Inflation in Russia will be lower this year, as the government will nearly meet its 4.0 - 4.5% target, Bloomberg Economics reported on Monday, citing Aleksandr Isakov, its leading expert on Russia and Central and Eastern Europe.

Isakov said that if the country’s central bank avoids a sharp reduction of the key interest rate from the current 16%, consumer price index inflation will be in line with objectives.

“The Bank of Russia’s key rate has peaked. Policymakers’ next job is avoiding premature easing. While most central banks face the same task in 2024, the Bank of Russia has fresh experience of what this mistake may cost. Its front-loaded easing in 2022 resulted in a ruble rout and drove price growth to triple its 4% inflation target in 2023. If it keeps the policy rate above 12% throughout 2024, inflation will come down to 4.7% year-on-year in December 2024,” Bloomberg Economics’ latest quarterly outlook on global monetary policy quoted Isakov as saying.

The Bank of Russia more than doubled the key rate in 2023 to 16% in a series of consecutive hikes, citing high inflationary pressure. In December, the regulator signaled that the end of the tightening cycle may be approaching. Central bank governor Elvira Nabiullina warned, however, that “until we are confident that there is a steady downward trend in price growth and inflation expectations, the key rate will stay high for as long as necessary.”

The regulator may start lowering the rate in March or April, Isakov said in December in an analysis piece for the Russian weekly Argumenty i Fakty. By December 2024, the key interest rate may ebb to 12-13%, he added.

The Bank of Russia will hold its next key rate review meeting in February.

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Restoring France’s financial system will require tough spending cuts, Finance Minister Bruno Le Maire said on Monday, as he warned the nation of hard times ahead.

Speaking in Paris, Le Maire said he is determined to straighten out the nation’s finances by reducing the country’s multi-trillion-euro debt and the budget deficit. The French government spent heavily to support households and businesses during the Covid-19 pandemic, and the energy crisis which was triggered by EU sanctions on Russia.

“I remind you that we must find at least €12 billion in savings by 2025. So, let’s call a spade a spade: in terms of public finances, the hardest part is ahead of us,” said Le Maire.

The finance minister lamented “the difficult decisions” that the government has made and has yet to make. New proposals will be made in the coming weeks, he added, especially regarding revisions to public spending.

In June, Le Maire said austerity “was not an option,” and that it would be “an economic and political mistake.”

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Russia is firmly focused on reorienting trade and business cooperation toward the Global East and South and away from the West, Presidential Business Rights Commissioner Boris Titov told RIA Novosti in an interview published on Monday.

According to the official, the country’s pivot away from the West is not a political decision nor something “done out of spite or malice,” but a course chosen for purely economic reasons.

“It’s just that the West is already a closed chapter. It is, if you like, a thing of the past for humanity. The future is the East, the so-called global South,” Titov stated, adding that it is unlikely that Russia would pursue economic cooperation with Western countries in the future.

“You know, even if we imagine that Washington and Brussels lifted all sanctions placed on Russia [in connection with the Ukraine conflict] tomorrow and reached out to us again, we would never turn to the West again. There will be no return. And not only because their actions toward Russia were unacceptable,” he said.

Eastern countries are developing dynamically, they possess powerful human capital resources and are the place where the latest technologies are developed, Titov explained.

“And this is where our friends are, those who want not just to be friends, but to develop trade and economic relations with Moscow,” he concluded.

Russia has been steadily expanding ties with countries in the Global East and South in recent years, and this process has greatly picked up speed and scope due to the conflict in Ukraine and the ensuing Western sanctions against Moscow. Russia rerouted the bulk of its energy exports to Asia last year, becoming the top supplier of oil to both China and India.

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Iran and Russia have officially switched from the West’s SWIFT financial clearing system to a direct interbank transfer mechanism, the deputy head of the Central Bank of Iran (CBI) has said.

Mohsen Karimi told Iranian state television on Sunday that the system allows companies in both countries to trade in their respective national currencies instead of using the dollar or euro, FARS news agency reported.

“We have linked the financial correspondence networks of the two countries,” he explained.

“This means that the banks of our two countries no longer need Switzerland to communicate with each other and commercial banks of both countries can establish brokerage relations with each other. The [Iranian] exporter can now charge the Russian side in rials and receive money from them via Russian banks in Iran,” Karimi added, noting that the system also allows for payments in Russian rubles.

Belgium-based SWIFT is a high-security banking messaging system that enables financial transfers around the globe. While a number of countries have their own messaging systems, most global transactions are still conducted via SWIFT. Last year, key Russian banks were disconnected from the network as part of sanctions related to the Ukraine conflict.

Western restrictions forced Russia to actively promote its domestic payment system, SPFS, first introduced when the US targeted the country with sanctions in 2014, as an alternative to SWIFT. The system, which facilitates financial messaging between banks domestically and internationally, had 514 participants, including 131 foreign entities from 15 nations, as of the first half of last year.

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Restrictions imposed by the US on exports of computer chips to China go beyond the concept of national security and destroy supply chains, Chinese Foreign Ministry spokesperson Mao Ning said on Monday.

The Biden Administration introduced a sweeping set of export controls in 2022 aimed at slowing China's technological advance, claiming the decision was motivated by national security concerns. Among the measures was a ban on sales to China of certain semiconductor chips made anywhere in the world with US equipment, and a block on shipments of chips for supercomputing systems and artificial intelligence (AI).

Speaking at a weekly press conference in Beijing, Mao said that the US has “unreasonably” suppressed China's semiconductor enterprises, according to Global Times newspaper, adding that the restrictions are “a genuine act of economic bullying.”

The US Department of Commerce also announced it would conduct a semiconductor supply chain review in January to “reduce national security risks” posed by Beijing.

“The US is using ‘national security’ as a pretext to restrict chip exports to China, but in fact its relevant initiatives completely go beyond the boundaries of the concept of national security, so that the normal trade of ordinary civilian-use chips is significantly restricted,” Mao said. Such actions have also seriously impacted the stability of international production and supply chains, she added.

According to the Global Times, the US-made Nvidia RTX4090 graphics card, which is mainly designed for use with computer games, has been taken off the shelves in China due to the export control measures. Instead, the world's leading AI chipmaker recently unveiled a slower, less powerful version of the card that complies with US export controls and can be sold in the Asian nation.

Beijing on Sunday announced its own sanctions on five American defense industry companies, citing arms sales to Taiwan and the unilateral sanctions which the US has slapped on Chinese companies and individuals.

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Farmers all over Germany are rallying for a week of protests against government austerity measures, which they fear may leave the agricultural sector without support and force farms to shut down.

Thousands have flocked to Berlin and other major cities to protest the cuts to diesel subsidies and tax breaks for agricultural vehicles introduced by Chancellor Olaf Scholz last month as part of a broader package intended to plug a multibillion-euro budget deficit. Among other things, farmers plan to stage blockades on motorways and travel in slow-moving convoys.

The farmers had already staged a mass protest in Berlin following the announcement in mid-December, forcing the government to partially roll back the planned measures. For instance, Berlin agreed not to abolish the preferential tax treatment of agricultural vehicles, and postpone diesel tax break cuts until 2026. However, protesters say the government’s concessions were not enough, and are calling for an ‘Action Week’ of daily protests nationwide from January 8 to demand a full reversal of the proposed cuts.

“This can only be a first step,” Joachim Rukwied, head of the farmers association DBV, said regarding the partial cancellation of the cuts, pledging that farmers would protest the government’s plans “as the country has never seen before.”

“We demand the complete reversal of these tax increases without any ifs and buts… I expect that tens of thousands of tractors will come to our rallies all over Germany,” Rukwied told Bild news outlet.

The week-long rally is expected to end with a major demonstration in the German capital on January 15.

Many fear the protests could paralyze transportation across the country and pose a threat to public safety.

“Not every form of protest helps the cause. This applies to striking actions as well as to tractor blockades. Anyone who oversteps must face consequences,” Herbert Reul, Interior Minister of North Rhine-Westphalia, told the Rheinische Post, warning the demonstrators not put their own interests above public order. His comments came after a group of some 100 farmers blocked German Vice Chancellor Robert Habeck from disembarking from a ferry last week.

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Major oil producer Saudi Arabia has cut the February price of crude for buyers in all regions, Reuters and Bloomberg reported on Sunday, citing a company statement.

According to the reports, state producer Saudi Aramco has slashed its flagship Arab Light crude oil price to Asia, the country’s main market, by $2 to $1.50 a barrel above the benchmark, its lowest level in 27 months. The company also reduced oil prices for February delivery to northwestern Europe, the Mediterranean, and North America.

The move comes ahead of the traditional February and March slump in oil consumption, which analysts say may further increase the build-up in oil inventories that has worried market participants for months.

The situation already forced the OPEC+ group of major oil-producing countries, led by Russia and Saudi Arabia, to take a series of steps in recent months to support crude prices and help stabilize the global oil market. The global oil industry had a volatile year due to Western sanctions on Russia and, more recently, the Israel-Hamas war. The most recent move involved significant output cuts (around 2.2 million barrels per day) which the group agreed last month to extend into the first quarter of 2024.

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Force majeure has been declared at Libya’s largest oilfield, Sharara, after protesters shut down the field, according to a statement released by the National Oil Company (NOC) on Sunday.

The company added that negotiations are ongoing to resume production at the site as soon as possible.

“The National Oil Corporation has declared a force majeure on the Sharara oilfield effective Sunday, January 7th, 2024, due to it’s closure by protesters,” the statement reads.

According to the company, the closure has resulted in the suspension of crude oil supplies from the field to the Zawiya export terminal.

The 300,000-barrel-per-day field in southern Libya has been occupied by protesters since Tuesday. They have been urging the government to address their demands, such as the provision of fuel and its derivatives in the region of Fezzan, the activation of a refinery project in the south, road infrastructure improvements, employment opportunities for local graduates, restructuring of the Fezzan Reconstruction Fund, as well as the revocation of an agreement between the Ministry of Health and the NOC regarding Ubari General Hospital.

Turmoil has plagued the once-prosperous African country since 2011, when longtime ruler Muammar Gaddafi was overthrown with the help of NATO. The events left Libya divided between two rival administrations – one in the capital, Tripoli, and the other in the eastern city of Tobruk. There have been several attempts to unite them under a single authority, but they have so far failed.

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Global prices for crude oil will double if disruptions triggered by Yemen’s Houthi rebels also affect the Strait of Hormuz, Daan Struyven, Goldman Sachs’ head of oil research, said on Saturday in an interview with CNBC.

The Houthis have staged a de facto blockade of shipping through the Red Sea and continued to attack cargoes following the escalation of hostilities between Israel and Hamas in Gaza. The Yemen-based militants target vessels thought to be linked to Israel, which they say is in solidarity with the plight of the Palestinians.

“If you’ve got a disruption of the Strait of Hormuz for a month, prices would rise by 20%,” Struyven said, adding that prolonged interference in the strait could eventually double oil prices.

Despite viewing the scenario as “highly unlikely,” Struyven joins a wide range of analysts from across the entire energy sector decrying the situation in recent weeks.

The increasing attacks have forced global shipping companies to divert vessels from the Red Sea around the Cape of Good Hope, at the southern tip of Africa. For cargos travelling from Asia to Europe or North America, that course adds around 6,000 nautical miles to the journey and can delay delivery times by up to a month, inevitably sending shipping costs soaring.

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Iraq is planning to halt imports of petroleum products as soon as in 2024 after launching a number of oil refineries, which were stalled during decades of military conflict, according to Oil Ministry spokesman Asim Jihad, as cited by RIA Novosti.

The Middle Eastern nation has been purchasing oil products, such as reformulated gasoline, from international markets to compensate for energy shortages.

“In 2024, Iraq will rely on domestic production more, and after a number of refineries start production, there will be a reduction in the volume of petroleum product imports until they are completely ceased,” the official said.

In October, Iraqi Prime Minister Mohammed Shia Al Sudani said the authorities had set a deadline of January 2024 for international energy companies to submit formal letters of intent to take part in new licensing rounds.

Despite its immense oil and gas reserves, Iraq, the world’s fifth largest oil producer, has remained dependent on imports to meet demand. Ravaged by decades of conflict, the country’s crumbling infrastructure and endemic corruption have obstructed reconstruction efforts.

Earlier this week, the energy authorities reported over $97 billion in 2023 oil revenues – a decline compared to 2022’s record-setting $115 billion.

Iraq sold over 108 million barrels of oil in December alone, averaging 3.4 million barrels per day at an average rate of around $77 per barrel. The sales brought in a total revenue of $8.3 million for the last month of 2023.

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Germany has retained its position as the largest exporter of beer to Russia over the past two years, RIA Novosti reported earlier this week, citing international trade statistics covering 2022-2023.

Export data for the first ten months of last year shows that Germany accounted for about a third of the Russian market. In 2023, German beer sales saw a year-on-year increase of 32% to $96 million, despite Western sanctions over the Ukraine conflict.

It was followed by Lithuania and Latvia, each of which accounted for more than 15% of Russian imports of the beverage. In 2023, the former nearly doubled beer sales to Russia to $36.5 million, while the latter saw a fourfold surge to $34.4 million.

Due to the significant increase in exports by the Baltic states, Belgium and the Czech Republic were pushed out of the top three in the ranking of top suppliers of beer to Russia. However, exports from both nations saw a modest year-on-year increase of 11%.

In monetary terms, exports of Belgian beer to Russia amounted to $26.6 million, while Czech sales totaled $26.4 million.

Poland, the sixth largest exporter of the beverage to Russia, doubled its supplies to $5.3 million last year. Finland also doubled its exports, to almost $2 million.

Italy, the world’s largest wine producer for the past nine years, was second, at $55.4 million (up 27.6%). Another Baltic state, Lithuania, rounded out the top three at $42.7 million, nearly doubling last year’s amount ($23 million).

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The first week of January proved to be a rollercoaster for financial markets, as conflicting economic data left investors grappling with uncertainty. After a robust Christmas rally, the markets faced a series of mixed signals, prompting a reevaluation of expectations for the year ahead. As the week concluded, the focus shifted to the upcoming earnings season, particularly in the banking sector, with expectations running high despite the looming specter of inflation.

The S&P 500, after weeks of gains, experienced its first week of declines for 2024. While the week’s volatility was notable, the market closed with a slight gain of two-tenths of one percent, indicating a degree of resilience. Investors navigated through a sea of mixed economic data, including a hotter-than-expected jobs report and a softer-than-expected ISM services report. 

Market sentiment has swung Bearish after the Nasdaq drops 2% on the first trading week of the year pic.twitter.com/hKuqgEpPbq

— Stocktwits (@Stocktwits) January 5, 2024

The week’s economic indicators painted a nuanced picture of the US economy. Strong payroll numbers provided an upside surprise, but concerns of a gradually slowing economy persisted. The ISM services report, which contains the economic activity of more than 15 manufacturing industries, measuring employment, prices, and inventory levels, added to the uncertainty, with questions about its reliability due to potential seasonal adjustment issues. The Federal Reserve’s cautious stance reflected a delicate balance, acknowledging potential wage pressure but maintaining an eye on an easing labor market.

Just a little paradox https://t.co/EKUzc76e36 pic.twitter.com/bajis5qgIX

— zerohedge (@zerohedge) January 5, 2024

Apple’s Regulatory Scrutiny

Amid the economic turbulence, tech giant Apple faced headwinds as regulators reportedly delved into the competitive practices within its ecosystem. While historical trends suggest that market reactions to such investigations tend to fade, the sweeping nature of this probe, coupled with Apple’s significant market share, raised concerns among investors. The potential exclusion of competing apps within the ecosystem added to apprehensions, influencing the stock’s performance.

Bank Earnings on the Horizon

As the markets closed the week, attention turned to the forthcoming corporate earnings season, with banks taking center stage. The KBW Bank Index, a benchmark stock index of the sector, reached a ten-month high in anticipation of strong performances from major players such as JP Morgan, Wells Fargo, and Citigroup. The banking sector’s ability to navigate economic headwinds will be closely scrutinized, offering insights into the broader market trajectory. 

She canna take any more, Cap'n! She's gonna blow pic.twitter.com/HOC2YEMX9j

— zerohedge (@zerohedge) January 5, 2024

One of the key concerns casting a shadow over the markets is the looming specter of inflation. While consensus estimates project a 12% S&P 500 earnings growth for the year, skepticism surrounds the attainability of such lofty figures. The mixed economic data, coupled with the potential softening of the macro environment, raises questions about the sustainability of rapid earnings growth. Investors are cautiously watching for signs of a nasty inflation surprise in the weeks ahead. 

Here comes the next supply-driven inflation shock pic.twitter.com/2H7ppdmRVQ

— zerohedge (@zerohedge) January 5, 2024

The first week of January has set the stage for a year of market volatility, driven by a complex interplay of economic indicators, regulatory challenges, and corporate performances. As the markets enter the earnings season, particularly in the banking sector, investors are bracing for further turbulence amid lingering uncertainties about inflation and the Fed’s response. The coming weeks promise a delicate balance of economic analysis and corporate scrutiny, as the market grapples with the aftermath of a mixed and tumultuous start to 2024.

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The Russian economy will inevitably slow down in 2024 due to tight monetary policies pursued by the central bank, RIA Novosti reported on Saturday, citing a consensus outlook for the Russia's GDP growth.

Gross domestic product is expected to see a moderate increase of 1.6% compared to the previous projection of 3.5%.

The slowdown will occur due to a reduction in state investment and subsidies of the construction sector, as private investment will not have a chance to turn into a full-fledged driver of the economy, according to Aleksander Abramov, head of the Laboratory for Analysis of Institutions and Financial Markets at RANEPA, as cited by the news agency.

“In 2024, we expect GDP growth at 1.5-2% with the main driver most likely to be demand from the population,” Abramov said.

According to Oleg Abelev, head of research at Ricom-Trust Investment Company, growth will also be dragged down by the weakening ruble.

“Further economic growth will be facilitated by maintaining a stimulating fiscal policy, structurally high demand for investment in core assets, further growth of incomes amid a labor shortage, and policies supporting a faster increase in the minimum living wage,” Popov said.

Analysts polled by the news agency share the view that the Bank of Russia will not rush to soften its monetary policy, although the regulator has already completed its hawkish cycle.

On December 15, the central bank raised the interest rate by 100 basis points to 16%, explaining that inflationary pressures remained high. That marked the fifth hike since summer, when the base rate was 7.5%.

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Russia maintained its position as the top oil and gas supplier to Türkiye in 2023, the Hurriyet newspaper reported on Saturday, citing data from Ankara’s Energy Market Regulatory Authority.

In October, the share of Russian gas in Türkiye’s imports reportedly amounted to 59.14%, while Russian oil accounted for 49.93% of national consumption, an increase from 40.74% in October 2022.

According to the paper, deferring payments for Russian natural gas last year “had a calming effect on Ankara in solving economic problems.”

In May, Moscow agreed to postpone the settlement of Türkiye's gas bills. Under the terms of the deal, up to $4 billion in Turkish energy payments to Russia were reportedly put off until 2024.

Last month, Reuters reported that the Turkish government and companies had managed to save around $2 billion on energy bills in 2023 by increasing imports of discounted Russian oil and refined products.

China and India have been importing even larger volumes of Russian oil and gas, but Türkiye's proximity to Russian ports helps Ankara to save more than other buyers, thanks to lower shipping costs.

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More than 55,000 businesses were shut down in France in 2023, marking a record high for company closures since 2017, according to data compiled at the close of December by the Bank of France.

The statistics released by the regulator on Saturday show that 55,492 companies, on average, have faced bankruptcy or liquidation over the past 12 months.

Although the recorded surge in closures was significant, the Bank of France noted that the level is still below the average annual bankruptcy filings of 59,342 scored between 2010 and 2019. The pandemic years saw a considerably lower number of companies going out of business, almost half of the current figures.

According to the report, mostly small and medium-sized enterprises (SMEs) were bearing the brunt of the closures in 2023. Businesses, employing up to 250 people, accounted for vast majority of the total, with 55,435 closures.

Meanwhile, medium and large firms with over 250 employees, also saw an increase in closures, the regulator noted, adding that their numbers reached 57, doubling from 2022.

The country’s agricultural sector was the only one recording a drop of 1.3% in the  number of bankruptcy filings.

