Ukraine Crisis: European gas prices hit record high; Boeing, Apple & Exxon cut business ties with Russia

Ukraine Crisis: European gas prices hit record high; Boeing, Apple & Exxon cut business ties with Russia
Members of the Ukrainian community hug during a protest outside of the Russian embassy in Buenos Aires, on March 1 (AP)
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Updated 03 March 2022

Ukraine Crisis: European gas prices hit record high; Boeing, Apple & Exxon cut business ties with Russia

Ukraine Crisis: European gas prices hit record high; Boeing, Apple & Exxon cut business ties with Russia

RIYADH: European gas prices hit record highs: oil prices on both sides of the Atlantic are at their highest since 2014; while US businesses such as Boeing and Apple are taking measures against Russia.


  • China refuses to impose financial sanctions on Russia.
  • Shares in Russian aluminum giant Rusal plunged 26 percent on Wednesday after the world’s largest commodity trader said it would review its business ties in Russia while condemning the country’s invasion of Ukraine.
  • Dubai’s Mashreqbank has halted lending to Russian banks due to heightened risk from the Russia-Ukraine war.. 
  • Russia's central bank kept stock market trading on the Moscow Exchange suspended for a third day in a row on Wednesday, but said it would allow a limited range of operations for the first time this week
  • European gas prices surged Wednesday to a new record high on concern about supplies from Russia in the wake of its invasion of Ukraine.
  • The price of US oil - West Texas Intermediate crude has also spiked up to $109 a barrel.
  • Rise in oil prices came just a few hours after the International Energy Agency's members decided to release 60 million barrels of oil from emergency stockpiles.
  • South Korea has also joined the list of western countries imposing bans on Russian banks, including Sberbank, VEB, PSB, VTB, Otkritie, Sovcom, and Novikom. 
  • Apple Inc halted its product sales in Russia, Bloomberg said.
  • American aviation giant Boeing has decided to suspend all support for Russian airlines and its operations in Moscow, according to an FT report.
  • Siemens Energy AG is stopping all businesses in Russia, according to a Reuters report. 

Oil majors depart

Exxon Mobil on Tuesday became the latest oil major to exit Russia oil and gas operations that it has valued at more than $4 billion and halt new investment as a result of Moscow’s invasion of Ukraine.

The decision will see Exxon pull out of managing large oil and gas production facilities on Sakhalin Island in Russia’s Far East, and puts the fate of a proposed multi-billion dollar liquefied natural gas facility there in doubt. 

 It joins Shell and BP who have dropped all Russian ventures, while TotalEnergies has decided not to invest in new Russian projects.


Pressure on Eurozone mounts

The euro has plunged to its weakest since March 2020. The latest updates suggest that the common European currency fell half a percent to as low as $1.1069, according to a Reuters report.

However, the dollar is going strong, with the index 0.4 percent to 97.755.

Russia's Ruble is still facing the heat at 108 per dollar, having fallen as low as 120 earlier in the week. Eurostat, the statistical office of the EU, reported eurozone inflation hitting a record annual high of 5.8 percent in February since records began in 1997.

China refuses to join in sanctions

China won’t join the United States and European governments in imposing financial sanctions on Russia, the country’s bank regulator said Wednesday.

China is a major buyer of Russian oil and gas and the only major government that has refrained from criticizing Moscow’s attack on Ukraine.

Beijing opposes the sanctions, said Guo Shuqing, the chairman of the China Banking and Insurance Regulatory Commission.

“We will not join such sanctions, and we will keep normal economic, trade and financial exchanges with all the relevant parties,” Guo said at a news conference.

“We disapprove of the financial sanctions, particularly those launched unilaterally, because they don’t have much legal basis and will not have good effects.”

US businesses

As Russia stages large military onslaught on Ukraine, several US-based businesses are cutting ties with the European giant, in an attempt to show solidarity with war victims.

Google and Meta have restricted or withdrawn services in Russia since the invasion of Ukraine.

Since then, several top American companies partially or completely halted their business operations in Russia.

Apple Inc., the manufacturer of the iPhone, has halted its product sales in Russia.

The American tech giant has also removed RT News and Sputnik News applications from App Stores outside Russia.

