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market vibes

October 23…)

“I cannot forecast to you the actions of Russia. It is a riddle wrapped inside a mystery, inside an enigma.” Winston Churchill October 1, 1939.

Jobless data at 8:30. EIA natty stats at 10:30.

In the news

Sanctions on Russia announced yeterday by the US treasury will freeze all U.S.-based assets and interests of Rosneft and Lukoil, which together account for nearly half of Russia’s crude oil exports (about 3.1 million barrels per day). They prohibit U.S. persons and companies from any dealings with them, unless authorized (Europe $20 billion per year) or Russia’s military-industrial base. A general license allows a wind-down period until November 21, 2025, to minimize immediate global disruptions. Violations typically carry civil and criminal penalties.

The direct impact from freezing US-based assets is described as “minimal” according to internet sources, roughly $100 million, and overall Russian-US trade was just $5 billion in 2024. The sanctions’ primary leverage comes from penalties on third parties, China and India and other BRIC allies, not asset seizures, unlike the $300 billion in frozen Russian custodial deposits in Europe.

What caught my eye was not cutting off China and India from SWIFT or access to dollars. The BRICs were created to sidestep financial restrictions. These new sanctions will probably accelerate de-dollarization. It is this: The US Coast Guard and allies will be able to interdict shadow fleet vessels at sea. In this context “interdiction” means boarding suspected vessels at sea, searching their cargo and documents, and potentially seizing oil or the ships themselves if violations are confirmed. This implies adversarial contact by armed forces and high-risk use of international law (sources: US Naval Institute, Rand Corp, Reuters, and others).

I spent about 3 hours on Grok trying to weed through all the legalese and finally came out with this: Sanctions target specifically “all property and interests” of Rosneft/Lukoil, including shadow fleet oil cargoes. Enforcement and seizures will be selective if necessary and confirmed according to the SHADOW Fleet Sanctions Act of 2025. These new actions are expected to reduce Russian oil revenues by 20% to 30%.

I can’t imagine what will happen if and when the Royal Navy orders an oil cargo bound for China or India to heave to and takes ship, crew, and cargo into a European port, but it could happen under the UK’s October 2025 Russian sanctions package, EU Council Decision 2014/512/CFSP, and US sanctions announced by Trump on Truth Social yesterday.

In other news, Game 1 of the World Series between the LA Dodgers and the Toronto Blue Jays starts on Friday night in Toronto. And post-debates last night, the money is on Mamdani.

In the markets

A technical checkdown of oil, straight ahead, plus the usual stocks, gold, silver and bitcoin… and a stoic assessment of these sanctions in the vibe.