In December, the Financial Times reported that the number of corporate bankruptcies across the world exceeded levels reached during the 2008 global financial crisis.

Analysts attribute the surge to higher key rates, as well as self-liquidation of so-called ‘zombie firms,’ which had pulled through the Covid era only thanks to government support.

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China’s first domestically manufactured electric airplane successfully completed its maiden flight this week, the country’s media reported on Friday.

The AG60E plane, developed by China Aviation Industry General Aircraft Corporation, took off from Jiande Qiandaohu Airport in east China’s Zhejiang Province on Wednesday. It landed at the same airport after conducting a short test flight, China Daily said, quoting the manufacturer.

The AG60E is an electrically modified version of the AG60, an all-metal, side-by-side two-seat, single-engine, light-weight aircraft. The AG60 was designed for civilian purposes such as flight training, agricultural surveys, and aerial sightseeing.

The AG60E has a total length of 6.9 meters, a wingspan of 8.6 meters, and a maximum cruising speed of 185kph, according to Xinhua. The development of an electric version of the fixed-wing aircraft contributes to a strategic emerging industry, the manufacturer told the outlet.

Instead of jet fuel, electric planes are typically fitted with rechargeable lithium-ion batteries and electric motors known for their zero-carbon-emission output. Alternative power sources include solar power or a hybrid, part-electric, part-combustion engine approach.

Rolls Royce launched what it described as the world’s fastest all-electric plane in 2021. Global high-tech startup AutoFlight, which started in China and has manufacturing and test facilities in Shanghai, has been working on an electric, vertical take-off and landing aircraft. Europe’s Airbus has also been running electric flight projects since 2010.

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Sales of new motor vehicles in Russia amounted to more than 1.3 million units in 2023, a 60% surge compared to the previous year, the Ministry of Industry and Trade reported on Friday.

According to data released by the ministry, sales of passenger and commercial vehicles amounted to 1.056 million (+62%) and 104,958 units (+35%), respectively. The number of trucks and buses sold in Russia during the year totalled 140,204 (+74%) and 17,792 units (+19%), respectively.

For comparison, the Association of European Businesses (AEB) reported last year that sales of new passenger and light commercial automobiles in Russia had totalled 687,370 in 2022, a dramatic decline of 58.8% compared to 2021, when nearly 1.7 million vehicles were bought. The plunge was attributed to a shortage of vehicles at local dealerships after American, European, Japanese and South Korean automakers either left Russia, or suspended deliveries of cars and components, halting local production indefinitely due to Western sanctions arising from the Ukraine conflict.

Despite the positive data, Russian and Chinese automakers have not been able to fully meet demand at a quick pace, and many buyers have been deterred by the high prices of vehicles produced in China or locally.

Chinese automakers have embarked on a major expansion in Russia, in an attempt to fill the void left by departing Western firms.

While Russian automakers still account for the majority of the local market, Chinese brands have seen impressive sales growth.

According to data released by the Russian research agency Autostat in November, sales of Chery vehicles jumped to 105,601 units in January-November 2023, an increase of 236% from the same period of 2022. Haval sold 96,381 cars, up 224%. Sales Geely cars soared 260% to 79,936 units.

Among light commercial vehicles, the GAZelle NEXT produced by the Russian automotive giant GAZ was the best-seller, with 53,952 units sold in 2023, while its share of the local market reached 51%, according to the Trade Ministry. It was followed by UAZ, with 19,273 cars sold.

Russia’s KAMAZ remained the best-selling truck with 28,237 new vehicles sold in 2023. It was followed SITRAK (23,811), SНACMAN (19,983), and FAW (12,565) – all produced by Chinese automakers.

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Finland will ban imports of Russian liquefied natural gas (LNG) from next year, Environment and Climate Minister Kai Mykkanen said on Friday in an interview with Helsingin Sanomat.

According to the minister, Helsinki intends to develop a regulatory framework this year, which will allow the embargo to be imposed.

“I wouldn’t like to set any specific date, but hopefully next year we will be in a situation where the ban comes into force,” Mykkanen said.

Finland's state-owned energy company Gasum still receives LNG from Russia under the terms of the current contract. However, the amount of gas entering the Nordic nation has decreased over the past two years.

So far, imports of Russian LNG have been prohibited at Finland’s largest terminal, Inkoo, located on the south coast.

“Finland’s LNG imports from Russia have been small. This issue is not significant,” Mykkanen stressed.

In September, Leonid Mikhelson – head of Novatek, Russia’s second-largest natural gas producer – said that Gasum had resumed LNG purchases in contracted volumes from the Kryogaz-Vysotsk plant controlled by the company, and was receiving 40% of all fuel produced at the facility.

Russia cut off pipeline gas supplies to Finland in May 2022, when Gasum refused demands to pay for gas in rubles.

The EU has not imposed sanctions on Russian LNG. Although pipeline gas imports to Europe decreased sharply in response to Moscow’s military operation in Ukraine, member states purchased record amounts of Russian LNG in 2023.

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China has begun an anti-dumping investigation into the import of competitively priced brandy from the European Union, the country’s commerce ministry announced on Friday.

The probe follows a complaint submitted by the country’s domestic brandy industry, the ministry’s announcement said. Dumping occurs when producers export their product to another country at a price below fair market value, harming local manufacturers.

According to Bloomberg, Chinese authorities are targeting French cognac producers, specifically Pernod Ricard and Remy Cointreau.

The probe comes nearly four months after European Commission president Ursula von der Leyen complained about global markets being “flooded” with Chinese electric cars (EVs), which are cheaper and, she claimed, have kept prices artificially low through “huge” state subsidies. In October the EU opened an anti-subsidy probe into EV imports from China.

France was the main backer of Brussels’ investigation, with carmakers Renault and Stellantis particularly exposed to a threat coming from cheaper competitors, Bloomberg noted.

China’s commerce ministry said the timeframe for its probe into imported brandy is one year and that it may be extended by another six months.

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Russian high-end carmaker Aurus, best known for producing limos for the Russian president, is expected to broaden its range of vehicles by adding two more affordable and mass-market models, according to Deputy Prime Minister Denis Manturov.

Sales of new large executive and business class sedans will be launched in 2025, the official said on Thursday in an interview with TASS news agency.

According to Manturov, a new SUV may also appear in the same line, but not in the near future.

“They will be in a different price category, more affordable and more mass produced,” the minister said.

In December, Manturov announced that Aurus had started to assemble its luxury cars in the United Arab Emirates, and was planning to open a dealership there.

The Aurus line of premium vehicles was created in 2013 by order of the Russian Ministry of Industry and Trade, with the aim of replacing the fleet of mostly foreign-made cars used by top Russian officials. The car specs are akin to those of luxury British maker, Rolls Royce.

Prices of the Aurus Senat sedan start at $443,700, and at $447,000 for the Aurus Komendant, according to the Panavto dealership.

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A slump in industrial production and an economic downturn in Germany, Europe’s second biggest economy, have caused carbon emissions to drop to their lowest level in seven decades, a German think tank has reported.

Last year, Germany’s greenhouse gas emissions fell to 673 million tonnes of CO2, which represents a 46% drop compared to the reference year 1990 – their lowest level since the 1950s, Agora Energiewende, a non-profit think tank advocating for energy transition, said in a press release on Thursday.

CO2 emissions were well below the annual target stated in the Federal Climate Protection Act, the organization added, citing its preliminary calculations.

The think-tank named a significant drop in electricity demand among the factors behind the reduction. Coal-fired power generation fell to its lowest level since the 1960s, it said.

“Economic situation and international crises” also saw production by energy-intensive companies decline, which drove emissions from industry down, the think tank explained. According to preliminary figures, energy-intensive production fell by 11% in 2023, it added.

Germany, the EU’s economic powerhouse, has seen a decline in manufacturing and new factory orders in 2023. The German economy shrank in the 2nd and 3rd quarters of last year compared with 2022, according to figures from Germany’s statistics agency, Destatis. The country has become the worst-performing major developed economy in recent months.

“An important factor in the slump in production was the ongoing price rise in the European gas market due to the switch from cheap pipeline gas to more LNG imports,” Agora Energiewende wrote, describing the development as “the fossil fuel crisis.” EU countries, including Germany, dramatically cut imports of natural gas, coal, and oil from Russia in 2022 as part of their Ukraine-related sanctions campaign, leading to a massive hike in prices. Energy prices have since gone down but remain above their pre-crisis levels, the release noted.

The drop in emissions was also achieved by Germany importing more electricity from neighboring states and a 5% increase in renewable energy production. According to the think tank, wind and solar energy supplied more than 50% of total gross electricity demand for the first time in 2023.

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Container freight rates are surging as attacks by Yemen-based Houthi rebels on cargo ships in the Red Sea have forced shipping giants to send vessels around southern Africa's Cape of Good Hope, Reuters reported on Thursday.

According to data tracked by the international shipping marketplace Freightos, Asia-to-North Europe rates have more than doubled to over $4,000 per 40-foot container this week, while prices for Asia-to-Mediterranean shipping have climbed to $5,175.

Some carriers have announced rates above $6,000 per 40-foot container for Mediterranean shipments starting mid-month, and surcharges of $500 to as much as $2,700 per container could make all-in prices even higher, according to Judah Levine, Freightos' head of research, as cited by the agency.

The price leap is attributed to attacks carried out by Yemen-based Houthi militants across a key artery leading to the Suez Canal, and have so far forced global shipping majors to send cargo ships on the long journey around Africa. The prolonged voyages last up to 20 days more, and are leading to a shortage of container ships.

“People desperate to get space (on ships), are going to pay,” Christian Sur, executive vice president for ocean freight at Unique Logistics, told the agency.

Rates for shipments from Asia to North America's East Coast have surged 55% to $3,900 per 40-foot container, while West Coast prices have soared 63% to over $2,700 ahead of expected cargo diversions to avoid Red Sea-related issues, according to Levine.

On Tuesday, US Central Command said a US destroyer on patrol in the Red Sea shot down two ballistic missiles fired from Houthi-controlled areas of Yemen, while it was responding to a report that a commercial vessel had been struck by a missile.

The attacks on vessels in the Red Sea area are being carried out by Yemen-based Houthi rebels, who claim they are acting in support of Hamas, following the escalation of hostilities between Israel and the Palestinian armed group in Gaza.

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In the wake of Barclays downgrading Apple’s stock and trimming its price target, the tech giant experienced a 4% drop in its shares on Tuesday and the slide continued on Wednesday. The downgrade, prompted by weakening iPhone 15 sales, has raised concerns among analysts and investors regarding the outlook for iPhone 16 sales and broader hardware projections.

Barclays analyst Tim Long expressed apprehensions not only about Apple’s hardware sales but also about the services business, citing regulatory scrutiny as a potential factor. Long anticipates that regulatory challenges could lead to a deceleration in the growth of Apple’s lucrative services segment. Despite Apple CEO Tim Cook highlighting “better-than-expected” growth in the services unit during a previous investor call, Barclays remains skeptical about the reliability of this growth in the long term.

The regulatory landscape poses additional uncertainties for Apple, as Long points out the potential impact of investigations into app stores and the upcoming determination on the Google Traffic Acquisition Cost (TAC) in 2024. These factors contribute to Barclays’ cautious stance on Apple’s future performance.

The overall market sentiment appears to have been influenced by the Barclays analysts’ downgrade of Apple’s stock. The tech sector, in particular, faced headwinds, with Apple shares experiencing a decline. The recent stall in the stock market rally, after two months of gains, is indicative of the concerns that analysts have raised regarding Apple’s performance and the broader tech industry.

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French supermarket Carrefour is telling shoppers that it will no longer sell PepsiCo products such as carbonated soda drinks Pepsi and 7up and Lay’s chips products because they’ve become too expensive, Reuters has reported.

According to the outlet, a spokesperson for France’s second biggest grocery has chain confirmed that it will place a note on shelves that have displayed PepsiCo goods which reads “We are no longer selling this brand due to unacceptable price increases.” It is unclear whether PepsiCo products already on Carrefour shelves will be withdrawn, the report added.

In October, PepsiCo warned of “modest” price hikes in the new year amid steady demand. The US snacking and beverage giant has raised prices for seven consecutive quarters, hiking them by double digits in the July-September period last year. The company also reduced package sizes of some of its products claiming the aim was “to meet consumer demand for convenience and portion control.”

Negotiations are underway in France between food manufacturers and retailers, with the latter demanding price cuts, as they say prices for raw materials and energy have recently come down. Food industry representatives argue that production costs remain high and that manufacturers have absorbed significant inflationary shocks.

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Business activity in Europe’s 20-nation single currency bloc continued to contract at the end of 2023, as a downturn in the dominant services industry stretched into the final month of the year, data compiled by S&P Global has revealed.

The Flash Composite Purchasing Managers’ Index (PMI) for the bloc, a measure of manufacturing and services activity, was revised up for December to match November's 47.6 after a preliminary estimate of 47.0. However, the gauge remained below the 50 mark, which separates growth from contraction, for a seventh consecutive month.

The data shows that the Eurozone saw a contraction of 0.1% in the third quarter of 2023, and likely shrank again last quarter, having met the technical definition of a recession.

Meanwhile, the Services Business Activity Index moved up to a five-month high of 48.8 compared to 48.7 recorded in November, as demand was seen to further weaken in the euro area.

Although the decline in demand for services slightly eased in December with the new business index rising to a five-month high of 47.1 from 46.7, it remained below 50 for a sixth month.

“It's not quite recession territory yet for services, but the vibe is far from growth-oriented. There are a lack of clear signals indicating an imminent return to robust expansion,” said Cyrus de la Rubia, chief economist at Hamburg Commercial Bank.

“The Composite PMI... is sounding the recession alarm for the euro zone though,” he added saying his economic modelling forecast a contraction in the fourth quarter.

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Global prices for crude oil increased on Thursday, stretching gains scored during the previous day as tensions around the Israel-Gaza military conflict continue to escalate, and protesters at the largest oil field in Libya ceased production.

Global benchmark Brent futures increased 0.42% to settle at $78.58 per barrel. The US benchmark West Texas Intermediate (WTI) crude rose 0.55% to $73.10 per barrel.

On Wednesday, both benchmarks soared some 3% to end higher for the first time in five days, with WTI recording the biggest daily percentage gain since the middle of November.

The surge came amid local protests that forced a complete halt to production at Sharara, one of Libya’s largest oil fields, which regularly produces up to 300,000 barrels per day.

Elsewhere, almost 100 people were killed and more than 200 injured by two explosions that ripped through a memorial marking the fourth anniversary of the death of Iranian General Qassem Soleimani in Iran’s south-central city of Kerman.

Concerns regarding shipping vessels in the Red Sea area also remain, as Yemen-based Houthi rebels continue to attack cargoes following the escalation of hostilities between Israel and Hamas in Gaza.

The market was also supported by data from the American Petroleum Institute showing that US crude stocks dropped 7.4 million barrels in the week ended December 29. However, gasoline inventories rose by about 6.9 million barrels, against forecasts for a 200,000-barrel drop, and distillate stockpiles rose more than expected.

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The number of homeless in rural England has surged by 40% in five years amid rising property prices and the cost-of-living crisis, according to a recent report by British countryside charity Campaign to Protect Rural England (CPRE).

The number of people sleeping rough – meaning those living in the open air, in tents, makeshift shelters or buildings not meant for human habitation – has increased in the UK from 17,212 counted in 2018 to 24,143 in 2023, according to the study.

It’s estimated that every 15 people per 100,000 are homeless across England, the researchers said. CPRE found that the problem is more severe in rural areas than in many of England’s towns and cities, including London, Leeds or Norwich.

According to the charity, the crisis stems from the economic downturn that started in 2022, when inflation in the UK hit a multi-decade high of 11.1% due to soaring costs of energy and food. The crunch eventually resulted in record-high house prices, stagnating wages, huge waiting lists for public housing and price rises for second homes and short-term lets, including Airbnb. A lack of affordable housing that it describes as “severe” has exacerbated the country’s cost-of-living crisis, CPRE said. The report adds that 300,000 people are waiting for social housing in rural England, where the average house price stands at around £420,000 ($535,000).

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Elvira Nabiullina’s ten-year stewardship at the forefront of the Bank of Russia, marked by fiscal mastery and trailblazing leadership, showcases a narrative of exceptional achievement against the backdrop of societal shifts and global economic challenges. Nabiullina’s journey from humble beginnings to becoming the firate woman to steer the economic course of a then G8 country underscores her mettle and intellectual prowess, exemplifying the significance of equal opportunities in a landscape defined by traditional gender roles.

Maintaining a low profile yet earning the accolade of Russia’s ‘leader of distinction,’ Nabiullina’s transparent and disciplined leadership style, complemented by an unparalleled work ethic, has solidified her position as a beacon of excellence, integrity, and resilience. Her impact on the financial landscape resonates not only as a testament to her adept economic stewardship but also as a pioneering force toward a more inclusive and equitable future.

Nabiullina’s tenure has been characterized by deft maneuvers, particularly during challenging times when her hawkish monetary policies stabilized the economy and garnered international acclaim, including the prestigious title of central bank governor of the year. As the West intensifies efforts to isolate Russia financially, Nabiullina stands as the linchpin, navigating the economy through unprecedented sanctions.

However, despite commendable fiscal strategies, the recent International Monetary Fund prediction of a 2.2 percent growth in Russia’s economy, a substantial increase from the initial 0.7 percent forecast, prompts scrutiny.

Entering a new year, Nabiullina faces mounting challenges – tightening sanctions, potential brain drain, volatile commodities markets, a weakened ruble, and spiraling inflation. This critical juncture prompts the question: Will she persist as Moscow’s steadfast economic steward, ensuring the Kremlin’s financial resilience, or will internal dissent and external pressures necessitate a change in course?

Furthermore, Nabiullina revealed that the Russian central bank will require two to three months or more to ensure a steady decline in inflation before making decisions on interest rate cuts, emphasizing the importance of a comprehensive analysis of indicators characterizing sustainable inflation declines. Admitting that the central bank might have initiated monetary policy tightening earlier than July, Nabiullina stressed the uncertainty surrounding the timing of rate cuts, urging a cautious approach and considering a broad spectrum of indicators indicative of inflation stability.

In her role as a torchbearer for gender equality, Elvira Nabiullina aligns with her counterparts, Christine Lagarde and Janet Yellen. Her decade-long leadership has not only demonstrated fiscal mastery but has also championed inclusivity in the financial realm, actively addressing gender disparities in the global economic landscape. Nabiullina’s commitment to gender diversity extends beyond fairness, recognizing its indispensable role in fostering sustainable economic growth. Her leadership is a beacon of inspiration for women aspiring to excel in central banking and finance, contributing to the broader narrative of achieving gender equality in influential economic positions.

As we reflect on Nabiullina’s decade-long stewardship, the upcoming year promises to be a pivotal chapter in her legacy. Will she continue to navigate economic challenges with the finesse that earned her international recognition? Only time will tell, but one thing remains certain – Elvira Nabiullina’s journey is far from over, and the world will be watching closely.

Russia’s gas exports to China were nearly 50% higher in 2023 than they were the previous year, energy giant Gazprom has revealed.

In 2023, Russia supplied 22.7 billion cubic meters of gas to the Asian nation via the Power of Siberia pipeline, the company said in a Telegram post on Wednesday. The amount exceeded Gazprom's contractual obligations by 700 million cubic meters, it added. In 2022, 15.4 billion cubic meters of gas were delivered to China via the mega-pipeline.

According to the post, Gazprom has accelerated the supply of gas to Russia’s leading trading partner via the Power of Siberia pipeline to a new level; a new daily record was set on Tuesday. Gazprom has exceeded its contractual obligations on a regular basis throughout the past year, with frequent daily records reported.

Gazprom CEO Aleksey Miller said last week that gas supplies to China will grow further and are forecast to hit 38 billion cubic meters in 2025.

Russia rerouted its energy exports to Asia after it lost buyers from the countries of the EU in 2022 due to the start of the conflict in Ukraine and Western sanctions.

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The EU has added Russian mining giant Alrosa, as well as its CEO Pavel Marinychev, to its sanctions blacklist, the European Council announced on its official website on Wednesday.

According to the statement, the designation complements the import ban on Russian diamonds, which Brussels included in its 12th package of Ukraine-related anti-Russia sanctions adopted in mid-December.

