Oil embargo and "deswiftization" of Sberbank in response to Russian blackmail

Western countries have been given additional motivation to put even more pressure on Russia

Russia has been blackmailing the world with energy and the ruble in recent months, but it is becoming increasingly clear that the aggressor has achieved exactly the opposite result. Western countries have been given additional motivation to put even more pressure on Russia.

After Russia cut off gas supplies to Poland and Bulgaria without warning, Europe has become more determined in terms of energy sanctions. Germany has radically changed its rhetoric and agreed to support the European Union in banning oil imports from Russia. So, the draft of the sixth package of EU sanctions, presented on May 4, already includes a gradual rejection and a complete embargo on Russian oil by the end of the year. A compromise was reached for Hungary and Slovakia, which prove that they will not be able to secure supplies without the import of Russian energy, so the gradual introduction of sanctions has been extended to 20 months.

At the same time, Europe has finally decided to impose sanctions and exclude from the SWIFT system, and the key Russian bank Sberbank, as well as two other large banks that form the system, ICD and Rosselkhozbank. This means that it will be much harder for Russia to account for foreign transactions, and its isolation from the global financial system will significantly deepen.

In addition, the European Union and the United Kingdom have decided to ban the export of accounting, consulting and PR services to Russia, especially in the field of political technology. This will make it even more difficult to run a modern business in Russia, as many business processes in one way or another required the knowledge and skills of Western experts.

And although the sixth package of EU sanctions has not been adopted yet, the market is already reacting, even to rumors and announcements. Indian refineries, as one of the few remaining importers of Russian oil, are asking for discounts of less than $ 70 per barrel. Another European energy company, the Norwegian state-owned company Equinor, has confirmed the cessation of trade in Russian oil and plans to supply Europe with gas. Against the background of reduced global demand, oil production in Russia was seven percent in April, and experts predict a significantly larger reduction by the end of the year.

Putin's blackmail with the ruble also failed. On April 4, Russia tried to make a payment in rubles for two issues of Eurobonds worth $ 650 million. The decision was made because of the US ban on using frozen dollar reserves abroad. Payment was not allowed, and Russia has 30 days until the declaration of technical non-fulfillment of due obligations.

However, a few days before the end of the grace period, Russia still made payments in dollars, and despite sanctions and delays, money began to flow to investors. The move was rather unexpected for creditors, although it was in line with U.S. intentions to force Russia to deplete its foreign exchange reserves to leave less money available to the aggressor for the war.

Thus, Russia again avoided non-fulfillment of obligations, this time by fulfilling American conditions and the failure of another blackmail with the ruble. However, that will not help the economy much: Russia is already experiencing all the usual consequences of non-fulfillment of obligations as a result of unprecedented sanctions and increasing isolation from world markets, including financial ones.

The next test awaits Russia at the end of the month. Namely, on May 25, for Russia expires the license of the American Office for the Control of Foreign Assets (OFAC) to make payments in dollars. The next payment of the Russian Federation will be made on May 27 on bonds maturing in 2026. And although

Russia has several options FOR resolving this issue, the final decision on approving or blocking payments will be made by OFAC.

Meanwhile, more and more foreign companies are deciding to leave Russia and sell off their assets. In the last few days, five companies have announced the sale of Russian business or active negotiations with potential buyers: logistics giant Maersk is selling a stake in the company's port management, Raiffeisen Bank is considering selling a Russian subsidiary, PPF Group is selling agribusiness in Russia, and Emerson is selling a plant in Chelyabinsk.