The Duran Podcast - Energy sanctions on Russia and seizing ships on the high seas

Episode Date: May 24, 2025

Energy sanctions on Russia and seizing ships on the high seas

All right, Alexander, we are here with Stanislav, joining us once again on the Duran, and we are going to talk about energy, oil, maybe natural gas. We'll see what we talk about with Stanislav. On this episode, Stanislav, before we get started, where can people follow your work? Okay, so on YouTube, at Mr. Slavic Man, and that's with a K, not a seed. On Telegram, there's two channels. The Russian channel is Stas Tudaya Abratna, and the English language channel is Stas was there.

And if you want to contact me, my email is Stas.cdorfnik at yannikstitch.ruj. All right. I will have a link to your channels in the description box down below as well as a pinned comment. Alexander Stanislav, let's talk about what's happening in the energy world as it's related to Russia. the European Union is talking about a $30 price cap Alex Ander Stadislav. Let's let's begin. That's what they're talking about.

That's what they're talking about. Why 30? Let's go back to something like the 1920s. I think negative 30. I think negative 30 is better. Yeah, like $8 or now. I mean, why stop at 30? It's just kind of, there's no scientific

economical basis on this by 30, which is funny. You know, you've got, as we. used to call him Lighten the Lofers Lindsay Graham. That was his nickname when I was in the U.S. But he's the combat lawyer, Extraordinary, is screaming about the super sanctions that are going to just crush Russia, the 500% sanctions,

which is funny because I guess the most powerful factor here is the total ignorance of economic and business processes in the vast majority of the American power elites, most of whom are lawyers. So they never ran businesses. They've sat in Congress or as assistant to a congressman from their first career day until they drop dead or become president. And then the same thing with the EU. You look at these people and you understand that they have absolutely no concept of how an economy runs. and they live in their own little bubble of non-reality.

So where do we start? Shall we start with the usage of oil, supply and demand, the basics? Alexander. Well, I can tell you a few things about this. I mean, I've never been in the oil industry, but I was actually quite heavily involved in shipping. And I'd say a number of things, first of all. I mean, if we're talking about Lindsay Graham sanctions, if you actually think about what

they really are. They're not sanctions against Russia. They're sanctions against countries that trade with Russia or at which the United States trades with Russia. So it's going to sanction other countries, third countries, because they trade with Russia. Now, that is already, to put it mildly, unusual, very, very controversial indeed. It is interfering in trade with those countries. Now, two of these countries are China, which is, of course, the United States, It's big adversary at the moment. The United States has just had a major tariff battle with China. There's been problems with shortages of Chinese goods in American stores.

And we are hearing reports now. And there was a big article about this in the Financial Times just a few days ago, literally a few days ago, about how supply chains are starting to buckle because the Chinese are restricting. exports of rare earth, and there is no alternative. So you're going to impose 500% sanctions on China if they continue to buy Russian oil just after you have tried to put 145% sanctions on China and then being forced to reduce them. That doesn't make a great deal of sense to me. The other country is India, of course. I met several people from India at this legal forum which I have just attended in Russia. I'm not going to identify who they were or discuss in detail what they said.

All I will say is that they're not very happy altogether with American policy at the present time. The attempt by the United States to claim credit for brokering a ceasefire between India and Pakistan, done, even by the way, if it is true, has not gone down well at all in India. India depends on Russian oil to keep prices of oil down within India itself. India has an inflation problem. India has a standard of living problem, a cost of living problem. So they will not take well to having trade sanctions imposed on them by the United States. India runs a trade deficit. So it doesn't actually export. It's not dependent. It's not actually

an economy dependent upon exports to the United States. The Indians are absolutely clear that they're going to continue to buy Russian oil. All this is going to do is it's going to make them incredibly angry with the United States and potentially distance them from the United States at precisely the time when the United States is trying to make them. trying to win over India in order to try to build up India as some kind of rival to China. So this is misconceived. I'm not talking about economics. I'm not talking about the importance of oil. I am simply talking about the geopolitics of this, which already looked to me to be profoundly wrong. Anyway, over to you, Stanislav.

So the audience knows. I'm not just a pretty face and former military. I've got to an MBA in supply chain and I spent 13 years in oil and gas supply, so oil and gas services working the supply side. So yeah, I do know. I got some knowledge of what we're talking about. The thing is about, first of all, first of all, what you hear constantly, especially towards Europe in this case, that Europe used to buy Russian oil and gas, the energy market. But the problem with Europe is Europe bought a whole lot more than just oil and gas. gas. Eurobought diesel.

Russia is the second and biggest export of diesel in the world and producer of diesel after the U.S. Europe bought fertilizer. Russia is the biggest producer of fertilizer in the world. Chemical fertilizer in the world. Europe bought wood, wood products, furniture or semi-finished. Europe bought aluminum, aluminum goods. I mean, we're talking parts for automobiles.