“The Council today introduced additional restrictive measures against one person and one entity responsible for actions undermining or threatening the territorial integrity, sovereignty, and independence of Ukraine,” the council said in its statement.

It noted that the diamond industry is “strategically important” for the Russian economy, and Alrosa, in particular, has a long-standing partnership with the Russian Armed Forces, being therefore “involved in an economic sector providing a substantial source of revenue to the Government of the Russian Federation.”

Alrosa did not immediately reply to media requests for comment. The company is the world’s largest diamond producer, with a 95% share of Russian and 27.5% of global production. The company has access to roughly a third of the world’s diamond reserves and exports more than 90% of the stones it mines.

The EU’s ban on Russian diamonds partially came into force on January 1, when restrictions on importing non-industrial diamonds produced or processed in Russia became effective. An indirect prohibition on the import of Russian diamonds processed in third countries, including jewelry of Russian origin, will be gradually introduced from March 1. By September, the bloc also plans to introduce a tracking mechanism to help authorities identify the origin of imported diamonds and thus avoid sanctions violations.

Russia views the diamond ban as evidence that Western states have largely exhausted areas where they can still sanction the country. Moscow has already mainly redirected its diamond trade to the markets of China, India, the UAE, Armenia, and Belarus, which all saw a sharp increase in rough and cut stone imports from the country last year. Kremlin spokesman Dmitry Peskov said last month that Russia has been long prepared for restrictions on its diamond industry and has tools to circumvent them.

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Two global shipping firms, Denmark’s AP Moller-Maersk and Germany’s Hapag-Lloyd, have extended their decision to not allow their vessels pass through the Red Sea and Suez Canal, citing security risks, according to company statements.

Maersk initially halted all transits through the waterway for 48 hours on Sunday, a day after its Singapore-flagged containership Maersk Hangzhou was struck by a Houthi missile fired from Yemen. However, on Tuesday, the company announced that it will extend the pause to shipping in the area “until further notice” as it reviews security risks of sailing the waterway.

“An investigation into the incident is ongoing, and we will continue to pause all cargo movement through the area while we further assess the constantly evolving situation,” Maersk said in its statement. The company had already halted shipping in the Red Sea in mid-December but resumed travel last week after the US and its allies launched Operation Prosperity Guardian (OPG) in the region, aimed at ensuring safe passage.

In its Tuesday statement, Maersk said some of its vessels will be rerouted around the Cape of Good Hope in South Africa. According to a shipping schedule published on the company's website late on Monday, it was forced to divert more than 100 vessels scheduled to use the route in the coming weeks.

Meanwhile, Hapag-Lloyd, which also halted shipping via the Red Sea last month, said it would extend the travel pause for at least another week.

“We monitor the situation closely day by day, but will continue to reroute our vessels until January 9th,” a company spokesperson told reporters on Tuesday.

The attacks on vessels in the Red Sea area are being carried out by Yemen-based Houthi rebels, who claimed they are acting in a show of support for Hamas, following the escalation of hostilities between Israel and the Palestinian armed group Hamas in Gaza.

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The US emerged as the globe’s largest exporter of liquefied natural gas (LNG) for the global market in 2023, Reuters reported on Wednesday, citing tanker tracking and government data. Australia came in second, while Qatar, which ranked first in 2022, saw its output drop by 1.9% and slid to third place.

According to the report, US LNG exports hit monthly and annual records last month, with the country exporting 8.6 million metric tons in December alone to total 88.9 million metric tons in 2023, up 14.7% compared to 2022.

According to US government data, Europe remained the foremost destination for US LNG exports last month, accounting for 5.43 million metric tons, or more than 60% of overall shipments. Nearly 70% of US LNG exports were destined for the region in November. The EU significantly increased its LNG imports last year, following the drop in pipeline gas flows from Russia, once its major supplier. This occurred amid Ukraine-related sanctions against Moscow and a sabotage of Russia’s Nord Stream pipelines in 2022, which made them inoperable.

Analysts link the increased shipments with the restart of Freeport LNG in Texas, whose production had been paused for several months following a June 2022 fire. The facility’s return to full service reportedly added 6 million metric tons to overall output. Another factor, according to experts who spoke to Reuters, was increased production at other LNG plants. For instance, Venture Global LNG’s Calcasieu Pass facility boosted output by 3 million metric tons year-on-year in 2023.

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Germany’s economy is expected to continue to slow in the coming years; the country is slated to relinquish its position as the fourth-largest economy, in nominal US dollar terms, to India in 2027, according to a new report by the Centre for Economics and Business Research (CEBR).

The research says Germany’s fall to fifth place will come as a result of its reliance on Russian energy to drive its manufacturing sector.

“The importance of the manufacturing sector means that Germany has been more exposed to supply-side headwinds in recent years, notably from the surge in global energy prices in 2022. Germany’s dependence on Russia for its energy supply exacerbated this issue,” CEBR wrote.

According to the report, exposure to the energy price shock has helped to fuel inflation in the EU’s largest economy. Prices rose by an expected 6.3% in 2023, down from the 8.7% price growth recorded in 2022, but still firmly above recent averages. “Elevated inflation has contributed to weakened spending power and has subsequently curtailed consumer activity. This has hit consumer-facing services significantly,” it said.

The country’s gross domestic product is expected to have shrunk 0.4% in 2023. “With the exception of the pandemic-induced decline in 2020, this represents Germany’s weakest growth performance since 2009,” CEBR wrote, noting that supply-side issues and weaker spending power both contributed to this decline in output. Another factor contributing to the contraction was the tighter interest rate environment. CEBR projected the German economy returning to growth in 2024, at a rate of 0.7%, with a further acceleration in 2025.

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US government federal debt has breached an unflattering milestone, topping $34 trillion for the first time in history and amounting to more than double the total of the world’s next-biggest borrower, China.

The US Treasury Department disclosed the new debt total on Tuesday, saying it exceeded the $34 trillion mark by nearly $1.5 billion as of December 29, the last business day of 2023. The amount owed had increased by $90 billion since just the previous day.

Washington’s public debt now amounts to about $102,000 for every man, woman and child in the US, or nearly $260,000 per household. The total US federal debt is roughly equivalent to the economies of China, Germany, Japan, India and the UK combined, as pointed out by the Peter G. Peterson Foundation, a nonpartisan fiscal policy group in New York.

“We are beginning a new year, but our national debt remains on the same damaging and unsustainable path,” foundation CEO Michael Peterson said. He added, “Adding trillion after trillion in debt, year after year, should be a flashing warning sign to any policymaker who cares about the future of our country.”

The amount the US government owes lenders has increased by $6.25 trillion, or 23%, since President Joe Biden took office three years ago. To put that in perspective, it took about 225 years from the nation’s founding to approach $6 trillion in public debt. The growth in debt has accelerated rapidly in the past two decades. It jumped by more than $9 trillion during Barack Obama’s eight years as president, then increased by $7.8 trillion during Donald Trump’s four-year term.

Biden has repeatedly made false claims about having cut the US debt. The annual budget deficit – the extent to which government spending exceeds revenue – shrank by $1.7 trillion during his first two years in office, reflecting the absence of Covid-19 stimulus spending, but it’s projected to surge this year. The US hasn’t spent less than its government revenue in 20 years.

BYD sold more than 526,000 electric vehicles in the fourth quarter of 2023, the Chinese company announced on Monday, exceeding Tesla’s total of over 484,000 in the October-December period, essentially ending the American EV giant’s reign as the industry’s dominant manufacturer.

The result marked the first quarter in which BYD’s sales by number of units exceeded Tesla's, and capped a year in which the Chinese carmaker achieved almost double the growth rate of its top US rival.

Tesla still led all EV makers in sales by volume for the full year, delivering more than 1.8 million units in 2023. Shenzhen-based BYD posted sales of nearly 1.6 million vehicles that run on electricity alone, as well as more than 1.4 million plug-in hybrids. BYD’s sales jumped 73% from a year earlier, dwarfing Tesla’s gain of 38%.

US billionaire Warren Buffett was an early investor in BYD, buying a 25% stake in the company in 2008, when it was known more for making mobile phone batteries than cars. Buffett’s Berkshire Hathaway Inc. achieved a 30-fold gain on its investment when it began selling some of its BYD shares in 2022.

That was many years ago. Their cars are highly competitive these days.

— Elon Musk (@elonmusk) May 27, 2023

Tesla CEO Elon Musk laughed off BYD when asked in a 2011 Bloomberg interview about the company becoming an EV rival. At the time, he dismissed BYD, citing its product quality and alleged technological shortcomings. Musk acknowledged the company’s progress last year, however, saying he was no longer laughing at BYD. “That was many years ago,” he said of the Bloomberg interview. “Their cars are highly competitive these days.”

Tesla, on the other hand, has faced slumping demand in its home market, where US buyers have been deterred by higher interest rates and concerns over charging infrastructure. Tesla cut sticker prices by up to $20,000 on some of its models, contributing to a 20% gain in its fourth-quarter sales by volume.

The combined net worth of Russia’s wealthiest people jumped by $50 billion in 2023, according to the Bloomberg Billionaires Index. It marks a significant change, after their fortunes shrank by $93.7 billion in 2022, due to Ukraine-related sanctions against the country and its businesspeople. The total net worth of the 25 Russian billionaires listed in the index stood at $328.53 billion as of January 2.

Vladimir Potanin, the owner of mining giant Norilsk Nickel, remained Russia’s richest person on the list, having increased his wealth by $2.49 billion from the previous year, to $31.1 billion. Second place is currently held by Leonid Mikhelson, the co-owner of Novatek, Russia’s second-largest natural gas producer. He earned $2.83 billion in 2023, bringing his capital to $27.5 billion.

Vagit Alekperov, the ex-boss of Russian energy giant Lukoil and who still owns a large chunk of the company’s shares, came in third. He earned $9.3 billion last year, increasing his net worth to $24.7 billion. Vladimir Lisin, the chairman of NLMK, Russia’s largest steelmaker, was ranked as the fourth-richest with $23.9 billion as of the end of the year (up $4.08 billion). Alisher Usmanov, who owns 49% of USM, an investment group that controls Russia’s largest iron ore producer Metalloinvest, as well as the MegaFon mobile operator, closed off the top-five. His fortune jumped by $2.61 billion last year to $21.1 billion.

The Bloomberg Billionaires Index purports to be a ranking of the world’s 500 richest people and is calculated on the basis of the share price of the companies in which those listed own shares.

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Kazakhstan has raised the tariff on the transit of Russian oil by some 20% from January 1, according to an announcement on the official website of the country’s pipeline operator KazTransOil.

The measure covers crude transported along the 186km Kazakhstan section of the Tuymazy-Omsk-Novosibirsk-2 (TON-2) pipeline. The levy was raised to $11.3 per ton per 1,000km, up from $9.3, which had been in force since 2018. Given the length of the pipeline section running through Kazakhstan, the cost of pumping oil for transit through its territory will cost Russia $2.1 per ton.

TON-2 has an established throughput capacity of 10 million tons of oil per year, but its design capacity reaches 18 million tons. The pipeline carries Russian oil to the Pavlodar petrochemical plant, the largest refinery in the northeast of Kazakhstan, as well as further to China and Uzbekistan.

According to recent media reports, Russia plans to boost oil flows via TON-2 more than threefold in 2024 on requests from buyers. In particular, Uzbek Energy Ministry announced in November that it wanted to raise its imports of Russian oil and petroleum products to 1 million tons in 2024. It noted at the time that oil imports via the pipeline traditionally come cheaper than rail deliveries.

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One of the most recognizable fictional characters ever, Mickey Mouse, has entered the public domain, with the Walt Disney Company losing exclusive rights to early versions of the iconic cartoon.

US law allows a copyright to be held for 95 years, meaning Disney’s rights for Mickey Mouse’s first-ever appearance from ‘Steamboat Willie’ in 1928 expired on January 1, 2024.

Anyone can now use the cartoon mouse in paintings, novels, songs, and elsewhere, but with certain restrictions. Disney still has ways to protect Mickey Mouse as it will retain copyright over the character’s more modern versions for years to come. The company says it will continue to defend its trademarks, which could limit what creators are able to do.

“Ever since Mickey Mouse’s first appearance in the 1928 short film Steamboat Willie, people have associated the character with Disney’s stories, experiences, and authentic products,” a Disney spokesperson told the Associated Press. “That will not change when the copyright in the Steamboat Willie film expires.”

An anthropomorphic mouse with red shorts, large yellow shoes, and white gloves, Mickey has become the symbol of the Disney brand, and one of the most recognizable and beloved characters worldwide. Shortly after drawing Mickey, Walt Disney drew him a girlfriend, Minnie, a female mouse with a polka-dot dress and a big bow on her head. 

Just one month after creating ‘Steamboat Willie’ in 1928, Walt Disney officially registered the Mickey Mouse character for copyright protection. Along with other companies, Disney successfully lobbied the US Congress to extend copyright lengths, pushing it to 95 years. Over the decades, Mickey and Minnie’s appearances in various non-Disney cartoons, as well as comic strips, films, and merchandise, have resulted in lawsuits due to copyright infringement.

Industry experts describe Mickey’s entry to the public domain as historic. “This is a big one,” the director of the Duke Center for the Study of the Public Domain, Jennifer Jenkins, was quoted as saying. “It’s generating so much excitement in the copyright community – it’s finally happening.”

The list of works or characters entering the public domain in 2024 includes Tigger, who, like Mickey Mouse, made his first appearance in 1928. The book in which the bouncing tiger first appeared, ‘The House at Pooh Corner’, has turned 96. Other 1928 works include the novel ‘Lady Chatterley’s Lover’ by D. H. Lawrence; E.M. Remarque’s novel ‘All Quiet on the Western Front’, and Buster Keaton’s film ‘The Cameraman’.

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Bulgarian officials on Monday raided the Neftohim oil refinery and 50 crude warehouses, according to an announcement on the country’s customs service website.

The raids coincided with the start of a ban on Russian crude. Neftohim, owned by Russia’s Lukoil, is the refinery responsible for most of Bulgaria’s diesel and gasoline supplies.

The customs service said inspections aimed to inventory the available quantities of Russian oil and oil products remaining on hand.

Bulgaria was initially exempt from an EU ban on Russian crude and allowed to continue buying it until the end of 2024, but Sofia passed a motion in mid-December that prematurely waived its exemption and restricted imports of Russian oil. The ban is to be implemented in two stages: from January 1, Neftohim has been prohibited from exporting petroleum products made from Russian crude, and from March 1, the plant has to completely stop using Russian oil for refining. Industry experts have previously warned that halting exports of oil products made from Russian crude could cause overstocking of warehouses and a decrease in fuel production volumes in the coming months.

Lukoil has not yet commented on the inspections. However, the company previously warned that the ban on would pose difficulties for the refinery, which is geared to the particular grade of Russian oil.

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The UK’s cost-of-living crisis is fueling a record surge in shoplifting as people increasingly turn to the black market for food, The Guardian has reported, citing official data.

Estimates by the British Retail Consortium show that retail thefts cost the industry £1 billion ($1.3 billion) in 2023, the newspaper said. Meanwhile, Home Office data shows that shoplifting has reached its highest level since records began, while the number of unresolved incidents has also risen.

According to the report, the items most commonly stolen are meat, cheese, and sweets, which are typically considered high value goods that can be resold. The items are being stolen in large quantities from shops and trucks in order to be sold to people hit by soaring prices.

The cost-of-living crisis has made people “think of alternative ways of sourcing items that are essential to them,” the chief executive of the British Independent Retailers Association, Andrew Goodacre, was quoted as saying. Shops that had not previously faced shoplifting reported that thieves were clearing whole shelves in seconds, Goodacre said. “I think that’s because the black market has got so much bigger,” he added.

Meanwhile, Wendy Chamberlain, a former police officer-turned-Liberal Democrat MP who chairs the all-party parliamentary group for the elimination of food banks, claimed it is unsurprising that people are obtaining food through criminal means as important nutritional foods have “essentially rocketed in price.” According to Chamberlain, food poverty in the UK could be particularly acute at this time of year, with food banks providing only essentials that are generally “not particularly attractive or nutritional.” 

“When money is tight, when they’ve spent a long time saying ‘no’ to other family members, the opportunity to buy something a bit more premium and high-end, with ‘ask no questions’, and ‘off the back of a lorry’, as it were, is appealing,” she told The Guardian.

The CMA report indicated that food price inflation in the UK continues to be at historically high levels, despite falling to 10.1% in October.

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The Russian government has given the green light for duty-free imports of eggs in the first half of 2024, in a bid to stop a surge in prices by boosting supply. The measure became effective on January 1 and will be in force until June 30.

The corresponding decree was signed by Russian Prime Minister Mikhail Mishustin in late December after the measure was approved by the Council of the Eurasian Economic Commission (EEC), the executive body of the EEU bloc, which brings together multiple post-Soviet nations.

According to the decree, the tariff waiver applies to shipments of fewer than 1.2 billion eggs.

The duty-free imports will be monitored by the country’s Agriculture Ministry, which has been charged with issuing permits for duty-free deliveries and tracking volumes.

The EEC earlier said it expects the temporary tariff relief to help bring additional egg supplies to Russia from countries such as Türkiye, Iran and other non-CIS states, at a cost comparable to domestic production.

The commission emphasized the short-term but necessary nature of the measure, which it views as the most expedient way to curb the rise in prices for the food staple in the winter-spring period and to avoid a shortage. In mid-December, Russian food safety watchdog Rosselkhoznadzor already authorized a number of Turkish and Azerbaijani companies to supply eggs to Russia, while Belarus also announced last month that it was ready to export surplus eggs and chicken to the country.

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The Russian economy is in good shape and rapidly expanding despite pressure from Western sanctions, President Vladimir Putin said during a visit to Vishnevsky Military Hospital in Moscow on Monday.

The head of state noted that the country’s gross domestic product (GDP) grew 3.5% in 2023, which he described as a very promising development after the 2.1% contraction in 2022.

“Our GDP, the key indicator that shows how much our economy has produced… grew 3.5% in 2023. What this tells us is that our economy is functioning steadily. We recuperated our losses and moved forward. This is fundamental,” he stated, noting that while there are still problems facing the economy, like rising inflation, “we’re keeping everything under control.”

Putin noted that this growth stems from changes the country’s economy has gone through over the past year.

“We have never seen anything like that before: while we used to make money from oil and gas [exports], 2023 was the first year when our processing, our manufacturing sector has been growing much faster and generated much more revenue. What we’re witnessing are structural shifts in our economy, and they are very important,” he stated.

The president added that the West’s Ukraine-related sanctions, including Russia’s disconnection from the SWIFT financial messaging system, and the exit of some large Western companies, have failed to cause lingering harm to Russia’s economic stability.

The president also noted that Western departures were beneficial for Russia’s domestic companies.

“Everyone thought that our manufacturing would stop because [the West] stopped supplying components. It didn’t happen. Yes, they created problems, but these problems are being overcome... When certain foreign firms have left, our businesses immediately took over,” Putin said, adding that Russia has enough talent, qualified specialists and managers to “ensure that everything runs smoothly.”

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Latvia has emerged as Russia’s largest supplier of sparkling wine during the first nine months of 2023, RIA Novosti reported on Sunday, citing international trade statistics.

From January to September last year, the Baltic country exported $105.4 million-worth of bubbly to Russia, roughly a 25% more than during the same period in 2022. Italy, the world’s largest wine producer for the past nine years, was second, with $55.4 million (up 27.6%). Another Baltic state, Lithuania, rounded out the top three with $42.7 million, nearly doubling last year’s amounts ($23 million).

Other major suppliers of bubbles to Russia included Poland ($8.65 million) and Spain ($2.98 million). The top ten also included France, whose exports to Russia dropped sharply compared to 2022, from $5.71 million to $2.78 million. It was followed by Georgia ($1.91 million), Armenia ($0.98 million), Azerbaijan ($0.84 million), and Germany ($0.45 million).

The EU banned wine exports to Russia that exceed €300 ($315) per bottle amid the Ukraine conflict, which resulted in a sharp drop in deliveries from the bloc. According to earlier reports based on UN Comtrade data, Latvia and Lithuania replaced Italy and Spain in overall sparkling and still wine exports to Russia this year. However, industry experts note that as the origin of Latvian and Lithuanian wine exports to Russia is not publicly available and neither of the two have sufficient domestic wine production, it is likely that the Baltic states are reselling wine bought from their EU peers to Russia.

