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Russia’s Putin: ‘No Tragedy’ in Current Low World Oil Price

By Gregory L. White MOSCOW–The recent plunge in the price of oil isn’t a "tragedy" for Russia, which also has enough foreign-exchange reserves to control the resulting decline in the ruble, President Vladimir Putin said Friday. Speaking to reporters in Milan, where he is at a summit meeting, Mr. Putin said that low oil prices might force "corrections" to the budget in Russia but that the government would meet all its obligations for social spending. He also expressed optimism that the oil price would recover as the global economy does. Mr. Putin said that "no serious market participant" is interested in a price below $80 a barrel, given high production costs and budgetary needs in producing countries. Mr. Putin said the ruble’s exchange rate, which has set record lows against the dollar almost daily in recent weeks, ultimately would stabilize. The central bank, while committed to a flexible rate, […]

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Is the oil crash a secret US war on Russia?

Comments (104) A woman pumps petrol into her car. Continue reading the main story Related Stories Could the US start sending its oil overseas? Lower oil prices, reflected in falling petrol prices at the pump, have been a boon for Western consumers. Are they also a potent US weapon against Russia and Iran? That’s the conclusion drawn by New York Times columnist Thomas L Friedman, who says the US and Saudi Arabia, whether by accident or design, could be pumping Russia and Iran to brink of economic collapse. Despite turmoil in many of the world’s oil-producing countries – Libya, Iraq, Nigeria and Syria – prices are hitting lows not seen in years, Friedman writes. Continue reading the main story “Start Quote This is business, but it also has the feel of war by other means: oil” Thomas Friedman New York Times Analysts identify a number of possible reasons for […]

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Russia says it has the right to hit U.S. with sanctions

Russia says it has the right to hit back in response to U.S. sanctions targeting its energy sector. UPI/Dennis Van Tine Deputy Foreign Minister Sergei Ryabkov said the Kremlin likely won’t issue reactive sanctions against the United States, but felt the measures targeting the Russian energy sector were reflexive. "Strictly speaking, we now have every right amid this mass of anti-Russian US sanctions to impose sanctions against the United States non-stop and in all the areas," he told state news agency RIA Novosti . The Russian economy is struggling to cope with sanctions imposed on its energy sector in response the Kremlin’s posture on the conflict in Ukraine. Exports of crude oil, petroleum products and natural gas accounted for nearly 70 of all Russian export revenues in 2013 and the Russian Central Bank said it was struggling to keep Russian inflation in check because of U.S. and European sanctions. […]

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Russia takes EU to court over Ukraine sanctions

Russia state oil company Rosneft is challenging the EU sanctions in court ©Reuters Russia is taking the EU to court over sanctions imposed on some of its biggest companies. The move is a sign of the pain that the companies’ exclusion from global capital markets is inflicting on the Russian economy . Rosneft , the state oil company, and Arkady Rotenberg, a long-time friend and former judo sparring partner of President Vladimir Putin , have both launched legal challenges to the sanctions, imposed over Russia’s actions in Ukraine . The EU bans, with similar measures adopted by the US, have all but frozen Russian companies and banks out of western capital markets, at a time when they have to refinance more than $130bn of foreign debt due for redemption by the end of 2015. Rosneft filed a case against the EU’s European Council in the general court under the […]

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Fall in Oil Prices Poses a Problem for Russia, Iraq and Others

MOSCOW — A steep decline in oil prices is straining the budgets of major petroleum-exporting countries around the globe, raising a specter of spending cuts in Russia , where the economy is under pressure from Western sanctions, and posing a potentially grave security challenge for Iraq , which is already struggling to finance its fight against the Islamic State. From Moscow to Caracas, Riyadh to Baghdad, in Tehran, Algiers, Kuwait City and Lagos, political leaders, finance ministers and central bankers have been scrambling to confront the plunge in prices — roughly 25 percent since a peak in June — driven by increased production in the United States and by projections of sustained cuts in demand in many developed countries, as well as decelerating growth in China. The price drop is mostly welcome news in the developed world, and particularly in Washington. Countries like Russia, Iran and Venezuela that in […]

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Sanctions noose begins to tighten on sanguine Russia

Sberbank’s headquarters in Moscow…epa01749680 The headquarters of the biggest Russian bank Sberbank in Moscow, Russia, 03 June 2009. Nizhny Novgorod-based Oleg Deripaska’s GAZ Group, Sberbank and Canadian autoparts maker Magna intend to purchase controlling stake in General Motors’ Opel division, newspaper Delovoy Kvartal reports. EPA/SERGEI CHIRIKOV ©EPA For the Russian banking sector, these are the most nervous times since the global financial crisis six years ago. Half a dozen of the biggest state-connected banks – accounting for more than half of Russian banking assets – have in effect been cut off from western financing by EU and US sanctions imposed over Moscow’s aggression in Ukraine. The sliding rouble , meanwhile, creates at least the possibility that Russian consumers could start pulling their savings out of deposit accounts and swapping them into dollars. Those factors plus falling oil prices , which reduce Russia’s dollar receipts for oil exports, are creating […]

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Putin Loses His Best Friend: Expensive Oil

The decline in oil prices may be depriving Russian President Vladimir Putin of his biggest ally. Oil has been the key to Putin’s grip on power since he took over from Boris Yeltsin in 2000, fueling a booming economy that grew 7 percent on average from 2000 to 2008. Now, with economic growth slipping close to zero, Russia is reeling from sanctions by the U.S. and the European Union over its land grab in Ukraine, and from a ruble at a record low. Putin, whose popularity has been more than 80 percent in polls since the annexation of the Crimean Peninsula in March, may have less money to raise state pensions and wages, while companies hit by the sanctions also seek state aid to maintain spending. “His ratings remain high but for a person conducting such a risky policy, Putin has to understand the limits of patience for the […]

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Kremlin agrees to trilateral gas talk schedule

Russia agrees to Oct. 21 date to talk with EU and Ukrainian leaders about gas issues. (File/UPI Photo/Sergey Starostenko) MOSCOW, Oct. 10 (UPI) — The Kremlin said Friday it agreed on a date for the next round of talks aimed at resolving a Ukrainian gas issue endangering European energy security. "The Russian side has agreed to the proposed date of three-party talks in the Russia-Ukraine-EU format to discuss uninterrupted transit of gas via the territory of Ukraine," the Russian Energy Ministry said. "The new round of talks will take place Oct. 21 in Berlin." Ukraine under an interim deal would pay the $3.1 billion it owes Russian energy Gazprom. Ukraine, in return, would get a price discount and assurances of adequate winter natural gas supplies. Russia sends most of its gas for European consumers through the Soviet-era transit network in Ukraine. Contractual disputes in 2006 and 2009 between Kiev […]

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Morgan Stanley’s Rosneft deal flounders

A security guard stands inside the Morgan Stanley headquarters in New York ©Bloomberg Morgan Stanley ’s deal to sell an oil trading business to Rosneft , the state-owned Russian oil group, is close to collapse amid the profound chill in relations between Russia and the US. Morgan Stanley said on Friday: “In the current environment there can be no assurance that the transaction will close, especially in light of the existing contractual requirement that all necessary approvals be received by year end.” More On this topic Financials lead charge on day of records Morgan Stanley pays $275m to settle SEC mortgage securities case Investment banking boosts Morgan Stanley Morgan Stanley sells oil distributor IN Banks FCA accuses banks of forex control failure Investcorp chief Kirdar to retire Malaysia lenders take steps to merge NAB blames profit warning on UK troubles “We are continuing to operate the business in the […]

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