipb2134]

Another possibility is that Russia no longer is capable of shipping such volumes.

[@davidavery3182]

love the sneaky avatar line there :D

[@dmuth]

20:51 I think your next book should be called "Lines on Maps"!

[@RodicaMihutArmando]

Thank you for this information.

[@root_pierre]

Intelligence services on both sides know that influencing the wider world is a cheap way to fight a war whilst their governments limit or lack in material support. Thank you for the Meta part of my daily diet❤

[@christopherboudreau2451]

The last dude who did an episode on Russian oil, found his account hacked.

[@puraLusa]

Joe blogs - he has a financial/ economical analisis based on graphs and charta, harder to dismiss his conclusions by propaganda bots.

[@GNMbg]

@@puraLusa yeah and this dude draws lines on maps, so its even harder to counter his videos

[@puraLusa]

@@GNMbg lol, it's just intern economics general logic and math. It isn't charts and graphs whose source is russia gov itself. That's what makes joe blogs such a pain for rus propagandists, as these count on people ignorance when it comes to economics, they spread "russia is strong, europe is freezing" kind of bs.

[@morstyrannis1951]

@@puraLusawhat, you mean the Germans aren’t eating their kids’ hamsters?

[@buzzyhardwood2949]

Great analysis, William. Thanks.

[@timberwolfe1645]

Enjoyed this video. It makes so much sense.

[@asan1050]

William Spaniel, ThanksMuch for posting !

[@GrzegorzBrzeczyszczykiewicz420]

I love the Avatar the last Airbender refference "But that all changed when the Russian nation attacked" "The western response consistet of 4 elements: Sanctions, Sanctions, Sanctions & Sanctions" :D

[@louisgiokas2206]

Your auto buying example is right on point. My mother-in-law was out to buy a new car. She was a good negotiator in general. The salesperson at the dealership actually told her that if she did not buy the car that day from him, the chance that she would be back later to buy were miniscule. She was also not under any type of pressure and had bought from the dealership before. So, she got a great deal. I have seen this in other cases. Her daughter was also good at such negotiating. I am not, at least for consumer purchases. On the other hand, in my professional life I am great at large multi-million-dollar negotiations with experiences working for large companies and for my own companies. Go figure.

[@puraLusa]

Because of the pressure effect. They have the time that u don't have as u are busy in an extremely demanding career. When u have personal time u need to use it fast for ur personal needs, no time to check every week for the good car deal.

[@louisgiokas2206]

@@puraLusa That has not been my experience, or that of anyone I know. This is especially true in the Internet age, where all car buying research can be done online.

[@puraLusa]

@@louisgiokas2206 does ur line of work allows u stay focus on internet websites unrelated to tasks set up for the growth of ur business? Time is a big part of the equasion on buying/ selling something. The internet age only increases the pressure cause it also oppens up to more potencial buyers.

[@Chuck_Hooks]

Appreciate Ukraine's contributions to making all this a problem

[@deadwingdomain]

It's all Putin. But sure, blame the victims.

[@Chuck_Hooks]

​@deadwingdomain I mean Russia's problems. Have to be cryptic to not get auto-deleted.

[@flowpipe]

​@@Chuck_HooksWhy does the auto delete seem to protect Russia from negative comments? It happens a lot

[@davidgraham4807]

@@flowpipe KZbin my friend

[@GeraldBeagan-ee6se]

It might upset trump

[@seanmellows1348]

Great stuff here. The big question is: lines or no lines? Or both?

[@mukkah]

Subtle double avatar reference lol nice ^^

[@emmanuelnava6582]

Bro this was such a great video!! Thank you.

[@terryberard1355]

My first though went to reducing the number of production site to ensure enough protection for each

[@ralphmtsu]

Sounds like an old grad school class I took called the Political Economy. Still have it somewhere in my library.

[@UncleJoeLITE]

Thank-you from Australia. Yes, I reckon it's 'and/or', with the current emphasis being cartel pus the squeeze on Russia. With Russian facilities widely dispersed & Ukrainian equipment frankly 'meh' atm,, UA must have identified the weak link to go after. Whether this can succeed we don't yet know.

