SCW RUSSIAWIRE: “Russia clashes with Western oil buyers over new deals as sanctions loom” – Reuters

File Photo of Oil Wells with Mountains in Background, adapted from image at blm.gov by Steven C. Welsh www.stevencwelsh.info :: www.stevencwelsh.com

“Russian energy majors are putting pressure on Western oil buyers to use euros instead of dollars for payments and introducing penalty clauses in contracts as Moscow seeks protection against possible new U.S. sanctions. … Western oil majors and trading houses have clashed with Russia’s third and fourth biggest producers, Gazprom Neft and Surgutneftegaz, over 2019 oil sales contract terms during unusually tough annual renegotiation in recent weeks. … mirror[ing] a similar stand-off between Western buyers and Russia’s top oil producer, Rosneft. * * *  Russia has been under U.S. and EU sanctions since 2014 when it invaded Ukraine’s Crimean peninsula. The sanctions have been repeatedly widened to include new companies and sectors, making it tough for Russian oil firms to borrow money abroad, raise new capital or develop Arctic and unconventional deposits. * * * … Russia supplies over 10 percent of global oil ….”

Click here for: “Russia clashes with Western oil buyers over new deals as sanctions loom” – Reuters







 

 

SCW RUSSIAWIRE: “Russia Inc. Isn’t Waiting for Central Bank to Brave a Rate Hike” – Bloomberg/Anna Andrianova

“The cost of money is rising for Russians well ahead of any potential central bank move to lift interest rates for the first time in almost four years amid concern the U.S. may impose fresh sanctions. State-run Sberbank PJSC, which holds almost half of all Russian savings, is increasing rates for ruble accounts for the first time since 2014. … [and] pay[ing] consumers more to keep dollars on deposit to stanch an outflow …. One of the country’s five largest mortgage lenders, Raiffeisenbank JSC, is charging more for home loans …. From sausages to gasoline, inflation is on the march …. with the central bank’s benchmark on hold at 7.25 percent since a quarter-point cut in March, rates adjusted for inflation remain among Europe’s highest …. “

Click here for: “Russia Inc. Isn’t Waiting for Central Bank to Brave a Rate Hike” – Bloomberg/Anna Andrianova

 





SCW RUSSIAWIRE: “In Russia, the Corporate Raiders Are Often Cops; Companies face harassment from law-enforcement officials, according to business owners, lawyers and activists” – Wall Street Journal/James Marson, Thomas Grove

Kremlin and St. Basil's at Night

“… Russian companies routinely face harassment from law-enforcement officials seeking to extort money or expropriate businesses, according to business owners, lawyers and activists. One in six Russian business owners is facing criminal prosecution, according to [a Kremlin-launched agency]. …  weaker prices for oil … and Western sanctions in 2014 sent the economy into a recession that it only emerged from last year. … Putin’s authoritarian rule relies on security officials and political heavyweights who use their authority not only to squash political opponents but also to squeeze companies for payoffs, seize them on behalf of rivals or take them over for themselves, critics say. … mak[ing] changes to the justice system potentially perilous. … [P]eople who should be building Russia’s economy are losing their businesses and their freedom. Russian courts found 99.8% of defendants guilty … and are ripe for hijacking using fabricated cases …. Resisting can be risky and often ends with the company being destroyed anyway. ….”



Click here for: “In Russia, the Corporate Raiders Are Often Cops; Companies face harassment from law-enforcement officials, according to business owners, lawyers and activists” – Wall Street Journal/James Marson, Thomas Grove



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NEWSWATCH: “Putin’s Success Masks Russian Weakness; Things are breaking his way. But if China is a tiger, Russia is a pussycat on stilts” – Wall Street Journal/Walter Russell Mead

“Despite … Putin’s successes, Russia remains weak, and its leverage over other nations is limited. China can woo its neighbors with multibillion-dollar projects like its ‘One Belt, One Road’ trade initiative. Russia has much less to offer: If China is a tiger, Russia is a pussycat on stilts. … Putin can obstruct Germany’s faltering European project, but he lacks the resources to offer an alternative. In the Middle East, the Kremlin’s position depends on American forbearance. If … Trump decides to make opposing the Assad regime a crucial part of his anti-Iran strategy, … Putin may have to stand by and watch his client fall. … developments at home counsel restraint as well. … Putin’s string of dramatic foreign-policy successes has shored up his domestic popularity, [but] Russia’s sclerotic economy and corrupt social order ensure that the foundations of his power remain weak. … Putin has made Russia great again on the international stage, but the Russian people would rather see him use that daring and finesse to improve the situation at home.”

Click here for: “Putin’s Success Masks Russian Weakness; Things are breaking his way. But if China is a tiger, Russia is a pussycat on stilts” – Wall Street Journal/Walter Russell Mead

 







 

NEWSWATCH: “Uber, Yandex combine ridesharing and UberEATS in Russian markets in a $3.72B JV” – TechCrunch

Map of Former Soviet Union, CIS, Western Portion, adapted from image at cia.gov

“As Uber continues to work through a huge amount of internal management turmoil, the company is also consolidating and rationalising more of its international business. Today, the company announced that it will be combining its rides-on-demand business and UberEATS, its food ordering and delivery business, in Russia and neighboring markets with Yandex.Taxi, the ridesharing business built up by the Russian search giant over several years and the current leader in the market, in what will be a separate, joint venture valued at $3.72 billion.

The deal — which will cover operations in Russia, Kazakhstan, Azerbaijan, Armenia, Belarus and Georgia — is expected to close in Q4 of this year and has already been approved by the boards of both companies. It’s a substantial operation. Currently it covers 35 million trips each month across 127 cities, with the bulk of those coming from the Yandex.Taxi part of the JV; Uber was only in 21 cities. …”

Click here for: “Uber, Yandex combine ridesharing and UberEATS in Russian markets in a $3.72B JV” – TechCrunch/ Ingrid Lunden





IMF: Russia still facing risk from low oil prices Country remains in recession for 2016, but returns to slow growth by next year.

Kremlin and Saint Basil's At Night

Russia’s economy returns to modest growth next year, but faces medium-term risks from volatility in crude oil prices, the International Monetary Fund said.

An IMF assessment found the Russian economy contracted by 3.7 percent last year because of the collapse in crude oil prices. The economy remains in recession this year before growth resumes at an estimated 1 percent next year. * * * [OPEC] said it expected Russian oil supplies would increase slightly to average almost 11 million barrels per day in 2016, a level that’s higher by 10,000 bpd from the previous estimate. More narrowly, however, second quarter output was 40,000 bpd lower than the first quarter average.

Click here for UPI: “IMF: Russia still facing risk from low oil prices; Country remains in recession for 2016, but returns to slow growth by next year”