Supply: Russia Halts Oil Exports & Extends Wheat Export ban

Supply: Russia Halts Oil Exports & Extends Wheat Export ban
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Geopolitical conflicts and climate changes helping, pressure on Oil and Food prices will probably last for the next couple of years. In this perspective, the Russian economy will have a significant impact on current oil and wheat prices following the announcements of respectively, starting a ban on oil exports in May and extending the ban on wheat exports until July. Moreover, as one the top oil world exporters, Russia accumulated important currency reserves that are slowly transforming the Rubble into a regional powerful exchange currency, especially with Ukraine.


“RIA: Russia, the world’s largest oil producer, will hike its gasoline export duty 44 percent from May 1 instead of an expected 34 percent to fight local fuel shortages, the government said in a regulation on Friday.

The tariff, tied to international prices for gasoline, will stand at $408.3 per ton instead of the previously planned $304 per ton, it said.

“Gasoline exports will now make sense only for companies with refineries near the border,” said Vadim Mitroshin, an analyst at Otkritie bank.

International oil and oil product prices have been boosted by unrest in the energy-rich Middle East and local companies prefer to sell gasoline on the world market after the Russian government capped retail prices. The price regulations led to a deficit of gasoline in many Siberian regions and in the north of the country.”


Seeking Alpha:”…Russia has been slowly converting oil and gas customers to paying in rubles rather than dollars. China and Belarus have already agreed. With special pricing incentives, others, like Ukraine, will follow. Occasionally, the once and future Russian President continues to have very nasty things to say about the U.S. dollar. He can’t seem to hold back his annoyance toward American economic policies. But, where he is scripted, as in speeches to the Russian Duma, he now creates a facade that implies the world wants to turn to rubles, rather than dump dollars…”


“World grain markets have remained relatively calm this week despite the announcement by Russia that it will extend its grain export ban from the end of June until at least October. The announcement was largely anticipated as the drought, which initiated the export ban last year, also prevented a big proportion of winter wheat from being planted.

Now its large cereal growing neighbour, the Ukraine, is making similar noises and there are conflicting reports about an extension of the current export restrictions from March to June. In both instances the bans are partly to ensure adequate home supplies but also to help support their growing livestock sectors by preventing internal prices from rising to international levels.”


Photo Credit: Russia By Helge V. Keitel / FlickR