The Economist - USA (2022-03-12)

6 TheEconomistMarch12th 2022
The world this week Business

ThedecisionbyAmericaand

Britain to ban Russian oil

imports rattled markets. At one

point Brent crude briefly came

close to $140 a barrel; Russia

warned that the ban would

send it hurtling towards $300.

But prices retreated when the

United Arab Emirates became

the first member of opecto

support ramping up produc­

tion. Earlier, the International

Energy Agency said that its

member countries were ready

to release more oil from their

emergency stockpilesto help

tame prices. Shell, meanwhile,

said it would withdraw fully

from Russia. This came after

the energy giant was criticised

for buying a ship’s cargo of

heavily discounted Russian oil

to supply one of its refineries. 

European markets for natural

gasunderwent huge price

movements. Benchmark Dutch

futures briefly hit a record

high of €345 ($380) a megawatt

hour before falling back; prices

swung back and forth within a

spread of €200. The price a

year ago was around €17. 

Trading in other commodities

was also volatile. Shipments of

wheatfrom Russia, the world’s

biggest exporter, and Ukraine,

the fifth­biggest, have ground

to a halt, pushing crop prices

to a record. The London Metal

Exchange was forced to halt

trading in nickelwhen prices

more than doubled to over

$100,000 a tonne; Russia is the

biggest supplier of the top­

quality nickel used in things

like electric­car batteries.

Palladium, manufactured in

catalytic converters to help

curb emissions, hit a new

peak. The spot price for gold

touched $2,070 an ounce,

close to its all­time high,

before falling back. 

AmericanExpress,Mastercard

andVisasuspendedtheir

operationsinRussia.Russian

banksaretryingoutseveral

alternativepaymentsystems,

suchasChina’sUnionPay.

Creditcardswillbenogood

anywayforRussianshopingto

goona spendingsplurge;

Cartier,Hermès,lvmhand

otherluxury-goodscompa­

nieshavestoppedsellingtheir

productsthere.Professional-

servicesfirmsalsoheadedfor

theexit.Deloitte,Ernst&

Young,kpmgandpwc allcut

tieswithRussianbusiness.

McDonald’stemporarily

closeditsrestaurantsin

Russia,a movefilledwith

symbolism.Thefast­food

chainopeneditsfirstoutletin

MoscowinJanuary1990,dur­

ingtheglasnosteraandtwo

yearsbeforetheformaldisso­

lutionoftheSovietUnion.

Picturesofhundredsof

Muscovitesqueuingfortheir

firsttasteofa BigMacwere

beamedacrosstheworld.

Underpubliccontrol

The British government im­

posed sanctions on Roman

Abramovich and six other

oligarchs suspected of having

links to Vladimir Putin, freez­

ing their British assets. The

government took control of

Chelseafootballclub,which

MrAbramovichowns.The

PremierLeaguesidenowhas

tooperateundera special

licence,whichgrants

“permissions”fortheteamto

continueplayingmatches.

Aeroflotsuspendedallflights

outsideRussia,excepttoBela­

rus.Thiscameafterthecoun­

try’scivil­aviationauthority

warnedRussianairlinesthat

planes leased from foreign

entities could be impounded if

they land abroad (the British

government is making it a

criminal offence to fly Russian

aircraft into Britain). Russians

seeking to return home were

advised to transit through

countries that have not signed

up to sanctions. 

The Chinesegovernment set

an annual gdpgrowth target of

5.5%. That is the lowest target

in 30 years, but higher than

most analysts had expected,

given the war in Ukraine. 

American regulators have

reportedly launched an

investigation into whether

Barry Diller, a media mogul,

used insider informationto

buy options on Activision

Blizzard’s stock days before the

announcement that it was

being sold to Microsoft. David

Geffen, a music tycoon, and

AlexandervonFurstenberg,

thesonofMrDiller’swife,are

alsobeinginvestigated.

Amazonapproveda 20­for­

stocksplitandannounceda

sharebuy­backofupto$10bn.

Themoveisanefforttoboost

thecompany’sstockmarket

performance.Theshareprice

hasfallenmoresharplythis

yearthanmostofAmazon’s

otherbigtechpeers.

With cyber­attacks on the rise,

Googleagreed to pay $5.4bn

for Mandiant, a company that

specialises in identifying

threats and tracking down

perpetrators. It helped respond

to the ransomware attack on

the Colonial Pipeline last year.

Thelastword

Elon Muskasked a judge to

throw out a settlement he

reached with the Securities

and Exchange Commission

requiring Tesla to review and

sign off tweets he writes that

relate to the business. The sec

and Mr Musk agreed to the

settlement in 2018, after he had

suggested on Twitter that he

would delist the company and

take it private (Tesla’s share

price soared in response to

that tweet; it remains a public

company). Tesla’s boss says the

settlement is unenforceable. 

Brent crude oil price

$ per barrel*

Source: Refinitiv Datastream *Closing prices

120

90

60

30

0

2020 21 22