$125 looks like a 10-year high, but it's interesting to see that oil has actually been unusually cheap since around the Fall/Winter of 2014 -- before that, the average was around $100/barrel for nearly a decade (with a spike and trough during the Great Recession).
It looks like the 25-year high is around $140.
Edit: Adjusted for inflation, the 25-year high is around $186.
Yep. Inflation is hitting a lot of areas but the "gasoline is really expensive" headlines are the worst example of this. "Gas prices are the highest since 2008" is another way of saying "gas prices went down for fourteen years and have only just now bounced back."
Oil is a particularly sensitive commodity. It swings all over the place. No surprises here.
Is this because of speculation? Doesn't the US only get 3% of oil from Russia? I'd love to look at the numbers of crude oil produced/consumed globally and compare. Surely, Russia isn't stopping production. So what's the worst that can happen? A country like China gets cheaper Russian oil while the west pays a premium for non-Russian oil. Does that really cause such a massive run up in price?
2. The fact that the US only gets 3% of its oil from Russia is kind of irrelevant - it's largely a global market.
3. The idea that Russia can just switch to selling all of its oil to China, so then the West can then get its oil from someplace else (a) is not feasible and (b) would completely defeat the purpose of sanctions in any case.
4. Prices are always set at the margins. A relatively small shortfall can cause a huge price increase primarily because, when there is a shortfall, the price needs to increase enough for some buyers to just drop out of the market altogether.
I think (3b) isn’t true, since the sanctions are effecting every part of Russia’s economy. And while the petroleum industry is like 40% of their exports by revenue, the other 60% is obviously significant. Also from a Russian point of view, the difficulty importing and lack of access to the international banking system may be more painful.
In fact if the west could target everything except oil, they probably would (since that’s the most critical export that Europe needs).
Your overall point still stands though. Your argument is strong. It’s not practical for Russia to simply redirect their flow to maintain “business as usual”.
China is supporting Russia. At the end of day, you want buy "stuff". China makes worldwide "stuff". Yes, they can't but Channel or enjoy netflix, but they are world food producers and near unlimited oil (if you factor in the frozen methane supply will dwarf entire Saudi). For money, China will be the middleman. So you still supporting Putin everytime you purchased an app from iPhone store. It is just a more complicated steps to assist Putin to take down Ukraine. The real question is can you sanction China? Look around you. China ensures decades of low inflation. Take China out of equations, you gonna see BLM rioting on steroid in America.
The pipelines from Russia through Ukraine are still flowing energy into western Europe. Producer and transit countries have diligently avoided pipeline disruption.
Russia has a 12% share of the global market, and that's what matters. But even if it was only 3%, that could significantly move markets. There's a saying "supply 100 demand 99, price goes down. Supply 100 demand 101, price goes up.". Price is set at the margin, and small changes can sometimes have a large effect.
Everything is inelastic in the short run. Energy is less elastic in general. Is that too obscure, pretentious, or jargony? Is the concept not common sense? Is it not sufficient to explain prices going up?
Russia is the biggest oil exporter in the world. They produce about 10 million barrels a day, slightly more than Saudi Arabia. When it's no longer being bought, it's not just the US who isn't buying it, and the rest of the oil out there has a greater demand for it.
This is speculation, but it may be because oil production doesn't outstrip demand by much. The world uses a certain amount of fuel in a day. Oil batteries, refineries, pipelines, etc. are designed to supply that, but not much more. Similar to chip supply chains, there isn't a lot of excess production and storage capacity built into the system because that doesn't generate income.
If this is the case, then removing a major producer, such as Russia, will create shortages. Demand exceeds supply and prices go up. Even just the fear of bans could drive prices up.
>be because oil production doesn't outstrip demand by much.
Because marginally profitable sources get turned off when price drops and they are not profitable, and turned back on again when price goes up and they are.
The US is a net exporter of oil I think, in the post fracking era.
As a commodity, for the most part there is one global price, modulo delivery location. What happened last week is that the normal buyers don't want to transact with Russia, so they're in the unique position of having to sell a global commodity at a discount. What we may be seeing is a thinning out of suppliers on the exchange. I dont think Pussia can transact on WTI given current sanctions (did they in the past?) and intermediaries may not want the ambiguous risk of being stuck with sanctioned oil in the future.
Not any more. The biden administration halted oil exploration on federal land, so now we are a net importer. We are running the existing wells dry and not drilling any more.
