Category: Russia

A customer holds bread rolls as he stands with a shopping cart in the baked goods area inside a Perekrestok supermarket in Moscow. Consumers are retrenching after the ruble lost almost half of its value against the dollar in the past 12 months. Photographer: Andrey Rudakov/Bloomberg (Bloomberg) — Russian households are bearing the brunt of the blowback from the crisis in Ukraine and a tailspin in oil prices, setting the stage for the biggest drop in consumption in more than two decades that will deepen the country’s recession. Crushed by a 44 percent slump in the ruble in the past year as prices soar, retail sales are set for what Otkritie Capital predicts will be their biggest decline since the breakup of the Soviet Union in 1991, when savings were wiped out and households endured food shortages and hyperinflation. That’s unnerved consumers like Svetlana Korotkova, who’s stockpiling cereals and […]

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Photo As fighting intensified along a broad area of eastern Ukraine on Friday, a Ukrainian soldier loaded a tank with shells near Donetsk, one of the largest cities in the region where rebels are active. A truce agreement already considered fragile appears even more so Credit Alexei Chernyshev/Reuters ARTEMIVSK, Ukraine — As fighting erupted throughout eastern Ukraine on Friday before a cease-fire begins on Saturday night, the United States accused Russia of joining separatist rebels in an all-out attack on Ukrainian forces around the contested town of Debaltseve. When the pact was signed with a two-day window before the truce, some last-minute jockeying for position was expected. But the intensity and scope of the violence raised concerns that the agreement signed this week, rife with ill-defined and ambiguous provisions, might prove as ineffective as the first cease-fire pact, signed in September. Artillery shelling and gunfire reverberated in the area […]

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Given the impact of sanctions, low prices and the absence of any large projects expected to come online, oil production in Russia will drop in 2015 by 70,000 barrels a day, according to a report from the Organization of the Petroleum Exporting Countries. At the same time, production at Bashneft’s Arctic fields in the Nenets Autonomous Okrug is going up. Though Russia plans to maintain production above 10 million barrels a day, it may fall in the coming years if oil prices remain around $50 a barrel for an extended period of time, OPEC said in a monthly report released on Monday. Production is estimated to fall by 70,000 barrels a day, while oil exports will drop by 60,000 barrels a day, according to the report, TASS writes. At the same time, some companies like Bashneft have continued to see steady growth in their output, with production increasing by 15.1 percent on the […]

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(Bloomberg) — OAO Gazprom, Russia’s largest company, has the strength to weather the country’s economic crisis, according to its chief financial officer. The state-run gas exporter cut its debt by 10 percent last year, has a cash pile of about $20 billion and is benefiting from the ruble’s declines, Gazprom’s Andrey Kruglov said. The company’s board will review its 840 billion ruble ($13 billion) budget for this year later this month and Gazprom plans “additional stress tests” using oil at $40 and $50 a barrel, Kruglov said in an e-mailed response to questions. The company sees no need to ask for state aid, he said. Russia economy has been whacked by the collapse in oil and the plunge in the ruble, yet export-focused companies like Gazprom are seeing profits supported because they earn revenue in dollars while paying most costs in local currency. That’s helping to offset oil’s drop, […]

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Russia’s finance minister expects low oil prices to have widespread economic impacts. (UPI/Shutterstock/ekina) Low oil prices may have an aggregate negative impact on the health of the global economy, Russian Finance Minister Anton Siluanov said Tuesday. Siluanov told reporters from the sidelines of the summit for the Group of 20 major economies in Istanbul the impact of low oil prices, for importers and exporters alike, would be negative . "The cumulative effect from the current steep fall of prices for resources may enfeeble the aggregate demand in world economy and this in turn will slow down its growth rates," he said. A blog posted last week by economists at the International Monetary Fund found low oil prices will boost economic growth short-term, as consumers save on energy costs, but mid-term risks are present in terms of national monetary policy planning. Exporters will lose and importers will win in the […]

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A week ago we explained that yet another conspiracy theory, one involving virtually every geopolitical hotzone, from Saudi Arabia, to Russia, the United States, Qatar, Syria, ISIS, and Ukraine, has become fact when our speculation from last September , namely that the plunge in oil was an choreographed move between the US and the Saudis (even if Kerry realized – we hope – that it meant a recession for the US energy producing states and a collapse in the only vibrant US industry of the past decade: shale), one seeking to dislodge Russian control over the Syrian government and to facilitate the passage of a Qatar pipeline under Syrian territory. This is what the NYT said: “Saudi Arabia has been trying to pressure President Vladimir V. Putin of Russia to abandon his support for President Bashar al-Assad of Syria, using its dominance of the global oil markets at a […]

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Car sales in Russia will probably fall 35 percent this year as U.S. and European sanctions over Ukraine and a ruble collapse batter the economy and raise prices, according to Continue Reading

OAO Rosneft Chief Executive Officer Igor Sechin, a long-time associate of President Vladimir Putin, discussed the tax regime with Russia’s president last week. Photographer: Andrey Rudakov/Bloomberg (Bloomberg) — Russia, where energy production provides more than half of state revenue, is preparing for a battle with oil producers over taxing the country’s most vital industry. Oil’s rout has made an agreement last year, which reduced export taxes in return for higher levies on extraction, unworkable because the plan was based on $100 a barrel crude. Producers led by state-controlled OAO Rosneft have proposed changes to the tax regime, Deputy Energy Minister Kirill Molodtsov said in an interview. On the brink of its first recession since 2009, Russia’s state coffers are being depleted by lower energy revenue as sanctions and a plunging ruble put further pressure on the economy. While the government must maintain funds from oil, it can’t afford to […]

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