FedEx and UPS, two of the largest shipping companies in the world have now stopped shipping to Russia.

These companies  have also announced the suspension of both inbound and outbound packages in Ukraine citing security reasons.

The aviation industry is also strongly responding to Russia's ongoing invasion of Ukraine.

Delta Air Lines, one of the largest US carriers, has suspended its "codeshare services" with Russia's Aeroflot. 

Boeing announced on Mar. 1 the suspension of all support for Russian airlines and its operations in Moscow.

Government funds

The British Columbia Investment Management Corp is actively working to sell Russian securities after Russia's invasion of Ukraine, the Canadian province's public sector pension fund said on Tuesday.

"BCI has not only been working to sell the Russian shares in our clients' portfolios but also to have Russia removed from all global and emerging market indices," Chief Executive Gordon Fyfe said in a statement.


ING Groep NV, the largest Dutch bank, has announced it will not do any new business with Russian companies.

The firm has wholesale banking offices in both Russia and Ukraine, with 400 Russian employees and 110 Ukraine employees.

The bank said it remained in close contact with employees in both countries.

Out of ING's 600 billion euro ($666 billion) loanbook, around 4.5 billion euros is outstanding with Russian clients and 600 million euros with Ukrainian clients.

"We strongly condemn the invasion of Ukraine, the devastating and heartbreaking impact it has on people’s lives and the threat it poses to international stability and security,” said Steven van Rijswijk, CEO of ING Group in a statement.

The bank said that in addition to halting new business with Russian companies, it would waive transaction fees for retail transactions to Ukraine.

It said it is complying with international sanctions. 

Russian oil, gas to Britain

Russia can still send oil and gas to Britain despite a ban on the country’s ships visiting British ports, the Department for Transport said on Wednesday.

Britain on Tuesday passed a law that it said banned all ships that have any connection to Russia from entering its ports. It applied to all ships that are Russian owned, operated, controlled, chartered, registered or flagged, Reuters reported.

However, the transport department said the sanctions were focused on the vessel, not its cargo, and so would not stop ships registered with other countries from transporting Russian oil or liquefied natural gas to Britain.

G7 looks to stop cryptoassets 

The Group of Seven industrialized nations are examining ways to stop individuals or companies targeted by Western sanctions over Russia’s invasion of Ukraine using cryptocurrencies to dodge the punitive measures, Germany’s finance minister said on Wednesday.

“We should take measures to prevent listed persons and institutions from switching to unregulated cryptoassets. We are working towards this in the context of the German presidency of the G7,” said Christian Lindner.

Cryptocurrency purchases in rubles have climbed to a record high since the US and Western allies have sought to cripple Russia’s banking sector and currency with a barrage of sanctions over last week’s invasion.

They include cutting selected Russian banks from the SWIFT messaging system, rendering them isolated from the rest of the world.

Egypt In-Focus — Annual headline inflation rises 1%; M&A activity amounts to $3.2bn in H1

Egypt In-Focus — Annual headline inflation rises 1%; M&A activity amounts to $3.2bn in H1

Updated 11 August 2022

Egypt In-Focus — Annual headline inflation rises 1%; M&A activity amounts to $3.2bn in H1

Egypt In-Focus — Annual headline inflation rises 1%; M&A activity amounts to $3.2bn in H1

CAIRO: Egypt’s annual headline inflation rose to 15.6 percent in July, up from 14.6 in June, according to the Central Agency for Public Mobilization and Statistics.

CAPMAS attributed the rise in inflation to the increase in food and beverage prices that grew by 23.8 percent, along with growth in commodity and services prices.

M&A activity

Egypt reported a total of 65 mergers and acquisitions deals, valued at $3.2 billion, during the first six months of 2022, according to the EY MENA M&A Insights report.

Deal activity has surged thrice year-on-year during the first half of 2022. The report attributed the surge to “favorable government initiatives including granting a special license to foreign investors.” 

Port agreements

Egypt on Thursday signed two initial agreements for the development of port facilities with Hutchison Ports, Cosco and CMA CGM, Reuters reported citing a Cabinet statement.

The agreements with the international consortium could see investments of up to 800 million, it added.

