Dash out of Russian oil and fuel highlights acute threat of under-investment

That is what occurs to grease manufacturing while you turn out to be a pariah on the worldwide stage and lose entry to capital:

It is untimely, however Russia could also be headed down the identical path. Russia is presently the world’s largest oil exporter and one of many top-3 producers general.

Yesterday, BP introduced it was unloading its 20% stake in Russian oil big Rosnet and now Shell says it’s going to exit Russia.

These stakes will probably be bought to somebody for cents on the greenback however Russia higher hope it is to somebody with deep pockets. Russian oil and fuel has possible suffered from the identical under-investment as the remainder of the world for the previous 5 years (and notably within the pandemic). That is a recipe for falling manufacturing. Piling on sanctions will add to the issue.

For now, Russia can nonetheless promote to China, India and Turkey — all large importers — so it isn’t completely bleak, however between this and ESG headwinds, the chance of a long-term excessive overshoot in oil costs is rising.

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