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Coinbase & Binance Pressured to Freeze Russian Accounts

Coinbase & Binance Pressured to Freeze Russian Accounts

Coinbase and Binance reject demands for a blanket ban on Russian users,
as critics claim their platforms are being used to side step Western sanctions

By continuing to do business in Russia, the two exchanges are deviating from mainstream finance, according to anti-money laundering specialists and European authorities, weakening Western efforts to isolate Moscow.

In a series of tweets on Friday, Coinbase Chief Executive Officer Brian Armstrong stated, “We think everyone deserves access to fundamental financial services until the law states differently.”

However, if the US government decides to implement a blanket ban, the exchange will enforce it, according to Armstrong.

In an emailed response to Reuters, a representative for Binance, the world’s largest crypto exchange, stated, “We are not going to arbitrarily suspend millions of innocent consumers’ accounts.”

Both crypto exchanges have said that they will abide by government sanctions.

Major cryptocurrency exchanges have been asked to prohibit their services in Russia in order to prevent sanctioned organizations from utilizing cryptocurrencies to store their assets. The exchanges, on the other hand, claim to be well-equipped to prevent misuse of their systems.

Following Russia’s invasion of Ukraine, the price of bitcoin has risen as people in those nations want to keep and move money in anonymous and decentralized crypto.

This is a perfect example of how a decentralized currency can be used outside of government control.

We can see how the same financial instrument can be used to both: fund Ukrainian resistance, allow Russians to transfer wealth around imposed sanctions.

That is, of course, so long as the exchanges themselves are outside the government’s reach.

 

Coinbase & Binance Pressured to Freeze Russian Accounts

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Second Biggest Oil Company in Russia Calls for An Immediate End to the War

Second Biggest Oil Company in Russia Calls for An Immediate End to the War

Russian owned Lukoil supplies 2% of the world’s supply of oil and is calling for an end to the war

President Vladimir Putin’s second-largest oil business has broken ranks with him.

Lukoil, which employs over 100,000 people and generates more than 2% of the world’s crude oil, has called for an end to Russia’s conflict in Ukraine.

In a message to shareholders, employees, and customers, the company’s board of directors said it was “asking for the military conflict to be ended as quickly as possible.”

“We send our heartfelt condolences to all those who have been impacted by this tragedy. We firmly support a long-term cease-fire and a peaceful resolution of disputes via serious dialogue and diplomacy,” the board stated.

Vagit Alekperov, chairman and CEO of Lukoil (LUKOY), is one of Russia’s wealthiest men. According to Reuters, the former Caspian Sea oil rig worker and his deputy, Leonid Fedun, possess the bulk of Lukoil’s shares.

The corporation is Russia’s second largest oil company, behind state-owned Rosneft, with activities in dozens of countries across the world.

It now faces significant difficulties as traders avoid Russian oil for fear of falling foul of Western sanctions, which do not specifically target fossil fuel shipments.

Following the invasion, Lukoil shares listed in London have lost nearly all of their value. On Thursday, trading in the company’s stock was halted.

In the United States, where 230 Lukoil fuel outlets are controlled by American franchisees, the oil giant is already facing demands for a boycott. The majority of Lukoil service stations are located in New York, New Jersey, and Pennsylvania.

Russian billionaires Mikhail Fridman and Oleg Deripaska broke ranks with the Kremlin earlier this week and urged for an end to the conflict. In a message to staff, Fridman, who was born in western Ukraine, expressed his desire for the “bloodshed to halt.”

Fridman is the chairman of Alfa Group, a private corporation with operations in banking, insurance, retail, and mineral water manufacturing largely in Russia and former Soviet republics.

He is also the chairman of Alfa Bank, Russia’s fourth largest financial services company and largest private bank. Sanctions were imposed on Alfa Bank last week, preventing it from raising funds in the US market.

Deripaska built his wealth in aluminium and was sanctioned by the US in 2018.

The crippling sanctions imposed on Russia are having a crippling effect on their economy and are putting increased pressure on Russian business owners who deal in international markets.

