Russia

Moscow finds oil and vodka make a poor cocktail

21 May 2020

The former owners of Yukos, the energy group founded by Vladimir Putin foe Mikhail Khodorkovsky, are going after the Kremlin by grabbing trademarks for brands like Stolichnaya. These won’t make up for their lost $57 bln but may give aggrieved investors some negotiating leverage.

Russia’s oil-and-virus airbag is robust but finite

24 April 2020

The double whammy of a crude price collapse and Covid-19 could cause a hefty budget deficit. Moscow’s $170 bln wealth fund can plug a hole worth 5% of GDP if need be. The issue is more the optics of raiding the piggy bank while looking relatively stingy on subsidising wages.

Viewsroom: The F’d up oil market

23 April 2020

Breakingviews columnists in London, Mumbai and Brooklyn discuss what’s going on in the global energy markets amid the coronavirus crisis, as well as Facebook’s big Indian deal and the U.S. government’s attempt to prop up small businesses with the Paycheck Protection Program.

SEC puts small plug in oil ETF loss gusher

21 April 2020

The U.S. agency has stopped USO, a popular exchange-traded fund used by investors to bet on oil, from creating new shares. Stemming the fund’s growth may help trading in a futures market wracked by negative prices. But it won’t stop its investors facing huge losses.

Oil’s big crash is more rational than it looks

20 April 2020

U.S. one-month crude futures went below zero for the first time ever on Monday. With the May contract about to expire, the slump is partly driven by technical factors. But the wider panic – that recent output cuts won’t stop storage being filled – couldn’t be any more real.

OPEC throws sand in wheels of oil’s runaway train

9 April 2020

The producer group and allies like Russia are set to knock one-tenth off global daily oil output. The cut, which could rise if other countries agree to join in, might start draining the epic glut holding down prices. But it won’t do much if the Covid-19 demand slump persists.

Brazen Trump oil claims may yet fire partial deal

2 April 2020

A day before meeting with beleaguered U.S. crude-industry execs, the American president predicted an epic supply cut by Saudi Arabia and Russia. Yet he may only need a chunk of the 10 mln barrels a day reduction he’s hoping for to keep the U.S. shale industry from total collapse.

Rosneft Venezuela exit is not as good as it looks

30 March 2020

The $41 bln oil giant is selling its operations in the country to the Russian state to avoid more sanctions. Moscow is making a generous share payment but in practice keeps voting control. It’s a cheap way for the government to protect a key asset and send a message to the U.S.

Corona Capital: Ackman’s hedge, Oil stockpiles

26 March 2020

Concise views on the pandemic’s corporate and financial fallout, including investor Bill Ackman’s surprise reversal of fortune, and the U.S. shale oil bailout that wasn’t.

Oil storage crisis is new threat to OPEC

25 March 2020

The double whammy of a Saudi Arabia-led price war and a virus-fuelled collapse in demand points to a huge oversupply of crude this year. Space to store the surplus may run out at this rate. If that’s exhausted, a barrel of the commodity could soon be worth less than $20.

Trump can make oil markets balance in his favour

20 March 2020

To hike low crude prices, the U.S. President needs a big producer to cut supply. He already has leverage over Saudi Arabia and more scope to threaten Russia with sanctions. Add in output curbs by shale, and a path exists to keep American producers afloat but oil values in check.

Viewsroom: Oil shock

12 March 2020

A major rift between Saudi Arabia and Russia has sent oil prices plummeting just as the Covid-19 outbreak saps demand. The fallout is pummeling U.S. shale producers and calling traditional energy-security concepts into question. Plus, market fallout in Japan, China and India.

MbS vs. Putin will be an oil drama in several acts

11 March 2020

The Saudi crown prince and Russian president’s crude supply pact has blown up into a full-on price war. On the face of it, Moscow’s budget means Vladimir Putin is better able to bear extended low prices. But Mohammed bin Salman also has options to keep the wolf from the door.

Big Oil’s wipeout invites a new sort of activist

9 March 2020

Plunging crude prices have sent BP shares down 20%, with Shell and Total close behind. The rout could make it harder for oil majors to shift away from fossil fuels. Dirt-cheap valuations offer a way for activists to push CEOs to cut investment and return cash to shareholders.

Saudi sets global oil a stress test few will pass

9 March 2020

An all-out price war launched by the kingdom crashed the crude price over 20%. Values well below $40 a barrel are a setback for U.S. shale producers, global oil majors, national budgets, and the climate change fight. At least Saudi oil giant Aramco will share the short-term pain.

OPEC Russian roulette yields circular firing squad

6 March 2020

Moscow has rejected the cartel’s pleas for a supply cut to ease a virus-linked demand slump. Given the scale of the oil market imbalance, an inadequate deal was the best that could have been hoped for. But OPEC’s efforts to force the issue look like leaving everyone worse off.

Russia rainy day fund raid sets bad precedent

6 March 2020

The country’s National Wealth Fund may buy the central bank’s 50% stake in Sberbank for $36 billion. It’s a sneaky way for the government to boost spending without breaking its fiscal rules. The danger is that President Vladimir Putin repeats the ruse with other state firms.

OPEC readies knife for oil demand-slump gunfight

3 March 2020

The cartel and its Russian allies are set to curb crude supply again, to counter a virus-induced price fall. But even a 1 mln barrels per day cut may not do the job. To hike prices, OPEC needs Russia to prove helpful, Libya to stay troubled, and the coronavirus to not get worse.

Rosneft’s sanctions yellow card won’t turn red

19 February 2020

The Russian oil giant’s trading subsidiary is the target of the toughest form of U.S. sanctions over Venezuela. Unlike 2018 curbs on Rusal and En+, it shouldn’t hurt Rosneft much. Tougher measures are unlikely given the unwanted surge they might trigger in oil prices.

Russia’s En+ tiptoes between sanction risks

6 February 2020

The metal and energy group will buy VTB’s stake in itself for $1.6 bln. Not having the sanctioned bank as a shareholder is a positive. But with a new 7% stake the En+ chairman is even more incentivised to prevent Russian tycoon Oleg Deripaska from regaining his former influence.