Archives for June 2018

“We had a very short discussion on Russia, Ukraine and the Minsk Agreements that led to a political decision to extend the sanctions for another six months,” an unnamed source in the EU Council told journalists in Brussels.

The decision came at the bloc’s summit and is expected to be confirmed in the coming days. According to the source, the move was triggered by French President Emmanuel Macron and German Chancellor Angela Merkel, who reportedly urged the leaders to prolong sanctions against Moscow due to the current state of implementation of the Minsk peace accord on Ukraine.

Russia sanctions a ‘dead horse,’ seriously damaged economy – German regional heads

“It was said that there are no changes, so sanctions are prolonged, the sanctions regime remains unchanged,” the source added.

Meanwhile, Italian Prime Minister Giuseppe Conte said that the renewal of the punitive measures against Russia should not be automatic. Italy has repeatedly voiced concerns over the sanctions, saying they were having a huge negative impact on Italian firms’ exports to Russia.

“We will reaffirm the principle that there should be nothing automatic about the renewal of sanctions,” the official told parliament. “We need to be very careful about this. Sanctions should be a means and not constitute an end.”

The penalties were initially introduced in 2014 over Moscow’s alleged involvement in the Ukraine crisis and its reunification with Crimea. Sanctions target Russia’s financial, energy and defense sectors, along with some government officials, businessmen and public figures.

The Kremlin responded by imposing an embargo on agricultural produce, food and raw materials on countries that imposed sanctions on Russia. Since then both sides have repeatedly broadened and extended the restrictive measures.

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Article source: https://www.rt.com/business/431238-eu-extend-sanctions-russia/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

American crude supplies declined by 9.9 million barrels for the week ended June 22 – the largest weekly decline so far this year.

Saudi Arabia to boost oil production to record high – report

“Record crude exports and record refinery runs have combined to yield the biggest draw to crude stocks so far this year,” said Matt Smith, director of commodity research at ClipperData, as quoted by MarketWatch. “Even crude production holding at a record level has been unable to offset strong domestic and international demand.”

WTI crude futures were trading at $73.19 per barrel on Friday. Brent crude futures were trading at $77.76 per barrel, virtually unchanged from their last close and still below the $80 May highs.

The oil market remains well-supplied despite the high demand after OPEC and non-OPEC producers agreed to raise output. “The physical oil market is well supplied,” said Konstantinos Venetis, senior economist at research firm TS Lombard, as quoted by Reuters. He warned that OPEC and Russia were producing at near maximum output “leaving a thinner margin of safety for the future.”

Last week, OPEC and non-member allies led by Russia agreed to boost production by one million barrels per day despite opposition by Iran. Russia had reportedly insisted on an output increase of 1.5 million barrels per day (bpd), while Iran wanted to ditch the deal at first. Saudi Arabia is expected to raise production to an all-time high of 10.8 million bpd in July.

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Article source: https://www.rt.com/business/431222-wti-oil-price-growth/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

“We are planning to start this summer,” Corcoran told journalists on the sidelines of the World Gas Conference in Washington. “If Denmark doesn’t approve construction and operation in its territorial waters, we’ll have to run the pipeline through transboundary waters north of the country.”

US threatens to punish Russia Germany if they continue playing with gas

Earlier this year, Danish Prime Minister Lars Lokke Rasmussen said that Denmark was not able to prevent the Russian-led Nord Stream 2 gas pipeline project from being implemented, but could slow down the construction works. The country pledged to pass a law that would ultimately allow it to block or postpone the implementation of the Nord Stream-2 project on legal grounds. Copenhagen is reportedly under considerable pressure from Washington.

Nord Stream 2’s top manager added that the company hasn’t filed an application for building the pipeline in multinational waters yet, as Denmark hasn’t issued the refusal so far. The construction works are currently running to plan, according to Corcoran.

“We have received 96 percent of pipes with 55 percent of them were concreted. We have also deployed ships. We are in compliance with the schedule,” he said, stressing that the company is currently in talks on granting financial guarantees for up to five billion dollars.

“We’re negotiating financial guarantees with six export agencies – German Hermes, Italian SACE, Austria’s OeKB, Netherlands’ Atradius, Belgian Credendo and Russia’s EXIAR,” Corcoran said. “We hope to get financial guarantees from the export agencies and start negotiating with banks to raise project funding at the end of the year, or in early 2019.”

The Nord Stream 2 gas pipeline project is seen as the most efficient way, both economically and ecologically, to deliver Russian gas to European consumers. The pipeline is projected to provide transit of 70 percent of Russian gas sales to the EU via the German route when it is built in 2019.

The future pipeline, which is set to run from Russia to Germany under the Baltic Sea, is expected to double the existing pipeline’s capacity of 55 billion cubic meters annually.

The project, led by the subsidiary of Russian energy giant Gazprom, is implemented in cooperation with German energy firms Wintershall and Uniper, French multinational Engie, British-Dutch oil and gas giant Royal Dutch Shell, and Austrian energy company OMV.

Earlier this year, the White House pledged to sanction all the participants of the Russia-led project due to its potential to increase Russia’s “malign influence” in Europe.

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Article source: https://www.rt.com/business/431185-nord-stream-denmark-no-matter/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

The country’s gross domestic product (GDP) is now expected to grow by 1.4 percent in 2019 compared to the 1.9 percent growth projected this year, according to reports in various media. In the second half 2017, the Russian economy ministry had anticipated economic growth of 2.1 percent and 2.2 percent in 2018 and 2019, respectively.

Russia’s exports to India surge 40% thanks to sunflower seeds radar equipment

“2019 will not be an easy one both in terms of adaptation to changed macroeconomic conditions, and decisions taken to increase VAT… We also forecast a slowdown in economic growth next year to 1.4 percent,” said a source in the ministry.

The Bank of Russia warned in June that lower key rates are at risk due to a planned VAT hike to 20 percent from 18 percent. The Central Bank warned that higher taxes would translate to inflation.

Inflation in Russia remains at its lowest level since the collapse of the Soviet Union at 2.4 percent. It is also well below the Central Bank’s target of four percent.

“The balance of risks up to the end of 2019 has shifted towards pro-inflationary risks. The main risks are related to the effects of the adopted tax and fiscal policy decisions and to external factors.

“With regard to tax policy measures, the Bank of Russia will pay special attention to the estimation of secondary effects (including the response of inflation expectations), which are difficult to capture at the moment,” the Central Bank said at a meeting in June, when it maintained a key rate at 7.25 percent.

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