Europe bought titanium parts and so on. Steel, the same thing with parts. that then went into assembly into Europe, paper, everything across the board. Paper is an interesting one, for example, cardboard. Russia used to import almost all of its cardboard, right? It produced paper, those giant rolls of raw paper, shipped them to Germany. Germany then produced paper for printers, paper for toilet paper, everything across the board. And a lot of it went back into Russia.

Well, what happens when Germany starts putting sanctions or EU starts putting sanctions in Russia? And this is a good example because a friend of mine was an IT director in the biggest paper manufacturer in Russia. Okay, so they can't get the cardboard to resell from their paper. What do they do? They build four plants across Russia to manufacture cardboard. They don't need Europe anymore.

Europe lost that market forever. Russian paper for office paper? Yeah, for about half a year, it was brownish, like beige, because they didn't have a bleaching element into it, but then they added a bleaching process, and then you got the same white paper. Everything's been replaced. In the three years, something that the EU made, the business more or less understands it, but the politicians don't. There is no coming back to this market.

The market is full. The company's walked in, they said, okay, fine, we don't import anymore, so we'll invest and build here. once you've put once you have a sunk cost you kind of have to justify that sunk cost so even if tomorrow's german paper happened to be a bit cheaper it still wouldn't get bought because you already have a factor in your hands or in this case four factors manufactured cardboard and so on with everything so europe really cut its throat on a lot of things uh death by a thousand cuts oh yeah and a big shot in the head for the energy but here's a thing about energy uh gas uh particularly oil is a fungal good that's a fungal commodity So even if you're not buying from Russia, what Russia does affects the market as a whole. Even the U.S. that exports oil and yet imports 8 million barrels per day of oil, it still gets hit. So here's a problem with the U.S. And I'm going to go talk about what it's going to do to other countries. Of course, it's just going to massively accelerate the dollarization because any bank that

it processes dollars parallel with rubles or rupees that are going to Russia, have you, is going to get hit by these secondary sanctions. So either there's going to be a separate financial structure that has to be set up, that the Chinese are kind of starting finally set up, or you de-dollarized. You have no exposure to the U.S. dollar. You have no exposure to the euro, and you continue business as previous. Well, the thing is, is the world right now uses approximately 104 million barrels of oil per day.

Russia produces 9.5 million barrels per day, so basically about 10% of the world consumption. Iran produces another 2.2 million barrels a day, because these sanctions already went toward Iran, so they're trying to now expand it on a larger scale. So you're looking between Russia and Iran, and Russia exports 7.5 million barrels a day. Iran exports $1.5 million a base. you're looking about 9 million barrels or 10% of the world, world consumption of oil. That's what they export, not counting internal consumption. So let's take that off the market and see what happens.

Because the Arabs, A, they can't produce that much oil to cover that much. So you're instantly going to go right below. And the thing is, production and supply and demand are basically at equilibrium. They go up a little, go down a little, go down a little, go up a little. Right now it's going a bit down, but it's not going down because of Russia. It's going down because the West is in a recession. Whether or not politicians won't admit they're in a recession, like the Biden administration that kept rewriting the economics books, oh, well, you know, two-step quarters and yeah, that's

a lot, let's do it here. Or we don't ever see a recession. There's all such thing as a recession. It's like the modern monetary policy. Debt doesn't matter. Recessions don't matter. Well, yes, they do, and businesses still get hit by them no matter what the politicians say.

So if we take that down, we take 10% of the world's oil off the market. You're looking at a hundred plus dollar barrel oil instantly. You're looking at $7, $8 a gallon for the U.S. a gallon of gasoline. In the driving season, this is the driving season, but it gets worse. It gets much worse. You see, the U.S. refineries in the South, West, I'm sorry, Southeast, Beaumont, Texas, Lake Charles, Louisiana, Lafayette, Louisiana.

They're all set for a specific brand of oil that's called heavy sour crude. Heavy sour crude. What is heavy sour crude? Heavy because it's very thick. You know, you can actually make statues out of oil. I've seen that Chinese statue at an expo. Because oil can be actually almost rock-like, so it's not flowing at all. Or do you get that oil like what the Arabs have, that,

it's almost transparent, right? That's a light, sweet, crude. The sour means the level of, of, oh, Lord, the word just dropped on my head. On a match. Viscosity. No, no, no, no, no, viscosity. No, no, no, flammability.

You mean flammability? No, no, the... Sulfur. Sulfur. Sulfur. I can think of it in Russia. I can't think of anything. So, yeah, it's a sulfur.

It's a level of sulfur. So the technological process for these... refineries is A, specifically designed for the heavy oil, because there's some difference in products that you can get out of it, and B, for removal of sulfur.

