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Comment by blackoil | Hacker News Reader

I am curious about these statements. Europe, China and India are still buying oil and gas from Russia. They can still import from China/India. Why would the economy collapse?

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Europe is planning to sharply reduce their oil & gas imports so this can't continue to be used as a lever against them. Every EV, every electrified house, etc. lowers demand for Russian petroleum. Similarly, they have a lot of other exports and as each of those is replaced by purchases elsewhere they'll have to work harder to re-enter the markets after hostilities end. There are also some big challenges for certain sectors: for example, after watching the current massive under-performance, how many places are going to be jumping at a chance to buy their weapons systems?

Also, remember that while China and India can choose to continue receiving exports they didn't pay as much as Europe did _before_ the war. If Russia has reduced itself to one or two potential buyers, those buyers have the power to dictate pricing well under market and the financing options are going to be very much not in Russia's long-term interests. China has a strategy they've used on smaller countries where they offer aggressive loans for projects and then take control of infrastructure / resources if the borrower defaults, and I'd be exceedingly unsurprised if some Chinese companies end up doing something similar here.

Their entire supply chain from cars to planes to military goods to computers and software relies on the west. Their best people have already left and more will leave soon.

In some sense they could survive on a war footing (i.e. people won’t starve) but their economy will take decades to recover even if sanctions are lifted soon. They lost 25% of their wealth in a few days (rubble) and don’t even have a functioning stock market.

This is already a catastrophe for Russia.

The Russian government sadly already thought of that. They have already set up parallel supply chains for their planes, military goods, cars, softwares and computers. For planes, it's through domestic industry being kept isolated for military reasons. For military goods, it is all made in CIS countries and use no foreign (except maybe Chinese? Not sure) critical components. For cars, they have begun to import Chinese cars already. For software, piracy solves the issue. For computers, they have domestic low performance processors with already functional x86 emulation, as well as the option to buy Chinese chips.

Most of their civilian planes are Boeing and Airbus, then much further down in numbers Tupolev et al. While there had been efforts to revive civilian aircraft industry, the only recent model is the Sukhoi Superjet 100, which is relatively small and limited to regional flights.

It is not absolutely necessary to use Russian-owned planes for civilian aviation. Foreign airlines (Chinese, Indian, etc...) can take over the routes.

It is only necessarily for regional flights.

Maintenance needs to be done on Russian airports in any case. That's significantly more expensive now in the best case, impossible in the worst.

So far there have been no such sanctions, and there doesn't seem to be any plans for it. Foreign airlines are allowed to order parts into Russia for their own use just fine.

In the worst case, the airlines will have to transport the parts to Russia themselves, which is not much more costly than getting Boeing to do it.

Right. The main trouble with planes is how advanced avionics and engines have become. That, and whoever you’re flying to needs to certify the aircraft; China started the 737Max grounding, they’re no aviation regulatory paper tiger.

All Russia has the domestic capability for is going back to long range four engine planes, which will increase maintenance and fuel consumption.

Let’s see how well they do; judging by their war planning, it won’t go as well as you expect.

Oh don't think I am under the illusion it will go perfectly, I think it will have grave disasters. I just don't think it will have a significant impact on their warmaking ability, and that eventually they will mostly recover.

> Their entire supply chain from cars to planes to military goods to computers and software relies on the west.

Explainer-Importance of Russian Titanium to Global Industry

https://money.usnews.com/investing/news/articles/2022-03-01/...

Sure it is absolutely going to be difficult for the west as well, but not catastrophic.

So many reasons. Fossil fuels are half of their economy at best. As a single market, China doesn't pay them much per barrel. Their oil production per barrel is expensive. Their drilling industry uses Western tech and resources, including Western technicians. I have a difficult time imagining any country doing well with their imports and exports reduced by 50-60%.

oec.com has lots of info per country on what makes up their economy.

Europe and the USA simply have no alternative to Russian oil and natural gas. They may have in 20 or 30 years from now if they start investing in it several billion dollars per year right now. That's why gas prices in Europe and oil prices in the USA are skyrocketing these days.

> Europe and the USA simply have no alternative to Russian oil and natural gas.

Russian oil is already going unsold, without formal sanctions.

Because you can't just shift all of your supply chains to cut off all dependence on imports from Europe overnight.

In the long term, Russia can survive by selling gas to Europe, and buying goods from China. In the short term, there's an absolute madhouse in the domestic markets.

Unlike in the Soviet days, when most of its domestic products were locally produced, Russia has de-industrialized, and all of its supply chains have become incredibly dependant on the West. It can't turn back the clock 40 years overnight.

Europe diversifies from Russia as we speak, and China was already buying Russian hydrocarbons at or below cost.

Aside from the economic disruption everyone else has mentioned, there's also the incredibly expensive war they are currently engaged in. Income is plummeting while expenses are going through the roof.

Americans think denying people Iphones is a great punishment. In reality Russians will save a lot of money buying Oppo and Vivo phones from China that function just as well for 99% of users.

They will use Linux, build their own alternatives for Google/Youtube or use Chinese sites. It will all be fine. In fact their data will be safe from Google and Meta.

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