[@AnnabelleBeaudoin]

Great video ❤

[@jameswyre6480]

This top notch professor employs impeccable logic with excellent examples. Yet, somehow, the presentation is still eminently listenable. Even the long episodes don’t drag and feel shorter than they are. The generals sat and the lines on the map mooooooved from side toooooo side….

[@manserizawa2327]

The answer is that the US has imposed a price cap on Russian oil of 60 USD/barrel. This caused cheap Russian oil to flood the market, lowering the market's overall price, and thus challenging OPEC nation's profit. This led to the initial voluntary production cut by OPEC in June 2023. Later more cut was announced and extended the duration to the end of 2024. Well for Russia it's just the war economy demanding more and more money to keep going since the war has transformed into a painful war of attrition. Either way, it's supply-side inflation at this point. Oil prices will keep getting higher and higher if world leaders can't play nice with each other. What's more the US just announced they are targeting to get their oil reserve back to the previous level. This means more oil will divert away from everyday consumers like you and me. Guess the non-oil-producing nation can expect inflation to spike because everything from production and transportation depends on oil to operate.

[@bigolboomerbelly4348]

Depends on how much USA produces and what they do with it They can sell and store oil simultaneously and if they produce enough the reserves can be restored while selling enough on the market to keep prices at a slow rise, in stasis or even in decline. As for reserves, these are kept precisely so they can keep prices down in the future. So stocking reserves need not lead to high prices.

[@ShanGamer1981]

I enjoy your videos sir

[@randalsaladbar]

Great overview. Makes good food for thought for when oil, coal, gas, is looked at like asbestos. A paradigm shift is visually present in battery storage is cheaper, and more economically sustainable as the most profitable than any other energy source. Every becomes independent, and that power of leverage is gone forever

[@puraLusa]

Battery tech isn't that good at the moment. It doesn't a good longevity, it's very pollutant to produce, etc. Maybe this whole ordeal will put political pressure to invest in more research and better batteries in the future.

[@randalsaladbar]

@@puraLusa the battery storage trend is S curved, and ahead of what's previously hypothesized. Exponential, profitable, and residual income are key words to corporations bottom line, because that's all they care about. So, battery storage for electrical grids is inevitable because of the profit margins. Solar farms are popping up everywhere in anticipation of its storage application. TSLA is dirt cheap at the bottom of the S curve 🔵🇺🇲✌️

[@deshawncruz]

Just talking about the optic if the steel companies in the beginning. I live in Bethlehem like 10 miles from Bethlehem steel

[@ttttttttt744]

love the ATLA reference

[@kauffner]

Russia was selling the oil to India in exchange for rupees. There comes a time when you have enough rupees.

[@josephahner3031]

Yet I keep smashing jars and cutting grass anyway.

[@ShotKalTank]

8:51 love that reference

[@Naomi_dreamz]

Beautiful video 😍

[@skywillfindyou]

Copium. Copium must flow.

[@xman933]

Prolix! Russia’s post USSR oil industry is heavily dependent on Western technology and personnel and is falling apart just like Venezuela’s. Soviet trained personnel are past retirement age and talented young Russians who can help have either fled the country because of mobilization or are dying in Ukraine

[@davidgraham4807]

So true. But, nobody wants to address this. But, for us in the oil patch in the GOM know better.

[@daniellarson3068]

Good video - no lines on maps

[@LegaliseFinland]

Very informative, thank you. I suspect the truth is somewhere in the middle of the two theories.

[@EEX97623]

Belarus supply to Putin isn’t going to last long

[@puraLusa]

Belarus production was for internal consumption and a nominal portion for export (profit to pay up for internal consumption costs), but it can't produce in quantity to supply a russian size economy of war, not enough refineries or capacity at all.

[@bigolboomerbelly4348]

Belarus isn't giving russia oil per se. They are giving Russian crude access to refineries that Ukraine won't target. russia exports crude but refines their own oil for domestic consumption so in this instance the crude is extracted in Russia sent to Belarus and then sent back to russia for domestic consumption.

[@kenithandry5093]

Thanks for this video! It’s helpful.

[@jordandoerksen6167]

I will purchase every book of yours that you narrate and publish as an audio book!

[@pukpuku4545]

maybe you want to look at oil imports from India,.... The ammount cuts in the last months are in line with Indias import cuts.

