How Russia seeks to limit the scope of Western sanctions

He is a great boxer who is sent to the ropes. He wakes up, stumbles a little, tries to put his thoughts back in place after the shock, and disappears again, even if it means releasing a few mad blows into the void. The sanctions against Russia took Westerners who were as radical as they were unexpected. They pushed the Ruble into the ravine, with a 40% drop in one week. The Moscow Stock Exchange remains closed since Monday and is not expected to open until March 5th. But Russia’s response is gradually falling into place.

The last example so far, this Wednesday, March 2, the Russian central bank announced that foreigners were banned from selling their bets in companies based in the territory. An attempt to stop the bloodshed, and the success of the multinationals was announced during the week, oil giants BP, Shell and Exxon Mobil, to name but a few, abandoning their assets without even trying to resale.

These measures to prevent capital flight also target individuals, as it is now forbidden to leave the country with a cash equivalent of more than $ 10,000.

The ghost of nationalization

It remains to be seen whether the Russians will go so far as to nationalize the assets of Western companies. Dmitry Medvedev, liar Vladimir Poutine and now vice – president of the country’s security council, the threat has been repeatedly raised in recent days.

“We will seize the assets of foreign and foreign companies in Russia, depending on what this country or country has introduced as anti-Russian sanctions. We may nationalize the nationalist property of unfriendly countries, ” it confirmed to a winning newspaper over to the government cause at the beginning of the week, its reporter said International email.

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“The impact of nationalization on Russian-based companies would depend above all on activity, with a supply disruption. The impact is likely to outweigh the issue of asset losses, ” explains Philippe Métais, business lawyer at Bryan Cave Leighton Paisner. TotalEnergies, for example, derives a significant portion of its production from its activity in Russia.

To lose assets depends entirely on the amortization of investments. For an oil tanker, for example, the cost is not the same if a field has just been cultivated or if the drills have been running at full speed for ten years. Anyway, the Quai d’Orsay sailed from 1^yes March letter to 35 CAC 40 companies operating locally, advising them to leave the country.

Penalties in the sky

The Kremlin has endorsed a number of countermeasures, whose impact is more symbolic than economic. Russian airspace is now closed to almost 40 countries, in response to the European Union’s decision to do the same. Many Western companies have already stopped serving the largest country in the world.

Still in the air, Russian authorities are withdrawing from satellite launches thanks to Soyuz. The evacuation of the Russians was present on the Kourou space basis, thus in Guyana. Three launches were planned during the year. The National Center for Spatial Studies (Cnes) reassured them of their ability to find alternatives.

On Wednesday 2 March, Russia demanded that the United Kingdom, which participated in the sanctions, Project OneWeb, pull a satellite constellation project to bring the Internet. A launch is scheduled for March 5, via Soyuz, from Kazakhstan.

Energy lever

However, the energy tap is the main lever for Russia. Europe imports almost 40% of its gas from Russia, which is also the second largest oil exporter in the world. The barrel (brent) is over 100 dollars due to the crisis, and OPEC +, the organization that brings together producing countries and of which Russia is an important member, decided on March 2 to slightly increase production, which will keep the highest prices. The price of gas is also peaking.

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If it’s difficult for Europe to do permanently without Russia’s hydrocarbons as they are, the firm Energy Aspects, a consulting firm in the raw materials sector, argued at the end of the day on Wednesday 2 March that most “European oil wardens do not buy Russian oil, and only a few European filters and brokers are in contact with it”because these big companies are afraid of being caught in the sanctions against Russia.