And yet the war continues on…at least for the moment.

Second Biggest Oil Company in Russia Calls for An Immediate End to the War

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Job Creation Smashes Expectations

Job Creation Smashes Expectations

Americans return to work,
destroying expectations and indicating the economy is growing stronger.

In February, the US economy added 678,000 jobs, beating experts’ projections.

It was the most productive month for employment creation since July. According to the Bureau of Labor Statistics, the country still needs to add 2.1 million jobs to get back to previous levels in February 2020 level in order to regain all of the jobs lost during the epidemic.

The consensus forecast for the report — 400,000 jobs – was once again off the mark. During the pandemic, the labour market’s erratic changes from month to month made forecasting virtually impossible.

The jobless rate fell to 3.8 percent, which was better than predicted and marked a new post-pandemic low.

The leisure and hospitality industry, which was impacted the most by Covid-related losses, added 179,000 jobs back. But to get back to pre-pandemic levels, the sector will require additional 1.5 million employment.

The majority of the jobs produced in February were in restaurants and bars, as Americans began to mingle more once the Omicron surge receded.

Job growth was particularly robust in professional services, health care, and construction.

Wages were unchanged in February, following a period of rapid wage rise as firms competed for talent and fought to keep current employees despite the persistent labour shortage.

Last month, average hourly wages were $31.58 per hour, barely one penny more than in January, bucking the recent trend.

That’s excellent news for those concerned that growing wages may exacerbate already-high inflation, such as the Federal Reserve.

The robust data released on Friday, which included a new Covid-era low for the unemployment rate, means the Fed’s expected interest rate hike later this month is all but guaranteed.

(We’ve heard that before.)

But a stronger than expected jobs report shows that people are returning to work and that the economy is strengthening.

Job Creation Smashes Expectations

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Big Corporations Are Voluntarily Cutting Off Russia

Big Corporations Are Voluntarily Cutting Off Russia

Even if they aren’t part of the sanctions,
many big companies are refusing to sell their products in Russia,
putting even more strain on the Russian economy

Governments aren’t the only ones squeezing the Russian economy. Dozens of large global corporations are following suit.

Even though they are not compelled to, an increasing number of enterprises are opting to shut their operations in Russia.

Apple (AAPL), Ikea, ExxonMobil, and General Motors are among the companies that have pulled out of Russia.

The corporations express alarm over Russia’s invasion of Ukraine, which has prompted considerable criticism in the United States and across Europe.

It’s not always clear if these big corporations are leaving to comply with official sanctions or for other reasons.

What is known is that there are several commercial reasons to avoid doing business with Russia.

First and foremost, there’s the issue of uncertainty. After all, why in the world would a company want to sell a product only to be paid back with quickly depreciating Russian currency? And why would you ship a car or a smartphone to Russia when you already have a huge demand for your product in western markets?

Sanctions against Russia’s financial industry may make recouping some of those losses difficult. Making things even more difficult for companies trying to conduct business in Russisa, Russia is putting restrictions on money leaving the country, so it’s getting harder to get paid for products already shipped..

“Businesses are asking themselves, ‘Do I want to continue where I don’t know if a contract I sign today will be completed weeks or months from now?'” said Josh Lipsky, director of the Atlantic Council’s GeoEconomics Center. “The Russian financial system is in such a state of turmoil that it is just too unclear. Businesses despise unpredictability and this is unpredictability on a grand scale.”

Even in a crisis like this, the significant number of enterprises leaving Russia is exceptional, according to Lipsky.

“In general, they’ll continue to invest in a market if there are possibilities to earn money,” he added. “However, there is widespread agreement that marketing these items is inappropriate. That’s a unique dynamic I’ve never seen before.”

Economics aside, one can wonder if there isn’t some peer pressure felt by companies still doing business with Russia as they see their competitors leaving …in the form of an unstated social and moral obligation where ceasing business operations becomes a symbolic gesture against the Russian invasion of Ukraine.

