08/10 Closing Prices/ revised 08/11/2022  09:23 GMT  | 08/10    OPEC Basket  $101.29   +0.37 | 08/10  Mexico Basket (MME)  $86. 96   +0.85  | 04/30     Venezuela Basket $83.40  (Estimated Statista)  | 08/10    WTI Texas Intermediate Septiembre CLOO   $91.93   +1.43  | 08/10    Brent October BRNOO    $97.40   +1.09   | 08/10    Gasoline September    RBU22   $2.9062     +0.02  | 08/10     Heating Oil  September HOU22   $3.4103     +0.0765 | 08/10    September Natural Gas   NGU22  $8.2020   +0.3690  | 08/05    Active U.S. Rig Count (Oil & Gas)  764  ( -3 )  | 08/ 11   USD/MXN Mexican Peso  $20.02  Live data 08/11    EUR/USD  $1.03   Live data  | 08/11    USD/Bs. (Bolivar)  $5.92490000  | –   08/10 Closing Prices/ revised 08/11/2022  09:23 GMT  | 08/10    OPEC Basket  $101.29   +0.37 | 08/10  Mexico Basket (MME)  $86. 96   +0.85  | 04/30     Venezuela Basket $83.40  (Estimated Statista)  | 08/10    WTI Texas Intermediate Septiembre CLOO   $91.93   +1.43  | 08/10    Brent October BRNOO    $97.40   +1.09   | 08/10    Gasoline September    RBU22   $2.9062     +0.02  | 08/10     Heating Oil  September HOU22   $3.4103     +0.0765 | 08/10    September Natural Gas   NGU22  $8.2020   +0.3690  | 08/05    Active U.S. Rig Count (Oil & Gas)  764  ( -3 )  | 08/ 11   USD/MXN Mexican Peso  $20.02  Live data 08/11    EUR/USD  $1.03   Live data  | 08/11    USD/Bs. (Bolivar)  $5.92490000  | –   08/10 Closing Prices/ revised 08/11/2022  09:23 GMT  | 08/10    OPEC Basket  $101.29   +0.37 | 08/10  Mexico Basket (MME)  $86. 96   +0.85  | 04/30     Venezuela Basket $83.40  (Estimated Statista)  | 08/10    WTI Texas Intermediate Septiembre CLOO   $91.93   +1.43  | 08/10    Brent October BRNOO    $97.40   +1.09   | 08/10    Gasoline September    RBU22   $2.9062     +0.02  | 08/10     Heating Oil  September HOU22   $3.4103     +0.0765 | 08/10    September Natural Gas   NGU22  $8.2020   +0.3690  | 08/05    Active U.S. Rig Count (Oil & Gas)  764  ( -3 )  | 08/ 11   USD/MXN Mexican Peso  $20.02  Live data 08/11    EUR/USD  $1.03   Live data  | 08/11    USD/Bs. (Bolivar)  $5.92490000  | –    

Meet Natalia Zubarevich, a Russian Who Speaks Truth to Power -Paul Roderick Gregory/WSJ

Natalia Zubarevich being interviewed on the First Radio 89.1 FM Israel, May 17.(Pervoe Radio). She’s a podcast regular, running down the reasons sanctions over the war in Ukraine are working despite Putin’s claims.

By Paul Roderick Gregory

Grigory Potemkin built the original “Potemkin Village” to impress his former lover, Empress Catherine II. Vladimir Putin is creating a Potemkin economy to impress on the West that its sanctions are a minor irritant for Russia.

According to the Kremlin, it is the West that is suffering from the sanctions through inflation, soaring energy prices and food shortages. Meanwhile, unscathed Russian industry is purportedly replacing Western supplies, equipment, brand names and spare parts by engaging in “import substitution” and “parallel imports.” The ruble is strong, there has been no financial panic, and, by the way, the “special military operation” in Ukraine is going according to plan. To assert otherwise may earn you a prison sentence. Even the burgers at Russia’s new brand (Tasty & That’s It) are far better than the old McDonald’s on Pushkin Square.