Gas consumption 

Egypt has launched a plan to rationalize gas consumption in electricity plants in a bid to save foreign currency and achieve financial returns from gas export, according to Daily News Egypt. 

Maersk to invest $500m in Egypt

Danish shipping company Maersk is planning to invest  $500 million in Egypt to operate a new 1,000-meter container berth adjacent to the existing 500-meter berth in East Port Said. 

The company also aims to increase the number of cranes to 30 winches, all powered by electricity instead of diesel, according to a statement. 

This came at the end of  the head of the Suez Canal Authority Osama Rabie’s tour to the Netherlands and Denmark, which lasted 4 days, from Aug.7 to 10.


Oil rises as IEA hikes 2022 demand growth forecast

Oil rises as IEA hikes 2022 demand growth forecast
Updated 11 August 2022

Oil rises as IEA hikes 2022 demand growth forecast

Oil rises as IEA hikes 2022 demand growth forecast

LONDON: Oil prices rose by over 2 percent on Thursday after the International Energy Agency raised its oil demand growth forecast for this year as soaring natural gas prices lead some consumers to switch to oil.

Brent crude futures gained $2.39, or 2.5 percent, to $99.79 a barrel by 1348 GMT, while US West Texas Intermediate crude futures rose $2.65, or 2.9 percent, to $94.58.

“Natural gas and electricity prices have soared to new records, incentivizing gas-to-oil switching in some countries,” the Paris-based agency said in its monthly oil report, in which it raised its outlook for 2022 demand by 380,000 barrels per day.

By contrast, the Organization of the Petroleum Exporting Countries on Thursday cut its 2022 forecast for growth in world oil demand, citing the economic impact of Russia’s invasion of Ukraine, high inflation and efforts to contain the pandemic.

OPEC expects 2022 oil demand to rise by 3.1 million bpd, down 260,000 bpd from the previous forecast. However, it still sees a higher overall global oil demand figure than the IEA for 2022.

A rise in US oil inventories last week and the resumption of crude flows on a pipeline supplying central Europe capped further price gains.

US crude oil stocks rose by 5.5 million barrels in the most recent week, the US Energy Information Administration said, more than the expected increase of 73,000 barrels.

Gasoline product supplied rose in the most recent week to 9.1 million barrels per day, though that figure shows demand down 6 percent over the last four weeks compared with the year-ago period.

The premium for front-month WTI futures over barrels loading in six months’ time was pegged at $4.38 a barrel on Thursday, the lowest in four months, indicating easing tightness in prompt supplies.

The resumption of flows on the southern leg of the Russia-to-Europe Druzhba pipeline further calmed market worries over global supply.

Egypt to ration electricity to boost gas exports

Egypt to ration electricity to boost gas exports
Updated 11 August 2022

Egypt to ration electricity to boost gas exports

Egypt to ration electricity to boost gas exports

CAIRO: Egypt’s Cabinet has approved a plan to ration electricity to save natural gas that it will instead divert to the export market to generate foreign currency, it said on Thursday.

Egypt has suffered from an acute foreign currency shortage since Russia's February invasion of Ukraine, which pushed up global commodity prices, led to the collapse of tourism from the two countries and drove up the cost of borrowing.

Under the draft plan, shops and malls will have to limit their use of strong lights and keep their air conditioning at no cooler than 25 degrees Celsius.

Ministries and government facilities will have to turn off lighting at the end of working hours, the statement added. Street lighting will also be reduced.

The government last month postponed a planned increase in electricity prices by six months. The higher prices would have been intensely unpopular among a population that over the last few years has endured a series of harsh austerity measures.

On Tuesday, Prime Minister Mostafa Madbouly said the government hoped to reduce the amount of gas used to generate electricity by 15 percent. He said domestic power plants bought their natural gas at one-tenth the price that it could fetch on international markets.

Europe has been seeking alternative sources of gas to cut its reliance on Russian gas as the war in Ukraine escalates.

Rapid growth in Egypt’s natural gas supplies, boosted by the discovery of the Mediterranean’s largest field, turned it from a net importer to an exporter in late 2018.

Egypt exported 9.45 million cubic meters of liquid natural gas in the first seven months of 2022, up 44 percent from a year earlier, according to Refinitiv data. 