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Western restrictions on direct imports of Russian diamonds have come into effect. As of January 1, deliveries of non-industrial diamonds mined, processed, or produced in Russia to the markets of G7 and EU countries are forbidden.

These restrictions are only the first part of the ban. On March 1, the second phase is set to kick in, which applies to natural Russian diamonds from 1 carat that were processed in third countries. From September 1, 2024, imports of Russian synthetic diamonds processed in third countries, jewelry, and wrist or pocket watches made in third countries using Russian diamonds weighing 0.5 carats or more will also be banned.

In September, Western countries also plan to introduce a tracking mechanism for inspecting unprocessed stones in order to establish their origin more effectively and avoid sanctions violations.

Some industry experts have expressed doubts regarding the tracking mechanism. While the details of the proposed system have not yet been made public, it will reportedly be based on the Kimberley Process Certification Scheme, which is currently the only way to trace a diamond’s origin at the start of the supply chain, as the certificate is issued to rough gems. Cut and polished stones which later flow through the markets and trading houses are nearly impossible to track.

“With the best will in the world, the average customs agent will not be able to look at one diamond and another diamond and go, ‘That’s the Russian one,’” Al Cook, the CEO of De Beers, the world’s biggest diamond miner by value, said last month.

The diamond ban was first announced by the G7 countries (Canada, France, Germany, Italy, Japan, the US, and UK) in early December. Several days later, the ban was included in the EU’s 12th package of sanctions on Russia.

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Nearly $300 billion worth of Russian forex reserves have been frozen by Western countries since March 2022. The EU has been looking into ways to legalize tapping profits from those funds, but Moscow has warned that any such move would constitute theft.

Russian officials have repeatedly said the confiscation of state and private assets goes against all the principles of free markets. Finance Minister Anton Siluanov has warned of “an absolutely symmetrical response,” noting that there are “sufficient assets” in ‘C-type’ accounts, specialized ruble-denominated bank accounts. Some of these include dividend reserve liabilities to counterparties from ‘unfriendly’ countries (those that support sanctions). Siluanov added that all of those assets are frozen, “the amount isn’t small,” and the proceeds from their use are significant.

The finance minister was echoed by Kremlin spokesman Dmitry Peskov, who stated Russia would challenge any confiscation in the courts. The seizure of Russian assets by Western countries would be “illegal” and “extremely dangerous” for the global financial system and the world economy, he continued, adding that any such a move would amount to theft. “If something is confiscated from us, we will look at what we will confiscate. We will do this immediately,” the Kremlin spokesman warned.

According to official estimates, the Russian central bank’s reserves decreased by 8.4% in 2022 after the assets were immobilized in G7 countries, the EU, and Australia. Notably, €210 billion ($232 billion) of Russia’s reserves are reportedly held in the EU. There is believed to be €191 billion in Belgium, €19 billion in France, and €7.8 billion in non-member Switzerland. The US has reportedly frozen around $5 billion of Russian state assets. The EU aims to mobilize €15 billion for Ukraine from the proceeds generated by frozen Russian assets, contingent on unanimous approval from all member states.

Western states have been mulling for months on how these funds could be confiscated and donated to Kiev, despite numerous warnings that such measures could jeopardize the credibility of the Western financial system and currencies. EU policymakers have been discussing the imposition of a windfall tax on profits generated from the immobilized funds, which are estimated to create some €3 billion in profits. According to Reuters, citing sources, the leaders of the G7 are expected to discuss a plan that would enable the seizure of frozen Russian assets when they meet in February.

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The 20-nation euro currency bloc is expected to see only moderate economic growth, +0.6% in 2024, according to the results of a survey carried out by the Financial Times among 48 economists.

The outlooks issued by the European Central Bank (ECB) and the International Monetary Fund (IMF) are more optimistic, as analysts from the institutions expect the bloc’s economy to grow 0.8% and 1.2% in 2024, respectively. 

The experts polled by the FT said that the Eurozone economy won't be able to exceed 0.6% growth in spite of the fact that wages are expected to grow faster than inflation. Two thirds of the respondents said that they see the economy in the euro area slip into a recession. commonly defined as two consecutive quarters of GDP contraction. According to the economists, wage growth in the single currency area is set to total only 4% in 2024, while consumer prices are projected to rise by over 2.5% on average next year and slightly below 2.1% in 2025.

The ECB had previously forecast wages and inflation next year to grow 4.6% and 2.7% respectively, which would mark the growth of real household incomes for the first time in three years. The regulator expects consumer prices to grow 2.1% in 2025. Meanwhile, unemployment is projected to rise from a record eurozone low of 6.5% in October to 6.9% at the end of next year, according to most economists polled.

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Russian natural gas production has continued to grow in annual terms for the fourth month in a row in November, reaching nearly 60 billion cubic meters, business daily Kommersant reported this week, citing official data.

Statistics by the Energy Ministry, seen by the newspaper, reportedly show that the figure was up 6.4% compared to November 2022. Analysts attributed such growth dynamics to the low base effect of last year.

Last month’s output growth was due to increased production by the state-run energy company Gazprom, Kommersant wrote. In addition, statistics showed an increase in the output at the Sakhalin-1 oil and gas project in Russia’s Far East.

In general, the total volume of the country’s gas production decreased by 3% in January-November in annual terms to almost 595 billion cubic meters.

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Gold prices are expected to rally further in 2024 as lingering uncertainty about the prospects for the global economy spurs safe-haven demand for the metal, Reuters reported this week, citing industry experts.

Bullion finished the year at $2,063 per ounce, surging more than 13% year-on-year in its first annual gain in three years, and hitting an all-time high of $2,110 per ounce earlier this month. Prices have been rallying for more than two months, driven by investor demand in the wake of recession fears and expectations of interest rate cuts by the US Federal Reserve after an aggressive rate-hiking cycle that started in early 2022. Moreover, heightened geopolitical tensions in the Middle East have boosted the safe-haven appeal of gold. All these factors and more are still expected to buoy gold prices in 2024.

“Following on from a surprisingly robust performance in 2023 we see further price gains in 2024, driven by a trifecta of momentum chasing hedge funds, central banks continuing to buy physical gold at a firm pace, and not least renewed demand from ETF investors,” Saxo Bank’s Ole Hansen old Reuters. JPMorgan also predicts a “breakout rally” for gold in mid-2024, forecasting a peak of $2,300, when the US is expected to cut rates. UBS sees bullion hitting $2,200 by the end of next year on heightened geopolitical risks and inflation.

In its 2024 outlook published earlier this month, the World Gold Council said it expects central banks to continue their gold-buying spree, which could provide additional support for gold and further boost its appeal.

“Gold could be forced to unwind some of this year’s gains if an inflation resurgence forces the Fed to abandon plans for a policy pivot in 2024,” Han Tan, chief market analyst at Exinity, told Reuters.

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Iran and Russia have officially abandoned the US dollar for mutual settlements after the countries finalized an agreement to trade in the ruble and the rial, Iranian news agency IRNA reported this week. The agreement was sealed during a meeting in Russia between the heads of the central banks of the two countries, the outlet said.

“The establishment of new financial and banking platforms has opened a ‘new chapter’ in relations between Iran and Russia,” IRNA reported, citing the Iranian central bank. The arrangement allows banks and entrepreneurs to use alternative financial and banking platforms, such as non-SWIFT money-messaging systems, and also involves the establishment of bilateral brokerage relations in national currencies.

Iran and Russia, both subject to US sanctions, first announced plans to use their respective national currencies instead of the US dollar in mutual trade in July 2022. Earlier this week, members of the Russia-led Eurasian Economic Union (EEU) signed a full-fledged free trade agreement with Iran.

In July, Iranian President Ebrahim Raisi called for the dollar to be abandoned in global trade, saying that the US currency has been used as an instrument of Western hegemony.

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Russia’s foreign currency reserves have continued to grow, surpassing $593 billion as of December 22, the country’s central bank has reported. 

Statistics show the volume of international reserves increased by $5.5 billion, or 0.9%, in the week from December 15, largely due to “a positive market revaluation.” 

The stockpile reached a historic high of $643.2 billion on February 18, 2022. However, roughly half of Russia’s foreign currency reserves were frozen by Western central banks last March as part of Ukraine-related sanctions.

In addition to freezing the funds, Western countries banned operations related to their management. The remaining holdings consist of gold and foreign currency held within the country, as well as Chinese yuan assets.

President Vladimir Putin said recently that Russia has already earned double the amount of the gold and foreign exchange reserves frozen by the West last year. According to the Russian leader, the freezing of the country’s assets has caused an “erosion of credibility” in Western countries.

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McDonald’s Malaysia is suing the Boycott, Divestment and Sanctions (BDS) Malaysia movement for damaging its business through a series of social media posts linking the fast-food chain to Israel’s “genocidal war against Palestinians in Gaza,” Reuters reported on Sunday citing court documents.

According to a writ of summons dated December 19 and seen by the news agency, Gerbang Alaf Restaurants (GAR), which controls the McDonald’s franchise in the country, has accused BDS Malaysia of promoting boycotts against its restaurants with “false and defamatory statements,” which resulted in a loss of profits and job cuts. GAR is now seeking damages from the movement in the amount of 6 million ringgit ($1.31 million).

McDonald’s Malaysia confirmed it had started court proceedings against BDS Malaysia in a statement on Friday, saying it is seeking to protect its “rights and interests” in the country. The latter, meanwhile, said it “categorically denies” any wrongdoing and expects the court to sort the matter out.

Israel declared war on Hamas, the Palestinian militant group that controlled Gaza, after the latter’s October 7 surprise attack that killed an estimated 1,200 Israelis. Since then, an Israeli offensive has resulted in the deaths of over 21,000 Palestinians in the enclave, according to the local health ministry. Many activists, especially in majority-Muslim countries, have since launched boycott campaigns against businesses with alleged ties to Israel and called for an end to hostilities. Apart from McDonald’s, the companies targeted by the campaigns include Coca-Cola, Starbucks, KFC, Nestle, and IBM. 

The Malaysian government is an outspoken champion of the Palestinians, and earlier this month reversed its 2002 decision to allow Israeli-flagged ships or vessels headed for the Jewish state to dock or load cargo at its ports, according to an announcement by Prime Minister Anwar Ibrahim’s office.

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Trade between Russia and Egypt is set to top $7 billion by the end of the year, Aleksey Tevanyan, Russia’s trade representative in the North African country, told RIA Novosti in an interview published on Saturday. According to Tevanyan, the surge is due in large part to increased exports to Egypt.

“The positive dynamics in mutual trade continued in 2023... By the end of this year, we expect that trade turnover will increase by a quarter [against last year],” the official stated, adding that the trend will likely continue next year. In 2022, trade turnover between Moscow and Cairo jumped by 30% year-on-year to over $6 billion.

Tevanyan noted that with economic cooperation growing, Egyptian companies are increasingly eager to switch from Western to national currencies in trade transactions with Moscow.

“Over the past few years, dollars and euros have become scarce in Egypt, which is why problems periodically arise with payments for goods already delivered. In this regard, Egyptian partners have expressed great interest in switching to payments in national currencies,” he said.

The trade representative noted that agricultural goods and equipment are the most promising areas for trade growth. He went on to say that Russia has been among the major suppliers of grain to Egypt, one of the world’s top wheat importers, throughout 2023, shipping more than 8 million tons to the country.

“Our vegetable oil and steel are also popular. The developed local cable industry has a significant demand for copper, and the furniture and construction industry for wood,” he added.

“The conclusion of a free trade agreement between Egypt and the EEU will simplify access for our goods to the Egyptian market,” he added.

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Data on manufacturing activity in Russia during December has shown the fastest pace of growth in almost seven years, spurring job creation to a three-month high, a survey by S&P Global published this week reveals.

Data based on the Purchasing Managers’ Index (PMI) compiled by S&P Global showed that factory activity in Russia rose to 54.6 in December from 53.8 in November in the highest reading since January 2017. The reading of the index, which reflects manufacturing and services activity, stood well above the mark of 50 which separates expansion from contraction.

The growth in the manufacturing sector has been driven by strong customer demand and increased output, lifted by an inflow of new orders as industry bounces back from the impact of Western sanctions, data showed. The survey linked overall expansion to a growing number of customers, the release of new products and better-quality items on sale.

“Confidence stemmed from planned investment in new products and machinery,” S&P Global said. “The level of positive sentiment was historically elevated despite dropping to a three-month low.” 

Despite labor shortages, unemployment in Russia hit a record low of 2.9% in October, the lowest level since the early 1990s, as firms increased staffing numbers in a bid to reduce backlogs of work, the analysis also noted. 

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The US dollar’s share of global central bank reserves has continued to decrease, nosediving to 59.2% in the third quarter of 2023, according to the latest data released by the International Monetary Fund (IMF). The decline comes amid the de-dollarization trend gaining momentum across the globe.

IMF statistics show the greenback’s share is down from roughly 70% in 2000. The dollar remains the world’s leading reserve currency with the euro coming second, while the latter’s share has slid to 19.6%. The Japanese yen’s proportion of world reserves grew to 5.5% from 5.3% in the previous three-month period. The Chinese yuan, British pound, Canadian dollar and Swiss franc were little changed.

Meanwhile, according to data compiled by global financial messaging service SWIFT, the yuan’s share of international payments hit a record high in November, with the renminbi becoming the fourth most used currency worldwide. Cross-border yuan lending has risen as well, while the People’s Bank of China holds over 30 bilateral currency swaps with foreign central banks, including Saudi Arabia and Argentina.

The growing share of the yuan in cross-border transactions reflects China’s trend of shifting away from the dollar, as well as Beijing’s efforts to promote the use of the renminbi, according to SWIFT.

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China is on track to become the world's top car exporter this year for the first time ever, Nikkei Asia reported on Friday, citing preliminary data from the China Association of Automobile Manufacturers (CAAM).

Statistics show the country exported 4.41 million automobiles from January through November, up 58% from the same period in 2022. China thus overtook former export leader Japan, whose full-year total is expected to be around 4.3 million. According to the report, the last time Japan dropped from the top spot was in 2016, when it was surpassed by Germany.

“China aims to become an automotive powerhouse, and sees the global shift to EVs (electric vehicles) as a way to achieve that goal,” Nikkei wrote.

The report pointed out that the surge in Chinese exports to Russia followed the exodus of Japanese and Western automakers from its market amid new sanctions. CAAM statistics show that China exported 730,000 vehicles to Russia in the January-October period, seven times as many as a year earlier. Chery Automobile and Great Wall Motor reportedly exported mostly gasoline-powered cars to the country, including midsize and large sport utility vehicles (SUVs).

Mexico was the second-largest export market, with the volume of Chinese cars there soaring 71% to 330,000 units. “Chinese automakers are looking to build a customer base in the country to serve as a foothold for an eventual expansion into the US and Canadian markets,” Nikkei wrote.

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Russian producers of petrochemicals are planning to ramp up international sales of diesel from the country’s major western ports by nearly one-fifth in January as refinery runs grow, Bloomberg reported on Friday, citing industry data.

Loadings of diesel from the country’s facilities on the Black and Baltic Seas are set to see growth to 3.39 million tons next month, which amounts to around 817,000 barrels per day and marks an increase of 18% compared to the first 28 days of December, the outlet said, citing energy analytics firm Kpler.

The potential rise is attributed to increased processing rates by local refineries. Crude refining averaged around 5.57 million barrels per day as of December 20, marking a surge of nearly 60,000 barrels per day versus November, when a planned maintenance season concluded.

Earlier this year, the Russian government placed temporary restrictions on exports of commercial gasoline and diesel fuel to stabilize the domestic market after prices soared to record highs. In October, the ban on foreign sales of diesel exports was partially lifted, while the restrictions on gasoline shipments remained in place until late November.

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The chemical industry has significantly grown and contributed to the Russian economy in 2023, Industry and Trade Minister Denis Manturov said on Friday.

Speaking at the ‘Russia’ expo at Moscow’s VDNKH complex, the minister highlighted stable growth in consumption of chemical industry products across various sectors of the economy.

“At the end of the current year, we expect consumption to amount to 8.3 trillion rubles ($93 billion), marking an increase of 11.5% compared to the previous year,” Manturov said, adding that more Russian companies have been launching production on the basis of their own technologies and inventions, something that “clearly strengthens technological sovereignty in the chemical complex and in domestic industry as a whole.”

He noted that overall investments into chemical companies in 2023 totaled 100.4 billion rubles, almost twice the levels recorded in 2020, while state support for the sector amounted to nearly 30 billion rubles.

According to Manturov, the most impressive increases in production volumes have been seen in the polymer processing, polymer products, dyes, pigments and mineral fertilizer industries.

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The United States has called for working groups from the Group of Seven (G7) countries to explore ways to confiscate hundreds of billions of dollars in frozen Russian assets, the Financial Times reported this week.

The US, backed by the UK, Japan and Canada, has proposed setting up preparatory work for expropriating over $300 billion in Russian foreign exchange reserves that were immobilized by Western nations after the start of the Ukraine conflict.

Washington wants to consider confiscation options at a G7 leaders’ meeting scheduled for February next year, according to the outlet. Discussions on how to develop a policy regarding Russian funds, and what risks are involved, were reportedly held in December by G7 finance ministers and their deputies.

“The three working groups proposed by Washington would examine the legal issues around confiscation; the method of applying such a policy and mitigating risks; and options for how to best channel the support to Ukraine,” the FT wrote.

While no final decisions have been taken and the issue remains highly debated in the EU, the acceleration of work to seize Moscow's assets and use them to help Ukraine highlights its “rising importance” for the West, the outlet noted.

Debates are ongoing on the details, and whether the frozen funds would be sent directly to Ukraine – notorious for corruption – or used in some other way, such as tapping the proceeds from the blocked assets or using them as collateral for loans. 

The EU, where most of the assets are blocked, reportedly fears retaliation from Moscow. The bloc has so far stopped short of seizing Russian money, instead seeking ways to tap profits generated from the frozen funds.

Currently, €210 billion ($230 billion) of Russia's reserves are held in the bloc's financial institutions, with €191 billion in Belgium, €19 billion in France, and €7.8 billion in non-member Switzerland.

France, Germany, and Italy, which take over the G7 presidency in 2024, remain highly cautious about the idea, and have expressed reservations, urging to carefully assess the legality of confiscating Moscow's assets before a decision is taken.

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Gazprom may once again become the only gas supplier to Moldova if the latter can secure a better price from the Russian energy giant than it can on supplies from the EU, Moldovan Energy Minister Victor Parlicov said on Friday in an interview with Publika TV.

The minister also said that the territory controlled by Chisinau switched to imports of gas from the EU in 2022, after Gazprom slashed supplies to the country by about 30%. Up to 5.7 million cubic meters per day are sent to the breakaway self-governing region of Transnistria.

The Russian company attributed the reduction to the refusal of Ukrainian state energy company Naftogaz to provide gas delivery services through the Sokhranovka entry point. 

“A pragmatic decision will be made: either we will buy gas from Gazprom, because it is at a very competitive price, or we will find a cheaper alternative,” Parlikov said, adding that the purchases could be resumed as soon as in May.

He added that the daily volumes of 5.7 million cubic meters will be enough for generating electric power on both the left and right banks of the Dniester River. Moldova still purchases electricity generated in a Transnistrian power plant using Gazprom’s gas.

Moldova has been subject to a state of emergency that is renewed every 60 days since the launch of Russia’s military operation in Ukraine in February 2022. Since last December, Moldovagaz has been receiving the fuel from both the country’s state-run enterprise Energocom and Gazprom.

Earlier this year, Parlicov said that much of Moldova would no longer purchase Russian gas, adding that it had managed to procure gas from EU suppliers at a better price.

In December, Russian gas has been sold to Moldova for $831 per thousand cubic meter, Meanwhile, the same volume from the EU has cost the nation some $610.

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The outgoing year is set to become the best in history for Russian banks, which saw their profits soar despite Western sanctions on the economy, the Vedomosti news outlet reported on Tuesday, citing central bank data.

According to the report, the cumulative profit of the country’s banking sector has exceeded 3 trillion rubles ($32.7 billion) in the 11 months so far of 2023. By the end of the year, banks are expected to fetch 3.3 trillion rubles, a record high.