It was designed that way because the U.S. was buying oil for Venezuela, back, if you remember, back in the 80s, in the 90s, until the U.S. decided to steal overthrow the Venezuelan government steal their money. So, well, yeah, that kind of ran into a block. The other place

that produces that oil as Iran. That's not even a talking point. And then there's their Russian Euro brand. There's some that also comes from Canada, but Canada's oil sands, they don't make any financial sense until oil is at least over $80.85 a barrel. It's a expensive process because what they're doing is they're digging up sand, taking it to a processing plant, and literally evaporating the oil out of the sand, washing it out, and then moving the sand back in. It's an expensive process. And it's a continuous process. So basically what you've got is Russian Euro brand, which is that sour, heavy oil. It's 3, 4% of what the U.S. uses, but it's a good hit on the gasoline market.

The petrol market in the U.S. too, by the way, for summer, has a very big handicap because most of the states have their own formulas for gasoline for the summer, right? So the refineries are running short batches. The longer the batch run, the cheaper it becomes, because you don't. don't have to retool, but they have to retool for the different chemicals that they want for each brand of gasoline for Petro for each of the states. And that's downtime. So that's just wasted time and money. So the shorter the batch run, the more expensive it becomes. So even if it's three or four percent, it's a pretty big hit. So when you add that in, you could be possibly looking at $10, $12 oil. I'm sorry, $10, $12 gasoline per gallon for the Americans, which is just

a crushing blow right off the bat. Then we go to the three. diesel. And here's the biggest problem. The American ports, from port to customer, everything runs for the most part on trucks. The American rail system is inept. It's got lots of mileage. I mean, kilometers worth of rail on there, but it's basically inept. You get trains that run that are like four or five kilometers long. One line of rail, then they have to pull that train off on the sideline, get another train going the other direction. And then if you ever looked at the video in Ohio as a good example of a train driving down the rails in Ohio and the video camera standing in front of the train. It's like something out of an abandoned railway out of Central

Africa or South America where somebody, a former colony is dropped it and left. I mean, the train is doing this, right? It's like going across waves because that rail hasn't been repaired in probably 70, 80 years. And the trains go about five kilometers an hour. In 23, You remember East Palestine, the American Chernobyl? I lived there before. When we moved to the U.S., I lived a year in East Palestine, Ireland. It was a nice town. It was just a quintessential American small town back then.

But then my father's engineering company moved to North Carolina, and we moved with it. Then the ceramics company eventually moved to China when everything started globalizing and de-industrializing the U.S. And all they really had left was basically farming. And now they don't have that because everything's been poisoned, even though the government doesn't want to talk about it. But the rail lines in those areas are so old. And the trains are so old that the brakes failed. And in fact, that company, talk about corruption, that company paid off the U.S. Congress to torpedo a bill that was going to force all the train owners to put new

brakes on after a certain amount of time. And it was the brakes because there was a camera that was about 20 kilometers away from the wreck site and the train's passing through trying to break and it's just fire. The brakes are burning. The train's already burning. It got another about 20 kilometers and went off the rails, 120 rail cars. So you've got that. Now everything's gone by diesel and Russia is the second largest producer of diesel. And diesel again is a fungible good. And it's as a fungible good commodity. the moment Russian diesel goes off, you're losing probably about a quarter of the world's diesel, prices are going to skyrocket.

Instantly prices skyrocket. And everything skyrocketed in the U.S. Not only do you have inflation because supply chains are broken, and order placement to delivery to California sports is three months. So if tomorrow everything's good and they place orders, it's going to take three months to bring those orders in. So, crudes are going to, you're right, there's empty shelves or adding in that direction anyways. They did buy up some quantities before and prepared, but those are going to run out.

The price is already going up. I've talked to our friends are all saying, you know, prices are skyrocketing. And if diesel goes up, just to understand right now to fill up one semi is over $2,000, diesel is a very, very important part of the American economy, whether they understand or not. And if world prices go up, prices of diesel in America go up. Because private companies, the first thing they're going to do is they're going to ship wherever the best prices. They're not government-owned companies. So you, and that's not even going into uranium fuel rods.

That's not going into aluminum, titanium, and everything else that the U.S. needs, desperately needs, that Russia produces. And fertilizer prices, that's another thing. Fertilizer is another fungible good. So, come on, any, no Russian fertilizer, and the Russian makes, what, almost half the world's fertilizer, chemical fertilizers, I mean, that's a collapse. That's a collapse on the markets for agricultural goods. The price are going to skyrocket. Farmers are barely affording fertilizer as it is.