With the price of oil so high, though, I wonder if more dramatic changes to the market are coming, including massive numbers of oil wells on private land and fracking nearer to cities.
Actually, they only halted the issuing of new permits. Oil companies have years of existing permits stacked up. Additionally, federal land makes up for about 10% of total US production. So it has about zero effect right now and will have minimal effect in the future.
From the outside, you can see stats like "wells produce an average of 1000 barrels a day and last 20 years" and it looks like this doesn't have a big effect. However, most oil wells have output that decreases exponentially over the life of the well. After about 2 years of life, an average well's production decreases by 80-90%.
As a result, new wells account for an outsized fraction of production, and considering all of the costs involved (including high constant costs per well regardless of pumping output), new wells are the cheapest source of oil. Without new wells, the average price to produce a barrel of oil goes up substantially.
The US oil industry is starting the new wells they have in their backlog, but markets are ridiculously forward-looking and you should note that we are talking about the price of futures, not spot price today. Markets are anticipating having a much harder time getting further oil wells, and they are anticipating that the largest supply of currently unexploited oil is on public land. Put another way, current production doesn't involve much federal land, but future production expansion will largely have to happen on federal (and state) land.
The number of wells on federal land has been declining over its history: we are at 38,000 leases in 2020 compared to 55,000 in 2008 (per the BLM), and data presented to congress suggests that in the past, 25% of oil production was on federal land. Today, the number is 8%. That supports the theory that new oil wells will largely have to be started on federal land rather than private land.
This is a particular policy where extrapolation from current data undervalues the effect of the policy.
The US Energy Information Administration publishes a variety of energy related information, including US Oil Extraction. In Dec 2021, 11,567,000 barrels per day were extracted, compared to a 12,966,000 bbl/day peak in Nov 2019 [1].
Of course, this aggregate number doesn't disambiguate the cause of the decrease in production.
There was of course a fairly obvious reason for decreased oil production between late 2019 and late 2021. You may remember a certain pandemic that caused demand to drop, oil prices to go negative and highly-levered oil exploration/production companies to go bankrupt...
> OPEC and its oil-producing partners have rebuffed President Joe Biden’s calls for increased production amidst rising fuel prices, retorting that if the United States believes the world’s economy needs more energy, then it has the capability to increase production itself. The OPEC+ alliance, made up of OPEC members led by Saudi Arabia and non-member top producers guided by Russia, approved an increase in production of 400,000 barrels per day for the month of December.
> US energy secretary Jennifer Granholm told oil executives today the administration was not "standing in the way" of oil and gas production and supported increased output. She noted that the administration has approved drilling permits on federal land at a faster pace than the prior administration, while pursuing other policies that could bring down retail gasoline prices that in the week ending 13 December were still just 10¢/USG shy of a seven-year high.
> The change in tone comes amid growing frustration from US oil executives, who have bristled at what they see as a lack of support from the administration. Biden in one of his first acts in office blocked the 830,000 b/d Keystone XL pipeline and spent this summer unsuccessfully asking Opec+ to accelerate plans to boost output. US independent producer Pioneer Natural Resources' chief executive Scott Sheffield last week said he has yet to meet another oil executive who has received a call from the administration asking them to increase drilling.
> "They can't find people, and can't find equipment," said Robert McNally, president of consulting firm Rapidan Energy Group. "It's not like they're available at a premium price. They're just not available."
As a result, US oil production is just under 12 million barrels a day, 8% lower than in 2019. Experts say the industry is unlikely to get back to that pre-pandemic level this year — and that the last decade's rapid increases in US oil production, typically double-digit percentages year-over-year, are probably a thing of the past.
> Another factor likely making oil companies cautious about investing too much, too fast is 2020's oil bust. The early days of the pandemic drove oil briefly to negative pricing, resulting in a spate of bankruptcies across the industry.
Not that every conversation has to be about Elon Musk :) - but it would seem like the perfect time for Elon to tweet about the benefits of Tesla and EV cars (in addition to or instead of trolling about Starlink). A world with strong alternatives to fossil fuels would seem safer as fossil fuels invariably seem to funnel petrodollars to oligarchs/corrupt politicians/puppet states.
An EV + grid storage world seems safer from geopolitical conflicts, on top of the more commonly mentioned climate change benefits.
