Rerouting Russian oil would require dozens of supertankers that don't exist.
, behind only China’s COSCO. Russia’s Sovcomflot reportedly owns 110 tankers.
The logistics headache only gets worse. If China buys more cargoes of Russian oil, it won’t need as much from Saudi Arabia — those barrels can instead flow to Europe. But that’s a longer voyage as well, requiring more ships and more time. “More expensive ships. More expensive cargo. More expensive transit fees. Much longer transit routes. More risks of piracy. More to pay for insurance. More price-volatile cargo. More margin calls. More need for term bank credit.
It’s why Pozsar believes that trade is entering a “new world order” where nations seek to build up commodity reserves rather than currency reserves, and where just-in-time supply chains will be replaced by just-in-case hoarding of commodities and the redundant supply chains. He believes that money-printing as a panacea for all economic ailments will end. “You can print money, but not oil to heat or wheat to eat.
Analyst Neil Beveridge at Bernstein Research likewise sees macro trends of de-globalization and de-dollarization taking hold: “if we are coming to the end of globalization we should expect higher inflation and high commodity prices.
There is historical precedent for Russian oil collapse; between the fall of the Berlin Wall in 1989 and the Russian financial crisis a decade later, oil output from the former Soviet states halved from 12 million bpd to 6 million bpd due to brain drain and underinvestment.
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