All key banking operation areas have been growing rapidly: Lenders’ corporate loan portfolio surged by more than 20% in January-November, mortgages by 30.3%, and consumer loans by 16%. In addition, company deposits grew by 15.3% and household deposits by 20.4%. In comparison, in 2021, the “reference” year for the sector, mortgages and corporate portfolios grew slower: By 26.4% and 14.8%, respectively, while household deposits increased by a mere 5.7%.

Experts note that banks’ profits have been growing amid the overall recovery of the country’s economy after the sharp decline it suffered due to Ukraine-related Western sanctions last year. Relatively low interest rates in the first half of the year (for instance, 7.5% in mid-summer) also contributed to the trend.

Despite the regulator’s more recent turn toward tighter monetary policy, which brought the key rate to 16% earlier this month, experts note that the banking sector’s net interest margin remained high at 4.8%. This was achieved by reducing funding costs compared to 2022, when banks sharply raised deposit rates to 20%.

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Google has agreed to settle a class-action lawsuit filed in 2020, claiming its Chrome browser secretly tracked the internet activity of millions of people, even when they were using the ‘Incognito’ setting, Reuters reported on Thursday.

Filed in the Northern District of California, the lawsuit accused the US tech giant of continuing to “track, collect, and identify browsing data in real time” when users thought they were doing their browsing privately.

The plaintiffs alleged that sites using Google's analytics collected information from browsers in ‘Incognito’ mode, including web page content, device data, and IP addresses.

The complainants said this turned Google into an “unaccountable trove of information” by letting the company learn about their friends, hobbies, favorite foods, shopping habits, and “potentially embarrassing things.”

They also accused Google of taking Chrome users’ private browsing activity and then associating it with their already existing user profiles.

In August, US District Judge Yvonne Gonzalez Rogers rejected Google's bid to dismiss the lawsuit, pointing out that the company had never revealed to its users that data collection continued even when using private mode.

The lawsuit, filed by Florida resident William Byatt and California residents Chasom Brown and Maria Nguyen, covers “millions” of Google users since June 2016. It sought at least $5 billion, or about $5,000 in damages per user, for violations of wiretap laws.

According to the notice filed earlier this week, Google and the plaintiffs have reached a preliminary settlement that will result in the litigation being dismissed. Settlement terms were not disclosed, but, according to Reuters, the lawyers said they have agreed to a binding term sheet through mediation, and are expected to present a formal settlement for court approval by February 24, 2024.

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Global consumers and exporters of crude are now managing without dollar-denominated trade deals, the Wall Street Journal reported this week, citing the head of global commodities strategy at JPMorgan Chase, Natasha Kaneva.

The report comes a day after Iran and Russia, two of the world’s leading oil exporters, said they have finalized an agreement to trade in their national currencies instead of the US dollar. Moreover, the sanction-hit states have found buyers for their commodities in China and India, selling them at a generous discount.

“The US dollar is getting some competition in commodities markets,” Kaneva told the journal, emphasizing that the share of the world’s oil traded in other currencies has increased to nearly 20%.

The trend is less obvious when it comes to other commodity-selling majors. However, some of them, including Brazil, the UAE, and Saudi Arabia, have taken some steps to prepare the groundwork for trade that bypasses the greenback.

According to data tracked by JPMorgan, twelve major commodities contracts have been carried out in non-dollar currencies in 2023 versus just seven last year, and only two scored in 2015 through 2021.

Earlier this year, India and the UAE signed a deal on local currency trading. A refiner in India bought the first shipment of Emirati crude in rupees. Brazil and China have also conducted their first local-currency commodity transaction for a shipment of Brazilian pulp.

Last month, China and Saudi Arabia signed a local currency swap agreement worth 50 billion yuan ($7 billion) to strengthen financial ties and expand the use of local currencies between the nations.

The share of the dollar in all trades in foreign exchange markets is reportedly hovering around 88%, which makes the US currency broadly dominant in global trade and finance.

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The Russian economy has been growing much faster than expected in 2023, despite numerous rounds of sanctions – in what many see a failure of Western policy. RT reviews the economic performance through the outgoing year.

1. Adapting to sanctions
   The Russian economy has not only withstood Western restrictions, but has seen stronger growth through new trade ties and increased investment in domestic production. International experts and politicians have been questioning the effectiveness of sanctions, warning they could be harmful to the global economy. They suggest that the punitive measures are ineffective and outdated. The Russian Academy of Sciences believes Western sanctions have failed due to the ‘big country trap’ effect, in which a nation rich in resources and spanning 11 time zones cannot be isolated. Russian President Vladimir Putin has repeatedly stated that the West “is shooting itself in the foot” with the restrictions.
   
2. Economic performance
   Russia’s economy has demonstrated remarkable resilience in the face of external pressure over the past year, with GDP expected to grow by around 3.5% in 2023. Russia is projected to outperform all G7 and EU economies, and all other countries that joined the sanctions, in terms of GDP growth this year. Industrial production growth is estimated at 3.6%, and external public debt has decreased from $46 billion to $32 billion. The government has pledged to continue working to reduce inflation, which remains stubbornly high, and is projected to reach 7% this year. Real wages in Russia also continue to grow and real incomes are estimated to have increased 5% this year, amid a historically low unemployment rate of 2.9%.
   
3. Central bank monetary policy keeping the ruble afloat
   Due to the external pressure on the Russian economy and the national currency, the Bank of Russia took a timely decision to support the ruble, which had plummeted to a 16-month low against the dollar and euro in mid-August. Politico Europe recently named the head of the regulator – Elvira Nabiullina – as its top “disrupter” of this year, citing her role in stabilizing Russia’s economy despite the challenges, such as sweeping sanctions targeting the financial sector, high inflation, and the collapsing ruble. The central bank’s interest rate hikes to the current 16% have led to a drop in imports, and consequently, a decline in demand for foreign currency from importers, having bolstered the ruble. The Russian currency’s rebound has accelerated following capital control measures introduced by the government. A reduction in the budget deficit after growth in oil revenue has also affected the exchange rate, along with increased sales of foreign currency earnings by Russian exporters. Analysts expect the ruble’s rally to continue in 2024.
   
4. Western exodus and growth of Russian businesses
   Foreign companies that left Russia due to Western sanctions were steadily replaced by local businesses this year. Their exit has reportedly opened up some 2 trillion rubles ($22 billion) worth of niches. According to President Putin, Russia never asked anyone to leave, but the exodus of multinationals turned out to have its benefits, as it encouraged domestic businesses to grow and expand. Russia remains open to the return of foreign companies, the president insists, pledging to create the conditions for them to operate in the country.
   
5. Reducing oil dependence
   The Russian budget has reduced its dependency on oil revenue, as the government has long strived to diversify income sources and scale back the share of exports of natural resources such as oil and gas in its budget revenue. Income from outside the oil and gas sector is expected to exceed 3 trillion rubles ($32.7 billion) in 2023, according to Finance Minister Anton Siluanov. At the same time, Russia’s revenue from oil and gas exports is growing, and has exceeded expectations. Since Western nations effectively banned its oil and gas, Russia has successfully redirected energy exports to Asia.
   
6. West’s oil price cap failure
   The price limit imposed by the G7 and EU countries on Russian seaborne oil sales has largely failed, as Moscow’s export revenues are higher than before the Ukraine conflict. The mechanism bans Western firms from providing insurance and other services to shipments of Russian crude unless the cargo is purchased at or below the $60-per-barrel price cap. Similar restrictions were introduced in February for exports of Russian petroleum products. The measures were intended to substantially reduce Moscow’s energy profits. However, Russian oil consistently sells above the artificial limit, and state revenues have soared. Moreover, a recent study by the Center for Research on Energy and Clean Air (CREA) has reportedly found that around 48% of Russian oil cargoes were carried on tankers owned or insured in G7 and EU countries.
   
7. Pivot to the East
   Russia has been steadily reorienting trade and business toward Asia and the Middle East, and away from the West. The country has become the top supplier of oil to both China and India, as well as the largest European exporter to China overall. Trade with the Asian nations has been booming, despite Western sanctions. Statistics from the Finance Ministry show that 60% of the country’s exports are now going to Asia. At the same time, Russia’s trade with ‘unfriendly’ countries (those that support sanctions) has dropped threefold since 2021, and is on course for a further decline. Opinion polls have shown that the majority of Russians approve of the eastward pivot, while experts call it an ‘irreversible’ process.
   
8. De-dollarization and trade in national currencies
   The global trend towards using national currencies in trade instead of the US dollar started to gain momentum this year, after Ukraine-related sanctions saw Russia cut off from the Western financial system and its foreign reserves frozen. Moscow has reduced its reliance on the dollar and euro in foreign trade, and started to use its national currency, the ruble, more actively. The Chinese yuan and the Indian rupee have also become major players in Russia’s external trade, as Western restrictions have boosted their usage at the expense of the greenback and euro. Meanwhile, a former special adviser on the White House Council of Economic Advisers, Joe Sullivan, warned recently that the growing use of national currencies by the BRICS countries is likely to speed up de-dollarization.
   
9. Diminishing role of the West and the rise of the Global South
   The global process of power redistribution is already underway, experts say, noting that Asia, Africa, and South America are now becoming a vital counterweight to declining Western domination. Russia has steadily developed ties with countries in the East and Global South in recent years, and the process has greatly accelerated due to Western sanctions on Moscow.
   
10. ‘Victory’ budget for 2024-2026
    The Russian government says its main focus for the next three years will be on funding its military to help achieve victory in the Ukraine conflict. Nevertheless, the authorities do not plan to renege on their social policy commitments. According to the Finance Ministry, around 10-11% of the budget will be allocated to supporting economic growth. Moscow plans to earmark around $86 billion for welfare spending in 2024, with the figure projected to remain at the same level for the following two years. The government has said the goal is to fulfill all obligations to the population, and oil the wheels of the economy.

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Russia will retaliate in kind to the potential confiscation of its assets by Western countries, Kremlin spokesman Dmitry Peskov told journalists on Friday.

Russian authorities have assessed the unpredictability of the opposing side, as well as their tendency to violate international and other laws, Peskov stated, adding that, for now, confiscation of foreign assets in Russia can only be considered in theoretical terms.

“When they [Western powers] started piling unprecedented economic sanctions on us, they did not think about the boomerang effect at all, but now it is obvious,” Peskov said, adding that a number of sanctions supporters are now wondering whether they did the right thing.

According to the official, Moscow has a list of US, European, and other assets that would be seized if the G7 nations decided to confiscate the $300 billion in frozen reserves belonging to the Russian state.

“Of course, we analyzed possible retaliatory steps in advance. And we will do everything so that they best suit our interests. But in general, no theory can be legal; it can only be pseudo-legal,” Peskov explained.

He emphasized that taking any step of the kind by the West would amount to “theft,” violate international law, and undermine reserve currencies, the global financial system, and the world economy.

Earlier this month, the Financial Times reported that Washington had proposed that working groups from the G7 explore ways to confiscate $300 billion in frozen Russian assets on February 24, 2024, the second anniversary of the start of hostilities in Ukraine.

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Ukrainian Prime Minister Denis Shmygal has sent a letter to an international group coordinating funds, to request an emergency meeting with Western donors, as Kiev confronts “exceptionally high uncertainty” over its budget, Bloomberg reported on Thursday.

According to the outlet, Shmygal sent a letter this month to the Multi-agency Donor Coordination Platform for Ukraine, urging Western sponsors help cover the budget shortfall.

“To uphold macroeconomic stability, it is imperative that we receive sufficient, prompt, and predictable external financing, beginning January 2024,” Shmygal wrote.

The Ukrainian economy relies almost entirely on financial support from the West, and Kiev has voiced concerns as to whether the flow will continue, as new aid packages were recently blocked both in the European Union and in the US.

The Finance Ministry said last week that Kiev's fiscal needs for 2024 are estimated at $37.3 billion, after more than $42 billion in foreign aid received this year. Meanwhile, the Ukrainian budget may suffer a deficit in the first two months of the year, according to Finance Minister Sergey Marchenko.

US lawmakers in the House of Representatives have blocked a bill for the next major Ukraine aid package worth $60 billion, which President Joe Biden requested in October.

Another package from the EU worth €50 billion ($55.6 billion) was blocked by Hungarian Prime Minister Viktor Orban this month.

Earlier, Ukraine's former Prime Minister Nikolay Azarov compared the national economy to a “zombie” that only shows signs of life with Western financing, saying that it was “falling apart” with minimal GDP growth and a looming devaluation of the hryvnia.

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The EU is intentionally destroying demand for natural gas, Gazprom CEO Aleksey Miller stated at a company meeting to discuss the year’s preliminary results.

“We are well aware of the situation in Europe, where they have taken an unprecedented step,” the chief executive said. “There, for the first time in history demand for natural gas, a primary energy source, is being artificially destroyed.”

He insisted that the policy of eliminating one of the most environmentally friendly energy sources is forcing “some EU member states to de-industrialize.”

Global demand for gas, however, is expected to increase by 43% in the next 25 years, Miller noted, adding that the energy giant is ready, as it has been developing cooperation with nations that are interested in reliable energy supplies.

He pointed out that Gazprom has been working with Asia for a long time.

“The volume of gas supplies to China in 2023 will be over 22.5 billion cubic meters, exceeding the contractual obligations by 500 million cubic meters,” Miller stated, adding that Gazprom plans to deliver as much as 38 billion cubic meters of natural gas to East Asian nation.

Gazprom supplies natural gas under a long-term contract sealed with the China National Petroleum Corporation (CNPC). The Power of Siberia pipeline is part of a $400 billion, 30-year agreement between Gazprom and the CNPC clinched in 2014. Russia’s gas exports to China are projected to reach 100 billion cubic meters annually, taking into account a transit pipeline through Mongolia.

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Latvia’s National Electronic Media Council (NEPLP) has blocked access to services provided by Russian tech giant Yandex, the council’s chairperson, Ivars Abolins, has announced.

The ban comes despite the fact that Russians constitute Latvia’s largest ethnic minority group, comprising more than a quarter of the population.

According to a post published by Abolins on X (formerly Twitter) on Thursday, the ban includes the Yandex.Music service, which allows listeners free access to Russian podcasts and songs.

Last year, Latvian authorities annulled the registration of Yandex.Taxi and blocked the service’s ride-hailing app, Yandex Go. Riga justified its decision based on the service’s alleged storing of data on servers in Russia. Yandex denied the accusations, insisting that the company stored data in Latvia in accordance with EU legislation. The tech giant challenged the decision at the Administrative District Court of Latvia, which is reportedly due to review it in February 2024.

Russia’s most popular search engine, Yandex has come under intense pressure amid Western sanctions. Since last year, the Dutch-registered entity has been seeking to divest its Russian business, which generates the lion’s share of revenue, and to spin off a number of its international startups. According to Reuters, the company aims to maintain access to Western markets despite the sanctions on Russia.

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The world’s largest crypto exchange Binance has sent out last-call notifications urging its Russian users to complete the off-boarding process and to withdraw their money from the platform by December 29, RBK daily reported on Thursday.

The exchange is warning that all existing ruble deposits will be gradually shut down after the deadline expires and advised Russian cryptocurrency users to transfer their accounts and pull out their funds from Binance and into recently-launched exchange CommEX or to any other crypto platform.

Binance’s technical support explained to RBK that notifications were sent to users whose “location is temporarily or permanently determined [to be] on the territory of the Russian Federation.”

The crypto exchange said in November that it will stop providing Russian ruble deposits as it prepares to leave the sanctioned country’s market.

Binance’s decision to sell its Russia business, to comply with Western sanctions, was revealed in September. CommEX was announced as the buyer of Binance’s Russian operations for an undisclosed sum, as the exchange planned to gradually pull its services in the country over several months.

The move came amid reports of a US Department of Justice inquiry into whether Russian customers could access the exchange, potentially violating US sanctions.

Russian citizens have increasingly turned to using crypto exchanges after Western restrictions cut off Russian banks from global payment networks.

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Households in Germany will continue to struggle with high electricity and heating costs amid the cost-of-living crisis, Der Spiegel reported on Wednesday, citing the country’s Federal Network Agency.

The warning comes despite the recent fall in household energy prices, which have decreased 4.5% this year up to November 2023.

“The era of cheap energy is over, at least as long as we continue to consume large quantities of conventionally generated energy,” the head of the Federal Network Agency, Klaus Muller, was quoted as saying in an interview with the Rheinische Post.

Although wholesale electricity prices have “fallen significantly” compared to 2022, the price level is still higher than before the start of the Ukraine conflict, he reportedly said, adding that “nothing will change in the near future.” 

The energy regulator noted that an average four-person household will pay €120 ($133) more in network fees per year due to the government’s decision to eliminate the previously planned €5.5 billion subsidy. Network operators will pass the price rise on to customers, Muller assumed, predicting, “Sooner or later, the costs will reach all consumers, regardless of when the changes are implemented.”

Germany’s transmission system operators reportedly announced in mid-December that the grid fees will rise from 3.12 cents per kilowatt hour in 2023 to 6.43 cents next year.

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Western sanctions have had no notable impact on flight safety in Russian civil aviation, the Kommersant newspaper has reported, citing data from the nation’s air safety watchdog over the past five years.

According to the Federal Air Transport Agency, there are “no clearly defined negative trends” in the number of annually registered incidents.   

Russian civil aviation aircraft reportedly deal with some 800 incidents every year, while the number of incidents related to technical and power failures amounted to 485 in 2019–2022.

In the first 11 months of the current year, 670 aircraft incidents were recorded in commercial aviation, of which 400 were associated with equipment failures, the regulator said. It added that the figure is directly related to the number of completed flights, which is expected to drop in 2022 and 2023 compared to 2021.

The agency’s statistics factor in data from commercial transportation that includes 116 airlines with an air operator’s certificate. Roughly 65% of passengers are carried by the country’s five biggest airlines, including Aeroflot group, S7, and Ural Airlines. Foreign-made aircraft reportedly account for about 95% of passenger turnover.

“Violation of engine airworthiness maintenance or flight operation rules are the most common factor leading to engine failures,” the watchdog told the media.

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The head of the Bank of Russia, Elvira Nabiullina, has held the position for more than ten years. When she was just starting the job, the world's media highlighted that Nabiullina had become the first woman to run a central bank in a G8 country. Now, however, the Western press talks about her in a completely different context. Not long ago, Politico magazine named her “disruptor of the year” because she “has managed to stave off the effects of unprecedented Western sanctions designed to drain the Kremlin’s coffers.”

In her first interview since Russia’s military engagement with Ukraine began, Nabiullina told RBK about the toughest sanctions and the delayed key-rate increase, and specified whether subsidized mortgages will become rare in the future.

This interview was first published by RBK, translated and edited by the RT team.

“This is a highly negative signal for all the central banks”

— The financial sector was the first one to get hit by the sanctions. The largest banks fell under blocking sanctions, their reserves were frozen, currency restrictions were imposed, and the banks were disconnected from SWIFT. What was the most unexpected and difficult challenge for you?

— We have been living under sanctions since 2014 and, therefore, have always considered the risk that the sanctions may increase. We did a lot of work in this respect and conducted stress tests with many financial institutions. Therefore, when the major banks fell under sanctions, they were largely prepared for it. Disconnection from SWIFT has been a threat since 2014, so we created our own national payment system. We diversified our reserves and increased the share of yuan and gold reserves. International payments were actually the biggest issue, and we are still working on it. Blocked and frozen individual assets are also a painful subject since millions of people who were not sanctioned ended up with frozen assets. We are still trying to solve this problem together with the government.

As for the frozen reserves, I think this is a highly negative signal for all the central banks, because it violates the basic principles of security. But in this regard, we were aided by the floating exchange rate and the currency restrictions, which we adopted last spring and which were quite severe. Later, as you remember, these restrictions were weakened. This helped us mitigate financial stability risks.

As you rightly mentioned, the financial sector was the first one to get hit by the sanctions – and there were a lot of sanctions, not just the ones you mentioned. But in general, we managed to maintain financial stability.

— Do you think that the sanctions pressure will increase, particularly in regard to the financial sector?

