Ukraine/Russia

Oil self-sanctioning is unstable weapon for West

3 Mar 2022

Traders and utilities are refusing to buy crude and gas from Russia, even though sanctions allow it. Insofar as this turns up the heat on the Kremlin, U.S. and EU leaders may not mind. The danger is that spiking prices alarm voters and lead to strains in the Western alliance.

West’s best cyber move is to stick to defence

3 Mar 2022

Malware attacks on Ukrainian banks and state agencies make better protection for governments and companies essential. Western nations may consider retaliation. Given the shortage of cyber experts and the risk of badly targeted strikes, they’d be better off focusing on defence.

Russia financial fallout contained, for the moment

3 Mar 2022

The imposition of sweeping financial sanctions by the West to punish President Vladimir Putin’s invasion of Ukraine didn’t result in a Lehman-like moment in debt and equity markets. But there are still many unknowns to fret about, our columnists say in the Viewsroom podcast.

China’s Belt and Road strafed by Vladimir Putin

3 Mar 2022

As Russia’s president intensifies shelling of Ukrainian cities, Beijing’s infrastructure and technology push into eastern Europe looks increasingly vulnerable. That’s bad news for Chinese trade security. It also could further slow its shrinking investment across the region.

ECB’s inflation problem has bigger Ukrainian twist

2 Mar 2022

Christine Lagarde faces the same commodity price surge as her Canadian peer, who just hiked interest rates, and Fed Chair Jerome Powell, who is set to do the same. But a less robust euro zone economy is more exposed to the war on its doorstep. Her least bad option is to dawdle.

Vladimir Putin tests even Wall Street’s values

2 Mar 2022

American banks like Goldman have earned nearly $500 mln in investment banking fees since Russia annexed Crimea in 2014. They're not known for taking principled stands when money is at stake. With even oil giants responding to Putin's aggression, though, this could be the moment.

Russia exodus tests fund managers’ liquidity limit

2 Mar 2022

Western funds worth over $4 bln have suspended redemptions after Moscow froze equity trading, while MSCI may kick the country out of its emerging market benchmarks. The crisis once again exposes the flimsiness of asset managers’ promise that customers can sell when they want.

India’s Russian romance will be hard to stifle

2 Mar 2022

New Delhi is under pressure to join others aligning behind Ukraine. Beyond protecting its defence-equipment supplies, however, the ties to Moscow help check China’s influence. And the energy transition even makes a case for the oil-hungry nation to deepen the relationship.

Oligarch sanctions’ devil no longer in the detail

1 Mar 2022

Brussels froze assets of Russian billionaires like Alexei Mordashov and Mikhail Fridman. Unlike U.S. sanctions, their companies don’t automatically get hit. Even so, counterparties may in any case decide steel group Severstal and investor LetterOne are too toxic to deal with.

Ukraine war is tectonic shift for global finance

1 Mar 2022

Investor turned anti-corruption campaigner Bill Browder joins Dasha Afanasieva on The Exchange podcast to explain why tougher sanctions from the West, including freezing oligarch assets, threaten Russian President Vladimir Putin’s grip, and cripple the country’s economy.

How Europe can kick its Russian gas habit

1 Mar 2022

Conflict in Ukraine shows the folly of the continent depending on gas from Moscow. Speeding up renewable energy would help. To get to zero in a decade, however, Europe will also need other sources of gas, more nuclear power, multi-nation coordination and even consumer rationing.

Oil lubricates Beijing’s Russian tightrope

1 Mar 2022

China relies on crude from the now pariah state for nearly a fifth of total imports. Though the pair can sidestep Western sanctions on Moscow and settle most transactions in yuan, being too helpful could backfire on Beijing. Its banks will be caught in the crossfire either way.

Russian economic collapse will be hard to avoid

28 Feb 2022

The central bank more than doubled its main policy rate to 20% to support the plunging rouble. It won’t be enough. But further hikes or capital controls would compound pain in an economy where Western sanctions are spurring a run on banks. Moscow has few viable policy options.

Capital Calls: Buffett, Sanctions, Defence, Canada

28 Feb 2022

Concise views on global finance: The Oracle of Omaha has seen value in his company’s own stock; Switzerland breaks with traditional neutrality over Ukraine; military-equipment stocks are surging; and Ottawa may let the Rogers-Shaw telecom merger follow a discouraging U.S. path.

Investors in Russia face mark-to-no-market problem

28 Feb 2022

The rouble tanked and Moscow’s bourse froze after the West intensified sanctions against President Vladimir Putin. Money managers and foreign companies face the prospect of writing off Russian assets. Uncertainty about who bears those costs will ricochet around global markets.

Germany is turning fiscal exceptions into the rule

28 Feb 2022

Chancellor Olaf Scholz will hike defence spending to 2% of GDP and invest 100 bln euros in the military. A historic foreign-policy shift is just the latest instance of Berlin finding ways around its budget rules. Scrapping them would be simpler given a looming energy transition.

BP’s bruising Russian exit almost worth the pain

28 Feb 2022

The UK oil giant is getting out of its 20% stake in $39 bln Rosneft. Russia’s pariah status maximises the hit to its income statement. But the crisis has forced BP to take a step that could eventually allow investors to take a more generous view of its green transition.

Sanctions shock-and-awe reverberates beyond Russia

27 Feb 2022

Western allies will limit Moscow’s ability to use its currency reserves and kick some of the country’s banks out of the SWIFT payment system. While details are vague for now, it looks like a targeted attempt to undermine Russia’s financial system. Other countries, notably China, will take notice.

Russia is dry run for bigger China sanctions test

25 Feb 2022

The threat of penalties didn’t stop Vladimir Putin from invading Ukraine. Sanctions would have even less chance of preventing China from taking control of Taiwan. The deeper the trade ties, the greater the chance of self-harm. And China has a head start in creating workarounds.

Biden’s fossil-fuel enmity backs him into a corner

25 Feb 2022

The U.S. president’s climate stance has made him few friends in the oil patch. But U.S. drillers can fill gaps caused by Russia’s invasion of Ukraine. Expediting applications and rolling back regulations is a climbdown, but it would curb two foes: rising prices and low popularity.