I have a particular (and somewhat unique) relationship to this number:
I grew up in Alberta Canada and remember I heard that extracting oil from the oils sands became profitable at $16/barrel. I was very relieved that oil typically hovered around $10/barrel. Even then I knew the oil sands were a nightmare.
Of course, eventually two things happened: someone in the government subsidized the oil companies and price jumped high enough.
Both of those facts quickly turned Canada from “that place with all the polite people” to “The giant pimple on Earth’s face”.
I do not like this oil number.
It reminds me of too much that’s wrong with this country.
We've all pretty well beaten the electric-vehicle conversation to death, but since we're on the "oil demand and the nasty actors it empowers" topic, here's another slice of the demand pie that solutions are emerging for: ground source heat pumps as a replacement for heating oil in the remaining american northeast market -> https://www.youtube.com/watch?v=T_4mPwPRAt0
They've developed/adapted water well drilling rigs into a smaller faster machine that can fit in more backyards and drill a vertical GSHP well much faster and with much less impact to the property than a horizontal loop.
I love GSHP. You can see this in previous comments on HN. I've had it done many times, and am friendly with a lot of drillers.
I've even had this kind of rig drill for me before.
It will not change anything.
On the the mess: The majority of the mess is geology. Water/Sediment control (you hit 100 gallons/minute of water and need to control it) or cuttings.
It's possible to be cleaner about cuttings in the ideal case, but it would be a lot more expensive. If you dig a 500 ft hole with a 6 inch bore, that's 100 cubic feet of messy stuff to put somewhere. You are often drilling 3 or 4 of these holes.
Using vacuums and other rig would dramatically increase costs (if you are driving a dump truck into the yard, you are going to destroy the yard as much as it would to just bulldoze the cuttings into your soil :P)
Sediment control is similar.
On the economics - these rigs change nothing about the economics. Most drill rigs are already drilling about as fast as it can reasonably be done. They churn through granite quite quickly. The real issue i that they can only do a house a day for a random single family home because they have to go, set up, etc.
The kind of rig you are seeing here doesn't change that.
The economics only get good when they do entire developments that are under construction, because they can just drill, move, drill, move, drill, move much easier. They also often can locate the bores in a single area and extend the piping to the entire development.
I have to replace two oil furnaces and I wish this didn't cost 5x more and wouldn't be compatible with the very small lot (although with very close bedrock)
They say $18,000-$25,000 after incentives for the upfront cost, with annual savings of $1,600. That's still pretty expensive (even just in terms of direct payback time).
That's optimistic. The 3 GSHP systems and one ASHP I've been involved with have been in the $50K+ range although all but one were a new build and includes the AC ductwork in the house (the other was forced hot water and involved retrofitting ducts). Tack on another $15K+ or more for the drilled well & pump (obv. not needed with ASHP).
Sadly, it's kind of a boutique market and people who want these systems are often willing to pay quite a bit for them.
As for the rebates, most of the installers seem to think that belongs to them, so if they're quoting $50K, that's after the rebate, despite the fact that the equipment (e.g. a 3.5 ton water furnace) isn't really that much more expensive than a higher end high-efficiency gas boiler (e.g. $5-7K ish).
People need heating systems either way, so you want to compare additional costs vs savings not total system costs.
At a minimum subtract $3,300 – $6,900 for the high efficiency gas furnace you no longer need and to install. Further the savings should generally increase with inflation.
PS: Also when comparing the savings from this or other home improvements vs other investments, remember your savings are after taxes.
Sure, you'd want to do figure out the specifics for a given situation. Their estimate of the savings is for situations where the fuel is trucked in (and thus rather expensive).
Yea geothermal can work, but solar thermal is generally the better option in northern parts of the us. They cost ~1/2 as much and generally don’t need additional energy for heating beyond some pumps. The advantages of geothermal is it’s more hidden and it can also reduce your AC bill.
The This Old House video in a sibling comment to mine says that is one of the strategies the company is using (with the customer just getting a monthly bill lower than what they are paying to begin with).
We are a long, long way to reducing fossil fuel demand. We've barely even seen a leveling of coal demand and with increasing prices for gas and oil, coal may still be yet to see its peak. Certainly in China, fossil fuel demand will continue to skyrocket for decades. They're perfectly happy to buy from Russia, or Iran, or Saudi, or Syria.
For all the predictions of the demise of coal the fossil fuel industry driven propaganda about the green movement and the triumph of renewables, global coal consumption almost doubled over the past 20 years.