— It is impossible to predict the sanctions policy. But we calculate a scenario with increased sanctions pressure, and every year we present it in [the report called] ‘The Main Directions of Monetary Policy.’ There is definitely a certain risk. The main thing we can do to counter this risk is to ensure macroeconomic stability and financial stability. For example, we offered banks a wide range of easing measures but [now] began to roll these back. We believe that banks should again increase their capital buffers in case of possible shocks. These include not only sanctions but shocks related to financial conditions, and so on, which [the banks] must be able to withstand. Therefore, first of all, we need to understand the risks and be prepared.

— Politico magazine called you the “disruptor of the year” – among other things – for helping Russia adapt to the sanctions. Do you agree with this? And in your opinion, have we overcome all challenges? Are there any new shocks ahead?

— It's hard for me to answer the first part of the question. I believe that the central bank has long pursued a policy aimed at protecting incomes from devaluation as a result of high inflation, and we will continue doing so. [We have also worked on] ensuring the stability of the financial sector, which would allow people and businesses to preserve their savings and provide financial resources for economic restructuring. We see that economic restructuring is happening quite quickly. This is primarily due to the market-based nature of our economy and the business [sector], which has adapted very quickly.

Of course, we may be tempted to think that we did so well in 2022, and now, as they say, we have weathered the storm. But we must be prepared for increased sanctions and pressure. We were able to respond to the main challenges, particularly in the financial sector, but even in that sector, there are still unresolved problems, including cross-border payments. Yes, [payment] chains are being constructed, and they are constantly changing, but [cross-border payments] remain a problem for many businesses. However, according to our surveys, this problem has become slightly less severe.

The goal of developing the capital market is very serious. We will need to overcome a certain loss of confidence in the financial market due to the sanctions. 

Another challenge is to maintain the same pace of development in the fields of innovation and technology. Our financial sector is quite advanced – many people now understand this, comparing [our system with that of] other countries in terms of payment methods and so on. To continue on this course of development, we need to develop innovations. Moreover, some solutions – not all, but some – used to rely on foreign [technological] developments. Now, we’re doing it on our own. And, by the way, we see how this affects the availability of IT specialists, programmers, and other experts in all fields.

Therefore, there will be certain issues, we cannot say that we have solved all the challenges. However, I have a rather positive outlook on the development of the financial sector and its stability. I believe it will remain technologically driven, innovative, and will be able to meet the needs of both individuals and businesses.

“Looking back, we see that the policy was soft”

— This year, around mid-summer, the central bank began raising rates. Looking back, would you say this measure should have been implemented earlier?

— There’s been a rise in inflationary pressure in the second half of the year. Currently, the price growth rate is really quite high, well above our inflation target. Yes, looking back, we see that the monetary policy was soft, and we should have raised the rate earlier.

— When?

— In the spring, for example.

— You said that the key rate will remain high until the Bank of Russia sees a fairly stable trend towards slower price growth and lower inflation expectations. What parameters will you rely on? Will a slowdown in inflation over a period of two to three months be enough to make a decision on easing the monetary policy?

— We will indeed have to make sure that inflation is on a stable decline and that these are not one-off factors that affect the rate of price growth in a particular month. That's why we analyze a wide range of indicators – not only the general price growth index but particularly the indicators that characterize the stability of inflation. These include core inflation and the price growth rate without the consideration of volatile elements. [Also, we look at] the price growth rate on the goods and services that are less dependent on the ruble exchange rate. We will need to make sure that the decline in the stable [rather than one-off] price growth factors is in itself a stable trend. 

This will take at least two or three months – it will depend on a wide range of indicators that characterize stable inflation. And, of course, inflation expectations are very important. These remain high and, according to recent polls, have further increased. High inflation expectations demonstrate inert inflationary processes. The higher the inflation expectations, the more difficult it is to reduce inflation. Therefore, we will consider all these factors.

— Just when things started slowing down and inflation expectations were about to decrease, egg [prices] had to surge and ruin everything.

— This is one of the parameters. When the price growth rate is high, something unexpected constantly happens. I remember in 2021, prices suddenly increased first on this product, then on that one. We may be tempted to associate high inflation with a specific product. But, unfortunately, there are general reasons [for the inflation]. First of all, this happens when a high growth in demand exceeds the supply.

— How long will the factors that boost inflation – such as high demand, record-high fiscal stimulus, and low unemployment – last?

— Some of these are long-term factors. This includes the situation in the labor market and low unemployment. But I believe this factor will actually determine supply [by influencing] the pace at which supply adjusts to the demand.

As for the fiscal stimulus, we indeed have a stimulating fiscal policy, but we expect that in 2024, it will decrease compared to 2023.

Consumer demand is indeed high, but it is directly influenced by our monetary policy and the key interest rate. There is a certain time lag between our decisions and their implementation in the economy. This is a long chain – after the key rate increases, the market rates on deposits and loans increase. This, in turn, affects the number of bank deposits and loans and influences people’s behavior – whether they will spend money, save it, and so on. And only after all of that does it affect prices. According to our estimates, the response lag is three to six [fiscal] quarters.

— It is still three to six quarters, so it isn’t getting longer? 

— It’s still the same. We do not extend this period, but, of course, certain solutions may be implemented faster than others. It depends on other factors as well – inflation expectations, the dynamics of the exchange rate, and many other things. Therefore, in general, we assume that the decisions regarding the key rate are effective, we see that they are effective. They work, taking into account the response lags. We will assess how the effects of the previous decisions are being implemented in the economy.

— No, I don't think so. Of course, there may be certain consequences, but they would have been indeed serious if inflation continued to rise and we increased the key rate very slowly. Then people would have realized that inflation is not about to slow down, that it would continue to increase, and the interest rate would continue to rise. But we tried to act decisively. Just to remind you, in six months, we have increased the interest rate from 7.5% to 16%. And each time, we assess whether the monetary policy is sufficiently rigid to achieve our inflation target of around 4% by next year.

The effects are already evident when it comes to market loans – for example, the demand for market-based mortgages is slowing down. Of course, certain demand is increasing – for example, the demand for subsidized mortgages: People try to quickly apply for such mortgages since when interest rates rise, the difference between a standard-rate mortgage and a fixed-rate subsidized mortgage makes it more attractive. But this actually relates to the scale of government subsidies more than to monetary policy.

“If oil prices reach $88-$90 per barrel, we can switch to buying foreign currency”

—In January, the central bank will resume the mirroring of fiscal rule-based regular operations by the Russian National Wealth Fund. The Bank of Russia remains a net seller of foreign currency, but will it also be a net buyer?

— Whether we will be a net seller or a net buyer largely depends on oil prices. If oil prices remain at their current level, we will be a net seller of foreign currency. If oil prices reach $88-$90 per barrel of Brent oil, then we can switch to buying foreign currency. In January, we will sell foreign currency. We will soon announce the operations that will happen in January.

— Do you consider it necessary to extend the presidential decree on the repatriation of foreign currency earnings, which expires in April 2024? You have always said that such measures should be temporary.

— I believe it should be a temporary measure. We indeed see that the amounts of foreign currency sold by exporters have been increasing. As of November, net sales of foreign currency by exporters came close to 100% of the revenue. But there are several factors [that we must take into account]. First of all, the currency is mainly sold by exporters, and this is driven by the high oil prices that we’ve seen in the past months. 

Response lags exist here as well – between high oil prices, the arrival of export revenue, and the sale of currency. Mostly, the currency was sold due to high oil prices. There were [also] one-off factors related to foreign currency conversion for dividend payments. Plus, we’ve seen that some exporters, due to the high interest rate on ruble loans – which is also a result of our monetary policy — began taking foreign currency loans and then selling the currency to pay for their expenses in rubles. And, of course, the presidential decree also played a part. But it is probably impossible to isolate the effect of each particular factor now.

We believe the decree should be temporary because, over time, companies learn to circumvent the imposed restrictions. Plus, such restrictions make it difficult to make international payments, including payments for imports – such as the necessary equipment imports and so on. Therefore, we believe that [the decree] should be temporary. However, we will soon discuss this matter with the government.

— Is the sale of foreign currency revenue still a decisive factor for the ruble exchange rate?

I don’t believe so. The decisive, fundamental factors that affect the exchange rate include the state of the balance of payments, our exports, and the demand for imports in ruble terms. This demand has been fueled by the availability and rapid growth of ruble loans, among other things. So presently, the monetary policy clearly affects the stabilization of the exchange rate.

— So, in March, when the decree expires, we will not see any drastic changes in the situation on the foreign exchange market?  

— We don't expect that to happen.

— You mentioned the challenges for businesses [that may arise because of the decree]. There is something called “ruble circulation” – i.e. exporters who receive revenue in rubles under the terms of their contract need to convert it into foreign currency, return it, and convert it once again. Do you see the risks of such a double conversion?

— There is a certain problem related to the fact that many companies have switched to receiving export revenue in rubles. Though generally, this is a positive [trend]. When they are forced to convert a part of their revenue into foreign currency in order to sell it later, this increases the turnover of the foreign exchange market, but for companies, it simply implies additional commission fees for converting the currency. This has no major impact on the exchange rate. 

— It has a greater impact on business.

— On business, yes. In terms of certain additional fees.

— Will there be any adjustments to the decree in this regard?

— This will be decided by the government.

“Banks will continue to make a profit”

— This year, we expect a record net profit for the banking sector. This has partly been a result of the currency revaluation, but that was a one-off factor. Are there any fundamental reasons why this year was so successful for the banks, or was it just luck, and next year could be much worse?

— Most of the reasons behind the profit growth are fundamental ones, although there were also certain one-off factors, such as the currency revaluation. In 11 months, banks earned a profit of 3.2 trillion rubles, including about 500 billion rubles, as a result of the currency revaluation. I’ll remind you that last year, they lost one trillion rubles due to the currency revaluation. But of course, the fundamental factors have been more important.

But when we estimate the profits of the banking system, it is very important to look at the total two-year profit. Last year, bank profits amounted to just 200 billion rubles, they decreased almost ten times. In the economy as a whole, profits decreased by about 10%. Why did this happen? Because the banks acted in a conservative manner – and they were right to do so. They created reserves, expecting that some of the loans they provided would cease to be serviced since many businesses could get into financial trouble. But since the economy has been growing and loans are being serviced, the banks judge borrowers to be solvent, and they have dissolved these reserves this year.

But when we consider two-year profits, the average profits will probably be 1.7–1.8 trillion rubles. This is about a quarter less than in the ‘normal year’ of 2021.

Profits will remain positive next year, even without taking one-off factors into account. And this will allow banks to increase their capital. The banks have practically no other sources [of capital] – there is no access to external sources, so profits are their main source of capital. And capital is necessary in order to provide loans to economic sectors – without it, it is impossible to increase [the number of] loans. Therefore, banks will remain profitable and will continue to provide loans.

— Even at the current interest rates?

— Yes, even at the current rates. We’ve seen that lending has slightly slowed down as a result of high interest rates. I have already mentioned [the decrease in] mortgages and unsecured consumer lending. The first signs of this appeared in corporate lending. However, due to high inflation expectations, people and businesses took more loans because they believed that inflation would remain high. Therefore, inflation expectations are very important to us, and we are monitoring them. We expect that next year, lending growth won’t be as high as this year, but it will remain positive. In general, it will be about 5-10%.

— Large banks are planning to provide a fewer number of unsecured loans and mortgages in 2024. How will this affect their profits in 2024? Will the average profits that you mentioned – 1.7-1.8 trillion rubles – be exceeded?

— So far, we expect that the profit of the banking sector next year will be slightly over two trillion rubles. Due to high rates, the margin may slightly decrease, particularly since high interest rates are passed through to deposits more quickly than to borrowers and lenders. But nevertheless, economic activity is developing, there are positive growth rates, and [the banks] will earn profit.

“Subsidized mortgages will not be a rarity”

— The conditions for providing subsidized mortgages have already been made more strict. Could such mortgages become a rarity next year? Or perhaps all mortgages will become rare, considering the current interest rates?

— No, of course, mortgages will continue to be in demand. According to our estimates, this will not be a 35% growth, as this year, but around 7-12%. On the positive side, as a result of the decrease in the number of loans, real estate prices won’t grow as much. Because housing prices have also significantly increased. 

Subsidized mortgages will not become a rarity. We assume that the large-scale subsidized mortgage program will end in July, but, for example, the Family Mortgage program will remain effective. This is a very popular type of mortgage. Family mortgages are now about the same in size as general subsidized mortgages. Therefore, subsidized mortgages will remain and, of course, will not be as “exotic” as they were before 2020. Moreover, market-based mortgage [programs] will develop. This process has slowed down a bit, but market-based mortgages continue to develop.

— The government has already agreed to increase the size of down payments and reduce the loan amounts on subsidized mortgages for the residents of the country’s main regions. Is the idea of differentiating mortgage rates by region, which was proposed a while ago, still relevant? If so, how much can we expect mortgage rates in Moscow and St. Petersburg to rise?

— Yes, we are discussing regional mortgage programs. A special working group has been set up in the State Duma, and we are a part of it. The Family Mortgage program is likely to remain. We will soon talk about extending it and the possible requirements. Family Mortgages are part of targeted mortgage programs. 

There are indeed challenges since, in a number of regions, the housing market is stagnating. We see that the construction of new housing and affordable mortgages are mostly available in large cities. But we must give people a chance to solve their housing problems regardless of where they live. We will discuss how this may be done.

And, of course, we will also need to leave room for market-based mortgages. After all, people who do not fall under any preferential category or targeted social support program should be able to solve their housing problems with the help of market-based instruments.

— Could you list any regions that may take part in the subsidized regional mortgage program? What mortgage rates could be acceptable for them?

— It's too early to answer both questions. Probably, it would not even be correct to consider a certain region as such. Because often, in the region’s major cities, the situation is acceptable, while in medium-sized cities or small towns, there are major problems.

— The Bank of Russia pointed out the current imbalance in the mortgage market – prices on new housing (first-sale units) are a lot higher than on existing housing (resale). This fall, the gap exceeded 40%.

 – Yes, it was 42%.

— What are your expectations after the forthcoming changes in the terms of the subsidized programs next year? Will this gap shrink, and if so, to what extent and how fast?

— I believe the gap should shrink. Because it carries risks for people and for banks. Before the introduction of large-scale subsidized programs, the gap was about 10%.

In the next few years, we should go back to the normal pricing gap between the new housing market and the existing housing market. How quickly this will happen will depend, among other things, on the subsidized programs – whether they will cover only first-sale housing or resale housing too. In my opinion, these programs should solve the challenges of people, providing them with affordable housing, rather than just supporting developers. If people improve their living conditions, it doesn't matter whether they buy a new or resale property. But this also must be discussed with the government since the government is responsible for the subsidies. But I believe the gap should at least stop growing, because it kept growing last year as well, so it should begin to slowly shrink. But now, it is probably too early to talk about the pace at which [this gap] will shrink.

“Are there any issues that haven’t come to light yet? Probably, there are.” 

— For the first time in many years, the central bank has not revoked a single banking license in the course of the year. For anyone who follows the financial market, this is a very unusual situation. How did it happen? Are our banks so resilient or…

— They are resilient.

— Or maybe some of the challenges haven’t come to light yet, after the shocks of last year? What do you think?

— The sanctions crisis that we experienced last year and this year was a test that demonstrated the effectiveness of our policy. And I can confidently say that the banks are indeed resilient – they coped with so many problems and survived this period well.

Are there any issues that haven’t come to light yet? Yes, probably there are, but these are not major problems. They include the blocked assets of banks. We have implemented easing measures so that [the banks] can create reserves within a period of ten years. When it comes to other regulatory concessions, we are gradually rolling them back. We are returning to normal regulation and to creating additional buffers.

— So 2024 may also pass without any revoked licenses?

—I hope so.

— Unexpectedly for the market, Vladimir Komlev – the head of the Russian National Card Payment System (NSPK)  – recently announced that he would be leaving his post on January 1, after ten years in office. Could these changes indicate that the central bank intends to change the NSPK’s course of development?

— No, the course of development will remain the same: The creation of a national payment infrastructure. This has always been the goal of the NSPK and will remain so. The development of this infrastructure, which can be used by all the players in the financial market, ensures [healthy] competition. Both the central bank and NSPK will continue to pursue the same path.

And, of course, I would like to thank Vladimir Valeryevich [Komlev] – he has done a lot to provide Russia with its own national payment system – the Mir bank card and the Faster Payments System. Because when we started these projects in 2014, I remember how much skepticism there was. [People said], “Who needs this? We have Visa, we have Mastercard, we have other payment systems.” But we see that it turned out to be profitable. And these services, including the Faster Payments System, allow different banks to compete in the payments market.

“There are risks of investing in foreign securities even through friendly countries”

— The St. Petersburg (SPB) Stock Exchange was included in the Specially Designated Nationals (SDN) list. The regulator was reproached for allowing private investors to buy foreign securities, although unqualified investors were restricted from doing so. Where can we draw the line between protecting the interests of individual investors and offering a wide range of tools on the [financial] market?

— Finding balance is really difficult. We should give people an opportunity to diversify investments, but at the same time, protect them from risks that they may not be able to understand. We focus on protecting the unqualified investor. Indeed, our people had the opportunity to invest in foreign securities so that they could diversify their investment portfolios. And if they hadn’t had a chance to do this through Russian infrastructure, many would have done it directly through Western infrastructure.

After the sanctions were imposed, we warned about the [infrastructure-related] risks and restricted unqualified investors from buying foreign securities. 

By February of last year, our investors owned almost $7 billion worth of foreign securities. As of November of this year, that number decreased to just over $3 billion. So, over this time, people have significantly reduced investments in foreign securities. And now, over 80% of holders of foreign securities are qualified investors.

Of course, there are risks of investing in foreign securities even through the infrastructure of friendly countries. We warned about these risks and obliged brokers to inform their clients. It's one thing to work in a Russian jurisdiction, but it’s another thing to be responsible for the risks of a foreign jurisdiction. We see that our concerns were not in vain because many investors who owned foreign securities through the infrastructure of friendly countries met with challenges. Due to the risk of secondary sanctions, these organizations are now conducting lengthy compliance procedures.

— What does the central bank think about the fate and future prospects of the St. Petersburg Stock Exchange?

— Many of our large financial institutions are under sanctions. You can see for yourself that almost all of them have adapted, changed their business models, and continue to develop. I am sure that the St. Petersburg Stock Exchange will not be an exception. It is already considering new services and new products, and it possesses a high-tech infrastructure and is professionally competent. Therefore, I don’t feel worried about it.

— You mentioned that the Bank of Russia is considering scenarios of more severe sanctions. Do you consider it probable that sanctions will be imposed against the Moscow Stock Exchange? And in such a case, which currency trading scenarios will be implemented to determine the exchange rate?

— We consider different scenarios and different options of how to act [in such a case]. And so does the Moscow Stock Exchange. As for the functioning of the foreign exchange market, we also have an off-exchange market that offers currency trading. By the way, it already accounts for more than half (53%) of currency trading. As for the exchange rate mechanism, assessing various sanctions risks, last year, we issued an instruction explaining how the exchange rate would be determined. It will be established on the basis of off-exchange trading data, including bank reporting.

— In the absence of exchange trading, can off-exchange trading rates spin out of control?

— No, I don't believe there will be [such risks]. It depends on the supply and demand [of the currency]. We have a fairly large off-exchange trading volume, and there are many players. However, we will need to obtain information about off-exchange transactions, so we will make use of different sources. But I don't think that this in itself can seriously affect the exchange rate.

“There is interest, but it is weighed against the fears of sanctions”

— How do you assess the possibilities of an exchange of blocked assets between private investors? Are you aware of cases when non-residents asked national regulators for permission to carry out such operations?

— We have created the legal conditions that are necessary for such an exchange to take place. We believe this can be mutually beneficial for investors. But then, everything depends on the investors themselves, and primarily the non-residents. Currently, I have no information on whether they requested such [permission] or not. 

— Let’s first see if it happens, and then we will talk about it further. Because this stage is very important. It is aimed at helping a large number of investors, those with small investment amounts.

— The central bank discussed plans to build new chains with friendly depositories in order to gain access to foreign markets – but clearly, only friendly foreign markets. How are these plans going? And what kind of depositories are these?

— Indeed, building depository bridges is very important. We see that there is a need for this. We are holding talks with regulators of friendly countries to ensure that such projects are implemented. By the way, in September, we adopted a decision made by the board of directors and removed some regulatory barriers to constructing such bridges. If necessary, we are ready to make further adjustments. We see that the market players are also strengthening their cooperation. But so far, it’s too early to talk about final decisions. [The matter] is currently at the stage of discussions and [of seeking different] approaches.