Even the Kremlin admits that the acts of firms all around the world are causing an economic catastrophe in its own country.

In a conference call with foreign media, Kremlin spokesman Dmitry Peskov remarked, “Russia’s economy is suffering heavy blows.” On Tuesday, state news agencies TASS and RIA cited Russian Prime Minister Mikhail Mishustin as stating that the Russian government is considering what actions it may take to prevent Western corporations from withdrawing funds from Russia.

One element that makes it simpler for corporations to abandon Russian enterprises is the country’s lack of global economic clout.

According to the International Monetary Fund, Russia’s GDP is around 25% lower than Italy’s and more than 20% lower than Canada’s, despite the fact that both countries have a fraction of Russia’s population.

It is primarily a supplier of energy and other commodities, such as wheat, timber, and a range of metals (including aluminum) – the majority of which are readily available elsewhere.

“There are other options,” Lipsky remarked. “Companies are able to identify those alternative markets and trading partners, as well as satisfy all of their shareholders’ fiduciary obligations.”They’ve decided that risking Russia isn’t worth it.”

In the energy market, there is a distinct aversion to risk. Several western nations have spared Russia’s oil industry from sanctions so far, in the hopes of averting global energy shortages and price rises.

However, despite severe reductions, much of the Russian oil on the market remains unsold. Given the severe restrictions imposed on Russian institutions, traders are unsure if any agreements they make for Russian oil will be able to be completed.

Finding oil tankers ready to call on Russian ports, as well as insurance firms willing to cover the ships and supplies, has been problematic.

All of this has resulted in a “de facto embargo” on Russian oil, according to oil expert Andy Lipow of Lipow Oil.

Big Corporations Are Voluntarily Cutting Off Russia

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SEIZURE: Russian Oligarch’s Yacht Grabbed

SEIZURE: Russian Oligarch’s Yacht Grabbed

Sanctions on Russia become personal,
as countries start seizing assets owned by Russians with ties to Putin.

The French finance ministry said on Thursday that a boat owned by Russian businessman Igor Sechin had been confiscated.

Sechin is the CEO of Rosneft, a Russian oil company. Sechin was sanctioned by the European Union earlier this week, with Putin hailing him as one of his “most trusted and closest aides, as well as his personal friend.”

In January, the yacht “Amore Vero” — which means “True Love” in Italian — landed in the French Mediterranean port of La Ciotat. On April 1, it was supposed to leave the harbour.

In a tweet, French Finance Minister Bruno Le Maire stated, “Thank you to the French customs officials who are executing the European Union’s sanctions on people linked to the Russian regime.”

From 2008 to 2012, Sechin served as Russia’s deputy prime minister. His ties to Putin are “long and deep,” according to the European Union, with the two men in daily contact.

Le Maire revealed earlier this week that France has formed a task group to compile a list of financial assets and luxury items owned by Russians who are subject to EU sanctions.

On Sunday, BP (BP) announced that it will sell its 19.75 percent interest in Rosneft and relinquish two board seats.

Sanctions on Russia are beginning to crush their economy, and further sanctioning their officials is further cutting off their ability to interact financially with the rest of the world.

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SEIZURE Russian Oligarchs Yacht Grabbed

Collapsing Russian Economy Poses Risk of Contagion

Collapsing Russian Economy Poses Risk of Contagion

If the Russian economy implodes,
investors worry about the ripple effect could run through the rest of the world’s financial system…reigniting memories of the Lehman collapse of 2008

New Western sanctions are putting a lot of strain on Russia’s economy. As a result, financial institutions are having to examine how vulnerable they are if the market collapses.

The situation is as follows: According to the Bank for International Settlements, foreign banks have about $120 billion in claims against Russian counter-parties as of September 30, 2021.

Missed payments could build up and cause substantial losses as the ruble falls in value and Russia becomes further cut off from the global financial system.