[@britishskeleton777]

the only complaint i have with your vids is how at the end i feel like i learned something wilst not knowing it. also i don't like a book thrown into my face every vid :)

[@16252]

interesting, thanks

[@Syndr1]

Hi Will, not sure I like that bald eagle analogy in your story lol

[@Welgeldiguniekalias]

The 70s were not particularly prosperous for the Soviet Union - it was the "Era of Stagnation".

[@neutralevil1917]

Actually the 70's were the most prosperous decade in the entire previous Russian history

[@seneca983]

Prosperous compared to the following period of low oil prices.

[@4grammaton]

"Stagnation" referred to political stagnation, not economic. Like neutralevil said, it was the most prosperous decade of Russian history hitherto.

[@RobinTheBot]

They stagnated specifically because they were prosperous. That's why the political body settled on "the good times will never end" as a solution.

[@neutralevil1917]

@@RobinTheBot It was a bit more complicated, but you get it right, this was the main reason, so kudos to you

[@liberatesweden2404]

Yes! 🎉❤

[@TheRezro]

Interesting question? We do know that due to immense costs of war, Russia was undercutting cost of maintenance of they oil industry. What also was heavily dependent on the western imported hardware. So it was only matter of time when they industry start collapsing. On top of that OPEC manipulation would demand participation of other OPEC countries. Russia can't really on its own manipulate the prices, especially as they desperately need the money. On top of that India and China stack up massive quantities of oil under the cost, exactly because Russia was needing the money. And they can resell it, if prices would skyrocket. So from two scenarios, only one seams to be valid option.

[@timmommens901]

Burn the Oil refineries 😑😊 "pas de bras pas de chocolat": Les Intouchables. No money no war. 🇺🇦🇺🇦🇺🇦✌🇺🇦🇺🇦🇺🇦

[@carahiggs7157]

😄😄😄😄😄😄💩💩💩💩Ukraine is toast KAPUT 😂😂😂

[@timmommens901]

@@worldoftancraft You assume alot Try harder 😊

[@LePhil79]

​@@worldoftancraft You're aware that not only people from France can speak french?

[@timmommens901]

@@worldoftancraft Are you mental ? Cause you seem to double down. Not even getting a clue.

[@LePhil79]

@@worldoftancraft There are native french-speaking people outside of France, buddy ... Switzerland, Belgium, Québec and some other places in Canada, etc ... Also, what your "Chinese / Japanese" thing has to do with the subject? You should consult a specialist...

[@HiggsBosom]

Spaniel! Be Honest. Soviets have lost the oceanic Pipe-lines, Eastern Soviets have had many Refineries Blown-up by Kiev. India & CCP have stopped buying much of their Crude, and the Ruble currency is not desired much. Never thought Spaniel would be Spinning a bunch of B.S.! You might as well add that Genius Kiev, hit the Moscow Venue & not ISIS.

[@williamwells1862]

Right on.

[@vincentfoxcroft4870]

Very interesting

[@caylynmillard76]

Thank you for all the vids.

[@jamesclaytonbowman5977]

As a result of the refinery strikes, Russia has already become a net importer of refined product, now having to bring in gasoline, and I think diesel too, from Belarus. It gets worse: Belarus only has 2 refineries (compared to Russia's over 50), so if Ukraine keeps hitting those refineries at the some pace it has been in recent weeks, Belarus won't have the capacity to supplement Russia's internal gas & diesel needs. They will have some tough choices to make: 1) divert all refined fuel toward the war effort at the expense of consumer gasoline supplies, severely spiking gas prices internally (also, it's about to be planting season on the farms - demand for diesel is about to spike), OR, 2) ration fuel evenly between military & consumer needs to avoid the worst of the sticker shock at the pump for consumers, hindering their ability to prosecute mechanized war. They will likely start looking for places they can buy refined gas & diesel from once they've tapped out Belarus, and having to pay market prices for refined fuel will burn through their cash reserves VERY quickly. Also: who's gonna sell it to them? The sanctions are tightening once again. India and Turkey have pretty much stopped buying Russian crude in the last couple weeks now that the West has ratcheted up pressure on companies taking shipments from Russian oil tankers, which will put strain on supplies elsewhere. I don't see these countries having a whole lot of extra lying around to sell to Russia, and they're probably wary of running afoul of further sanctions. Virtually overnight, it appears gasoline & diesel for Russia will have gone from a value-added profit center to a cash hemorrhage.