Can I just give an example of how products are fungible? And this is in a very, very obvious way, and, you know, it's not as, complex and intricate, as you just described, Stanislav. But a good example of how the British authorities got this completely wrong. The British authorities advocated closing down the pipelines, bringing natural gas from Russia. And they were telling everybody, and I remember reading the articles at the time, that Britain is going to be the least affected because Britain did not import natural gas from Russia. In fact, that wasn't true.

The British government might have thought that we were not importing natural gas from Russia, but some of the natural gas that made up part of our gas mix actually did ultimately originate in Russia. But never mind, the fact is that the moment the pipelines were closed, that caused massive disruptions in the whole gas market in Britain. Now, in Europe, Britain is part ultimately still of the European gas market, despite the fact that we are not part of the EU anymore. And gas prices, natural gas prices in Britain skyrocketed. The result is that Britain has the most expensive gas and energy costs. I believe one of the most expensive in the world, more expensive than Germany.

by the way, despite the fact that people always assume that in Germany, that it was Germany was more affected by this than Britain was. Now, of course, there are other reasons like British energy costs are as high as they are. People always bring up the issue of the green transition and they're right to, by the way. That has played a big role in this. But the biggest role of all has been the sanctions and the way in which, you know, you may think that you don't understand that you're not going to be affected as badly as other people will be if you impose certain sanctions. But it can work out because of the complex way in which supply chains and economics and trade and movement of goods works, that you actually go to be affected very,

very badly indeed. Now, I should say that a few weeks ago, a few months ago, I remember when the United States started to impose sanctions again or restrictions on imports of Venezuelan crude, which the Biden administration relaxed, I suspect, because they were trying to stop imports from Russia or heavy oils from Russia. So they were relaxing sanctions on Maduro in order to get the sanctions from Venezuela, the oil from Venezuela in. Well, of course, the current administration, is now putting those restrictions back again. And it looked for a short time, brief time, as if they were going to start importing oil, heavy oil, openly from Russia.

Probably they do import some oil from Russia. But of course, it's probably again been laundered and moved around in all kinds of complicated ways. Now, I just want to pass on a conversation that I had in St. Petersburg. I should say this is a conversation. There was Morgan 1, and it revolved on exactly this topic. First of all, inevitably, the discussion came up of the so-called shadow fleet. There is no such thing as a shadow fleet. There are various ships which carry Russian oil products.

And sometimes they do, sometimes they don't. It's a constantly changing kaleidoscope of ships. owned by all sorts of people, some very interesting people, apart of my probably know a certain amount, but I'm not going to discuss who they are. But anyway, a lot of that, I mean, it goes on all of the time. Now, the British authorities who apparently were the people who persuaded Janet Yellen to go down the oil price cap idea, the people who work in the government, still apparently were under the illusions, the comforting.

illusion that maritime insurance is centered in London. Now, 50 years ago, that was true. At that time, you know, there was Lloyds of London and it pretty much did everything and all big ships were insured in London. And when I had, when I was working to some extent in maritime work or new people who were, it's fair to say that that was still largely the case then. It has not been the case for a significant amount of time now. It's remarkable that the political leaders don't understand this. They still live in the world of the 70s and 60s, but in fact, the marketing insurance, maritime insurance,

has evolved far beyond that. Now, there are certain very, very powerful insurance groups located all around the world that are able to provide maritime insurance. There are certain specialist products which require very deep reserves, financial reserves, for insurers to be able to provide the type of insurance that some ship earners need in certain situations. One of the biggest of these, interestingly enough, it turned out, was Russian. Now, it was observing the sanctions.

Despite being Russian, it was actually observing the sanctions. And then of course, along comes Joe Biden and the European Union, and they sanctioned it anyway. So what is it now do? It's now free to ensure, to provide insurance for some of these ships. And that is exactly what it is now doing. So in effect, one set of sanctions acted to us to us. undermine the entire oil price cap idea, you could see how, again, they just don't know what they're doing. One arm doesn't know what the other arm is doing. I mean, they go for one

type of sanctions because, you know, they understand that these ships are getting insurance somehow. So they go for one, they sanction one particular insurer and then that insurer because it still needs to do business, because it starts providing type of insurance. to the fleet, some of the ships that are part of this, as it's an endlessly changing shadow fleet, that it wasn't providing before. We have this going on all the time. And again, they have completely lost sight of how shipping works today. They still inhabit a world where it's all basically run from London,

It's all, you know, controlled in London. It's all Western shippers, Western companies. It isn't like that and hasn't been like that for a very long time. Yeah. And, you know, interesting enough, not only did the UK is affected by pipeline gas prices, but up to 22, the UK was importing on average about two to three Russian LNG tankers in the winter. And it was funny because you know when they're coming is when all the criticism of Russia and the U.S. media just died, and the UK media dies off. For like a week to two weeks, nobody says anything bad about Russia.

