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Defying Sanctions, Putin Moves Swiftly to Annex Crimea

Moving swiftly in the face of international condemnation, President Vladimir V. Putin on Tuesday notified Russia’s Parliament of his intention to make Crimea a part of the Russian Federation, defying the United States and Europe just hours after they imposed their first financial sanctions against Moscow since the crisis in Ukraine began. The Kremlin announced Mr. Putin’s decision only hours after he formally recognized Crimea as a “sovereign and independent state” late Monday night, after a vote to secede from Ukraine that was hastily organized and conducted under the watch of thousands of Russian special operations troops. Mr. Putin is scheduled to address both houses of Parliament on Tuesday afternoon and, according to reports, could outline his vision for annexing a region that has been under the authority of Kiev since 1954 and part of an independent Ukraine since the Soviet Union collapsed in 1991. Mr. Putin’s […]

Posted On : Published By : Tom Whipple
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Release oil from US reserve to hurt Russia

Russia’s seizure of Crimea has prompted political leaders in Europe and North America to seek meaningful measures to convince Russia to pull back its troops. In particular, they seek measures that would affect Russia immediately, putting internal pressure on the country’s leaders to stop their aggression while leaving the rest of the world unharmed. Some propose accelerating natural gas exports from the US to Europe. However, this is no better than computer “vapourware” because the gas would not arrive for years. A viable alternative to gas exports is releasing oil from the US Strategic Petroleum Reserve (SPR). These stocks are available today and could have a speedy impact on Russia. Given that the country depends on oil and natural gas exports for its survival, such an action would have a quick and significant effect if the release depresses oil prices. The SPR now holds 694m barrels of crude. The […]

Posted On : Published By : Tom Whipple
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Ukraine works to protect gas infrastructure

The Ukrainian government said Monday it was taking special security precautions to ensure gas pipeline infrastructure was protected during conflict with Russia. Ukrainian opposition leader Dmitry Yarosh said Sunday he’d destroy the Soviet-era gas transmission network through Ukraine in response to Russian "occupiers," Russian news agency RT reported. European consumers get about a quarter of their natural gas from Russia, though the bulk of that heads through Ukraine’s pipeline system. The Ukrainian Interior Ministry said Monday it was taking the necessary security precautions. "The National Guard and Security Service of Ukraine have put in place special protective measures concerning the gas transmission and distribution system of Ukraine," a statement carried by Russian news agency RIA Novosti said. "This decision was made to ensure the safety and smooth operation of critical infrastructure in the country." Conflict erupted in Ukraine in November when ousted President Viktor Yanukovych , a Kremlin ally, […]

Posted On : Published By : Tom Whipple
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Crimea parliament declares independence after vote

Crimea’s regional parliament has declared the region an independent state, after its residents voted overwhelmingly to break off from Ukraine and seek to join Russia, news agencies reported. Sunday’s referendum is not recognized by the West, and the United States and the European Union are preparing sanctions against Russia, whose troops have been occupying Crimea for several weeks. A delegation of Crimean lawmakers is set to travel to Moscow Monday for negotiations on how to proceed further. Russian lawmakers have suggested that formally annexing Crimea is just a matter of time.

Posted On : Published By : Tom Whipple
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Commodities Cushioned From Crimea Crisis by Ample Supply

Unprecedented natural gas reserves in Europe , record global grain output and the threat of mutual economic calamity from oil sanctions are cushioning commodity prices even as the Ukraine-Russia conflict spurs a gold rally. While U.K. gas prices, a European benchmark, rose 5.1 percent since the crisis began at the end of February, they are still the lowest for this time of year since 2010. Brent crude fell 1 percent. After wheat advanced 15 percent and corn 4.6 percent, both remain about a quarter below the peaks in 2010, the last time Russia and Ukraine curbed shipments. Gold reached a six-month high on March 14 as demand for a haven grew. Abundant supply is limiting some price swings caused by Russia ’s incursion into Crimea, where a majority in a disputed vote yesterday chose to join Russia, preliminary results show. Europe gets about a third of its gas from […]

Posted On : Published By : Tom Whipple
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Russia’s $160 Billion Stick Hinders Crimean Sanctions

2014. Fireworks exploded and Russian flags fluttered above jubilant crowds Sunday after residents in Crimea voted overwhelmingly to secede from Ukraine and join Russia. The United States and Europe condemned the ballot as illegal and destabilizing and were expected to slap sanctions against Russia for it. (AP Photo/Vadim Ghirda) Close Close Open Pro-Russian people celebrate in Lenin Square, in Simferopol, Ukraine, Sunday, March 16, 2014. Fireworks exploded and Russian flags fluttered above jubilant crowds Sunday after residents in Crimea voted overwhelmingly to secede from Ukraine and join Russia. The United States and Europe condemned the ballot as illegal and destabilizing and were expected to slap sanctions against Russia for it. (AP Photo/Vadim Ghirda) As U.S. and European officials threaten sanctions in their face-off with Russia over , Vladimir Putin’s $160 billion in oil and natural gas exports […]

Posted On : Published By : Tom Whipple
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16% of Natural Gas Consumed in Europe Flows Through Ukraine

. Europe, including all EU members plus Turkey, Norway, Switzerland, and the non-EU Balkan states, consumed 18.7 trillion cubic feet (Tcf) of natural gas in 2013. Russia supplied 30% (5.7 Tcf) of this volume, with a significant amount flowing through Ukraine. EIA estimates that 16% (3.0 Tcf) of the total natural gas consumed in Europe passed through Ukraine’s pipeline network, based on data reported by Gazprom and Eastern Bloc Energy. Two major pipeline systems carry Russian gas through Ukraine to Western Europe—the Bratstvo (Brotherhood) and Soyuz (Union) pipelines. The Bratstvo pipeline is Russia’s largest pipeline to Europe. It crosses from Ukraine to Slovakia and splits in two to supply northern and southern European […]

Posted On : Published By : Tom Whipple
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CEOs of Biggest Russian Firms Could Be Hit by Sanctions -Paper

The CEOs of Russia’s two largest firms are on a list of those who may be hit next week with European and U.S. sanctions over the Crimea crisis, a German newspaper said on Friday, suggesting tougher than expected measures against Russia’s elite. Moscow shipped more troops and armour into Crimea on Friday and repeated its threat to invade other parts of Ukraine, showing no sign of heeding Western pleas to back off from the worst East-West confrontation since the Cold War. Russia’s stock markets tumbled and the cost of insuring its debt soared on the last day of trading before pro-Moscow authorities in Crimea hold a vote to join Russia, a move all but certain to lead to U.S. and European Union sanctions on Monday. European officials told Reuters the EU was working on a five page list of 120-130 Russians who could […]

Posted On : Published By : Tom Whipple
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ANALYSIS: Potential sanctions may hit Russian oil, gas sectors long term

While many analysts see the sanctions, as they are proposed currently, only being partially effective, others say they could have much wider implications in the long term, potentially affecting the oil and gas sector too. "Though the scope of the sanctions remains uncertain, the effect could be enormous," Russia’s economist Sergei Guriev said in his column with the Project Syndicate, an online platform for expert opinion. A significant fall in foreign direct investment, "which brings not only money but also modern technology and managerial skills, would hit Russia’s long-term economic growth hard," Guriev said, adding that FDI was estimated to have reached $80 billion in 2013. In the short term, "it is trade that matters much more than investment," he said. Russia’s annual exports, mostly oil, gas, and other commodities, are worth nearly $600 billion, with annual imports totaling almost $500 billion, according to Guriev. The most important source […]

Posted On : Published By : Tom Whipple