A Very European Ban on Russian Oil. Maybe.

Reportedly Europe is considering a ban on importing Russian oil – gradually and partially, if at all. Russia is already finding alterative buyers at a deep discount – but the net price realized is still so high that Russian oil revenues (and related tax revenues) could be as high as last year’s even on lower volumes. Russia’s need – and willingness – to sell at a discount points to lower world prices, following an initial shock, if a European ban materializes. India and China are the big buyers so far, with Latin America possibly coming on as the US diverts refined product shipments to Europe. Saudi, UAE and Kuwait could contribute more oil if needed. Production is accelerating in the US, and the Biden administration is tentatively backing off its anti-fossil fuel agenda. The SPR release is a short-term palliative. The US continues to pursue a nuclear deal with Iran, even as Iran keeps moving the goalposts. Regional rival Saudi looks on, and conducts friendly diplomacy with Putin while mercilessly satirizing Biden on television.