00:00Well, oil prices jumped over 5% after the European Union and the United States imposed those sanctions on Russia over the conflicts in Ukraine.
00:08Let's talk to Ellen Balls, the Transversal Consulting President.
00:11Ellen, welcome back. Good to see you.
00:13The TASS News Agency reporting in the last hour or so that Putin says a sharp decline in the amount of Russian oil on the market will lead to price increases. Will it?
00:24Well, a sharp decline in Russian oil supplies in the market would definitely lead to price increases.
00:31I do think that many of the oil producers out there would actually welcome some price increases because oil prices have been very low recently.
00:41I don't think that the amount of Russian oil that would come off the market could lead to such high jolts as maybe even, you know, $120 a barrel.
00:51So I don't I don't think that that that kind of a threat is really going to take effect all that much compared with the fact that the people who are purchasing Russian oil really want to buy that oil.
01:05And as long as they're motivated to continue to buy it, there will be ways that these companies find to work around the sanctions.
01:13And what do we know about these sanctions and perhaps the impact they might have on the Russian economy?
01:21That's a really good question. I think that we can safely say that the sanctions may have a immediate effect on some of Russia's oil revenue.
01:31We have seen China and India, these Chinese state-owned companies are suspending imports of Russian oil while they, you know, look at look at what's going on here.
01:44Indian consumers have also been reviewing what's going on as a way to see what their potential sanctions exposures are.
01:53So the issue really is, will they are they using financial institutions that touch these Russian companies?
02:02And how will the U.S., the U.K., the EU actually enforce these sanctions?
02:06Because really, the harder they bite, that really comes down to what kind of enforcement we're going to look at.
02:13It's clear that if customers want to buy the oil and Russia wants to sell it, they will develop workarounds.
02:19The question is, how fast can they develop these workarounds and will the sanctions enforcement be swift and will they pinpoint these new workarounds?
02:28Because if they can do that, then Russia might actually see a real hit to its revenue.
02:34If they aren't able to really, you know, get a grip on these workarounds and they let it go,
02:39then we really won't see all that much in terms of an effect on Russia's economy.
02:45And just talk us through the energy market's reaction to the news of the U.S. sanctions on Russian energy companies.
02:54Yeah, so what we saw was basically a 5 percent jump, a little over a 5 percent jump in the price of Brent crude.
03:00But that is basically we're talking, you know, up to sixty six dollars a barrel.
03:04That's not in any way a financial hardship.
03:07So I do think that we're likely to see some price elevation as, you know, this all shakes out.
03:14We really have to see how the enforcement goes, what it's going to be like.
03:19Is there going to be pressure put on the on the customers?
03:23Is there going to be pressure put on the Chinese buyers, on the Indian buyers?
03:26Are they really going to be threatened in such a way that they do at least make significant cuts in their purchases?
03:34If they don't, I do think that we're likely to see that, you know, 5 percent jump go right back down and potentially even lower oil prices,
03:44because the more threats you make that aren't followed through, the less the market is going to even react to to this.
03:51Ellen, good to see you.
03:52Thanks so much for coming on the show again.
03:54Ellen Walls, the Transversal Consulting President.
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