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.
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Mar 08
20220
commentsBy The Minister of Capitalism
In News
Tags Market Commentary oil russia sanctions stock market
Russia Threatens $300/Barrel Oil if The West Cuts Energy Supplies to Russia
In response to sanctions imposed,
Russia threatens that oil could skyrocket to $300/Barrel,
effectively crushing the European economy.
If governments follow through on threats to stop buying energy from Russia, Western countries might face oil prices of over $300 per barrel and the eventual shutdown of the main Russia-Germany gas pipeline, a senior minister said on Monday.
On Monday, oil prices rose to their highest level since 2008 after US Secretary of State Antony Blinken indicated the US and its European partners were considering blocking Russian oil imports.
“It is very evident that rejecting Russian oil would have disastrous effects for the world economy,” Russian Deputy Prime Minister Dmitry Rogozin said.
In a statement shown on state television, Minister Alexander Novak stated.
“The price increase would be unpredictably high. It would cost at least $300 per barrel.”
According to Novak, replacing the volume of oil received from Russia would take more than a year, and Europe would have to pay much higher rates.
“European leaders must be honest in their warnings to people and consumers,” Novak added.
“Go ahead and reject Russian energy supply if you want to. We’re prepared for it. We know where the volumes may be redirected.”
Novak said Russia, which provides 40% of Europe’s gas, was fully complying with its responsibilities, but that it would be absolutely within its rights to react against the European Union after Germany blocked the Nord Stream 2 gas pipeline’s certification last month.
“We have every right to take a matching decision and impose an embargo on gas pumping via the Nord Stream 1 gas pipeline in connection with… the imposing of a restriction on Nord Stream 2,” Novak added.
“We haven’t made such a choice yet,” he remarked. “However, European politicians’ words and charges against Russia drive us in that direction.”
JP Morgan estimates that Russia produces 12% of the world’s total supply of oil. But almost half of what Russia produces goes to Europe, verses only 3% going to the United States.
As for natural gas, Russia produces about 17% of the world supply and about 40% of that goes directly to Europe as well.
If the Russians were to cut off supply in retaliation, it would put all of Europe in an incredibly tough position.
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