The tankers come in to get the gas and right back, we go back to the program. That's previously here listed. Oh, okay, Russia's bad. Russia's evil. Russia. Oh, now we've got the gas. It will be warm. But here's a nice story about shipping.

And as an eyewitness. So in 2002, I was heading up a inspection group in the U.S. Army. As a captain, I had a couple of sergeants, and we were checking units preparation for deployment. Everything's already heading toward Iraq at that point. And then I was given a mission to organize an exercise for an aviation battalion. out of 101st airborne, which is a helicopter airborne unit. So everything was getting shipped to Fort Jackson, going on a ship from Fort Jackson down to Hardin, Texas,

a little than Hardin, Texas, and then going up to Fort Polk, Louisiana for training, for the range, helicopter range, and so on. So I'm out there running around with my sergeants and decide, you know, well, we need to go out. Obviously, we need to go check Fort Jackson, the military portion, port of Fort Jackson. So I'm walking down here, looking at where our ship is supposed to go, what dock our ship is supposed to be with. And there's a major who's in charge of that docking area is walking with me.

And what do I see? I see U.S. Marine M.1 Abrams being loaded on a transport ship. And whose flag is flying off that transport ship? It's the Russian flag. Oh, that I'm like, whoa, what am I missing here? Like, oh, that's our little secret. The U.S. has no merchant marine, period. absolutely zero.

The last merchant marine ships the U.S. had were built in the 1950s. They've all been mothballed since the 80s, most of them been chopped up into scrap metal. And this is in 2002, and the U.S. had zero, zero. Now the U.S. doesn't even have tenderships to resupply the Navy. Apparently all of those have been chopped off. So the U.S. military cannot move anywhere in any large quantities. Now, the Marines, there are several Marines expeditionary battalion. or brigades, they have their own shipping with them, but that's a brigade.

Brigade's there to take the beachhead and hold it while everybody else comes in. They're not going to win you a war unless you're fighting something like, I don't know, Luxembourg. Well, Luxembourg doesn't have a coastline. So, you know, Aruba. But anything larger than that, any kind of large-scale warfare, you've got to have a large merchant fleet behind you that can supply not just bring the tanks in, obviously, but supply to a million of the things that are modern military needs.

the U.S. doesn't have that, hasn't had that in 30 years. Oh, actually 40 years now. So, yeah, it's one of those little secrets. You can, it's like the idea of you can project your superpower until the rubber hits the road. And then all of a sudden you start figuring out, oh, we can't do this, we can't do that, we can't get here, we can't get there.

Now what do we do? You can't air transport everything. There's not enough air transports and there's too expensive. So, yeah, so that was one of those little supply, supply point surprises. Surprise. We can't do really anything without foreign shipping. That's the modern US Army for the last 32 years.

Indeed it is. And can I just say again, as a person of a certain age, and who worked in the world, a little bit in the world of shipping. I came at the very, very end of the Liberty Ship era. There was still a few. There were still being operated at that time by people around the world. world, with dubious safety, by the way, because they were so out of time by that point. But of course, in the 50s, in the 50s, world shipping basically was conducted on Liberty ships,

ships mass produced by the United States in absolutely unimaginable numbers during the Second World War. And that capability just doesn't exist today. And it was one of the great industrial miracles of the modern world. And again, I mean, it is an example of how things have changed and how strengths have been lost. And of course, the shipyards today are in China, which are by far the biggest, I mean, by orders of magnitude. Korea, Korea makes lots of ships and their ships made in other places. I believe Japan still makes ships. But the European shipping industry, shipbuilding industry has basically gone.

The British shipbuilding industry has completely gone. The shipbuilding industry in the United States, I believe, is largely gone. So it cannot be replaced quickly. Again, people talk about re-industrialization, but this cannot be done in a day or a month or a year. All of this takes time. And if you're going to achieve it, you need to do everything. Now, I'm going to move and just tell you something else, which I know people were talking about in St. Petersburg, which is that there is a view that is gaining traction amongst

some people, at least in Russia, which is that the next step is going to start, is going to be starting to seize Russian ships on the high seas or ships, which may not be Russian at all, but which are ferrying oil products or suspected of doing so, and all of this, that there's going to be a major attempt to try to seize these ships. And with talk that a lot of this is going to happen in the Baltic, by the way, with Baltic governments being involved in doing that. And apparently, and here I am not privy to anything, obviously, because I wouldn't be. But there are rumors, I will stress, these are really rumors, that the Russian military is already looking at preparing convoys. You know, protected by the Russian Navy to protect merchant ships in the Baltic.

So, I mean, this seems to me an incredible situation. I can say without any doubt whatsoever that seizing ships on the high seas would be an act of war. And we see that it's provoking a military response. It can't be done in a legal way, in the way that is being apparently discussed or at least the Russian's belief is being discussed and talked about in NATO, in Europe at the present time. Well, it's actually much worse than that already. First of all, the first ship escorted went out a week ago.