An obscure geography professor from Moscow State University is an unlikely counter to the Kremlin drumbeat of sanctions failure. In her YouTube appearances, 68-year-old Natalia Zubarevich recites her facts authoritatively without notes. In interviews conducted by obscure Russian podcasters, which can last almost an hour, she covers the entire range of issues raised by the sanctions. She doesn’t shy away from difficult questions or inconvenient answers. Her political views sometimes seep through; when pressed, she asserts that “politics, not economics, decides everything” in Russia. And politics seeks to make the economy look strong when it is actually weak.

At times, Ms. Zubarevich appears to test the limits of what she can say. She disobeys Kremlin instructions and calls Russia’s invasion a “war.” She characterizes the 20% to 25% of her countrymen who oppose the war as “thinking people.” She advises those “with a conscience” to leave the country until the war is over. She warns about the looming human-capital crisis as four million largely young Russians have left their homeland since Feb. 24.

Yet Ms. Zubarevich’s job isn’t politics. It’s to explain what’s really going on in the economy. Her answer in short: The sanctions are ending Russia’s integration into the world economy. They will increasingly cripple an economy unable to replace foreign parts, equipment and technology with import substitution or parallel imports (German goods obtained through Kazakhstan, for instance). And don’t expect China or India to replace the shrinking European market: That presents logistical problems and demands for substantial discounts on Russian goods.

Without notes, Ms. Zubarevich runs through lists of companies spread throughout Russia’s vast hinterlands. Following their Soviet origins, they are often the sole local employer. With the departure of such Western partners as Ikea, Siemens and Volkswagen, and lacking parts, blueprints and technology—think Arctic offshore drilling without equipment from Shell or Exxon Mobil—they will go out of business or barely hold on. In other cases, such as Russian coal, the loss of export markets means enormous output losses.

Ms. Zubarevich readily cites the 12% decline in wholesale trade and the 17% decline in retail trade. Her symbol of the damage of sanctions is what remains of the Russian automobile industry, which is producing at only 15% of pre-Feb. 24 levels. There are no component parts and no new deliveries in sight. With sanctions, Russians will end up, in Ms. Zubarevich’s words, with a consumer market of “Belarus refrigerators.”

The labor market in particular has Potemkin traits. As Russian enterprises cease production under pressure from sanctions, they will continue for a time to pay workers small “tariffs.” As such, they remain “employed” until these minimum payments run out, perhaps in September. Ms. Zubarevich predicts that Russian unemployment will remain statistically low until these obligatory payments run out—another positive spin for Kremlin propaganda.

Ms. Zubarevich doesn’t hesitate to give credit where due. She congratulates the central bank for heading off a financial panic, but she notes that the much-touted strong ruble owes nothing to the strength of Russian public finances. Rather, the recovery of the ruble can be attributed to Western restrictions on sales of goods to Russia and Western companies’ inability to take their Russian profits home.

Ms. Zubarevich has an important message to Russia and to the West: A sanctions regime that severs a major raw-material producer from the world economy imposes its damage on the target slowly over time. She cautions those on both sides, as do the U.S. Treasury’s sanctions architects, that most of the costs of sanctions remain ahead. Ms. Zubarevich argues they will be substantial.

Why doesn’t the Kremlin shut down Ms. Zubarevich? There are two explanations: First, she is careful to cite only official Russian administrative statistics. It isn’t she who is sounding the alarm, it is the Russian government itself. Second, the Kremlin can’t shut down the means of transport of her message (YouTube) because that would signal that something is very wrong and must be hidden.

_________________________________________________________________________________

Paul Roderick Gregory is a professor emeritus of economics at the University of Houston and a research fellow at Stanford’s Hoover Institution. Energiesnet.com does not necessarily share these views.

Editor’s Note: This article was originally published by The Wall Street Journal (WSJ), on June 27, 2021. All comments posted and published on Petroleumworld, do not reflect either for or against the opinion expressed in the comment as an endorsement of Petroleumworld.

Original article

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EnergiesNet.com 06 27 20229

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