Prof. ST Hsieh
Director, US-China Energy Industry Forum
May 3, 2022
Should any one be surprised that “Moscow can terminate exports and deals?” The US led sanctions against Russia meant exactly the same effect “terminate exports and deals!” Putin’s retaliation is 10 days away, 80 days after he initiated military actions in Ukraine, while the US led sanctions are entering the 6th round soon. Putin, of course, must be disappointed by his military force could not score a “quick win” in Ukraine so he is retaliating against Ukraine’s allies now.
It should lead to a cease fire. Till now, US and allies are “free” to send massive military equipment to Ukraine without any direct consequences. It is well known that EU depends on Russia for energy supply. If Putin cuts off oil and gas to Germany et. al, immediately EU will face tremendous economic pains. Of course, no one in the world, even the USA, could be spared from a global recession so it should quickly lead to a negotiated cease fire. It also should give President Biden a reason to call off the “foreign war” and focus on the US mid-term election which is about six months away.
Further, there is no reason that President Zellensky should “veto” this cease-fire because his people has suffered enough. He said today that Ukraine will need US$600 B to rebuild his nation. If the war continues, the price tag will increase day by day. The war should end right now.
Putin puts West on notice: Moscow can terminate exports and deals
Tue, May 3, 2022, 3:19 AM
LONDON (Reuters) -Russian President Vladimir Putin put the West on notice on Tuesday that he could terminate exports and deals, the Kremlin’s toughest response yet to the sanctions burden imposed by the United States and allies over the Russian invasion of Ukraine.
Putin, Russia’s paramount leader since 1999, signed a broad decree on Tuesday which forbade the export of products and raw materials to people and entities on a sanctions list that he instructed the government to draw up within 10 days.
The decree, which came into force with its publication, gives Moscow the power to sow chaos across markets as it could at any moment halt exports or tear up contracts with an entity or individual it has sanctioned.
Putin explicitly framed the decree as a response to what he cast as the illegal actions of the United States and its allies meant to deprive “the Russian Federation, citizens of the Russian Federation and Russian legal entities of property rights or the restricting their property rights”.
The decree sets out “retaliatory special economic measures in connection with the unfriendly actions of some foreign states and international organizations”.
Russia’s Feb. 24 invasion of Ukraine prompted the United States and its allies to impose the most severe sanctions in modern history on Russia and Moscow’s business elite, steps Putin casts as a declaration of economic war.
The West’s attempt to economically isolate Russia – one of the world’s biggest producers of natural resources – has propelled the global economy into uncharted waters with soaring prices and warnings of food shortages.
Putin, 69, has repeatedly warned that Moscow will respond in kind, though until Tuesday the Kremlin’s toughest economic response had been to cut off gas supplies to Poland and Bulgaria and demand a new payment scheme for European buyers of gas.
Tuesday’s decree forbids the export of products and raw materials to people and entities that the Kremlin has sanctioned. It forbids any transactions with such people or entities – even under current contracts.
Putin tasked the government with drawing up the list of foreign individuals and companies to be sanctioned, as well as defining “additional criteria” for a number of transactions that could be subject to restrictions.
“This is a framework decree,” said Tatiana Stanovaya, a non-resident scholar at Carnegie Moscow Center and founder of the R.Politik political analysis firm.
“Now all the specific lists should be developed by the government. That’s the main thing and we need to wait for.”
Since the West imposed sanctions on Russia, the $1.8 trillion economy has been heading for its biggest contraction since the years following the 1991 break-up of the Soviet Union, amid soaring inflation.
A significant transfer of Russian assets has begun as the Russian state gains even more influence over the economy, many major Western investors – such as energy giants BP and Shell – exit, and oligarchs try to restructure their business empires.
Russia Retaliates: Putin Publishes New Sanctions Against The West
Tue, May 3, 2022, 10:00 AM
Russian President Vladimir Putin has threatened to terminate exports and deals with the West and add certain individuals and entities to the Kremlin’s sanctions list in retaliation for sanctions imposed by the United States and the European Union.
Russian President Vladimir Putin introduced a package of economic measures on Tuesday to retaliate against international sanctions placed on Moscow.
The decree, published on the Kremlin website, was “in connection with the unfriendly actions of the United States and its allies that violate international law and aim to illegally deprive the Russian Federation and Russian legal entities of their property”.
The Cabinet of Ministers now has 10 days to determine who will be put on the sanctions list.
Sanctioned individuals will be prohibited from carrying out transactions or signing external trade contracts, as well as from exporting products and raw materials.
According to Russian news agency Itar Tass, the Russian Finance Ministry and Central Bank will “have the right to give official clarifications on the application of this decree”.
The sanctions threat comes as the European Union warns its members against paying for Russian gas in rubles or using a Kremlin-designed loophole through Gazprombank, where payments in other currencies are then transferred to a separate ruble account, going through the sanctioned Russian Central Bank.
It also comes a day after the bloc alerted members to be prepared for Russia to cut off gas to all European Union countries in retaliation for its refusal to make payments in rubles. Last week, Russia cut off gas supplies to Poland and Bulgaria.
Threats of retaliation are mounting ahead of May 9th, Russia’s Victory Day celebrations–a day observers expect Putin to be hoping to be able to demonstrate a significant victory in Ukraine or over the West.
By Charles Kennedy for Oilprice.com