These Countries Are At Risk If The West Sanctions Russia, BofA Warns

Tyler Durden's picture

While most attention has been focused on Nat Gas, BofA notes that Russia is unlikely to unilaterally curtail its oil exports. However, Russian oil does indeed flow in large quantities through the Black Sea, making the Russian Navy station of Sevastopol as well as the whole Crimean peninsula crucial strongholds to control commerce flows. While BofA remains confident that oil-related sanctions are unlikely (as Europe cannot really afford to relapse into a third recession in six years), Brent prices could easily jump $10 on any disruption increasing the risk of recession for a number of weak economies.


Via BofA,

As for oil, we see temporary modest upside pressure...

As for oil, the Ukraine consumes about 300 thousand b/d, of which 220 thousand b/d comes from Russia and 80 thousand b/d is produced domestically. Unlike in the case of gas, however, the Ukraine does not have significant shale oil resources and does not pose a competitive threat to Russian dominance.

Moreover, transit volumes of Russian oil circulating through the Ukraine are rather minor, with the latest Transneft figures estimating normal flows of 300 thousand b/d through the Druzhba pipeline. However, Russian oil does indeed flow in large quantities through the Black Sea, making the Russian Navy station of Sevastopol as well as the whole Crimean peninsula crucial strongholds to control both Azov and Black Sea commerce flows.

These routes are, for now, secure and diverse. Thus, while oil has risen in sympathy with other commodities, we believe the upside risks are rather modest from here unless the conflict escalates.

...unless Western powers get involved, which is unlikely

Moreover, we believe Russia is extremely unlikely to disrupt oil exports to the world, as it would destroy its reputation as a reliable and non-cartelized supplier to the world's largest energy market. Also, oil-related sanctions against Russia are unlikely to happen, as we believe Europe cannot really afford to relapse into a third recession in six years. As nothing meaningful in terms of sanctions came on the back of Russia's conflict in South Ossetia and Abkhazia in 2008, it is also unlikely that anything would happen now, in our view.

If the conflict in the Ukraine turned into a full-blown war and the 1 million b/d of Russian oil flowing through the Black Sea are temporarily disrupted, oil may briefly jump by $10/bbl or more.

With EM currencies weakening by the minute, however, a spike in Brent crude oil prices above $125/bbl would likely increase the risks of recession for a number of weak economies. Consequently, we believe prices would probably reverse back down rather quickly.

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surf0766's picture

Someone actually thinks mommy jeans will sanction another communist?


Sashko89's picture

yes, because hes fascist..

nmewn's picture

Both, in my opinion are fascists.


A few dispute?

Well then, commie or fascist, lets rumble ;-)

IridiumRebel's picture

My theory? It's Satoshi628263839. He goes on diatribes and rants, works himself into a frenzy of anger at the world and then begins to downvote everyone and does so via his 4-9 different accounts.

strannick's picture

So the west sanctions Russian vodka, but then Russian crude jumps 10%? Genius.

Apostate2's picture

You are right about that. Satoshi 101, 401, 123, NotaRealamerican, and now Zionhead 101. I count 5 accounts so far. Very tedious.

FredFlintstone's picture

IMO, he wouldn't waste his time down voting or upvoting for that matter. I do not see him as angry either, but as a prophet trying to wake up the USA:)

IridiumRebel's picture

He has stated many things that have merit, but he gets a little crazy like the dudes with the "end is nigh" signs.

madtechnician's picture

Shatoshit101 is full of absolute bullshit. One week he says he's a Chinese computer scientist the next week he says he's a Jew who hates Zionism. I think the guy has forgotten to take his meds , or they are a group of shills working out of china. Whoever they are , they need help.

johngaltfla's picture

Funny they left the USA off the list. Because if the Russians liquidate $200 billion in US Government bonds in one day and shift the rouble to a currency based on a mixed basket of commodities like oil and gold along with other currencies like the CHF and JPY, then we'll hurt. All it takes is one nation openly announcing a short term (1-2 day) liquidation of USTs then other nations may panic sell also, including China.

It would be impossible for the Fed to absorb $100 billion much less $200 billion in UST's in a short period of time without causing a crash in the bond market. And for those who think stock market crashes are bad, you ain't seen nothing yet if bonds were to move causing interest rates to rise above the 3, 4, or 5% level in just one day.

NidStyles's picture

It amazes me how close those assholes come to fucking over the entire world over their petty statist disagreements. They literally have no idea what they are doing and there are a lot of them. Surrounded by infatile minds in adult bodies. 

disabledvet's picture

Actually what is scary is that they THINK they know EXACTLY what they are doing. This is "Masters of Chaos" theory "in practice."

In other does not send "nameless, faceless thugs" to "relieve" a base Commander.

That man is a General for a reason...and he has three hundred men under his command. YOU are his enemy if you do not show him the proper courtesy and respect.

In short "he must be relieved of his Command."