Ethiopia starts power generation from second turbine at mega-dam

Ethiopia starts power generation from second turbine at mega-dam
Updated 11 August 2022

Ethiopia starts power generation from second turbine at mega-dam

Ethiopia starts power generation from second turbine at mega-dam

RIYADH: Ethiopian Prime Minister Abiy Ahmed kickstarted electricity production from the second turbine at its controversial mega-dam on the Blue Nile on Thursday, despite continuing objections by Egypt and Sudan over the project, according to AFP.

Abiy also confirmed that a third filling of the multi-billion dollar Grand Ethiopian Renaissance Dam was under way, a development that led Egypt last month to protest to the UN Security Council.

Thursday’s move came even though there is still no agreement between Ethiopia and its downstream neighbors Egypt and Sudan about the GERD’s operations.

Abiy insisted that the third filling of the $4.2 billion dam — set to be the largest hydroelectric scheme in Africa — was not causing any water shortages for the two countries.

“We have repeatedly told downstream countries, especially Egypt and Sudan, that by generating power we’re developing our economy, as well as (our desire) to see our citizens who live in the dark see light,” he said.

There was “no aim to sideline and harm” those countries, he added.

Ethiopia first began generating electricity at the dam in February. Currently, the two turbines, out of a total of 13 at the dam, are generating 750 megawatts of electricity.

We are ready to face all scenarios after Ethiopia completes the third filling phase of the Renaissance Dam, and we expect an unprecedented rise in the Nile waters after the gates of the dam are opened, the Sudanese Minister of Irrigation Yasser Abbas told Asharq.  


Macro Snapshot — Romania inflation exceeds expectations; Singapore downgrades GDP in Q2

Macro Snapshot — Romania inflation exceeds expectations; Singapore downgrades GDP in Q2
Updated 11 August 2022

Macro Snapshot — Romania inflation exceeds expectations; Singapore downgrades GDP in Q2

Macro Snapshot — Romania inflation exceeds expectations; Singapore downgrades GDP in Q2

CAIRO: Romania's headline inflation exceeded expectations in July yet smaller rate hikes are still expected, while China’s July vehicle sales surged by 30 percent from a year earlier. Singapore downgraded its gross domestic product in the second quarter of this year as risks grew further, whereas the Federal Reserve officials stated the need for additional rate hikes despite the slowing inflation rates. 

Romania inflation overshoots expectations in July

Romania’s headline inflation rate rose above expectations in July but is showing signs of flattening out and analysts expect the central bank to continue to slow the pace of monetary tightening.

The year-on-year inflation rate in Romania hit 14.96 percent in July, just off a 19-year high and above a forecast of 14.4 percent in a Reuters poll.

It came down from 15.05 percent in June but analysts say there is still a chance it could creep slightly higher in the next two months.

Singapore downgrades gross domestic product in Q2

Singapore’s economy expanded less than initially estimated in the second quarter and the government revised its growth projections for 2022 lower, flagging risks to the global outlook from the Ukraine war and inflation.

The gross domestic product grew 4.4 percent year-on-year in the second quarter, the Ministry of Trade and Industry said, slower than the 4.8 percent growth seen in the government’s advance estimate.

“Downside risks in the global economy remain significant...further escalations in the Russia-Ukraine conflict could worsen global supply disruptions and exacerbate inflationary pressures through higher food and energy prices,” said Gabriel Lim, permanent secretary of MTI at a media briefing.

Fed officials say more rate hikes needed, despite slowing inflation

Slowing US inflation may have opened the door for the Federal Reserve to temper the pace of coming interest rate hikes, but policymakers left no doubt they will continue to tighten monetary policy until price pressures are fully broken.

A US Labor Department report Wednesday showing consumer prices didn’t rise at all in July compared with June was just one step in what policymakers said would be a long process, with a red-hot job market and suddenly buoyant equity prices suggesting the economy needs more of the cooling that would come from higher borrowing costs.

The Fed is “far, far away from declaring victory” on inflation, Minneapolis Federal Reserve Bank President Neel Kashkari said at the Aspen Ideas Conference, despite the “welcome” news in the CPI report.