Latest news with #WesternSanctions
Yahoo
23-05-2025
- Business
- Yahoo
Russia's sanctioned tanker group Sovcomflot plunges to $393 million loss
(Reuters) -Russia's leading tanker group Sovcomflot plunged to a net loss of $393 million in the first quarter, blaming the slump on new Western sanctions that have led to operational problems, lower revenues and some sanctioned vessels sitting idle. The United States and the European Union imposed sanctions on Sovcomflot and its fleet in 2024 to try and reduce Russia's revenue from oil sales that it can use to finance its war in Ukraine. In January, the United States added new Sovcomflot vessels to the list of sanctioned assets and withdrew a U.S. licence, granted last year, that had allowed some vessels in its fleet to operate despite sanctions. Sovcomflot, which reported a 49% year-on-year drop in first-quarter revenue to $278.5 million, said the January sanctions had been particularly impactful, creating additional commercial and operational difficulties. "The intensification of Western sanctions has made it more difficult to operate the fleet and led to lower revenues and downtime for some sanctioned vessels," Sovcomflot said in a statement. "In the reporting period, unprecedented sanctions restrictions were imposed on the company and its vessels, which created additional commercial and operational difficulties in operating the fleet," Sovcomflot said. The group's earnings before interest, tax, depreciation and amortisation (EBITDA) fell almost 69% year-on-year to $105 million. Sovcomflot considers the sanctions to be illegal. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Reuters
13-05-2025
- Business
- Reuters
Russian economy in worse shape than Moscow says, report for EU shows
BRUSSELS, May 13 (Reuters) - The Russian economy is in an increasingly precarious state as a result of a shift to a war mode and of Western sanctions over Moscow's invasion of Ukraine, a report by the Stockholm Institute of Transition Economics (SITE) said on Tuesday. The report, prepared for talks of European Union finance ministers, said that while still relatively stable, the Russian economy was only superficially resilient and that underlying imbalances and structural weaknesses were growing. "The fiscal stimulus of the war economy has kept the economy afloat in the short term, but the reliance on opaque financing, distortionary resource allocation, and shrinking fiscal buffers makes it unsustainable in the long term. Contrary to Kremlin narratives, time is not on Russia's side," it said. The EU has imposed 16 packages of sanctions on Russia since the start of the war in Ukraine in February 2022, targeting Moscow's main sources of revenue - oil, gas and coal exports. Other Western powers, including the United States, Canada, Britain and Japan also imposed sanctions. Keen to show Western sanctions are pointless, Russia says its gross domestic product grew 4.3% in 2024 after 3.6% expansion in 2023. But Torbjorn Becker, who presented the SITE report to EU finance ministers, said Russian GDP numbers could not be trusted because Moscow was most likely strongly understating inflation which affected real GDP calculations. "Russia claims inflation is 9-10%. Why would they then have a policy rate of 21% at the central bank? Which regular central bank would have a policy rate that's basically 11.50 percentage points higher than the inflation rate? If any of our central banks were doing something like that, they would be out of their job the next day," Becker told reporters. "That's a very clear indication that inflation may not actually be the right number. If you understate inflation, you will then overstate real GDP numbers," he said. He also pointed to Russia's budget constraints caused by falling revenues from oil, gas and coal and rising military spending. Since the start of its invasion of Ukraine and despite its massive war effort, Russia has been reporting a budget deficit of 2% of GDP every year. "Fiscal numbers in Russia don't really correspond to what we think that they are putting into the war effort," Becker said. He said much of the financing of the war machine was going through the banking system. "So if you add that to the fiscal numbers, their fiscal deficits would be ballpark twice as high as what they have shown in the official statistics," he said. This, in turn, was building up financial risks in the banking system, Becker said, because banks were reporting high credit growth. "These are all indicators that we usually look at when we want to predict the banking crisis," Becker said. European Economic Commissioner Valdis Dombrovskis said the European Commission agreed with the SITE report. "Their analysis highlights the unreliability of Russian statistics, and how the Russian economy is not performing as well as its official statistics suggest," Dombrovskis told reporters after the EU ministers' meeting. "The Commission broadly agrees with this analysis and the overall increasing fragility of the Russian economy. This underlines the importance of the international community's ongoing efforts to limit the Kremlin's capacity to continue its war of aggression against Ukraine," he said.