The two main European banks with the largest operations in Russia, Societe Generale (SCGLF) of France and UniCredit (UNCFF) of Italy, are being scrutinised closely. SocGen’s stock has dropped 25% since Russia’s invasion of Ukraine last week, while UniCredit’s stock has dropped 23%.

The consequences from Russia’s invasion of Ukraine will put pressure on big western European banks’ asset quality, according to Fitch Ratings, and their operations will be put at risk as they rush to comply with international sanctions.

So where’s the chink in the armor? Corporate and investment banking activities, as well as investment portfolios, according to Fitch.

Sanctioned entities may be unable to repay loans, requiring banks to write off part of them.

Compliance with sanctions would also be difficult, according to Fitch, because several of Russia’s largest banks are not part of the SWIFT global payment system.

Societe Generale said in a statement on Thursday that it “is diligently executing the procedures necessary to strictly enforce international penalties as soon as they are made public” and that it “is scrupulously complying with all applicable laws and regulations.”

At the end of last year, the bank reported having about $21 billion in Russian exposure. It did underline, however, that it is capable of withstanding even the worst results.

“The Group has more than enough buffer to withstand the repercussions of a possible extreme scenario in which the Group’s property rights to its banking assets in Russia are removed from the Group,” Societe Generale stated.

UniCredit, which has had a presence in Russia since 1989, stated last week that its Russian subsidiary is “extremely liquid and self-funded,” and that the franchise generates only 3% of the bank’s total income.

Because of the political situation in Ukraine, it backed out of a possible deal for Russian state-owned bank Otkritie earlier this year.

Banks in the United States can be affected as well. At the end of 2021, Citigroup had $5.4 billion in “Russia credit and other exposures,” according to a statement released this week. On Wednesday, Citi’s chief financial officer, Mark Mason, told investors that the firm had been conducting tests to assess the repercussions “under various stress scenarios.”

Since Russia’s invasion, Citi shares have declined by 4%. The KBW Bank Index, which covers banks in the United States, is down about 2%.

It’s significant because: When examining the effects of cutting Russian banks off from SWIFT, Credit Suisse investment analyst Zoltan Pozsar referenced Lehman Brothers’ failure in 2008. He believes the consequences will spread throughout markets, prompting central banks to intervene.

There hasn’t yet been a “Lehman moment” of systemic significance. However, as Russia’s economy falls, it will be crucial to monitor bank communications.

“One of the anxieties,” Robert Sears, chief investment officer of Capital Generation Partners, told me, “is that you don’t know for sure all the repercussions.”

With the global financial system so closely intertwined, it’s not hard to imagine how the ripples caused by a failing economy in a country like Russia could cause a tsunami around the world.

Collapsing Russian Economy Poses Risk of Contagion

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Wall Street Thinks Consumers Are Screwed

Wall Street Thinks Consumers Are Screwed

Wall Street shows where the market is headed as they short the retail sector… hard

Is the American shopper on the verge of tapping out?

Some Wall Street investors tend to believe that buyers are burnt out and have nothing left to spend.

According to a research released this week by S&P Global Market Intelligence, short selling in consumer stocks — effectively betting on the sector’s share prices falling — has reached a new high since January 2021.

“As of mid-February, the consumer discretionary sector remained the most-shorted sector, as short sellers continued to wager that skyrocketing inflation would eat into demand for nonessential products,” the S&P analysts wrote in the report.

This year, retailers Big 5 (BGFV) and Citi Trends (CTRN), electric vehicle charging company EVgo, plant-based food provider Beyond Meat (BYND), and dental braces producer SmileDirectClub have all been aggressively shorted (SDC).

The market is plainly concerned about whether consumers can endure future increases in oil and other commodity costs, as well as the Federal Reserve’s projected interest rate hikes.

The SPDR S&P Retail (XRT) and Consumer Discretionary Select Sector SPDR (XLY) exchange-traded funds have both lost almost 15% this year – falling way more than the rest of the market.

Inflation took a toll on Christmas shopping, resulting in a drop in consumer spending in December.