As Diplomacy...there are PROTOCOLS. We do not just respect the Rights of Revolutionaries...but we respect the Rights of ALL the people.

This is not done as an act of charity but at a minimum to ensure comity and thus promote...if not create...dialogue.

The irony that "all the commanding officers on both sides showed proper courtesy towards one another" should not be lost on ANYONE.

The "French Head of Europe" will show up in Kiev Thursday...mark my words...he does not know what he's gonna say until he gets there.

Once he is done..."saying"...that will be that.
Obviously a total cut off of Russian oil to global markets will have a dramatic and profound effect. But nothing like the movement of French Forces to defend "Independence Square."

That says to me "the dollar and treasuries."
Everything else is purely speculative at this point.

DeadFred's picture

The whole post is crazy. In case of a full blown war oil goes up $10 for a short time? LOL, in case of a FULL BLOWN war it will be 0 or infinity. They are laying out scenarios for taking out the western financial system, what if it's not a bluff? If there is a full blown war the safest place to be is right next to Obama. The last thing Putin would want is for the weak hand to leave the power seat.

nmewn's picture

"The last thing Putin would want is for the weak hand to leave the power seat."

The circle gets the square ;-)

Element's picture

Obama's weak-hand = Overconfidence

Actually believes he can threaten Russia with a renewed 20-year long collapse and recovery and get away with it, no devastating blowback.

Oh, actually, that's what you were saying ... leave the idiot in there and he'll bring it all down anyway.

zionhead101's picture

Obama is Kagan's Cock-Puppet and you know.

Better would be look at HILLARY, LURCH, or McCAIN as front men running the show.

Obama is a mixture of Dan Quayle and GW-BUSH-2.

Obama  is just trying to make it through this term alive, ... and nothing more, ... but he's no more descision maker than he was the day that he was first corn-holed in Chicago some 25+ years ago by Rev Wright, another Christo-ZIO cult, but for blacks.

zionhead101's picture

Except that all rationality is gone, there are no good guys anymore and the USA has quit even trying to play games. That's why you have UKRAINE being stolen in PUBLIC, and NULAND appointed 'family' to be president, all with public eye's, because if anybody even said the 'tribe' word they would lose their pension and freedom.

The end of history is here, and the ERA of Trillionaires is here and the new trillionaires can buy country's, and army's.

Where will it lead us?

But toss out all your yesterday rhetoric 'deadfred', its all about who is rational, and will they survive? At this point the CHINESE/RUSSIAN's are looking rational, but will they survive?

All is held together by anger and hostility, the 'break-point' even in the USA has long come and past.

The last thing that PUTIN would want it to risk losing GAZPROM, that said his enemy is a RAPID-DOG.

surf0766's picture

The label doesn't matter. No matter what they are called, each group wishes to control us in every aspect of our lives. Why fight over a label. NWO=COMMUNIST=SOCIALIST=PROGRESSIVES... and on and on.




IridiumRebel's picture

No shit. They're evil. Period.

MeelionDollerBogus's picture

NO, to be socialist requires the people own the means of production. Requires.

That's not happening.

Not sure "progressives" can get their heads out of their asses long enough to spit out a formal definition of what they are or are not so I'll withhold a definition yet of my own for them.

Rip van Wrinkle's picture

Communist...fascist? Different cheeks, same arse.

Boomberg's picture

Embarassing to even think that a nation with the economic and military resources the size of Russia can be sanctioned like Iraq, N. Korea, Iran, or Cuba, much less actually state it out loud. What an utter disgrace. 

Doubleguns's picture

Wait till they dump US bonds and are sitting on a pile of US dollars they cant spend and no one wants any way. 

zionhead101's picture

This is why the Chess players ( CHINESE/RUSSIAN ) just smile in public, and give OBAMA a "MEA-CULPA" in public to save face,

But BEHIND The SCENES "BUY GOLD BITCHES", BUY as MUCH as you can, and get rid of USA assets.

Problem of course for RUSSIA/CHINA, its no much how  fast you can BUY GOLD electronically, its how fast you can have it shipped to CHINA/RUSSIA and get physical possession. That is the limiting factor.


CrashisOptimistic's picture

You're just deluding yourself and talking your book.

No cash register no the planet is ever going to have a chemical test kit for gold built in and will never take gold in return for actual things of value, like calories.  That's just the way it is.

DoChenRollingBearing's picture


I find a lot of what you write is compelling, yet I buy & hold gold (it's hard for a condo-dweller to hold oil or similar).  But, I have not heard how you are preparing for what you think is going to happen (less energy / less food / less everything).

What are you doing to prepare?  (Not being smarmy and I don't ask for secret or personal infomation)


MeelionDollerBogus's picture

Every cash register in every pawn shop & every moneymart already has 'em.

It's only a matter of stores like that to migrate into other stores, like having the Winerack inside of Loblaws.

Done 'n one.

Tall Tom's picture

The Liquor Store next door to me takes Gold Jewelry and Silver for Liquor. He is Chaldean. He rips his alcoholic customers for it.


