Alex Frangos

There's been a lot of pressure on Russia from European countries and the U.S.

in terms of new sanctions on individual boats in their so-called shadow fleet that they've been using to move oil around the last few years.

There's also been these seizures that the Trump administration has conducted against shadow fleet ships that mostly work in Venezuela but are also tied to some Russian oil shipments.

And then Trump struck this deal with India to lower tariffs there in exchange for India saying they would cut back on buying Russian oil.

So all this has meant that there's all this Russian oil that gets produced, but they have fewer buyers.

And a lot of the oil is being stored on ships floating at sea waiting for a buyer to say, well, if the price gets low enough, we'll buy it.

Yeah.

So normal oil that is sold from non-sanctioned countries sells for something in the $60 to $65 a barrel range.

Russia, in order to sell its oil, has to offer a discount that's as much as $27 per barrel.

So they lose a lot of money compared to back when they were a legitimate member of the global economy.

Yeah, it's a steep discount, but there are fewer buyers because India is saying they're not going to buy as much.

And so then you're left with China.

And there are certain buyers in China who are willing to take it, but not everyone, because the other dynamic here is there's a lot of oil in the world right now.

The oil price in general isn't that high.

So refiners, these so-called teapot refineries in China, the kind of independent, more nimble refiners who buy a lot of illicit oil from places like Russia and Iran and until recently Venezuela, they can afford to say, we'll keep waiting till the price goes down more.

That was Journal Finance Editor Alex Frangos.

Alex, thanks as always.

Thank you.

Warsh is very much the candidate that Wall Street and markets probably are most comfortable with.

He's a former Fed governor.