I had a destroyer escorting an oil tank. The British, I'm sorry to the British. The Baltics, Estonia, I think, if I remember correctly, try to seize a Russian, well, a Russian bound ship. It's a Russian ship, but it was under, I don't remember which country's flag, but it wasn't a Russian flag. Sue 35 flew out and the Estonians got their tail between their legs and back battled out. But an Estonian ship went into Russian waters and got arrested. That was at the end of last, actually this week. So things are heating up, absolutely.

But things are much, technologically speaking, things are much worse for world shipping than most people realize. because most people still don't realize what age we've actually jumped feet first and without actually ever stopping to contemplate. They see the drone warfare, some in the Black Sea, and they see some of it on the battlefield. They still don't understand the reality of where we're at right now. And there's an American system called the Trident that they've already tested in the Red Sea. They're utilizing. And this is an AI, okay, there is no artificial intelligence to begin with. As somebody used to work in IT, there is no such things artificial intelligence.

There's just high processing with a large database that can make certain decisions based off of, again, an algorithm. Computers can't think creative like human beings. But it's great marketing, just like the cloud is great marketing. Still somewhere on a server and somebody's server farm. There's no cloud. But it's great marketing. But this thing, what it does is it's a submarine. It doesn't go very deep, but it's a submarine plus a surface vessel.

it has a sale that it raises, that's solar power cells, so it can recharge itself. It's in contact with satellites, guidance. It can go several months on its own, and it can carry intelligence packages, so surveillance intelligence package, or it can carry two anti-ship missiles. So you quite literally can send this thing out, and you're keeping track of it off the satellites. You send it out for two months. It sits somewhere, waits for a specific ship to go by. you give it the order, it shoots two missiles out at that ship, and floats away.

So piracy or the, well, piracy of a different form on the high seas. The problem is by moving this into reality, it's going to force everyone else to go for this. But the technology isn't that high tech at the end of the day. So what other groups are going to have this? What other organizations are going to have this? I'm not even talking nation states. Terrorist organizations, oligarchs, in different countries.

So what you bring to a point of, if you want to out-compete your competitor, just sink their ships in the middle of some trade lay by having one of these mini subs waiting for it, pops up to the surface, shoots two missiles out, and it floats away on its own. They're relatively small.

So now you're looking at, and this is going to be first and foremost, a hit on America. Because America lives, breathes, and dies by marine traffic, by shipping. You've got the big world continent going from Eurasia and Africa, right? They can live without it. You can't live with the U.S. can't live without it.

It can suck South America drive further as it's done for the last 200 years. But there's limits of that, too. So they've opened the Paneras box and where it's going to go after this. It even gets to a point if you think about it as a terrorist weapon, you can have one of these things slowly float up to a port and just shoot missiles out. Or that's out at a port. People don't even know who the hell attacked them. They just things start exploding.

And it just flows back away. It goes underwater, it floats back out. So as a terrorist weapon, I mean, these are insane possibilities. And people haven't realized what kind of era we've walked into. We're in an incredibly dangerous era right now. It's just insanely dangerous. And with the war in Ukraine, it's going to end sooner, Hopefully it ends in Ukraine and not in Paris, or on the shores of the canal.

But wherever it ends, this technology is going to go everywhere. And you're going to have a lot of people, especially off the Ukrainian side, that are armed, experienced, unemployed, going into criminal syndicates, into terrorist groups. They already are supporting terrorist groups around the world. They're doing assassinations like they did in Spain. Petron who was assassinated, Zelensky's critic was assassinated yesterday. So you've got these terrorist organizations that are going to be informed from the SOU that have extensive experience using drones to kill people and blow things up. I mean, it's incredible, the era of destabilization and just violence we are looking at.

Indeed. Can I just say, if I can just return again to the discussions that, I heard in St. Peter spoke. The first thing to say is a lot of people were talking about sanctions. I got no sense that anybody was afraid of them anymore. I think that is an important thing to say, and obviously I was talking with people from a big cross-section of what you might call educated and advanced Russian opinion. Most of them were lawyers. So that's the first thing. I didn't get the sense that they were afraid of sanctions anymore. Secondly, they are increasingly taking the view that sanctions are not just illegal, but that they represent a massive legal

overreach by the United States and its allies. And there were complaints, and I think this is a point to make. I heard a lot of complaints that Russia has been much too passive about this sort of thing for far too long. Why? And I heard people talk about this. And you know, these are They're not, as I said, the obvious political people. They were saying, you know, why did we sit back for so long and let Westerners talk about the rules-based international order when we know that nothing like that ever existed and that this is all an extremely dangerous concept? And there was considerable talk there amongst this group of people, they're mainly

lawyers, that the time has come to start pushing back and pushing back in concessible. concrete ways, by bringing legal cases, by talking to other countries, by pushing back at the level of the General Assembly in the United Nations, and in every other international forum where it is possible to do that. And there was actually criticism of the Russian government for the fact that it hadn't been doing this. So it was actually very interesting to hear these people talking that way. And there was talk about, you know, building up alternative legal structures.