He does not even have a Test Kit.


CrashIsOptimistic's post is laughable as it seems that he is not in the Real World.

BorisTheBlade's picture

- Can we impose sanctions on Russia to punish evil godless commies for what they've done to Ukraine?

- Yes We Can!

It would be laughable if it wasn't so sad. Next in line is Russia's blowback in terms of limiting opportunities for American companies, bye bye McDonalds. I bet Germans and to a great extent Chinese who seem to be more pragmatic already factored in future profits from increased market share in Russia. Not that US companies play any significant part in the Russian economy anyway.

Spumoni's picture

Ukraine can pay the debt back with all the marijuana they grow - just sell it to Colorado. THAT's what this is really all about!

Doubleguns's picture

Troll alert. -1's popping up everywhere. 

Tall Tom's picture

Do you really believe that I give a flat flying fuck about approval? 

I am not here for validation.

I am neither a part of the collective nor do I intend to be.


I will give myself a -1 for starters.


IridiumRebel's picture

I'm only here to be downvoted.

W74's picture

Must be doing something right.

My guess is there aren't enough Hasbara to go around to give more than onzies and twozies.

Their ranks must be spread fairly thin, trying to rally against truth and free type on the internet.

besnook's picture

russia wouldn't be so mean as to freeze euroland for the remainder of winter but they may just raise prices enough to give the euro punks some russian style austerity.

Stuck on Zero's picture

The Ukraine is a large food producer.  If Russia cuts off nat gas Ukraine can cut off food exports.  I'm sure thae average Russian would not like to see food prices skyrocket.


MeelionDollerBogus's picture

Ukraine + Russia + food.

I'm mystified as to what will happen.

Good thing this time is different so I don't need to check up on what history has to say on the subject.

CrashisOptimistic's picture

So WTI, after the big declaration that all was well today, is at $103+.


If it was $92, the exclamations would be that this is an $11 drop and will goose GDP 8% higher.  But because it went from $92 (which somehow the world has decided is a benign price, when 10 years ago it was $30) to $103 we hear NOTHING.

What we have is a GS projection of Q1 GDP at 1.7%.  That's after June's redefinition that adds 0.6% to it.  And that's probably before the rise from 92 to 103. 

Not a WORD do we hear about this.

walküre's picture


By non official standards the weak economies are already in recession.

Major increase in price of Brent would take them over the edge into a painful Depression (capital D).

Subsequently the people in these countries would switch a gear higher from protesting, marching and revolting into civil unrest with bloody consequences for the local elite.

Central banks, IMF and Worldbank do not like instability as the risk of losing all their debt serfs is far greater than cutting debt and lowering commodity prices via deflation.

GoldenDonuts's picture

Europe is out of a recession?  So 50% youth unemployment over the majority of that continent is a functioning economy? 

AnAnonymous's picture

An 'american' well functioning economy.

MeelionDollerBogus's picture

I was blobbing up tears in your long departuring. Welcoming 'back'

smartsun's picture

Look back at the history, all the facism leader came from your so-called democratic country... LOL... 

Johnny Cocknballs's picture

well, clearly not all of them.

and the fuckery that is about to happen in the western ukraine is not the making of Americans  {err, except in the past few years, or, since 1994 or so...


zionhead101's picture

Sen. John McCain, the leading supporter of the Zionist war agenda in the U.S. Congress, talks to Arseniy Yatsenyuk (left), the new provisional prime minister, who happens to be Jewish, and Oleh Tyahnybok (center) of the "neo-Nazi" Svoboda party, in the Ukraine in December 2013.  Isn't it odd that a Ukranian Jew and a neo-Nazi should be working so closely together?


One thing I never get a reply here on ZH ( AIPAC MSM NEWS ) is this Bitcoin mining and the UKRAINE. Some 80% of bitcoin mining was controlled by one man in the Urkaine ( dual citizen ).

I have always assumed that  first they tried to BUY Ukraine, and now of course steal it, ...

Certainly McCain see's his spawn sitting in the thrown of power.

WRT BTC look at the major Fraud's black-market was SHREM, but they blamed silk-road, bitcoin mining was Karpelese aka MT-Gox, again all dual citizens.


Lastly, today FACEBOOK (dual citizen) bought one of the world largest "DRONE" companys.

UselessEater's picture

facism, communism, NWO..... I'm running out of continents to find away to escape the lot; 3 down, trying another and it looks like the fry pan.

really sick of this

Element's picture

Stay away from Antarctica, ya get stuck in the summer blizzards and icepack growth.

zionhead101's picture

JC so tell us what to they want?

Other than Roman Hegemony, ...

Your author is spot on, why doesn't ZH post this article, its informative and thought provoking without mentioning the J- or Z- words.


IMHO they want what they have always wanted to perpetuate their legacy through their children. Today 'BUSH' won an election, and soon so will Chelsea. It's all  about HEGEMONIC control of the world and passing that legacy to your children.