The number one way to put the squeeze on petroleum regimes is to increase production in "friendly" countries. Number two would be massive expansion of nuclear power, which is long overdue for a Manhattan Project (joke intended) to seriously address climate change anyway.
Seems like closed loop (i.e. basically contained refrigerant in a pipe) seems to avoid the issues with contamination that results from the open loop systems.
I wanted to know if there's some... well more primitive version of ground source heat pumps... like circulating cold water through radiators and back into a well. Somewhere between pouring buckets on your head and star trek technology.
Heating scales up for complexity from a potbelly stove up to complex systems, wish cooling did as well.
For the Northeast US (the largest heating oil market in the world), there isn't any kind of heat pump isn't going to work with existing forced hot water heating systems which is by far the most common type of install.
The heat pumps don't put out enough volume of water at a hot enough temperature (heat pumps at maybe 125F vs 185F for oil/gas boiler). Most radiators / baseboards will radiate about 650BTU/hr per linear foot at 185F and are sized based on the heat loss calculations for the room/house and the ASHRAE design temps for your location. So if a room needs 6500 BTU/hr at 25F outside to maintain 70F inside, then you'll need 10' of baseboard. If you start feeding 125F water instead of 185F water, then you'll get significantly less heat out of the rads/baseboard and you won't reach the design temps indoors unless it's much warmer out.
Generally heat pumps (ground or air source) are forced hot air (since you only need to raise the air temp by a few degrees as long as you have enough CFM of air flowing), or radiant slab where you only need 75-80F water or the slab cracks and/or is uncomfortably hot. A combination of both also works as a radiant floor doesn't help with cooling in the summer.
If you've got an existing forced air heating system, or are building a new house with forced air then either a GSHP or some of the newer air source heat pumps are a fantastic idea (despite the somewhat premium price vs a traditional oil/gas/propane boiler).
Note that for GSHP it'll probably cost you upwards of $15K for the artesian well alone, but maybe you need one anyway (or already have one) if you're not on city-water in which case the only additional cost would be a variable speed pump vs a fixed speed one (assuming that the well is deep enough and has a high enough flow rate to provide enough "tons" of heating/cooling). Finally, not every city or town will give you a permit to drill a 600+' well (assuming the geology supports either an open or closed loop system).
... and you still need a heat source for domestic hot water, probably an on-demand natural gas/propane unit or an electrically heated hot water tank, although the GSHPs have a "de-superheater" feature that lets excess heat be diverted into the h/w tank during the summer/shoulder seasons, but generally not the winter.
... and the GSHP usually needs a backup heater (often resistive electric coils, but a smart design will use a hydronic coil on a zone on a condensing combi-boiler if you have one for hot water). The air source heat pumps definitely need a backup heater as they periodically run backwards to defrost the coils in the winter to prevent ice buildup in the condenser.
My father and grandfather were water well drilling contractors. I drilled two wells for ground source heat pumps for his home in the early 80s. They work very well, but the construction costs are higher than ordinary heat pumps.
Probably not much. Eyeballing this chart[1], it looks like "Finished Motor Gasoline" dropped from pre-pandemic levels of around ~9000 Mbbl/d to around ~8000 Mbbl/d around jan 2021, which was presumably peak WFH/lockdown. That translates to a drop of 11.1%. According to another chart[2], "motor gasoline" makes up 44% of oil supplied, with 96% going to transportation. Multilpying those numbers out, we find that for the US, reinstituting WFH/lockdowns similar to the ones in effect in jan 2021 would cause crude consumption to go down by 4.69%. Presumably "optional WFH" will have a lower impact than this, because of people not choosing to WFH, or people using their vehicle for leisure activities.
The US has about as many cars as China and India combined, so that would make sense. I was very surprised how few cars there are in India, about 30M, US has 285M or so.
As oil prices go higher, I assume the shale oil extraction will once again become economical in US/Canada, so supply will come online to stabilize the prices by $5 to $6 per gallon. I am just guesstimating, but I wonder what the real price point is at which shale becomes economical again.
It’s been economical. Investors have been preaching discipline and lower dev capex with funds going to higher payouts to investors. If it stays in the ground during lower priced periods, it can come out during times like this.
The vast majority of electricity is not generated from oil unless you’re in a remote area or an island (Hawaii).
Edit: This upward price pressure might really move the needle on utility storage and renewables for these locations, depending on how long this price spike lasts.