The Independent
13-05-2025
- Business
- The Independent
European economist says Russia's economy is strained due to the Ukraine war and sanctions
Russia's economy is under growing strain as its invasion of Ukraine drags on and Western sanctions are undermining President Vladimir Putin's ability to sustain his war, a leading European economist said after briefing finance ministers on Tuesday. The economist, Torbjörn Becker, Director of the Stockholm Institute of Transition Economics, warned that should Russia prevail, European Union governments would have to spend 2-3 times more than they currently do on defense for several years. Russia's 'financial system, their macroeconomic performance, is under pressure. It's not in balance. Risks are mounting. But it doesn't mean that we can sit back and relax,' Becker told reporters at EU headquarters in Brussels. He spoke after briefing the bloc's finance ministers to help provide a picture of 'the actual condition of Russia's economy, which significantly contrasts with the narrative promoted by Russian propaganda,' the EU's Polish presidency said. It said that discussion would help 'us to better shape punitive, financial and economic sanctions against Russia.' Becker said Russia's economy only accounts for about 12% of the economies of the world's biggest trading bloc. He underlined that it is highly dependent on oil and natural gas revenue, and on imports of high-tech equipment to sustain the war effort. Still, Russia's economy has outperformed predictions. High defense spending has propelled growth and kept unemployment low despite fueling inflation. At the same time, wages have gone up to keep pace with inflation, leaving many workers better off. Large recruiting bonuses for military enlistees and death benefits for those killed in Ukraine have also put more income into the country's poorer regions. Over the long term, inflation and a lack of foreign investments remain threats to the economy. The question is how long Russia's militarized economy can keep going before those issues bite and whether it can hold out for longer than Ukraine and its Western backers. To hit its economy harder, EU envoys have drafted a new set of sanctions that would target more ships in the shadow fleet of tankers that Russia has deployed to evade a price cap of $60 per barrel imposed on Russian oil by the Group of 7 democracies. They could also freeze the assets of the Nord Stream II gas pipeline consortium. The pipeline is not in use, but the EU believes the move could help to discourage investment. The sanctions could enter force as soon as Thursday. 'If we can lower oil prices and gas revenues and put tighter sanctions on what they can import, that's great,' Becker said. He said U.S. President Donald Trump should press 'China and India about what they are paying for and what they're exporting to Russia.' Russia found new markets for its oil in India and China after the EU imposed a near-total ban and continues to earn a substantial part of government revenues from exports of oil and gas. Becker also urged Trump to hit Russia's financial system by restricting international transactions. 'If something ruins an economy pretty quickly, it's a banking crisis,' he said. In a recent report, his institute said that Russia's oil revenues decreased dramatically in early 2025, notably due to EU and G7 sanctions on the ghost fleet. This has forced Russia to withdraw from its sovereign wealth fund. The institute estimates that the liquid part of the fund is now equivalent to less than 3% of GDP. 'If oil prices stay as they are, they will certainly run out of these funds in a year,' Becker said. ___ David McHugh reported from Frankfurt, Germany.