“The month of December was not especially favorable for retail,” said Phil Orlando, Federated Hermes’ chief equities market analyst. “And I’m being generous. It was a disaster.”

Although spending increased in January, Orlando claims that a large portion of the increase was attributable to the usage of Christmas gift cards, which are reported as retail sales when redeemed.

And now that energy prices are soaring, consumer spending may suffer much more.

With that in mind, Orlando believes consumer stocks will continue to suffer, particularly as increasing gasoline and gas prices, along with the likelihood of higher interest rates, are weighing on consumer confidence.

Furthermore, the pandemic’s stimulus checks have run out.

As a result, consumers would have to either take on additional debt or dip into their savings to maintain their current spending habits.

Orlando figures that the average consumer doesn’t have much buying ammunition left – if any at all.

The result? Retail stocks could crash & burn if consumer spending slows.

“Stocks are not going to recover in a couple of months,” said Phillip Toews, CEO of Toews Asset Management.

“The bear case was that, because to high inflation and increasing interest rates, we would be headed for a bear market before the [Russian] invasion,” Toews said. “Energy prices are now skyrocketing. Consumer equities may be part of a larger sell-off.”

Simply put: Consumer spending is what keeps the economy afloat.

If that’s cut off because of inflation and rising interest rates, the party could very well stop… plunging the economy into a full-blow recession.

Wall Street Thinks Consumers Are Screwed

 

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Wall Street Applauds Powell’s Interest Rate Plan

Wall Street Applauds Powell’s Interest Rate Plan

Powell Suggests a Tiny Interest Rate Increase,
Wall Street’s Ecstasy Pushes The Market Higher

Investors stopped worrying about Russia after Jerome Powell’s remarks on an interest rate hike.

And in the absence of their fear, the party resumed with The Street signaling their high praise of Jerome Powell’s as index prices shot higher.

 

Stocks surged on Wednesday after Federal Reserve Chair Jerome Powell told the House Financial Services Committee that the Fed will likely hike interest rates by a quarter-point next month.

He stated, “I’m inclined to recommend and support a 25 basis point rate rise.”

In late morning trade, the Dow was up roughly 550 points, or 1.6 percent. The S&P 500 climbed 1.5 percent, while the Nasdaq gained nearly 1%.

Investors were concerned that the Fed was going to hike rates more aggressively in response to inflation fears, particularly since oil prices have risen as a result of Russia’s invasion of Ukraine.

Powell, on the other hand, calmed the nerves of his favorite market on Wednesday with his low interest rate increase prediction.

Wall Street couldn’t have received any better news.

Of course, a quarter point bump in interest rates is unlikely to do anything to help curb runaway inflation.

It’s likely Powell’s choosing this route to show he’s still interested in combating inflation but without shutting down the markets full stop with a big interest rate bump.

 

Wall Street Applauds Powell's Interest Rate Plan

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Russian Invasion of Ukraine Intensifies, S&P and DOW Spike Higher

Russian Invasion of Ukraine Intensifies, S&P and DOW Spike Higher

Russia’s war on Ukraine becomes worse.
S&P 500 and DOW Jones: “Meh, let’s get back to what’s really important – chasing all time highs!”

 

Despite a sustained rise in oil prices, stocks climbed on Wednesday, despite the escalating confrontation between Russia and Ukraine.

The Dow Jones Industrial Average increased by 233 points, or 0.7%. The S&P 500 rose 0.5 percent, but the Nasdaq Composite, which is heavily weighted in technology, dipped marginally.

The adjustments came as oil prices continued to rise, building on a big surge from the day before.

Both U.S. oil futures and international benchmark Brent crude futures climbed by roughly 6% apiece. Brent was trading at $112.02 and West Texas Intermediate was at $110.06.

Wall Street wants to take a departure from the defensive playbook and avoid stocks in utilities, healthcare, and consumer staples. In a message to clients, Oanda senior market analyst Edward Moya wrote, “With oil prices and Treasury rates climbing so much today, it’s no wonder energy and financials are leading the open higher.”