[@puraLusa]

Albeit it's possible for turkiye and india to sell via black market, countries like companies are profit driven. But there is one more to add to the list: the conundrum of controling inflation or buying refined stuff at overprice, cause u if can't control both of these - ur inflation control is equal to zero.

[@user-nr8zj5nm4d]

In the second half of 1943 Allied Forces bombed Ploesti oil fields [Romania], Germany's main supply zone of fuel. It kept the Luftwaffe largely grounded and strongly impaired Panzer divisions and other units in their operations. Some Nazi top officials later estimated that it shortened Germany's resistance with a year. The combined fuel demand from civil Russia may turn out to be incompatible with maintaning the [intensity of the] war in Ukraine.

[@puraLusa]

@@user-nr8zj5nm4d yes, and usa knows that (pentagon is full of people who dedicate themselves knowing such things). Usa oficially said it hadn't discorage or encouraged - in political speak this translates to "we will for now not admit to have spoken about oil with ukraine". Why? Cause usa needs to keep line of comunication with russia (nukes) so it doesn't admit to have agreed with the strategy. It's basic common sense, politicians are profesional liers, and the statement fall into lie by omission, which is very common. Peeps are making this more than it is. The problem lies on congress that doesn't aprove the bill of military aid - this is just a distraction from the main issue.

[@nusub2222]

@@puraLusa - you are forgetting that the more Russian oil refining capacity the Ukrainians destroy, the higher the price of gas and pretty much everything else and the less likely Biden gets reelected.

[@Steve-cv7qv]

I love it when you say "vis-a-vis"!

[@bmunson4920]

The map at 6:48. Yugoslavia was not behind the ‘iron curtain’ or part of the Warsaw Pact….

[@Yezpahr]

William, upgrade your account security and click no links at all. Joe Blogs got hacked.

[@texasmario11]

Great analysis as usual. One topic that was not addressed that in my opinion is going to have very dramatic affects on the price of oil and gas and definitely geo politics is the blazing fast speed of EV adoption, especially in China and the EU. William, can do you a video to talk about that??

[@michaelgross7724]

Bloomberg ran an article last autumn where they projected electric vehicles reducedoil demand globally by about 1.5 million barrels, increasing to 5 million barrels per day by 2030 and 20 million barrels per day by 2040. They also project oil demand peaking in 2027. Note tha global oil demand is about 102 million barrels per day, and that about 60% of it is used for producing transportation fuels.

[@jackthatmonkey8994]

Germany is switching back to diesel and is backtracking its goal of phasing out the combustion engine in 2035. Resource availability is pressing. Especially since China has been taking control of a large part of the lithium supply. I wonder if my fantastical and idealistic idea of large scale nuclear power used to power an energy intensive yet carbon neutral way to synthesize liquid fuel is not more realistic than electric cars lol

[@deadsalmon4115]

Got up today and did not expect to watch a video on Nash Equilibriums often not being the most profitable outcome for ethier party in situations with incomplete information.

[@oldgreybeard2507]

Thank you for your perception

[@tonep3168]

It’s a shame that oil has (mostly) to come from such evil places.

[@robbiekop7]

Yea Underground

[@deadwingdomain]

It's all about power an politics

[@paulbrowne6087]

That's why I've and EV and solar. Screw these petrostates.

[@manserizawa2327]

​@@paulbrowne6087not to ruin your fun but the rare earth metals to produce EVs and solar panels came from China

[@lp9280]

I think we also need to add extra layer of complexity here for ruzzia. Saudi Arabia or OPEC in general can increase their output without losing much of the profits, because oil from Saudi Arabia is not sanctioned. Meaning that Riyad can sell more oil, but ruzzia can't easily sell more oil even if they wanted to. Also knowing ruzzian problems OPEC can simply "throw them under the bus", like they did in good old day of US shale oil boom. Simply said OPEC knows what ruzzia had issues with oil extraction and the price of the extraction, as such they know that if they let oil drop below $40 a barrel, ruzzia goes bust, their oil production goes bust and there will be one less competitor... at which point they can cut exports again. In short - cartel logic does not work so when when some members are constrained in their extractions and export capacity and are facing increasing cost of extraction.

[@catharinawestermark5792]

Kiitos!

[@Gametheory101]

Thank you!