Here's an interesting diversion from yesterday. War isn't just about the battlefield.
"Refineries, Titanium & Banks
Here are some fun facts for you.
Russia produces 90 percent of all high grade titanium, heck they invented the manufacturing processes, and they sold it even during the cold war.
Both the U2 and the SR71 was built using Russian titanium.
Same goes for medical titanium that most of us will be bolted together with at one point or another comes from Russia.
Have a titanium watch? Russian titanium...
Now ponder how much titanium our defense industry is using.
It is a lot.
Almost all of it comes from Russia.
Now you may ask yourself why the hell we are not producing something as essential as titanium ourselves?
The answer is that it is brutally expensive to manufacture initially, developping mines, refineries, processing it, etcetera.
The production facilities cost around 10 times as much as any other metal manufacturing.
It would also take us at least a decade to get the knowhow to do it as well as the Russians do it.
This ability is of no small pride to the Russians, and formely the Soviets.
Hence that the Soviets sold it to the West during the cold war, full well knowing what it was gonna be used for.
And same goes for Russia.
So much so that Russia have not put a sanction on it themselves, something that they could have done to hurt our weapons manufacturing.
I will return to this below.
Obviously this oversight is now being fixed, but it will take us a decade to get there...
And both the US and EU was told by the civilian companies that if we want titanium, then we will have to both pay for building the infrastructure and sign for viably large government guaranteed contracts.
Next part is that the US does not want Ukraine to bomb refineries and oil depots, because they believe that this will raise the price at the pumps in the US during the election year.
This is wrong for so many reasons, but if the price will go up, it will be blaimed on the current administration by people who have seen burning refineries in Russia, and then drawing the wrong conclusions.
And then we have Russia who for reasons of their own want to sell titanium, nickel and paladium (plus a few more unusual metals).
And most of this is sold to Western countries for usage in our arms production and special steel production.
And it is here that banks come into the picture.
There are basically 3 major types of banks in the world.
Commercial Civilian oriented banks.
Commercial banks catering to companies.
And special interest banks, catering to specialised services like shipping, hydrocarbons and minerals/metals.
The largest minderals/metals bank is Rothschild & Cie, just as an example.
But there are others, a bewildering plethora in fact.
Every large mining consortium have their own bank, and this goes for Russia too.
And as EU and US sanctioned banks we made a very wide net, leaving just a couple of hydrocarbon banks able to transact on the global market.
We did though make sure that we could make certain that only money for that specialised purpose was transfered through said special interest bank.
Problem here was that we sanctioned 18 banks that was specialised banks for the mining business in Russia.
Still Russia continued to sell their goods for 18 months, after all they could then accrue the sale and use it to print money inside of Russia to the same value.
But, they never got the cash on any account they hold in the west, and having a huge running debt for eternity is not a good idea.
So, naturally they started to grump in the end.
And pointed out that they soon could not continue to deliver.
At this point we ended up with 4 different parties holding very different views on desanctioning said banks.
Ukraine is in the **** no camp.
EU in the no, but we need ****, camp.
US in the, yes we need **** camp.
Russia in the Grump Camp.
So, a deal was made, even though Russia was not privvy to parts of it.
EU suggested that the US could desanction the banks, EU keeps the sanctions, US drops the "no bombing refineries part", and Ukraine was told the why's and that we need it to build weapons for them.
Ukraine grumped a bit, but blowing up refineries freely definitely swung them around.
So, your basical deal with the devil...
Forgot, Russia really need the cash that selling these products to EU/US, and we really need the products.
And both sides need it for the war.
Devil's choice really.
Refineries
This is why Blinken and foremost Sullivan all of a sudden are shutting up about the refineries.
EU want them gone, Ukraine want them gone, and US wanted titanium.
Everyone somewhat happy, or at least equally unhappy.
Well, except Russia really.
They were very happy about US wanting an end to the Refinicide.
Nobody told Russia about this side of the deal, and heck knows if they would have gone for it if they had known.
And yes, I am inordinately proud of having invented the word Refinicide.
But the one truly and spectacularly happy is Budanov, he also likes to commit Refinicide.
So he continued blowing up new and old refineries.
As with everything in large systems, it takes time before you notice the effects and disturbances.
In the beginning Russia did not have to bother much, they had spare capacity, and then they started to import fuel, and then they relied on their huge storages of it.
But, in the end the pinch would come.
Last week the price of diesel at the pumps in Russia increased with 20 percent, and petrol/gas/bensin increased by 10 percent.
This is a gut punch on the Russians, the inflation on other things have eaten into any margins they had, and then having the lifeblood of Russia go up in price is literally slowing things down rapidly.
From Friday to today 5 percent of Russias production capacity was taken out, and a refinery that was about to come back online was hit again hindering it from reopening.
And on top of that 3 storage depots was hit, taking away vital reserves.
Something tells me that there will soon be further price increases in Russia, and this time around the Government is even looking into taking away the subsidies to further limit private usage.
At the going rate the prices will at least double before the Russian holiday season sets in during August, the period when all of them drive down to Sochii and Crimea.
I do though doubt that Crimea will be as popular this year for "reasons"...
And, towards autumn/winter it is likely that there will be rationing in place.
Otherwise there will be severe shortages and petrol stations without gas and Russians screaming for bensin.
Come next spring/summer it is likely that Russia will be dry as a fiddle.
It is no secret that this is the goal of Budanov.
Sidenote: Commodities trading is interesting, there are always knockon effects from whatever you do.
Here is one that I foresee that nobody else seems to have pondered.
As and when Russia run dry the nickel/titanium production will have ground to a halt already.
Nobody seems to have pondered that mines and other vehicles used all go on diesel.
I will have to point this out so that we can order some whopping amounts and put in storage while we still can.
That would probably make the Russians very happy, for a short time.
At least we will soonish have enough nickel at least, and in a pinch we can grumble and do without titanium.
Anyhoo, my point is that the Refinicide is what will end the war.
It is either that or Russia will have to breed one hell of a lot of horses very rapidly.
In the end having one side gliding about in fancy vehicles and able to transport goods via oodles of trucks, while the enemy have to walk everywhere or ride on steamdriven trucks, is sort of a showstopper."