The stock market rose as a result of positive corporate news. Ford’s stock rose 4.6 percent after the company said it will divide its electric car and legacy manufacturing divisions into two distinct firms. Salesforce climbed 1.7 percent after reporting fourth-quarter earnings that exceeded expectations on both the top and bottom lines.

On Wednesday, Fed Chair Jerome Powell will give his semiannual monetary policy brief to Congress. Despite the “very unpredictable” impact of the crisis in Ukraine, the Fed’s chairman indicated that rate rises are expected to begin this month, and that the Fed will make headway but not complete a plan to decrease its balance sheet.

“The ultimate conclusion is that we will proceed,” Powell said,”but we will go cautiously as we learn more about the economic repercussions of the Ukraine war.”

Oil’s rise looked to benefit energy companies, with Exxon and Chevron both up nearly 2% in early trade.

However, rising energy costs have heightened fears of inflation and a potential slowdown in the economy. The index’s gains on Wednesday morning pared losses from the previous session, which included a significant increase in oil prices.

“Yesterday’s price action, which saw Fed tightening expectations pushed out, global yields plummet, the US dollar and gold strengthen, and equity markets (ex-Energy) selloff sharply, strongly suggests that investors are increasingly pricing in a potential sharp slowdown,” said Chris Senyek of Wolfe Research in a note to clients.

Government bond yields rose on Wednesday as well. After dipping below 1.7 percent the day before, the benchmark 10-year note recently yielded close to 1.8 percent. Bank stocks looked to benefit from the reversal, with Wells Fargo jumping 2.4 percent.

Investors were on edge Wednesday after news that Russian military had infiltrated Kherson and encircled Mariupol, two crucial cities in the country’s south.

In prolonged trade, earnings lifted numerous other equities. Nordstrom’s stock soared more than 30% after reporting solid results, while SoFi’s stock increased by about 10%.

On the negative, First Solar’s stock dropped more than 15% after the business missed revenue projections and provided poor outlook. After disclosing new financial targets, Citi fell 3.5 percent.

Investors are also anticipating Friday’s release of a critical jobs report. According to ADP, private enterprises in the United States gained 475,000 jobs in February. Dow Jones polled economists, who predicted 400,000. The company also raised its January figures.

The Dow Jones Industrial Average plummeted 597 points, or 1.76 percent, in Tuesday’s trade. The S&P 500 index fell 1.55 percent, while the Nasdaq Composite dropped 1.59 percent. All are rebounding today.

Several IT businesses are slated to report earnings on Wednesday, continuing the earnings season. After the market closes, Okta, Pure Storage, and C3 AI will report. After the bell, ChargePoint is also expected to report.

While the Ukraine battles for its freedom, the financial markets seem indifferent as they continue to lift on any hope of positive news.

 

Russian Invasion of Ukraine Intensifies SP and DOW Spike Higher

 

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Energy Prices Spike: Natural Gas +60%, Oil The Highest Since 2014

Energy Prices Spike: Natural Gas +60%, Oil The Highest Since 2014

As the Russian military rolls closer to Kyiv,
crude and natural gas spike to eye watering levels as the world fears a supply shock.

On Wednesday, as Russia’s increasing military assault in Ukraine raised fears of a supply shock, global crude oil prices soared to more than $110 per barrel and natural gas prices soared to a new high in Europe.

Brent oil futures, the worldwide benchmark, increased by over 9% to $113.65 per barrel, the highest since 2014. Oil futures in the United States rose more than 8% to $112.25 a barrel. Wholesale natural gas prices in Europe soared by 60% to a record high of €194 ($215) per megawatt hour.

This is more than double what it was on Friday.

Louise Dickson, senior oil market analyst at Rystad Energy, stated, “The market fear is here. The first higher price reaction following the commencement of the crisis in Ukraine six days ago is just becoming stronger.”

Western sanctions imposed in the aftermath of the invasion of Ukraine have not directly affected Russia’s energy resources. However, if Russia continues its offensive, the US and Europe may be forced to play this major card.