— Can you specify what kind of friendly depositories these are? Are they in neighboring or far-away friendly countries?

— [We’re talking about] all friendly depositories.

— Do you feel that the other side is interested in this?

— There is interest, but it is weighed against the fears of secondary sanctions.

“There is always a chance that some people will engage in unfair practices” 

— The president recently proposed extending the insurance of funds so that it would cover investment accounts up to 1.4 million rubles. However, this insurance will cover only the risks associated with the broker’s bankruptcy, not market risks.  Do you have any concerns that unfair practices may arise since market players may tell clients that everything is insured, so they should “invest boldly”?

— Yes, we have such concerns. Because there is always a chance that some people will engage in unfair practices. We have already seen this. Particularly in cases when investment products were sold under the guise of insurance or capital guarantees. This happened even before this type of insurance existed. But we will fight against it. We will clarify [the situation] and put an end to these practices. 

— Speaking of new tools for attracting long-term money, long-term investment tools, individual investment accounts of the third type (IIA-3), and long-term savings programs – how relevant are these tools for the investor, and will they be in demand?

— We believe they will be in demand. We see this based on the experience with IIA-1 and IIA-2 [brokerage accounts]– although a major motivation [for getting] IIS-1 was related to obtaining tax benefits. But we believe that people will also show interest in these [new tools]. We need to talk about these tools more. But we see people's interest in investment diversification and even extending the investment [period]. Moreover, we also provide a number of benefits.

This interview was first published by RBK, translated and edited by the RT team.

The US dollar is being used as an instrument for regime change and interference in the internal affairs of other countries, and “everyone” is “tired” of the greenback, Russia’s foreign minister, Sergey Lavrov, stated on Thursday.

The global trend towards using national currencies in trade instead of the US dollar began to gain momentum last year after Ukraine-related sanctions saw Russia cut off from the Western financial system and also saw its foreign reserves frozen.

“Everyone is already tired of the dollar, which is becoming a tool of influence, a tool for undermining the legitimate competitive rights of countries in different regions, and a tool for interference in internal affairs and regime change,” Russia’s top diplomat said in an interview with Rossiya24 and RIA Novosti.

Lavrov earlier accused the US and its EU allies of using a wide range of “geopolitical” tools, which include, among other things, “unleashing trade and economic wars.” He noted that Russia and many other countries are now “consistently” reducing their dependence on Western currencies by switching to alternatives for foreign trade settlements.

Experts note that the ruble is strengthening as Russia’s central bank plans to conduct currency operations on the domestic foreign exchange market in early January related to replenishment and using reserves from the National Wealth Fund.

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Former European Commission President Jacques Delors, who is regularly described as the creator of the EU single market, has died in his Paris home at the age of 98, AFP has reported, citing his daughter Martine Aubry.

The French socialist, who was an ardent advocate of European integration after World War II, Delors had made a high-profile political career in his country, where he served as finance minister from 1981 to 1984. He was also an MEP in the European Parliament between 1979 and 1981.

The politician headed the Commission of the European Communities, renamed the European Commission in 1985, and served as its president for three terms until the end of 1994, longer than any other holder of the office. Under his leadership the bloc finalized the integrated single market and agreed to introduce a single currency, the euro.

Under Delors’ tenure the EU created the Schengen agreement for travel within Europe, as well as the Erasmus program for student exchanges. After leaving his post in the Commission, he opted out of standing for the French presidency, despite a strong lead in the polls.

French President Emmanuel Macron paid tribute to Delors on Wednesday via X, formerly Twitter, hailing him as an “inexhaustible craftsman of our Europe” and “a fighter for human justice.”

“Jacques Delors was all these things. His commitment, his ideals and his uprightness will always inspire us. I salute his work and his memory and share the grief of his family,” Macron stated.

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Huawei’s chipset subsidiary HiSilicon has become world’s fifth largest chipmaker, with a 3% share of the global chipset market, according to the latest analysis published by technology market-research firm Counterpoint.

The research, based on third-quarter results, shows the ranking led by Qualcomm products, which account for about 40% of the entire chipset market. The US multinational is followed by Apple, whose market share amounts to 31%.

Meanwhile, Taiwanese fabless semiconductor company MediaTek was ranked third, with a 15% market share. Counterpoint’s findings calculate that the three chipset majors together control up to 86% of the entire mobile processor market.

One of the largest global smartphone manufacturers, Samsung, was ranked fourth on the list, with a 7% market share.

Following Huawei in fifth place, China’s UNISOC ranks sixth and has a market share of 2%, while seventh-placing Google controls 1% of the global market with its Tensor processors.

In 2019, Washington banned US firms from selling software and equipment to Huawei and restricted international chipmakers using US-made technology from partnering with the Chinese firm. The White House attributed the tech ban to national-security concerns, including a potential for cyberattacks from or spying by Beijing.

Before 2020, Huawei was a global leader in the smartphone industry, behind only Samsung and Apple. However, it relied heavily on technology and components made in the US or produced by companies under American patents.

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Russian pork exports to China are set to resume for the first time in 15 years, Sergey Dankvert, head of national agricultural watchdog Rosselkhoznadzor, said on Wednesday in an interview with Rossiya 24 TV.

According to the official, most of the preparations for deliveries have been completed, and the relevant departments now need to conduct final technical checks of exporters. Deliveries are expected to begin over the next few months. 

In September, China removed temporary restrictions on imports of approved Russian pork after an assessment of Russia’s system of controls for African swine fever (ASF). Beijing initially imposed the ban in 2008 after an outbreak of ASF.

Chinese customs representatives later visited Russia to evaluate pig breeding enterprises that would potentially export meat to the country as part of complex measures for lifting restrictions. 

The relevant parties also completed procedures on protocols for inspection, quarantine, veterinary, and sanitary requirements, as well as a draft certificate for pork exports.

Earlier this year, the head of Russia’s National Union of Pork Producers, Yury Kovalev, said the removal of the ban is the result of extensive work to contain ASF and create a satisfactory control system. He added that fewer and fewer countries are free of the virus, making it vital to introduce and amend import controls but refrain from sweeping bans.

China is the world’s biggest consumer of pork, accounting for half of all hog produce.

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International direct-sales cosmetics brand Avon has halted plans to sell its Russian business due to a steep exit tax, Kommersant reported on Wednesday, citing industry sources.  

The US-based multinational announced in March 2022 that it had stopped investments in Russia and exports from its Russian plant to other markets following the start of the Ukraine conflict.  

Earlier this year, Kommersant reported that Avon had launched preparations to sell the plant, which is just outside Moscow, although the company did not officially confirm its intention to exit the country.   

According to industry sources, Avon was negotiating a sale with a number of investors, including Russian cosmetics manufacturer Natura Siberica and Arnest Group, which bought Heineken’s Russian assets in August 2023. Avon’s plans included a transfer of rights to use its brand name but written in Cyrillic.   

In November, however, the company told potential buyers that it had decided not to sign binding offers for the sale, Kommersant said.  

Commenting on the Western corporate exodus from Russia, Kremlin spokesman Dmitry Peskov told the New York Times earlier this month that “those who are leaving are losing their position on the market. And of course, their property is being bought at a serious discount and taken over by our companies, which are doing it with pleasure.”  

Avon is the second-largest beauty products company in Russia, with revenue amounting to 13.89 billion rubles ($151.5 million) in 2022, financial data showed.

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Russian oil sales to the EU have shrunk to a tenth of their former level due to Western sanctions, Russia’s Deputy Prime Minister Alexander Novak announced on Wednesday.

As of the end of 2023, the share of crude deliveries to the bloc in Moscow’s overall exports has slumped from 40-45% before the Ukraine conflict to 4-5% now, the official said in an interview with the Rossiya24 broadcaster.

Last December, the EU, G7, and their allies imposed an embargo on seaborne Russian oil along with a $60-per-barrel price cap on other types of crude, in an effort to curb Moscow’s energy revenues. Similar restrictions were introduced in February for exports of petroleum products.  The agreed ceiling for diesel is $100 per barrel, and $45 for discounted products such as fuel oil.

In response, Russia – once Europe’s biggest supplier – has been diversifying its energy supplies and rerouted about 60% of its oil and gas exports from the EU to Asian countries, Finance Ministry data shows.

Meanwhile, a number of Western officials have repeatedly pointed out that oil from Russia is still entering the EU market despite Western sanctions, flowing through intermediaries at a much higher price.

India has become Russia’s second biggest energy importer after China, the official continued. New Delhi’s share of Russian hydrocarbons has surged from 2% to about 40% over the past two years. Before last year, India’s imports of Russian crude were insignificant, due to high freight costs.

Earlier in April, Novak said Russia had diverted 40 million tons of crude out of a total of 220 million tons from the EU to Asia in 2022. According to his estimates, this year Russian oil exports to the bloc will decrease by 140 million tons.

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The world’s richest people got even richer over the past year, Bloomberg’s top-500 billionaire list, published on Wednesday, shows. Some 77% of the billionaires who made it on the list saw their fortunes grow even larger, while others experienced certain losses.

Elon Musk remains at the top, with an estimated net worth of $235 billion. The South African-born billionaire first dislodged Amazon owner Jeff Bezos from the pedestal in mid-2021, retaining first place ever since.

This year, Musk saw his fortune grow by nearly $98 billion, according to Bloomberg. While his social media platform X, formerly Twitter, has been in turmoil, locked into back-and-forth with advertisers and battered by various scandals, Musk’s flagship asset, Tesla, has enjoyed steady growth, further solidifying his position.

Bezos himself is currently in third place with $178 billion, narrowly outmatched by Bernard Arnault, the CEO of the LVMH (Moët Hennessy Louis Vuitton), whose wealth grew to some $179 billion this year.

Among the top-15, in fact, only a single billionaire saw his fortune shrink. Indian billionaire Gautam Adani, the chairman of the Adani Group, saw his net worth decrease by a massive $36.3 billion to some $84.3 billion, with the development putting him out of the top-10 list.

The massive loss – which actually became the largest one in absolute terms this year – was prompted by a large scandal around Andani’s empire, which erupted early this year. Namely, the businessman was accused of “pulling the largest con in corporate history” and “brazen stock manipulation.” The company, however, has firmly denied all the allegations.

Natural gas prices in Western Europe rose more than 8% on Wednesday, according to data from the London Intercontinental Exchange (ICE).

The cost of gas futures for July delivery at the Title Transfer Facility (TTF) hub in the Netherlands saw an increase by 8.4% to $429.8 per thousand cubic meters, or €37.055 per megawatt-hour in household terms.

The surge has occurred amid rising tensions in the Middle East, a crucial energy supplier and an essential oil shipping passageway. In particular, the escalating conflict between Israel and Gaza that could spread to the whole region.

Meanwhile, the latest airstrikes carried out by US forces on Kataib Hezbollah militants in Iraq, along with renewed assaults by Houthi militants on shipping routes in the Red Sea, have exacerbated concerns about the stability of the entire region.

Vessels traveling to the Mediterranean via the Suez Canal deliver cargo through the Red Sea to Europe. Some cargos shipping liquefied natural gas have recently begun changing routes for longer voyages to bypass the region, Bloomberg ship tracking data shows.

Despite significant concerns over geopolitics, gas prices in Europe have recently remained in a relatively narrow range. They are set to lose over 50% for the year thanks to high fuel inventories and muted demand, which inspires optimism during the heating season.

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Proceeds from Russia’s oil and gas exports contributed about $100 billion (nine trillion rubles) to the state budget this year, close to revenue levels recorded in 2021, before the Ukraine conflict, Deputy Prime Minister Alexander Novak has revealed.

The senior government official told Rossiya 24 TV on Wednesday that more than half of Russia’s total export revenues came from the energy sector, emphasizing that sales of oil and gas ensured stable income to the country’s budget.

Russia’s energy sector contributed “about 27% to gross domestic product (GDP),” according to Novak, who specified that proceeds from oil and gas accounted for “nearly 57% of the total export revenue of our entire country.”

He also said that half of Russia’s energy exports this year have gone to China, while India’s share had risen to 40% in two years. Meanwhile, Europe’s share in Russia’s crude exports has fallen 90% over the past two years, from 40-45% in 2021 to about 4-5% this year, Novak added.

Russian energy companies were forced to redirect supplies to Asia after exports to EU dwindled amid Ukraine-related sanctions and the sabotage of the Nord Stream natural gas pipelines.

Asserting that the price caps are illegal, Russia opted to halt energy supplies to the nations that joined the measure.

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Russia’s exports of natural gas to China are expected to see a year-on-year increase of as much as 50% in 2023, Gazprom CEO Aleksey Miller said during a meeting with President Vladimir Putin on Tuesday.

Gas supplies to the South Asian nation this year will exceed contract obligations and reach 23.2 billion cubic meters, according to Miller, who added that in 2022 the exports had totalled 15.5 billion cubic meters.

Gazprom set a new record last week for daily gas supplies to China through the Power of Siberia mega pipeline, according to Miller. The energy giant has reported records for daily exports nine times since the beginning of 2023.

Miller also said that gas supplies to Russia’s leading trading partner will further grow and are forecast to hit 38 billion cubic meters in 2025.

Gazprom supplies natural gas to China under a long-term contract sealed with the China National Petroleum Corporation (CNPC). The Power of Siberia is part of a $400 billion, 30-year agreement between Gazprom and CNPC clinched in 2014.

Sales of Russian gas to the EU have dwindled due to Ukraine-related sanctions and the sabotage of the Nord Stream pipelines, previously Russia’s key gas route to the region. However, Gazprom has successfully redirected its energy trade towards Asia, with China emerging as its largest importer.

According to Deputy Prime Minister of Russia Alexander Novak, China accounts for 50% of Russia’s energy exports, while the share purchased by India is approaching 40%.

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The global market is facing a deficit of saffron due to a poor harvest in Iran, the world's biggest supplier of the spice, the Financial Times reported on Tuesday, citing local producers and exporters. Saffron is the most expensive spice in the world, renowned for its exquisite aroma, distinct flavor, and vibrant hue.

According to the report, this year’s yield in Iran, which supplies more than 90% of the world’s saffron, is expected to be less than half of the 2022 yield.

“Total production is expected to fall to about 170 metric tons from nearly 400 tons [last year],” Ali Shariati-Moghaddam, chief executive of Novin Saffron, a leading Iranian producer and exporter, told the news outlet.

Producers and traders have blamed the poor harvest on changing weather patterns and water shortages. According to Mojtaba Payam-Asgari, head of the Torbat-e Jam saffron exchange, extremely low temperatures last winter followed by a very dry and hot spring and summer had a devastating effect on the crop. The situation was exacerbated by the fact that thousands of wells intended for irrigation went completely dry.

Experts warn that the situation may worsen further due to climate change, which is altering weather patterns.

“Iran is more vulnerable than the global average, especially in arid and semi-arid areas [where saffron is grown]… Rainfall is declining, and evaporation and temperatures are soaring,” Mohammad Darvish, an Iranian environmentalist, told the news outlet.

“Many Chinese dealers were shocked by the price surge and left. They’ll have to pay even higher prices if they come back because there’s very little crop and the warehouses are empty,” Payam-Asgari of the Torbat-e Jam exchange warned.

China is the biggest foreign buyer of Iranian saffron, accounting for 45% of total exports. Other major buyers include Arab countries, Spain and Italy, where saffron is used in a variety of dishes.

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Israel is likely to boost its military spending by more than $8 billion next year as the war in Gaza continues, Bloomberg reported on Monday.

According to a Finance Ministry document presented to parliament, Israel’s overall 2024 budget will amount to 562 billion shekels ($155 billion), compared to 513 billion shekels in a previously approved spending plan.

Defense expenses will reportedly increase by at least 30 billion shekels next year. The estimates highlight the high price of war, which is costing Israel at least $269 million a day and is expected to hit the economy harder than previous conflicts, according to recent estimates by ratings agency Moody’s.

Along with the military spending, an additional 10 billion shekels will be needed to cover the evacuation of around 120,000 people from Israel’s northern and southern border areas, increased budgets for police and other security services, and the reconstruction of settlements destroyed during Hamas’ attack on October 7.

The financial cost of hostilities includes spending on hundreds of thousands of reservists, which Israel has mobilized for fighting Hamas and Hezbollah, the outlet said, citing the ministry.

Meanwhile, government revenues are expected to slump by 35 billion shekels due to shrinking corporate and real estate taxes, as well as plummeting private consumption.

Without changes to taxation, the country’s fiscal deficit would swell to nearly 6% of gross domestic product, well above the 2.25% ceiling set by the government, the ministry’s document said.

Israeli lawmakers are planning to discuss possible fiscal changes and an increase in the deficit limit, which the Finance Ministry recommends should not exceed 4.5%-5% of GDP next year. 

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China’s involvement in Russia’s Arctic LNG 2 liquefied natural gas project should not be the target of any third-party intervention or restrictions, Beijing’s Foreign Ministry has said, according to Reuters. 

The statement follows media reports that foreign shareholders in the new Russian energy project have halted their participation amid US sanctions.

Economic cooperation between Moscow and Beijing is mutually beneficial and “should not be interfered with or restricted by any third party,” Chinese Foreign Ministry spokesperson Mao Ning was quoted as saying at a regular press conference on Tuesday.

“China has always opposed unilateral sanctions and long-arm jurisdiction without the basis of international law,” she added.

The Arctic LNG 2 project in Russia’s Gyda Peninsula is operated by the country’s largest independent LNG producer, Novatek, and is due to begin commercial shipments in early 2024. The first train was launched in July, with the plant starting production of gas last week. After the addition of two more trains in 2024 and 2025, Arctic LNG 2 is expected to reach a full capacity of 19.8 million tons by 2026.

On Monday, the Kommersant business daily cited sources within the Russian government as saying that foreign shareholders in the project – France’s TotalEnergies, the China National Petroleum Corp (CNPC), China’s CNOOC, and a consortium of Mitsui and JOGMEC from Japan – have declared force majeure on their participation. This effectively means the four shareholders, who each own a 10% stake, have renounced their responsibilities for financing the plant and fulfilling offtake contracts for the supply of LNG it produces, the newspaper wrote.

The US Treasury Department’s Office of Foreign Assets Control (OFAC) imposed sanctions on Arctic LNG 2 in early November, banning third countries in Asia and Europe from purchasing LNG produced by the plant when it starts operating. OFAC has set January 31, 2024 as the deadline for closing transactions with the project.

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China is rapidly gaining market capitalization in the global automobile sector, while European carmakers are losing competitiveness, Maksim Oreshkin, Russian President Vladimir Putin’s top economic adviser, told Expert magazine in an interview published on Tuesday.

Oreshkin noted that China has already become the number one exporter of cars in the world, which does not bode well for European car brands.

“I wouldn't be surprised if companies like Mercedes and BMW fade into history in ten years. As brands they will probably remain, but will follow the fate of Volvo, which was sold to China. In other words, they will actually cease to be European cars,” the presidential aide predicted.

“European manufacturers now have neither the market nor the technological advantage that they had five to ten years ago,” according to Oreshkin.

The broader EU, and Germany, its industrial powerhouse, in particular, have been in the grip of an economic crisis for the past year and a half, ever since Brussels launched its sanctions war on Russia in response to the Ukraine conflict. As a result, the bloc lost access to cheap energy from Russia, which used to power much of its industry.

Earlier this year, the head of Germany’s Association of the Automotive Industry, Hildegard Muller, warned that the country “is losing dramatically its international competitiveness” as the location for the automobile industry because of soaring energy costs.

Meanwhile, following the departure of European, American, South Korean, and Japanese carmakers due to sanctions, China became Russia's biggest automobile supplier in 2023. According to the latest available data, Chinese brands accounted for 92% of all Russian car imports between January and August.

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The US insistence on sanctioning Russia has caused a downturn in the EU economy, according to President Vladimir Putin's top economic adviser, Maksim Oreshkin.

In an interview with Expert magazine published on Tuesday, Oreshkin said the sanctions imposed since February last year have caused the EU to lose both its energy security and a key export market.

Oreshkin pointed to the key factors underlying the EU's economic prosperity, outlined by the bloc's foreign policy chief Josep Borrell. They include easy availability of energy resources from Russia, the use of cheap production in China, and access to the Russian and Chinese markets.