You probably have no issues paying high prices given you’re in the tech field (I presume), but it is an issue for the common folks. Very elitist statement there
Some plants were decommisioned recently, very easy to get up again. We import coal for industrial use from Australia, we can use that before we ramp up the mining.
Anyways, this is supposed to be ironic. I'd be glad if that didn't happen.
I saw a comment on reddit that made me think, it was a Russian person saying that sanctions only hurt the average citizen when the ruling class has enough wealth to not be affected much. They also said that popular opinion will either turn against the west (for imposing the sanctions) or not hurt Putin much because he doesn't really need popular approval (which I'm not sure I believe).
Do the sanctions actually hurt Putin, or are we hurting ourselves and the everyday Russian for nothing?
I don’t know. Maybe it’s conspiracy minded, but in my opinion Putin will publicly pretend to be hurt by the sanctions (and acknowledge the depressed ruble and so on) as a so-called “act of war” so that the world can hear him acknowledging NATO countries as “doing something.” This serves many ways: Putin projects as vulnerable, sanctions are optically seen as successful measures, NATO countries get to say they’re helping, and all the way Russia gets to keep bombarding Ukraine…
I’m inclined to believe the former opinion that gas price hikes ultimately affect the average person and elite persons need not care. Putin and his inner circle operate at a level of power that is above even money. To an oligarch money is a toy thing, the power they have is above any short term economic concern. I’m reminded of that old Weibo thread of Chinese people posting symbols of their wealth, one upping each other over and over, until the ultimate show of “wealth” was posted as being an invite to a dinner with the president (or something like that) which not even billionaires have access to.
All this to say that theatre and public relations is a major tool of war and power, as much as soldiers and bombs.
As far as Russian oligarchs go, without their money, their power does not extend outside of Russia. Which leaves them limited to a rather poor country with the gdp of Italy.
When the average Russian on the street has had enough, Putin's time will be over. He doesn't have the rapidly increasing standard of living that China has to cover his sins, he just has the threat of violence to scare people, which will stop working when their lives are so shit that they don't care anymore. If he doubles down on violence, the government under him will unravel as the good (or at least not evil) people stop obeying his orders. That will lead to mob justice unrestrained by the disillusioned Russians tasked with enforcing Putin's will.
Putin lives in a palace and no one even knows how rich him and his thug friends actually are. They don't like the sanctions but I doubt he's 'feeling pain' whilst sending people's kids to war from his personal hockey rink. We simply live in a different reality than the rich, money is nothing to them. I work at a startup and am constantly astounded that our rich investors will write up another 200k check without more than a 5 minute conversation.
There’s no shortage of sushi Putin has on his dinner table. However, his chair started tilting a bit. His control is still above 90 degrees but that angle could take a sudden 180 turn. If he’s confident he’s most likely bluffing. If he’s scared i’d fear him more
Both solid points, but imo maybe that's more of a reason to approach the situation russia with more diplomacy than our current "leaders' are rather than force more sanctions and escalate the situation quickly. Some senators are openly calling for assassination.
At the very least the economy of Russia is being starved, so maintaining their military spending becomes more difficult over time unless they are willing to become like North Korea.
Members of the ruling class also may not join the rest in struggling to afford day to day life, but they certainly cannot be happy with having all their money trapped in a country without the rule of law.
There is a reason they have their children born in the West.
I found https://youtube.com/watch?v=rStL7niR7gs very useful for understanding where dictators derive their power from. Adapted from 'The Dictator's Handbook'
Very informative watch, humanity needs to evolve past rulers. We don't need senators, politicians etc in any capacity more than a custodial role. Social democratic systems like liquid-democracy which is both a direct and representative democracy should be a bigger part of conversation. It constantly feels like we are trying to run society via software made in 600BC but the hardware(agriculture, science, tech) has kept pace.
https://en.wikipedia.org/wiki/Liquid_democracy
The point of sanctions is to protect our allies by making it harder for Russia to build up more military power. The poorer they are, the fewer weapons they can build. If people get hurt that's incidental.
I have family in Ukraine and Russia. From the data points that I have, I'd say that most people in Russia support Putin (including in my family). While the average citizen will be impacted first by the current situation, it will have an effect on the leadership IN TIME (e.g. in years, not days). In fact, severe sanctions should have started in 2014 [1].
