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Saudi Arabia to Invest up to $10 Billion in Russia

MOSCOW—Saudi Arabia has signed a commitment to invest up to $10 billion in Russia, the Russian Direct Investment Fund said Monday. Russia’s latest pact with its closest oil-producing rival marks Moscow’s efforts to replace Western funding, which has been hit by sanctions , just a few days before a summit of five major emerging economies, known by the acronym of Brics, to be held in Russia’s town of Ufa. The majority of the $10 billion from Saudi Arabia’s sovereign-wealth fund, Public Investment Fund, will be spent on Russia’s agricultural projects, as well as on medicine, logistics, and the country’s retail and real estate sectors, RDIF chief Kirill Dmitriev told The Wall Street Journal. The agreement was reached after a “great” contribution from Mohammad bin Salman Al Saud, Deputy Crown Prince of Saudi Arabia, who met Russia’s President Vladimir Putin during an annual economic forum in Saint Petersburg in June, […]

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Russia Seen as Biggest Oil-Market Loser When Iran Comes Back

Iranian Oil Minister, Bijan Namdar Zanganeh. Photographer: Atta Kenare/AFP/Getty Images In Iran’s push for a nuclear deal, it’s had few better allies than Moscow. But if an agreement is reached this week, President Vladimir Putin’s regime will have at least one reason to reflect on its support. Russia, which vies with Saudi Arabia and the U.S. to be the world’s largest oil producer, has the most to lose when Iran returns to the global energy market, according to a dozen analysts and executives at oil companies, banks and trading houses interviewed by Bloomberg. “Iran is going to be competing in Europe head-on with Russia,” said Ed Morse, head of commodities research at Citigroup Inc. Iran has been barred from selling oil in Europe since 2012 when the European Union imposed a ban on crude imports. Coupled with tougher U.S. sanctions making it more difficult to buy Iranian oil with […]

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Russia mulls new sanctions against Western countries, Finland a possible target

Russian President Vladimir Putin speaks at a Security Council meeting in the Kremlin in Moscow, Russia, Friday, July 3, 2015. (Alexei Nikolsky/RIA-Novosti, Kremlin Pool Photo) MOSCOW — Russia will consider new selective retaliatory measures against some specific Western countries, the nation’s security chief said Friday, pointing at Finland as a possible target. The tough statement appears to herald a new round in spiraling Russia-West confrontation over Ukraine. It followed a session of Russia’s Security Council chaired by President Vladimir Putin, who vowed to firmly resist Western pressure and ordered to draft a new response. Russia may, for example, revise favourable conditions for Finnish timber traders in response to Helsinki’s refusal to issue a visa to the Russian lower house speaker, the council’s secretary, Nikolai Patrushev said. He added in televised remarks that Russia wouldn’t necessarily make the move, but wants to consider this and other retaliatory measures. Finland has […]

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Ruble Heads for Weekly Slide on Oil Before Fitch Rating Decision

The ruble fell as the biggest weekly drop in oil prices in almost three months outweighed optimism Fitch Ratings will retain Russia’s only investment-grade rating. The currency weakened 0.5 percent to 55.824 per dollar as of 5:49 p.m. in Moscow, heading for a weekly decline of 1.9 percent. Brent crude retreated 1.1 percent, poised for a 3 percent decrease in the last five days. Government bonds, known as OFZs, slid. The Russian currency has dropped 12 percent since May 18 as the central bank bought foreign exchange to replenish its reserves, adding to the impact of interest-rate cuts this year. Fitch is the only one among the three major rating companies to keep Russia at investment grade. Finance Minister Anton Siluanov said July 2 he doesn’t expect the agency to revise that rating on Friday. “Nobody is counting on the Fitch downgrade at the moment, so if it happens, […]

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Ruble’s Top Forecaster Sees Deeper Rout as Companies Repay Debt

Sanctions are once again catching up on the ruble. While still the best performer in the world this year, no emerging-market currency has fallen more in the past month as the effect of rebounding oil prices faded. Approaching foreign-debt payments and a shrinking economy probably mean it has a further 10 percent to drop this quarter, according to BNP Paribas SA’s Piotr Chwiejczak, the most accurate ruble forecaster in the four quarters through June 30. After a year of sanctions over Ukraine, Russian corporations remain shut out of foreign capital markets, meaning someone needs to sell rubles every time an international debt is paid. As well as a corporate bill this quarter that’s more than half as big again as the previous three months, the ruble is also under pressure as the Bank of Russia continues to buy foreign exchange, fueling speculation the government is demanding a weaker currency. […]

