April 15, 2024

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BP's exit opens a new front in the West's campaign against Russia

BP’s exit opens a new front in the West’s campaign against Russia

  • BP to divest Rosneft stake worth $25 billion
  • Companies with Russian assets are under pressure
  • Some Russian banks have closed their doors to the SWIFT system
  • The European Union, Canada and Britain closed the airspace of Russia

Feb 28 (Reuters) – BP has opened a new front in the West’s campaign to isolate the Russian economy by deciding to abandon its investments in Russian oil and gas, the most aggressive move yet by a company in response to Moscow’s invasion of Ukraine.

Western allies have stepped up efforts to punish Russia by closing airspace to Russian aircraft, closing some banks from SWIFT’s financial network, and limiting Moscow’s ability to deploy its $630 billion foreign reserves, all measures expected to hurt the economy. Read more

The ruble fell as much as 30% to an all-time low against the dollar on Monday, prompting the central bank to double its key interest rate to 20% to support it. Read more

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BP, Russia’s largest foreign investor, said it was giving up its stake in state-controlled energy company Rosneft. (ROSN.MM) At a cost of up to $25 billion, reducing the British company’s oil and gas reserves in half. Read more

The move highlights other Western companies with operations in Russia, including BP rivals such as France’s Total Energy. (TTEF.PA) Britain paralyzed (sigh)Amid pressure from governments to tighten the financial noose on Moscow after it launched the largest attack on a European country since World War II. Read more

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Equinor (EQNR.OL)The energy company, the majority Norwegian state-owned energy company, said on Monday that it would begin to divest from its joint ventures in Russia. Norway’s sovereign wealth fund, the world’s largest, will also divest its Russian assets, which are worth about 25 billion Norwegian kroner ($2.8 billion). Read more

Australia’s sovereign wealth fund also said it intends to end its exposure to companies listed in Russia. Read more

Out of bounds

Large parts of the Russian economy will be a no-go zone for Western banks and financial firms after the decision to isolate some of its banks from SWIFT, a secure messaging system used in trillions of dollars worth of transactions around the world.

Even neutral Switzerland is likely to follow the European Union’s lead in imposing sanctions on Russia and freezing Russian assets, its president said on Sunday. Read more

Russians queued at automated teller machines over the weekend, worried that the sanctions would lead to a cash shortage. Read more

Western companies that are open to Russia have also been hit hard. Shares in Societe Generale fell (SOGN.PA)the French bank that owns Russia’s Rosbank, and the carmaker Renault (RENA.PA)which controls the Russian automaker Avtovaz. Fenner’s stock plunged 21 percent after the 2022 guidance was withdrawn due to the possible closure of Russian airspace. Read more

The European Union has banned Russian media outlets RT and Sputnik, while Canadian telecoms companies have also stopped offering RT. Google has banned RT and other Russian channels from receiving money for ads on websites, apps and YouTube videos, similar to the move by Facebook. Read more

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European countries and Canada also took the unprecedented step of closing their airspace to Russian aircraft. US officials said the United States was considering a similar step.

Canada said on Sunday it was investigating a violation of its airspace by Russian airline Aeroflot (AFLT.MM).

United Parcel Service Inc., based in the United States (UPS.N) and FedEx Corp (FDX.N)Two of the world’s largest logistics companies said they have suspended delivery services to Russia and Ukraine. Read more

Asian aircraft lessor BOC Aviation (2588.HK) He said that EU sanctions requiring the termination of lease contracts for Russian airlines by March 28 would affect most of their aircraft in Russia. Analytics firm Cirium said Russia has 980 passenger planes in service, of which 777 are leased and 515 are leased from foreign companies. Read more

The head of the European Union’s internal market told the CEOs of Google’s owner Alphabet (GOOGL.O) It united on YouTube on Sunday to ban users who promote war propaganda as part of measures to stop misinformation about Ukraine.

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Additional reporting by Ron Bosso and Dmitriy Zhdanikov in London, Fu Yun Che in Brussels and Jamie Fried in Sydney; Written by Carmel Crimmens and Edmund Blair; Editing by Grant McCall

Our criteria: Thomson Reuters Trust Principles.