Oil, oil, everywhere
Developments
- How has Russia, one of the world’s biggest producers of crude oil, wound up importing its fuel?
- Iran finally buries one ayatollah, with the next still in the shadows. … The Strait of Hormuz is empty again. … & Near Alexandria, archaeologists open 18 tombs sealed for 2,000 years.
From the files
- How much do America’s biggest media platforms really change people’s minds? Michael Socolow on the challenges and limits of billionaire influence.
Features
- Why is the U.S. government going so easy on white-collar crime? John C. Coffee Jr. on how the White House is making corruption safe again.
Books
- What happened to higher education? Chad Wellmon, After the University.
Music
- Are jazz tracks getting longer?
- & New tracks from SML, Ela Minus x Nick León, Phoebe Bridgers, PIGMNT, & Carly Rae Jepsen.
+ Weather report
- What happens in the Pacific, stays in the Caribbean …
Developments
Buyback
Russia is one of the biggest oil producers on earth. This month, it started buying gasoline—from India.
For most of the past three years, that would have made no sense. Russia sells its crude around the world—a lot of it, at a discount, to India—and refines plenty more at home into the gasoline and diesel that keep its cars and its army moving. It exports fuel; it doesn’t import it. And yet: This summer, Russian gasoline output has fallen by about a quarter; drivers across dozens of regions have been queuing for hours; and last week, Moscow banned diesel exports outright. A great exporter of fuel has been reduced, for now, to buying it—from its own number-one buyer.
Russia, of all countries, running short of petrol.
Why?
- The soft spot. It turns out there’s a difference between having oil and being able to use it. Russia’s crude sits in thousands of wells scattered across a country that spans eleven time zones, and no one can bomb their way through all of that. But to become diesel or gasoline, the crude has to pass through a refinery, and there are only so many of those—big plants that take years to build and can’t be quickly replaced. Since spring, Ukraine has flown long-range drones deep into Russian territory to hit them: at least 16 refineries in May, more in June, each strike reaching further inland. Crude processing has dropped to its lowest in two decades. So: Hit enough refineries, and it stops mattering how much crude your enemy has.
- What sanctions couldn’t do. This has done something three years of sanctions couldn’t. The West’s answer to the invasion of Ukraine was to go after the money the invader makes selling oil abroad, and Russia mostly shrugged it off—finding new buyers in India and China, moving its crude on a “shadow fleet” of hard-to-trace tankers, keeping the cash coming. Ukraine’s drones don’t bother with the money. They go after the fuel Russia burns instead of the oil it sells—the diesel and gasoline its army and its economy both run on.
- India’s cut. When the West stopped taking Russian crude, India stepped in, buying it cheap, refining it, and selling the fuel on. Now Moscow is one of its customers, importing Indian gasoline to cover a shortfall of about a fifth of what the country burns. India makes money at both ends—buying the crude at a discount from a seller with few other options and selling the fuel back at the going rate. Russia has no shortage of oil; it just has a shortage of leverage over the guys it has to buy from.
None of this means Russia is about to run dry. It still has fuel, still has the crude, and the export ban keeps more of what it does refine at home; Moscow calls the shortages temporary and blames panic-buying. The deputy prime minister, Alexander Novak, announced the ban on state television, seated beside President Vladimir Putin, and described it as a routine step to “increase supplies to the domestic market.” Putin said Ukraine was only trying to spread anxiety, and that it would fail.
But the queues aren't from anxiety; they're from a lack of gas. The refineries are still burning. For three years, the front in eastern Ukraine barely moved, despite all the sanctions out of Washington and Brussels. The drones over its refineries have done more than either—deep inside Russia, far from the front.
For now, it seems there’s a new race: Ukraine has to burn refineries faster than Russia can repair and defend them; Russia has to keep the imports coming and hope the shortage doesn’t reach the front. Neither side is ahead yet, but the drones have the edge: A refinery takes months to rebuild, it can’t be moved, and Ukraine has already hit them thousands of kilometers inside Russia. Those strikes will keep coming—Russia can count on it. Which is what Ukraine appears to be counting on in turn.
Meanwhile
- A leader on paper. Iran buried Ali Khamenei on Friday in Mashhad, four months after the strike that killed him. His son Mojtaba Khamenei, named supreme leader in March, did not attend. No one outside the leadership seems to have seen or even heard him since the war began, while the leadership itself says young Khamenei is still recovering from his wounds. Four months in, all Iran has seen of its new supreme leader is his signature. Or what appears to be his signature. … See “In his absence.”
- Still water. After the U.S. called off the June ceasefire this week and went back to hitting Iran's coast, shipping through the American-escorted lane dropped close to zero by July 10, down from around 88 large vessels a day before the war. Both sides want to control Hormuz and charge for passage. For now, there’s almost nothing to charge for. … See “The trains to Mashhad.”
- To speak with the gods. On Egypt’s Mediterranean coast, west of Alexandria, at a Greco-Roman town the ancients called Leukaspis, archaeologists have opened 18 tombs from the Ptolemaic and Roman centuries. Alongside the usual grave goods—clay lamps, wine jars, a granite sarcophagus two and a half meters long with its occupant still inside—they found two dozen thin leaves of gold, each laid on the tongue of the dead. It was a known rite of the Hellenistic and Roman world: a “golden tongue,” placed in the mouth so the dead could plead their case before the gods of the underworld. Two thousand years later, the golden tongues are still there.
Gulf royals have moved billions into global football. Now what?
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From the files
The reach illusion
How much do America’s biggest media platforms really change people’s minds? Michael Socolow on the challenges and limits of billionaire influence.