On Wednesday, White House press secretary Jen Psaki told CNN, “It’s still on the table, it’s not off the table.”

President Joe Biden, on the other hand, does not want to “topple the global oil markets or the global marketplace, or harm the American people more with increased energy and gas costs,” according to her.

Moscow is already finding it more difficult to sell supplies of Russian crude oil to merchants and refineries concerned about getting caught in the crossfire of financial-system penalties. Tanker operators are apprehensive of the threat to ships in the Black Sea, and large international oil firms are abandoning operations there.

brent crude oil price

According to Commerzbank analysts, Russia’s hallmark Urals oil grade was selling at a $18 per barrel discount to Brent crude on Wednesday as customers ignored Russian supplies. According to the researchers, the discount hasn’t been this large since the Soviet Union’s demise.

“Oil price differentials indicate a clear reticence to buy Russian crude,” said Shin Kim, head of oil supply and production research at S&P Global Commodity Insights. “There remains to be [a] danger of new sanctions that might indirectly or directly damage oil purchases or supplies.”

Despite efforts by the West to calm markets, the enormous price increases risk stoking already high global inflation. The United States and 30 other International Energy Agency members approved the release of 60 million barrels of emergency oil reserves on Tuesday, enough to replace about two weeks of Russian oil supplies.

“In the end, this will not be enough to calm the market. It’s a band-aid approach, to be sure.” RBC Capital Markets managing director of global energy strategy Michael Tran said.

Fuel will become more costly throughout the world as a result of the massive price hikes, raising the cost of travel and commuting. They will also raise inflation and may slow economic development, making choices by global central banks to combat increasing prices more difficult.

Investors fear that as a result of the crisis in Ukraine — a critical pipeline route, more Western sanctions that might target Russia’s economy, or retaliation by Moscow — Russian energy exports could be reduced or terminated.

“Buyer interest in Russian oil is dwindling,” according to Commerzbank analysts. “An interruption of Russian oil shipments looks to be increasingly priced in,” they noted.

According to Alex Froley, a market analyst with Independent Commodity Intelligence Services, Russian natural gas is still flowing to Europe. However, he stated that there is “a lot of ambiguity and fear about how things may evolve.”

According to Froley, the United Kingdom has blocked Russian-owned and controlled ships from entering British ports, potentially disrupting liquefied natural gas supplies from Russia, which account for between 3% and 4% of the country’s gas supply.

“Traders may be apprehensive if continental Europe follows suit and imposes a similar embargo on Russian ships,” he warned.

OPEC Sitting On Their Hands

On Wednesday, the Organization of Petroleum Exporting Countries (OPEC) and its allies, including Russia, decided to adhere to their plan of gradually adding oil to the market, despite demand from developed nations to do more to lower prices.

In a statement, the Saudi-led group OPEC said it will boost supply by 400,000 barrels per day in April, a small fraction of Russia’s 10 million barrels per day crude oil output.

“Recent oil market fundamentals and consensus on its forecast pointed to a well-balanced market, and current volatility is triggered by current geopolitical developments rather than changes in market fundamentals,” OPEC stated.

More Iranian barrels might be put on the market as a result of nuclear talks between Iran and the US, but this would not help the situation in the short term.

Toxic Investment: The Exodus From Russia

Many of the world’s largest oil firms are pulling out of Russia or deferring new investments in exploration and development projects.
ExxonMobil said on Tuesday that it was abandoning its last project in Russia, Sakhalin-1, which was characterized as “one of Russia’s largest single international direct investments.”

The project was operated by an Exxon affiliate, and the company’s decision to exit Russia after more than 25 years would mark the end of the company’s involvement in the country.

BP, Shell, and Norway’s Equinor all said this week that they plan to quit their Russian operations, which would cost them billions of dollars. TotalEnergies, a French energy company, has ceased fresh investment.

Energy Prices Spike Natural Gas 60 Oil The Highest Since 2014

 

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