CNA
10-05-2025
- Politics
- CNA
European leaders tell Putin to agree to Ukraine ceasefire or face new sanctions
KYIV: Major European powers threw their weight behind an unconditional 30-day Ukraine ceasefire on Saturday (May 10), with the backing of US President Donald Trump, and threatened President Vladimir Putin with "massive" new sanctions if he did not accept within days. The leaders of Britain, France, Germany, Poland and Ukraine set the start of the ceasefire for May 12 at a meeting in Kyiv, during which they held a phone call with Trump. "So all of us here together with the US are calling Putin out. If he is serious about peace, then he has a chance to show it," British Prime Minister Keir Starmer told a press conference. "No more ifs and buts, no more conditions and delays." Soon after the European leaders' announcement, the Kremlin appeared to pour scorn on it. "We hear many contradictory statements from Europe. They are generally confrontational in nature rather than aimed at trying to revive our relations. Nothing more," Kremlin spokesman Dmitry Peskov was quoted as saying by Russian news agency Interfax. Peskov was later quoted by the state TASS news agency as saying that Russia would consider the ceasefire proposal, while Moscow has its own position. Western sanctions against Russia have been toughened repeatedly since its full-scale invasion in 2022, without ending the war. But following through on the threat would be a sign of growing Western unity after months of unpredictability in US policy since Trump's return to the White House in January. After engaging directly with Russian officials, clashing publicly with Ukrainian President Volodymyr Zelenskyy and briefly cutting vital military aid to Kyiv, Washington has patched up ties with Ukraine and signed an agreement giving the US preferential access to new Ukrainian minerals deals. Trump, who did not immediately comment publicly on the European leaders' remarks, has also signalled frustration with what Washington views as Putin's foot-dragging over a ceasefire. "In the event that the ceasefire is violated, massive sanctions will be prepared, in coordination between the Europeans and the United States," French President Emmanuel Macron said. By imposing new sanctions, the White House would be aligning itself more closely with Western Europe, which has been rattled by a trade war in which Trump has imposed tariffs on them and other countries and has suggested he might not come to the defence of NATO allies that underspend on their defence. Zelenskyy said he and the visiting leaders had agreed the unconditional ceasefire must start on Monday and cover air, sea and land. If Russia refused, it would face new sanctions, including the strengthening of punitive measures targeting its energy and banking sectors, he said. The leaders later issued a joint statement summing up the contents of the proposed 30-day ceasefire and saying its main purpose was "to make room for diplomacy". They welcomed support for the proposal from both Europe and the United States and said that if Russia sought to apply conditions, "this can only be considered as an effort to prolong the war and undermine diplomacy". Peskov had been quoted as saying on Friday that Russia supported the implementation of a 30-day ceasefire, but only with due consideration of "nuances". In remarks to US broadcaster ABC broadcast earlier on Saturday, Peskov had suggested Western military assistance for Ukraine must stop for a temporary ceasefire to take effect. "Otherwise it will be an advantage for Ukraine," he said. TRUMP PHONE CALL Macron said that if the ceasefire went ahead, it would be monitored mainly by the US and European countries would contribute. Dmitry Medvedev, a former Russian president who is now a senior security official, derided the idea of giving Russia an option between being sanctioned or giving Ukrainian forces an opportunity to rebuild. "Shove these peace plans up your pangender arses!" he wrote on X. The European leaders said the terms of a peace deal would be negotiated during the 30-day pause in fighting. "We have no illusions that the ceasefire will be breached," Zelenskyy said. On the eve of the summit, the US embassy in Kyiv warned of a "potentially significant" air attack in the coming days. When the European leaders arrived in Kyiv by train on Saturday, a screen on the platform announced the arrival of the "Bravery Express". Zelenskyy accompanied them as they paid their respects at a Kyiv memorial honouring Ukrainian soldiers killed in the war. The visit falls on the final day of a May 8-10 ceasefire declared by Putin that Ukraine did not accept, denouncing it as a sham. Both sides have accused each other of violating it. Reuters journalists at a field hospital near the front line in Ukraine's Zaporizhzhia region saw soldiers being brought in with combat injuries sustained since the Russian ceasefire began. "There hasn't been any ceasefire, shelling has continued just as before, drones are flying just like before, the same with explosives being dropped. Nothing has changed at all," said a wounded soldier who gave his name as Stanislav.