As for the argument that popular opinion will turn against the west: it already has [2] and I think we should not talk about sanctions any longer, but of separate blocks with minimal exchange and interaction. I understand that going back to an iron curtain of some sort may be shocking for some, but at least that will severely limit the risk of miscalculation and nuclear war. Putin is a dictator and we have to act.
> From the data points that I have, I'd say that most people in Russia support Putin (including in my family).
Russians are bi-modaly distributed: there are people who approve of him (many Russians like strong leaders, which explains photographs of topless Putin riding a horse, Putin in an expensive car etc.) and there are also Russian people who demonstrate and speak out despite the clearly severe consequences that come with that attitude (4,300 arrests of protesters against the invasion of Ukraine to date).
In this thread on sanctions versus non sanctions it is discussed whether the sanctions hit only ordinary people or also the super-rich. What we need to also mention is that a large part of the pro-Putin people are only supportive because of government propaganda bias, and the absence of any high-quality international media.
Finding more effective ways to make ordinary Russians aware of what is going on might be the least painful path to ending the nightmare (but it's still a long game).
Sure. I applaud the people who protest. However I also want people reading this to understand that most people support Putin. At least I have strong data points that support this and denying that fact doesn't help anyone.
> Finding more effective ways to make ordinary Russians aware of what is going on might be the least painful path
Maybe. The US tried to build a western society in Afghanistan for 20 years and that failed. I'm not convinced "educating" Russians to what we (the West) think is happening will work either.
>I saw a comment on reddit that made me think, it was a Russian person saying that sanctions only hurt the average citizen when the ruling class has enough wealth to not be affected much. They also said that popular opinion will either turn against the west (for imposing the sanctions)
I'm not so sure about the official sanctions (based on a quick skim[1] they seem to be mostly banking bans and bans on high tech exports), but the sanctions enacted by western companies (eg. netflix pulling out of russia), are definitely hurting the average citizen more than the oligarchs.
Until the West is happy with how this ends billions of capital are cut off from Russia and it's place on the mostly economic world stage will dwindle as it loses trade deals from companies and countries being unwilling to work with it.
Stopping the sanctions to pretect the average Russian would be like refusing arms to Ukraine to protect Russian soldiers. While technically that would do that you are sending a very different message but taking that action.
A country is a collection of natural resources and people. Unfortunately that means punishing a country will nearly always punish the people in it. That doesn't mean it is wrong to do so.
Also Putin isn't invincible and it isn't just ordinary citizens hurt by this. After all if the rich didn't care if they were worth $10m or $100m the world would not look like it does today.
Sanctions are a slow economic weapon, one that's only half of the current economic strategy (the other half being asset seizure and uncoupling of Russia's financial sector from global finance).
It's hard to say whether any given sanction is "worth it." But the long term trend is a politically advantageous one for NATO: oligarchs now need to keep all of their money within Russia's borders, where it's both unstable and subject to court whims. That should worry them, and the hope is that it worries them enough to unmoor them from Putin.
Sanctions have a terrible track record, but they might actually work somewhat against an aggressor waging a drawn out conventional war with its high materiel needs.
Normally the US uses them against countries who are not doing such a thing.
Well, geez, do you have a suggestion then? No, there is no special mind weapon the president can activate to vaporize Putin and make Russia bloom into a beautiful peaceful democracy. Such is the world.
In the meantime, we get to accelerate our transition away from fossil fuels and eliminate all kind of corrupt actors in the West that have been keeping us locked into gas. Win-win.
>Do the sanctions actually hurt Putin, or are we hurting ourselves and the everyday Russian for nothing?
This conversation will go nowhere unless you define "hurting ourselves" vs "hurting everyday Russians" in actual definable terms. What would you say is evidence that would support that we are only hurting ourselves, and what evidence would distinguish that from the view that sanctions hurt "everyday Russians"?
> for nothing?
Also this is a separate point. Whether sanctions work or they don't, there is the separate point of whether sanctions _work_. Do they work? What evidence is there for that?
It has been "common knowledge" among a lot of the people calling for sanctions that they don't work well and mostly hurt the common people of the country. I'd hear this a lot in discussions about sanctions for Iran, NK, Cuba, etc.
Sanctions seem to have worked quite well against North Korea and Iran, although not for the initial purpose.
North Korea can't afford anything new for its military. Sure they have a sizable army of weapons your grandfather fought against, but they also operate bitcoin scams to fund their country, despite sitting on tremendous mineral wealth.
