We were living in a united world without tensions just a week ago.
However, the world is now divided into two camps: the Russians and the rest.
The Ukrainian and Russian committees’ talks in Belarus yesterday were overshadowed by the escalating military conflict in Ukraine. Putin, who appears frustrated with the Ukrainian resistance and Western sanctions, retaliated by closing its airspace to 36 countries and prohibiting its residents from transferring hard currency abroad.
Because Europe has not sanctioned the industry, commodity trading in Geneva has remained largely unaffected.
However, the ultimate step in Western penalties would be to sanction energy and commodities, which have the potential to change the face of the world, particularly when it comes to our reliance on fossil fuel energy.
Renewable energy stocks go green
The price of a barrel of US crude fell to $100 after the US said it would consider using 30 million barrels from the Strategic Petroleum Reserve in conjunction with an equivalent amount from a group of other countries. This will alleviate positive pressure for a while, but it will not solve the problem of heavy oil dependence.
Divesting is the key
As reported by FX Street, BP’s shares fell nearly 7% following the decision to sell a 20% stake in Russian Rosneft, and the session ended nearly 4% lower. Shell also announced that it would end its partnership with Gazprom, focusing attention on other oil giants such as TotalEnergies and Exxon, which have yet to announce their plans.
Exxon, for example, has a 30% stake in a massive offshore crude development, and the pressure to act is increasing. Yesterday, the stock market gained 0.75 percent as oil prices rose due to the escalating conflict in Ukraine. However, if Exxon announces sanctions against its Russian partners, we may see a selloff in Exxon stock; that is the price to pay for displaying some dignity.
Switzerland takes a side
Switzerland has declared that the assets of 363 Russian individuals and 4 entities would be frozen. After being hit by the Swiss Secrets scandal last week, Swiss banks will face additional pressure, but that is the price to pay for avoiding harmful isolation and preserving the country’s reputation.