Putin's Export Machine Rolls Right Over Sanctions, Outcry
By Alaric Nightingale May 9, 2014 12:02 PM ET
Vladimir Putin’s incursion into Ukraine and the international condemnation that followed haven’t put a dent in Russia’s exports of gas and raw materials.
The world’s largest energy producer shipped 2 percent more gas to Europe in the first three months of 2014 than it did in the same period last year, government data show. Diesel output for export increased, while cargoes of grains, palladium and nickel either climbed or were about the same. Russia’s crude oil exports fell 0.2 percent from last year.
Economic sanctions from the U.S. and European Union haven’t dimmed demand for what Russia can sell even as price increases betray investors’ anxiety over future supplies. Any plan to pinch the country’s trade to punish Putin for his March annexation of Ukraine’s Crimea peninsula would have to overcome Europe’s dependence on Russian gas and China’s appetite for the country’s metals.
“Investors are paying more for those commodities where there’s perceived to be a greater risk of supply disruption,” said Caroline Bain, an analyst at Capital Economics in London. “The data prove it hasn’t happened yet, and if tensions subside, those risk premiums could diminish.”
Last year, Russia produced 42 percent of the world’s palladium, used in pollution-control devices in cars, and was the second-largest source of refined nickel, a component in stainless steel. At the same time, China was the world’s biggest metal importer.
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http://www.bloomberg.com/news/2014-05-09/russia-s-exports-unhindered-by-putin-s-incursion-into-ukraine.html