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Ruble Falls as Oil Offsets Data Hinting Russia Slump Not So Deep

The ruble fell after its biggest advance in two weeks as declining oil prices overshadowed data showing the nation’s economic slowdown isn’t as deep as predicted. The currency retreated as much as 0.7 percent and traded 0.1 percent lower at 55.3780 against the dollar by 3:36 p.m. in Moscow. Turmoil in Greece pushed the price of oil, Russia’s main export earner, down 1 percent in London. Government bonds rose for a second day as the Finance Ministry sold all 15 billion rubles ($271 million) of December 2017 floating-rate notes it offered. While there are almost no direct ties between the Russian financial sector and Greece’s, the ruble has suffered from receding appetite for riskier assets. Data on Wednesday showed a $5 billion upward revision of Russia’s current-account surplus in the first quarter, while the purchasing managers’ index for June rose to 48.7 versus an estimate of 48. Levels under […]

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Russian, Ukrainian gas talks collapse

Natural gas talks between Russia and Ukraine collapse in Vienna after Kiev balks on price offer. File Photo by UPI/Ivan Vakolenko VIENNA, July 1 (UPI) — European leaders said they’d get to work on proposing new strategies after natural gas talks between Russia and Ukraine collapsed in Vienna. European Commission Vice President Maros Sefcovic met in Vienna with Russian Energy Minister Alexander Novak, his Ukrainian counterpart, Vladimir Demchyshyn and Andriy Kobolev, the chief executive officer at Ukrainian energy company Naftogaz. The energy relationship between Ukraine and Russia has been strained at least since 2006, when Ukrainian debt issues prompted Russian energy company Gazprom to cut gas supplies through Ukraine. The European economy gets about a quarter of its natural gas from Russia, though most of that runs through the Soviet-era pipeline network in Ukraine. The European Commission has acted as a mediator to bilateral talks that began in March […]

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China starts work on Russian gas pipeline

China starts work on natural gas pipeline extending to Russia, touting the low-carbon benefits of switching away from coal. File Photo by UPI/Hamid Forotan/ISNA BEIJING, June 30 (UPI) — Construction on the Chinese side of a natural gas pipeline linking to Russia began in western Heilongjiang province, a Chinese energy company said Tuesday. Chinese Vice Premier Zhang Gaoli gave the ceremonial order to start construction on the pipeline during a video conference with Russian Prime Minister Dmitry Medvedev , the China National Petroleum Corp. said. Russian energy company Gazprom has a 30-year sales agreement with CNPC that calls for 1.3 trillion cubic feet of natural gas per year through the pipeline. With a European economy looking to break the Russian grip on the region’s energy sector, the Kremlin has shifted focus on building successful trade relations with Asia-Pacific economies. Gazprom in early 2015 received a AAA rating , the […]

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Russia Seen Extending Oil-Sales Lead With Second China Pipeline

Russia is set to strengthen its position as the biggest oil supplier to China in the coming decade with a planned second pipeline link to Chinese refineries, according to a unit of Fitch Group Inc. A construction contract was signed between two units of state-run China National Petroleum Corp. for a domestic pipeline carrying Russian crude, the country’s official Xinhua News Agency reported June 26. The 955 kilometer (594 mile) facility from Mohe to Daqing in northeast China will have an annual capacity of 15 million metric tons, it said. Russia in May surpassed Saudi Arabia as China’s leading crude supplier for the first time in almost a decade as a global fight for market share intensified. The Asian nation’s increasing reliance on oil from its northern neighbor also benefits a Russian economy weakened by American and European sanctions over Ukraine and a collapse in the ruble. “The promise […]

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Ruble Seen Extending Worst Drop Since January on Debt, Greece

The ruble extended its biggest monthly drop since January, with PAO Rosbank, Credit Suisse Group AG and Renaissance Capital seeing more weakness in the third quarter because of the crisis in Greece and external debt payments. Russia’s currency retreated less than 0.1 percent to 55.764 against the dollar at 4:45 p.m. in Moscow. The ruble is headed for a 6.2 percent drop this month, the most since January, while Brent crude is 4 percent weaker in June. Bonds gained as the Finance Ministry said it plans to sell 275 billion rubles ($4.93 billion) of debt in the third quarter, the most since the first three months of 2014. The rising likelihood Greece will leave the euro region is one more reason to be wary of the Russian currency. Oil-price risks and looming foreign-debt payments, in addition to the central bank’s foreign-currency purchases, will continue exerting pressure on the ruble […]

Posted On : Published By : Tom Whipple