46. Russian oil, winter war in Ukraine, Russian spies, saving Macron's face and raccoon (not related)

Welcome to my weekly newsletter about everything related to the war in Ukraine and realgeopolik. I try not to repeat the news you've already seen, but share the 2-3 page news you might have missed but what matter. Or just reflect the news from the different angle. A very personal view and I might be totally wrong, please find time to argue in the comments.

Russian oil (somewhat) capped

Today is when the price cap for Russian oil “kicks in” as well as the ban on the transportation of Russian oil via sea to EU countries (Hungary exemption). So what does the “price cap” really mean? Basically, the EU, G7 countries and Australia will stop buying Russian oil and expect the rest of the countries to buy Russian Urals oil at a max price of $60 per barrel, or the tankers cannot transport the oil and shipments cannot be credited or insured.?

However, there was a huge argument about where the cap should be set. Poland and Baltic countries, supported by Ukraine, argued that it should be as low as $30, cutting almost all of the profits, as the break-even is according to Rystad Energy at $15-20. Other countries like Greece and Malta, which are also transporting some of the seaborne oil, were arguing about a much higher level. A compromise was found at $60 or almost same-day market price. Rumors go that China and India, the biggest replacements for the EU, are already buying at ca $50. Probably this was the reason China reassured that it would respect the cap. There is also a ban on transport via sea to EU or not price-capping companies, which is quite a challenge for Russia as 95% of the tankers are insured by the UK company International Group of P&I Clubs. Russia already bought some old trash, sorry “shadow-tankers” but it is not even close to replacing the international fleet.

The US has already allowed Chevron to buy oil from Venezuela, and there is Iran..Maybe, someday.. Meanwhile, Russia has threatened not to sell oil to the countries or companies that “obey” the capped price. Then again, it added that they have direct negotiations with partners that don't mind the cap. Yep, they don't as they probably already trade below or somewhere around that. Russian budget has expected the price for 2023 to be 70, so not that far from capped price really. Cap will be reviewed every 2 months, starting from January. Coming next - cap for petroleum products in Feb 2023, one year after the beginning of the large-scale war…But then again, realpolitik, the world still, at this point, needs Russian oil flow, or the economies would face very challenging times.?

Winter war in Ukraine

While some analysts believe that activities on the battlefield will proceed slower with the winter, snow, and ground freezing, the Institute for the Study of the War believes it to be an advantage to Ukrainian forces. Ukraine is prepared to fight also in winter and is rather better equipped than very poorly supplied Russian forces.?

That reminds me of a heroic yet tragic and resembling chapter from Finnish history. November 30, 1939 started with a sunny day in Finland. Despite tensions with the Soviet Union, it believed in the peace treaty between countries. The Soviet Union, just like Russia, never believed in treaties, just in brute force, and the morning started with bombing Finnish cities, to be continued with shelling all along the 1600 kilometres of joint border. Finland didn't yet know about the Molotov-Ribbentrop pact dividing among them Baltic countries and Poland and that they were supposed to be next. It all started in 1938 when Finland argued against establishing Russian military bases in Finland “to protect Finland against Germany”. It was supposed to be blitzkrieg - a swift victory in 3 weeks to celebrate Stalin's 60th birthday. The Soviet Union had engaged 425 000 soldiers, 2300 tanks and 2500 planes. Even though Finland managed to mobilise 300 000 soldiers and build Mannerheim lines of defence, it had just 64 tanks and ten times less planes than the Soviet Union. What was the plan of the Soviet Union - to create “Finnish social democrat peoples government.” How familiar to Ukraine? In the most challenging moments of the war in certain regions, there was 700 000 Soviet army against just 100 000 Finnish army. The Soviet Union had 7 times more soldiers, 12x more artillery, 11x more planes and uncountably more tanks. But the soldiers were poorly equipped, unprepared for the long-lasting war, didn't know their grounds and had low motivation. Despite the West promising to send help, it never really did help Finland. Winter War ended with the Moscow Peace Treaty 105 days later, with Finland maintaining its freedom but giving up 13% of territories. Country had to pay war reparations, but on the grounds of government procurement to Finnish Nokia started growing, turning decades and twists and turns later into a mobile giant. Mannerheim commented later, “Russian officers were brave, but they didn't really care about losses. There was also certain incompetence in the higher ranks that could be seen especially in situations where quick decisions were needed.”

Spy-games, sanctions and helicopters in backyard

Big was the neighbours' surprise when 60 special forces fighters broke into the apartment of a quiet Swedish Stockholm suburb, “accompanied” by a helicopter landing on a lawn. It quickly became clear that the “quiet next-door couple” from Russia - Sergey Skvortsov and Elena Kulkova were actually GRU spies helping to avoid sanctions and send radio-electronic parts to Russia. How were they tracked down? Simple OSINT - the GRU spies that tried to poison Oleksiy Skrypal were registered next door. Dont they teach any conspiracy somewhere in their very secret academies?

But talking about sanctions - Russia is experiencing them in quite unexpected ways. Soon there might be a problem with printing new passports as Russia cannot acquire new printers. It will be like “good old times” when the photo was glued in, right? Some of the train routes are also closed down, as there are not enough spare parts for trains and need to save them for main routes. For understanding, trains are often the main lifeline in remote regions and are really vitally important. And back to Czar times with horses and postal stations. No, wait, Russia is restarting its production of Moskvitch with euro norms level 0, probably not sure if it will have ABS or airbags. First 600 models will be produced on a line left behind by French Renault.

So saving the face or war criminal? Can't have both.

Talking about French, I just watched the documentary “A President, Europe and War,” about president Emmanuel Macron and his start of the Presidency of the Council of the European Union. I swear, I started watching with an open mind, wanting and trying to get it. I didn't get it. It didn't get why he thought he can “order” the president of the other country Zelenskyy to talk to Putin and I still not get his first “saving face” and now “security guarantees for Russia”.? OK, for all fairness today there might have been "Putin is a war criminal".

It is wrong to even start with Putin his manipulative games. Putin knows that NATO has no ambitions for Russian territories, so no guarantees needed. His personal security guarantee. No-one should and can give those. Starting discussion is giving up to manipulations.?I don't want to repeat what I am always saying, but Putin understands only force and for him negotiations and diplomacy is a weakness. He doesn't do negotiations or simply does not respect them, if they are not backed by greater force. Most recent reminders of the grain deal where he tried to sneak out but President Recep Erdogan stepped in.? Its not about giving any guarantees to terrorist but helping Ukraine to win FAST.

And by the way, I very much agree with Politicos assessment of the movie and Macrons approach. “A behind-the-scenes documentary on Macron’s diplomatic efforts to stop the war in Ukraine exposes diplomatic failures and a hyper-personalized approach to foreign policy.” Read more. But please share your opinion, if you have seen it.

And here comes the raccoon.

You have probably already heard about the raccoon that was stolen by occupants from Kherson Zoo. Well, like a true Ukrainian trooper he just tried to bite off the collaborationist Vladimir Saldos finger.