“The gradual loss of these factors is leading the EU economy towards long-term stagnation,” Oreshkin argued, “because European manufacturers now have neither the export market nor the advantages in technology that they had five to ten years ago.”

Oreshkin accused the US of “cannibalizing its European partners, killing European chemicals, automotive and other industries.” This comes amid a broader degradation of the West and its economic model, he said.

“The economies of the Global North – the US, Japan, the EU – are slowly losing their status, their significance. This gradual decay of the countries of the Global North and the growth of countries in the East and South is what will further shape the landscape of the global economy,” he predicted. Oreshkin noted that China has already become the leading global economic power, while Russia is now the largest economy in Europe, “on course to replace Japan as the world’s fourth largest.”

“The stronger the economic growth [in Asia and Africa], the higher will their level of energy consumption be, and the better the energy markets will feel… For Russia, the key task is to remain the most efficient producers of what we make, which includes energy. We must have lower costs, more efficient production, and then the changes that will occur in the energy markets will affect us to a lesser extent.”

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Oil processing has intensified in Russia, jumping in the past week to reach close to the highest daily refining runs in more than eight months, Bloomberg reported on Monday, citing sources.

According to a person familiar with the matter, the country’s refineries processed around 5.65 million barrels of crude a day from December 14 to 20. The figure is down by around 50,000 barrels per day (bpd) from the previous seven days, when average daily refinery runs hit the highest since early April.

Bloomberg calculations show that Russian daily crude refining in the first 20 days of December averaged around 5.57 million bpd, up almost 60,000 bpd on most of November.

Meanwhile, tanker-tracking data reportedly shows that Russia’s daily overseas crude supplies in the global market decreased to 3.18 million bpd in the week to December 17 as a result of a brief pause in shipments from the Baltic Port of Primorsk. “Still, the less volatile four-week average increased by 80,000 barrels a day,” Bloomberg wrote.

Russia has been diversifying its energy supplies in response to Western sanctions since the EU stopped accepting the country’s oil transported by sea. In February, Moscow pledged to voluntarily reduce oil production by 500,000 bpd starting from March. The move came in response to sanctions, while Russia also halted sales to buyers that comply with a Western-imposed price cap of $60 per barrel.

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Danish shipping major AP Moller-Maersk plans to restart shipments through the Red Sea after a pause earlier this month, following attacks on vessels by Houthi rebels, the company announced on Sunday. According to a statement, Maersk expects the route to be more secure now that the US and allies have deployed naval ships to the area to deter further attacks.

“As of Sunday 24 December 2023, we have received confirmation that the previously announced multi-national security initiative Operation Prosperity Guardian (OPG) has now been set up and deployed to allow maritime commerce to pass through the Red Sea / Gulf of Aden and once again return to using the Suez Canal as a gateway between Asia and Europe,” Maersk said in the statement.

“With the OPG initiative in operation, we are preparing to allow for vessels to resume transit through the Red Sea both eastbound and westbound.”

The company said it would provide more details on the resumption of shipping in the area in the coming days, but warned that the decision to resume transportation may be reversed if the security conditions do not improve.

Major global freight companies have faced a number of attacks by Yemen-based Houthi rebels over the past several weeks. The assaults took place in the Bab el-Mandeb strait, a waterway that leads to the Suez Canal, a major thoroughfare for global trade.

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The seizure of Russian assets, including funds belonging to millions of private investors, and restrictions on international payments have been the most “painful” sanctions imposed by Western countries over the Ukraine conflict, the head of the Russian central bank, Elvira Nabiullina, told RBK in an interview on Monday.   

The regulator has been assessing the risk of sanctions since 2014 and was prepared for many of them, Nabiullina told the outlet. The US and the EU imposed their first batch of restrictions after Crimea joined Russia following a referendum in response to the armed coup in Kiev in 2014.    

“Large banks, when they fell under sanctions, were already largely prepared for this to happen. Disconnection from SWIFT has been a threat since 2014, so they were building a national payment infrastructure. We diversified our reserves and increased the share of yuan and gold,” the head of the central bank said in the interview.  

Last year, the US and EU imposed a range of financial restrictions on Russia in response to Moscow’s military operation in Ukraine. These included disconnecting Russian banks from the SWIFT interbank messaging system, a ban on Russia servicing its dollar debt, the freezing of Russian assets held abroad, and the exit of Visa and MasterCard from the country. Sanctions effectively deprived Russia of the ability to conduct international transactions in dollars and euros.  

“We have been able to respond to most of the challenges regarding the financial sector. But there are also problems in the financial sector that have not been fully resolved, including cross-border payments. Yes, supply chains are being built, they are constantly changing, but this remains a problem for many enterprises,” Nabiullina said.  

“Millions of people who are not subject to sanctions have ended up with their assets frozen. This is a very painful issue,” she added.   

An estimated €260 billion ($285 billion) in Russian central bank assets were immobilized in G7 countries, the EU, and Australia following the start of the Ukraine conflict in 2022, with most of the reserves being held in Europe.   

On top of that, around 5 million private Russian investors saw their assets blocked in accounts of international financial institutions. The value of frozen securities in portfolios of private investors amounted to $3.4 billion as of July of last year.

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The dollar’s standing as a reserve currency would be jeopardized if the West confiscates frozen Russian assets to aid Ukraine, Nobel Prize-winning economist and Yale University professor Robert Shiller said in an interview with Italian news outlet La Repubblica published on Sunday.

According Shiller, seizing the assets would give the global community, especially countries which, like Russia, “convert their savings into dollars and thus entrust them in the reliable hands of Uncle Sam,” grounds to doubt the US currency.

“If America does this to Russia today… then tomorrow it can do this to anyone. This will destroy the halo of security that surrounds the dollar and will be the first step towards de-dollarization, which many are increasingly confidently leaning toward, from China to developing countries, not to mention Russia itself,” the economist warned.

“I can’t convince myself that this [confiscation of Russian assets] is the right way,” he explained.

“In addition to the fact that this will be confirmation for the Russian leader that what is happening in Ukraine is a proxy war, it could paradoxically turn against America and the entire West,” Shiller explained, adding that the situation would likely turn into “a cataclysm for the current dollar-dominated economic system.”

Overall, he said that while he sees some moral ground for using Russian assets to aid Ukraine, there is too much risk and “too many unknowns” with regard to the impact of such an action.

Shiller is known for his research in financial markets, financial innovation, behavioral economics, macroeconomics and real estate. In 2011, he was named one of Bloomberg's ‘50 Most Influential People’ in Global Finance, and in 2013, he received the Nobel Prize in Economics for his empirical analysis of asset prices in 2013.

Russia considers both the initial freezing of its assets and plans to confiscate them unlawful. Speaking to reporters last week, Kremlin spokesman Dmitry Peskov warned that any country considering the move should understand that it would face an immediate mirror response from Moscow.

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The US has lost its economic dominance, Russian State Duma Speaker Vyacheslav Volodin wrote on his Telegram channel on Sunday.

Attempts to regain it by unleashing “military conflicts, sanctions and trade wars, organizing terrorist attacks and destroying the European economy” have not brought Washington the desired results, according to Volodin.

Russia’s top lawmaker called the dollar the only remaining instrument of US influence. However, other countries are increasingly abandoning it because Washington is using the greenback as a weapon in a “political battle.” 

He added that US President Joe Biden was depriving his own country of its “last advantage,” since such threats do not build confidence in either the country itself or its currency.

The global trend towards using national currencies in trade instead of the dollar began to gain momentum last year, after Ukraine-related sanctions cut off Russia from the Western financial system and froze its foreign reserves.

Amid sweeping sanctions on Russia, which have proved ineffective, the US is “hysterically threatening to disconnect banks around the world from their financial system for violating them,” he added. 

Moscow significantly ramped up the use of national currencies in its foreign trade last year, moving away from the euro and dollar in international transactions. The share of both in Russia’s export settlements fell from 96% in early 2022 to 17% this past September, according to the central bank.

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Foreign shareholders in Russia’s new liquefied natural gas (LNG) plant, Arctic LNG 2, have halted participation in the project amid US sanctions, Kommersant business daily reported on Monday, citing sources within the Russian government.

According to the report, French TotalEnergies, Chinese CNOOC and China National Petroleum Corp (CNPC), and a consortium of Japanese Mitsui and JOGMEC declared force majeure on their participation in the project, in which they each own a 10% stake. This effectively means that the four shareholders have renounced their responsibilities for financing the plant and fulfilling offtake contracts for the supply of LNG it produces.

This comes after the US Treasury Department’s Office of Foreign Assets Control (OFAC) imposed sanctions on Arctic LNG 2 in early November, banning third countries in Asia and Europe from purchasing LNG produced by the plant when it starts operating in 2024. OFAC has set January 31, 2024 as the deadline for closing transactions with the project.

According to a Reuters report last week, Novatek, Russia’s largest independent LNG producer, which owns a controlling 60% stake in the project, sent clients force majeure notices over future gas deliveries from Arctic LNG 2. The notices reportedly warned Novatek clients that the start of exports from the project was at risk of being delayed. Upon receiving the notice, CNOOC and CNPC both reportedly asked the US government for exemptions from sanctions on the plant, warning that restrictions could cause a disruption to crucial gas flows. According to a separate report from Poten & Partners brokerage, the Japanese consortium has also asked for an exemption, but experts say this could take a while.

Arctic LNG 2 is located in Russia’s Gyda Peninsula. The first train was launched in July. The plant began producing gas last week, and was set to begin commercial LNG shipments in early 2024. After the addition of two more trains in 2024 and 2025, the plant is supposed to reach a full capacity of 19.8 million tons by 2026.

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The Russian government will no longer base its foreign loan decisions on credit ratings compiled by Western agencies and the Organization for Economic Co-operation and Development (OECD). A corresponding decree was signed by Russian Prime Minister Mikhail Mishustin last week, and the document was later published on the government’s official portal.

Poor credit ratings have historically hindered many nations in securing loans. Under the previous regulations, in order to receive a loan from Moscow, foreign countries had to belong to credit risk groups with a score no lower than six (out of eight) according to the OECD’s classification, or with a long-term credit rating higher than B- (according to the Fitch and Standard & Poor's rating systems), and higher than B3 (according to Moody's). These provisions no longer apply, which means Russia will be able to provide loans to countries that don’t meet these requirements, according to the latest decree.

Russia also scrapped a rule that required countries wishing to borrow funds to have the average cost of sovereign credit default swaps in US dollars for a term of ten years over the previous three months over 800 basis points. Finally, the Russian government changed loan repayment requirements, allowing for payments in the “agreed-upon currency,” but naming payments in rubles the “correct” form of reimbursement.

In July this year, Russia announced it had written off $23 billion worth of debts carried by African states. Speaking at the Russia-Africa summit in St. Petersburg, President Vladimir Putin said that the measure settled 90% of liabilities of African countries to Russia, with the exception of some minor financial obligations.

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The Italian business lobby in Russia is finalizing a mechanism that would allow local buyers to pay for Italian goods in rubles, the president of the Italian-Russian Chamber of Commerce has said. In an interview with RIA Novosti, Ferdinando Pelazzo said the mechanism is expected to be ready by February 14, 2024.

“We are convinced that on February 14 we will offer the entire mechanism to our board of directors, and from the next day it will be launched. All we need is to report and get the green light,” Pelazzo stated.

He clarified that the payment mechanism will cover trade in unsanctioned goods which are permitted for import into Russia. According to Pelazzo, there are still “some financial issues” which the lobby needs to sort out, but none challenging enough for the mechanism not to be ready by the date indicated. Pelazzo previously explained that the system which the lobby is working on will allow it to pay for Italian goods in rubles, and then transfer the money to Italy from its account in a third country. The lobby has already chosen an Armenian bank for the purpose, though the name of the bank has not been disclosed.

“We have already reached an agreement with an Armenian bank... We will not only control payments, but also logistics. Currently, the costs of sending goods through Armenia and through Europe are more or less the same. The country is not very far from Italy, which will allow us to monitor the entire process more transparently,” Pelazzo stated. He also noted that the lobby has already secured permission for the new payment mechanism from the Central Bank of Italy.

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Western sanctions have failed to sink the Russian economy due to a “big country trap” effect, a recent study by the Institute of Economics of the Russian Academy of Sciences has found.

If a state is a major player on the global market – like Russia – the imposition of restrictions on its exports will inevitably backfire, leading to a surge in global prices, the researchers noted, referring to the Western embargo on Russian seaborne oil supplies.

The sanctions on Russian oil introduced by the G7 and EU late last year were conceived as a means to curtail Moscow’s energy revenues without causing a spike in global energy prices. In reality, however, they have had a boomerang effect. Soaring crude prices have helped Russia financially offset a decline in supplies, putting “formal effectiveness” of the sanctions in contradiction with their “strategic effectiveness,” the study said.

Russia’s monthly revenues from crude exports are reportedly higher than before the start of the military operation in Ukraine, with net oil revenues hitting $11.3 billion in October, according to Bloomberg’s calculations. The restrictions have led to a reshaping of the financial architecture of the oil and maritime trade and a change in the “pricing environment” of global markets, Alexey Kostin, an associate professor at Moscow’s Financial University, suggested. In response to the sanctions, Russia has “successfully” diverted most of its energy exports to Asia – particularly to India, China, and Iran, where the country’s oil has been sold well above the West’s $60-per-barrel price cap, the expert said.

Any new restrictions are unlikely to have a sizable impact on the Russian economy, a member of the business union Delovaya Rossiya, Aleksey Khizhnyak, said, commenting on the latest ban on Russian diamonds announced by the European Council (EC). Kremlin spokesman Dmitry Peskov said last week that the diamond embargo was “predictable,” emphasizing that “there are ways to circumvent these sanctions, and they will be realized.”

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Several members of OPEC affirmed on Saturday their commitment to the organization and its objectives after Angola decided to quit the group.

The African nation announced earlier this week that membership in OPEC no longer served its interests. The move came after the cartel asked Angola to cut production by 1.1 million barrels a day as part of the group’s drive to curb output in order to support oil prices. The country's exit brings the group down to 12 nations but elicited responses from those remaining in the cartel.

“We reiterate our firm support for unity and cohesion at the heart of OPEC and OPEC+. Each member, whether African or not, plays an indispensable role in achieving our shared objectives and in maintaining the balance of the global oil market,” Congo’s minister of hydrocarbons, Bruno Jean-Richard Itoua, said in a statement in response to Angola's departure.

In a statement on X (formerly Twitter), Nigerian Minister of State for Petroleum Heineken Lokpobiri wrote that his country is “resolute in our dedication to OPEC’s objectives while actively engaging with the organization to address concerns that resonate not only within our nation’s borders but across the continent.”

Iraqi Oil Ministry spokesman Assem Jihad defended OPEC’s stance on output quotas, telling the Iraq News Agency that the group “is trying to achieve the highest rates of balance between supply and demand to achieve stability in the global oil market.” The country is expected to make some of the group’s biggest supply cuts next month to meet its own new quota.

Angola is not the first country to quit OPEC – Qatar, Indonesia, and Ecuador have also left the group in recent years for various reasons. However, some experts warn that Angola’s move may signal growing dissent within OPEC’s ranks regarding production cuts.

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Russian lender Rosbank has received permission to buy out the local assets that belong to its former controlling shareholder, French banking group Societe Generale, according to a decree signed by President Vladimir Putin published on the official government portal of legal acts on Sunday.

The acquisition will include minority stakes in 24 Russian public companies, including VTB Bank, electric power company Rosseti, hydroelectricity company RusHydro, diamond giant Alrosa, several mining majors including Norilsk Nickel, as well as energy majors Gazprom, Surgutneftegaz, Rosneft, and Tatneft, among others.

The terms of the sale have not yet been made public. Based on the details noted in the decree, each individual stake is relatively small, but the total value of the portfolio could be worth billions of rubles, experts say.

The decree notes that the decision to allow Rosbank to proceed with the purchase was made in accordance with Putin’s order from August 5, 2022, which required government permission for transactions with shares of strategic Russian companies. It also placed restrictions on the sale of such assets if they are being sold by foreigners from ‘unfriendly’ states, meaning countries that placed sanctions on Russia in connection with the Ukraine conflict.

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Russia has sharply increased oil shipments to China and India this year, Nikolay Tokarev, the CEO of the Russian state-owned pipeline transport company Transneft, told the Rossiya24 broadcaster this week.

Russia remained China’s top crude supplier in November as Beijing imported around 2.2 million barrels of oil per day (bpd), according to Chinese customs data. Imports of Russian oil jumped by 22.2% between January and November compared to the same period last year.

India, which boasts Asia’s third-largest economy and is the world’s third-largest oil importer and consumer, has also become a major importer of Russian crude oil. According to ship-tracking data, India’s imports of Russian crude hit a four-month high last month, amounting to 1.6 million bpd.

“Export volumes to China and India have increased significantly, many times over. I can say that about 70 million tons of oil were supplied to India this year, while about 100 million tons of oil went to China,” Tokarev said in an interview. 

Since last year, Russia has diversified its energy supplies in response to Western sanctions after the EU stopped accepting the country’s oil transported by sea. Russian oil companies have rerouted supplies of East Siberian crude to Asia and resumed transportation by rail. The port of Kozmino, located at the end of the Eastern Siberia-Pacific Ocean (ESPO) pipeline system in Russia’s Far East, has handled about 42.5 million tons this year. 

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Berlin’s plan to phase out coal-fired power plants ahead of schedule is likely to fail, the head of the German industry lobby BDI, Siegfried Russwurm, told reporters on Saturday. He said the federal government lacks a strategy to persuade private companies to construct new gas-fired stations within the next seven years.

“It is extremely annoying that we could find ourselves in the situation of having to continue operating coal-fired power plants for longer because there is no sufficient other reserve capacity,” Russwurm stated.

Germany intends to stop using coal for generating electricity by 2030, eight years earlier than the official target date. In restructuring the electrical grid, the government wants to rely on renewable sources such as wind and solar. However, power from gas-fired plants is planned as a backup when there is not enough from renewables to cover demand. German companies have been waiting for Berlin to outline a strategy for how the construction of these new plants, which will initially be operated with natural gas and later with climate-neutral hydrogen, will be funded.

According to Russwurm, the government needs to provide incentives for private enterprise to build the plants.

“It’s going to take private investment, and it has to be worth it – even if it’s just a few operating hours a year. I am a fan of expanding renewables. But honesty requires us to say that we need back-ups. We are a long way from having sufficient storage capacity,” Russwurm warned, noting that the country needs at least 50 new gas-fired power facilities.

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The Russian economy is suffering from a shortage of skilled labor according to a recent study from the Institute of Economics of the Russian Academy of Sciences (RAS). Published in the RAS Herald earlier this week, the research by Nikolay Akhapkin shows that as of the end of 2023, Russia will be short approximately 4.8 million workers.

Akhapkin observed that the shortage has grown sharply over the past two years, since the onset of Western sanctions imposed over the Ukraine conflict, even though workforce supply, or the number of people already employed, has remained stable.

Unsatisfied demand for workers has already become a factor slowing economic growth. He noted however, that the severity of the trend differs across various sectors of the economy.

Unemployment levels in Russia have hit record lows over the same time span, reaching 2.9% in October, the lowest level since the early 1990s, according to the country’s statistics service, Rosstat. Experts, however, see the raidly diminishing pool of unemployed as alarming. 

Last month, Russian Central Bank Governor Elvira Nabiullina claimed labor scarcity was the main problem facing the economy. Likewise, Economic Development Minister Maxim Reshetnikov pointed to the metric as the country’s main internal risk factor.

He predicted that next year the labor shortage would be especially acute in industries offering low wages, difficult working conditions, and located in remote regions. These include agriculture, housing, and communal services and construction. However, he noted that high-class software specialists, engineers, technologists, machine operators, drivers, and robotics science specialists would still be in great demand.

Earlier this month, Yakov & Partners consulting firm (formerly a Russian subsidiary of McKinsey & Company, one of the Big Three) estimated the workforce shortage in the country had grown as well. The firm, however, gave lower figures, estimating the deficit at between 2 and 4 million by 2030. It also provided different estimates on which sectors would be affected, stating that Russia would be short up to 1.4 million top-qualified and up to 2.2 million medium-qualified personnel.

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