Iran has to make ever more economic sacrifices to fund its nuclear program and again also struggles with procuring weapons due to the cost.
We didn't get the regime change desired, but the enemy was substantially defanged as a result and they fall further behind as time goes on.
I would argue sanctions against Russia succeed if the next time they invade somewhere, they send their troops with rusting weapons and no body armor and cannot really afford to replace their equipment losses in Ukraine.
Sanctions against North Korea have resulted in terrible hardship for their people, the cementing of the dictatorship and its total subservience to and reliance on the Chinese Communist Party.
Not sure if anything else would have been an option given that China does not want them to open to the west, but you have to wonder if cooperation and help to develop their economy and trade might have resulted in less human suffering.
Sanctions on Iran definitely caused a lot of pressure.
I don't think these are comparable though. They're all unique circumstances and the people in power have varying capabilities of suppression and motivations.
Remember, at one point recently Iran turned the lights off on an entire city and gunned down hundreds of protestors[0]
This seems to be pretty handwavy, they definitely did something and the situations are different. Sure, I'd like to know what they did and how the situations are different. Are you saying sanctions in Iran actually did work contrary to "common wisdom"? And that they may not work in Russia because the situations are different, or what?
> Remember, at one point recently Iran turned the lights off on an entire city and gunned down hundreds of protestors[0]
This wasn't supposed to be an example of how the ruling class was hurt by the sanctions, surely. Not sure what the relevance is.
it's easy to think of sanctions as an abstract thing meant to apply pressure, but in this case that's not all they are. Russian oil is at least partially state-owned, and a major source of revenue for the russian government.
yes, the sanctions probably aren't impacting Putin's day-to-day quality of life, nor that of any of the other oligarch's. but that's kind of beside the point. they are cutting off a source of funding for the russian military that is currently invading ukraine. that is really not "for nothing".
The sanctions help Putin. Thus far they’re making a boat load off the oil.
Sanctions only hurt if you import, look at what they’re importing — it’s not much. What they do import is primarily from trade partners who aren’t sanctioning (China, Belarus, etc).
As more trade partners are refusing to buy Russian oil, they're selling at steep discounts in auctions, and need to use non-pipeline delivery for the resulting nonstandard buyers (which greatly increases delivery costs). Germany has also scrapped a plan for a new pipeline, which will decrease future sales.
Prices are rising on oil because people aren't buying Russian oil. Russia is even trying to sell it at a discount to offload it: https://www.bbc.com/news/business-60584798
Economic sanctions are violence and a form of collective punishment and like most violence and collective punishment it disproportionately affects average citizens. Different countries will serve their core interests by carving out exceptions. For example:
- Shell buys discounted oil from Russia [1];
- UK carves out exceptions for certain banks [2].
- Luxury real estate is routinely held by LLCs where the beneficial owner is meant to be declared to Companies House, a rule that isn't enforced allowing oligarchs, despots and criminals to hide and park money in London real estate.
- Italy sought exclusions of luxury goods from sanctions [3]
- Chinese banks will likely be a bypass to financial sactions [4]
Any actions that actually would target Russian oligarchs like seizing their assets (for example, real estate in the West) is nowhere to be seen.
There's no weakening Russia's military (this being one of the excuses for Iraqi sanctions) for military action because Russia is still a nuclear power. Russia has its own industry, its own food supply and its own energy.Given there are no military options, I get the desire for some form of punishment for an unprovoked and unjustifiable act of aggression that is the invasion of Ukraine but make no mistake, these sanctions will do nothing.
Does anyone find it strange how much lip service politicians and regular people alike pay to keeping prices low at the gas pump while saying they stand with Ukraine? Well, which is it? That's easy: it's the oil.
You need no further evidence of this than today's development that given the supply issues in oil due to the war in Ukraine, the US has decided that the arbitrarily imposed, violent sactions imposed on Venezeuela might be eased or removed because now it's expedient to do so [5].
Make no mistake: the US is not standing up for any principles in any of this. It's purely about strategic interests. And if a bunch of children die, as clearly happened in Iraq (although the actual numbers are disputed), look no further than the 1996 comments of then UN Ambassador and later US Secretary of State Madelline Albright answered the question of whether the sanctions were worth it answered [6]:
> I think that is a very hard choice, but the price, we think, the price is worth it.
Is it really any wonder that most of the world despises the USA?
It looks like the 25-year high is around $140.
Edit: Adjusted for inflation, the 25-year high is around $186.