It costs $32.07 to move a barrel of Urals from Primorsk to China. The barrel itself fetched $112.24 at the loading port last week, so before anyone has paid for insurance, financing or the lawyers, the voyage has eaten almost 29 percent of the cargo. For most of this year the market watched Brent, the number on breakfast television. I have spent more of it watching freight, war risk premiums, the discount a Baltic loader has to accept, and the storage tanks being quietly drained in Shandong, because that is where the money has actually moved. If you traded the outright and ignored the basis in 2026, it was expensive. If you traded the basis, you were trading geopolitics without waiting for the press release.
Then there is the number that should embarrass a few policy papers. Deputy Prime Minister Alexander Novak says Russia exported $21.3 billion of energy to the European Union in the first nine months of 2026, and that cumulative Russian energy deliveries into the EU since 2022 have reached $320 billion. This is the same EU that has spent four years building the most elaborate sanctions architecture of the modern era. Novak was careful to say the flows run through channels the European restrictions explicitly exempt, and he is right, which is rather the problem. A sanctions regime with enough carve-outs does not stop a trade. It reprices the trade and decides who collects the spread. Brussels did not sell an embargo. It sold an option with a very generous strike, and the market has been exercising it for four years.
The second Novak headline is stranger. Russia and the United States have opened talks on bringing Russian diesel back to international markets, the American market included. The talks run at two levels, between energy ministries and directly between Russian companies and prospective buyers, and Moscow has already partly lifted its own export restrictions. According to sources, Steve Witkoff and Jared Kushner told Ukrainian officials that a Russian diesel deal should be read as a signal of Donald Trump’s willingness to cooperate with Moscow, carrots instead of the stick. At the same time Washington is pressing Kiev to stop striking Russian refineries, because those strikes keep turning up in the American pump price. The Ukrainian delegation left Miami with nothing signed, though it allowed for the possibility of a mutual energy ceasefire.