And we discussed on the Durand a great deal about international alternative financial financial structures that have been constructed, but legal structures as well to return international law to its proper condition, to a healthy condition, because that international law has been so twisted and distorted and corrupted in all kinds of ways. And again, going directly back to the point that you were making, the whole point about international law, where it actually started modern international law, which many people don't realize is it started with trade. It was the needs to agree certain basic rules, certain generally applicable laws, that

would keep trade functioning normally in a way that would be beneficial for all countries and all peoples everywhere. And that this general attack that is happening against international law will disrupt trade generally and ultimately threatens everyone. And so there was a lot of discussion about this. And I'll just finish the best point I want to make, which is one that I have heard people tell me. Again, I'm talking about people from my own country.

This is, I'm not going to, this isn't mysterious in any way, which is that there are so many sanctions now that any ship owner is struggling to keep up with who is sanctioned and who is not. So the description that I go is, you know, you send your ship to say Karachi. or somewhere in Pakistan. And, you know, you might be buying, you know, grain there. And you might think that the grain comes from Pakistan, which is not sanctioned. But it could be that somebody along the supply chain, you know, a broker somewhere,

or someone at this like is sanctioned in some respect. It might be some, you know, levels down. And then because of this extraordinary maze of sanctions that exists, the question is, are you, because you've, handled this, you know, this wheat, this grain, completely inadvertently without knowing that there's this other person further up who has been involved in this. Are you also liable in some way? And this is creating major difficulties. It is, you know, putting sand into the wheel of global trade because every ship owner, every ship's captain, has to think about this sort of thing

all the time. And yes, you can argue that you've got a defense that you don't know, though with sanctions legislation, remember sanctions are not legislated. They're not through court decisions, exactly what their legality is anyway, or what the appeal mechanisms are. That is already very uncertain. But, you know, all right, let's say. Say you do push back and argue this. That may take ages and they take years to resolve. And if you are trading, if you are a shipowner, you have to keep your business operating 24-7 and not just 24-7, but absolutely 24 as well as 7.

That is the nature of shipping and how it works. You can't stop your ship at night or something of this kind. It doesn't work like that. So this incredibly intensive business is being disrupted constantly in this very strange way. And I can tell you for an absolute fact that these people have been trying to convey this to their governments. Very few governments see to understand or listen to any of this. Some of the governments in the Southern Mediterranean, and I'm being very careful. What are I saying now?

just to say, are perhaps more aware of what's going on because that's where the shipping is. And I'm not just talking about the country everybody thinks about. I'm talking about some of the island states as well in the central Mediterranean, which people don't know are heavily involved in shipping, but they are. And one of the big governments is also. But the big North European governments, Germany, France, Britain, don't listen to any of this at all. If you come along and try and explain it to them, you get blank stairs and people just don't listen to you and they don't understand what you're saying.

And there's a general perception is, of course we can do this. We are the European Union. We are the West. Presumably they're saying the same in the United States. We can do it. We are the United States. We can do it and it will work because we're the United States. We've never failed whenever we've done this sort of thing before.

And they don't like being told that this time it's different. That it just isn't working in the way that they assumed. Anyway, that's my last comment. If you want to follow up on that, Stanislav, I just, and then maybe we can wrap up. Yeah. The ludicrous thing about sanctions, I'll give you an example. Azerbaijan was part of my territories for Eurasia. And on our base, I had two containers with about $4 or $5 million worth of equipment,

locked up that we were legally not allowed to touch. The equipment had been used in Iraq's Kurdistan, semi-autonomous. Oh, it's not semi-autonomous. It's pretty almost totally autonomous. Well, Halliburton, this is Halliburton, Halliburton used it there, and the Halliburton office there then was going to ship it to Baku. They hired some local company, the company put it on trucks, and drove through Iran. And since they helped the Iranian economy by buying fuel, probably buying a sandwich somewhere

or a drink, that equipment is now sanctioned by the U.S. government against Halliburton. $3 million for support of equipment, had been standing there for a year, for about two years at that point, and nobody could touch it. So basically, you couldn't sell it, you couldn't write it off. You just had to keep it in a container for forever, as far as I can tell. And, you know, the best way to compare sanctions, when I was a platoon leader, if any of my soldiers screwed up on a Thursday or Friday, enough that it wasn't going to be something handled by the sergeants is going to be handled by me, I would tell them,

I will see him first thing on a Monday morning, especially if it's a young private. I'll see him first thing Monday morning after PT, after physical training. Why? Because there's a limited scope of what I can actually do to him as punishment. But he doesn't know that. So say it, it's like sanctioned. To him for the next three, four days, he's going to torture himself, what's going to happen? I mean, so weekends ruin, right?

Psychological warfare. That's what sanctions are. Psychological warfare, as long as you don't actually implement them. And it's the same thing in Russia. Everybody was afraid of sanctions. I remember when it was coming up, oh, my God, we're going to go starve to death. We produce more food than the other nation in the world. How are we going to starve?

But people were panicked. Ah, it's sanction, sanction, sanction. Then sanctions kicked in. Okay, I'm not starving. Prices haven't really gone up. Wait a minute. Oh, oh, more sanctions. Well, okay, third, fourth package.

Okay, what? Okay, there's a Russian saying, Paquette de la Paqueta. A package for packages. So you put all the packages in a package, you put it away somewhere. And that's exactly what the sanctions packages are. Nobody cares. Psychologically, it's a non-issue.

It's a non-star. It's one of those blips on the media radar. Oh, we've got more sanctions. Okay. And the average person doesn't give it damn because he's not affected in any kind of way, not just in the big cities, and the little cities, in the village. Nobody cares. Russia feeds itself.

Russia produces most of what it needs. When it doesn't need, it buys from China, subcomponents or from other countries. and then a lot of times assembles in Russia. There's massive localizations. The localization started back in 2014, really started kicking off more or less then. But it had been puttering along before that. And it was puttering afterwards too at a higher rate,

but it was still puttering. But since 22, it's gone into overdrive. So, and even before that, I was already seeing issues where Gasprom, we were working, building one of the three phases. for the gas lNG plant in a more

it's a 15 billion year of a plant and gas farm at that point was now insisting that everything comes or maximize everything that comes from Russia before that they were fine

if it came from Europe or a lot of things but no it changed the mentality it changed and now now everything's going full speed they're talking you know

Vladimir Vladimir has gone full mercantiless And I'm a mercantilism. I believe in mercantilism. You know, for big countries, mercantilism is the way to go. For people to know it,

the three pillars of mercantilism is maximum utilization of your own resources and your own workforce. Sell, finished goods. Don't buy anything. But if you have to buy, buy raw materials. And Vita, sell it for blood. In other words, gold, silver, something real,

not fine little pieces of paper with nice pictures on of that could devalue at any moment. Russia and what Putin said, for example, with the chip industry, the only way we because we stay a sovereign country is if we produce our own chips as just one of the steps. Russia produces chips. That's what the rockets are all, the missiles are fired off of is local and produce chips. But they're not high-end chips. And now the drive is to get into the high-end market. It's going to take a few years because just when you set up a chip manufacturing, it takes between three to five years to clear the dust.

out of it. So it's a sunk cost investment. You just wait until it just processed the air. I mean, but it's already going in that direction and they're going very hard in that direction. Total or as much as possible independence from the rest of the world market. And Russia has all the resource. What Russia now needs is more high-end workforce because the unemployment rate is very historically, very low. And as considered Russia produces more engineers than any other country in the world, there's not enough engineers. There's not enough welders. There's not enough mechanics. It's a booming economy. And yeah, so that's the, that's the only bottleneck right now, really, as far as the economy goes. Absolutely. Stanislav, I think we've been talking,

we can talk about this for hours. I should say that about two years ago, I read the Russian plan for building up a chip industry and very, very detailed it was. I noticed that Ross Atoms at the core of it, but we can talk about all of this for ours. I think we basically, as I said, we've covered a lot of this topic today. So I think this is where I'm going to finish.

And just to say thank you from my side. Thank you for your very, very important talk. I just actually, I will finish with one very last thing. This is from Michael Clark, one of our most brilliant commentators in Britain, who was talking about the situation between, he was very angry with Mr. Trump. And he complains in this article that he's written for the Daily Telegraph. It's Robert Clark.

I'm so sorry. Robert Clark. Putin is laughing in our faces. And he asks, why hasn't Trump acted to cut Russia on? off from the US-led global financial markets. This, this, after everything that's happened, you know, freezing Russian reserves, disconnecting Swift, stopping debit and MasterCard from working in Russia, all of this. But apparently, we haven't actually done anything in that direction yet.

I mean, I just, I'm just, I read that comment and I was. just astonished. And I think it sums up for me the quality of the sanctions debate. Now, some people just don't see to understand that we've done every possible sanction that we rationally could do. But there's nothing just rational about this, but conceivably could do. And it hasn't worked. Anyway, that's me. This is where we fit. I think we finish. All right. Thank you, Stanislav. Thank you. Take care.