Russia Rebounds, Despite Sanctions - Bloomberg View

By Matthew A. Winkler

Sanctions meant to punish Russia for snatching Crimea from Ukraine one year ago were supposed to hurt Russian business. And they did. Russian stocks, bonds and commodities had the worst performance in 2014 of those in any emerging market.

That was then. Now the picture is changing, with investors starting to favor Russia in 2015. The ruble, which became the world's most volatile currency last year after President Vladimir Putin's land grab, is stabilizing. The swings in its value narrowed this year more than any of the other 30 most-traded currencies.

Investors in Russian government securities denominated in rubles have earned the equivalent of 7 cents on the dollar so far this year, as measured by the Bloomberg Russia Local Sovereign Bond Index. In contrast, anyone holding similar government debt in emerging markets across-the-board has lost 1.1 percent in 2015.

The picture is even rosier for Russia's corporate bondholders; they've had a 7.3 percent total return in 2015, leading the gains in the index for emerging market corporate bonds compiled by Bloomberg. And while shareholders in the global emerging market stocks measured by the MSCI Emerging Market Index gained 1.7 percent this year, the 50 Russian stocks in the Micex index are up 11.9 percent -- better than the Standard & Poor's 500 or any other North American market.

The ruble's relative value helps explain why there are some signs of confidence in Russia. Although the ruble remains the most volatile of the 31 most-traded currencies this year, its swings are narrowing. This is visible in implied volatility, a measure of traders' bets on how much the currency's value will change day-to-day. After surging in late 2014 amid the widening Ukraine crisis, the ruble now is fluctuating the way it did in 2009.

Complete story at - Russia Rebounds, Despite Sanctions - Bloomberg View

Polish Foreign Minister Says New Russia Sanctions Not Necessary; More Deaths Recorded In Eastern Ukraine

According to Poland’s foreign minister, the world does not need to discuss increasing sanctions against Russia, because the Ukrainian conflict that sparked the sanctions is essentially stalled. Grzegorz Schetyna, who made the comments while in Brussels on Monday, said that nothing has happened in recent weeks that would warrant an increase in the U.S.- and European Union-imposed sanctions.

"Now it seems that the conflict is frozen, and we have to respond flexibly to this situation. It is not necessary to radicalize it," Schetyna said. "For today, the EU countries have faced an issue of extending the existing sanctions, which is to be considered at the summit of the EU leaders this week."

Schetyna said that new solutions must be found if the conflict is to reach a peaceful conclusion.
"The thing is that we must use the most effective means for the resolution of the conflict,” Schetyna said. “The implementation of the Minsk agreements is important, but we need to look for another format ... and it is a challenge for those who are currently engaged in talks with Russia for a peaceful resolution of the Donbas conflict." The Minsk agreements are the February deal that led to a ceasefire between the Ukrainian army and pro-Russian rebels in eastern Ukraine. That ceasefire, however, is being violated with skirmishes almost every day.

Schetyna’s comments came as the government in Kiev reports that the pro-Russian rebels fired on Ukrainian military positions 30 times in 24 hours, and that three soldiers have been killed. According to Andriy Lysenko, a spokesman for the National Security and Defense Council, the men were killed after driving over a land mine. “Another five were injured as a result of military clashes," Lysenko said.

While the government offered no details of where the land mine exploded, clashes took place near the city of Donetsk, the de facto capital of the self-proclaimed Donetsk People’s Republic.

Complete story at - Polish Foreign Minister Says New Russia Sanctions Not Necessary; More Deaths Recorded In Eastern Ukraine

Russia Won't Return Crimea To Ukraine Despite Threat Of Continued Sanctions, Kremlin Says

Russia reiterated Tuesday it will not return Crimea to Ukraine, one year after its much-criticized annexation of the region despite objections from Western leaders. The United States and European Union have each said they will not lift economic sanctions against Russia unless Crimea was returned to Ukrainian control.

“There is no occupation of Crimea. Crimea is a region of the Russian Federation and of course the subject of our regions is not up for discussion,” Kremlin spokesman Dmitry Peskov told reporters Tuesday, according to Reuters.

Russia annexed Crimea in March 2014 following the disputed results of a referendum and one month after Russian soldiers entered the peninsula to quell unrest that forced pro-Russia former Ukrainian President Viktor Yanukovych to resign. Russian President Vladimir Putin said 97 percent of Crimean citizens had voted to join Russia, though many in the international community disputed the referendum’s alleged results.

The annexation of Crimea led to an ongoing conflict between pro-Russian separatist rebels and pro-government Ukrainian forces, resulting in the deaths of more than 5,800 people since last summer. Western leaders have accused Russia of providing the rebels with direct and logistical support, and both the United States and the European Union instituted economic sanctions as punishment. A U.S. State Department spokeswoman and EU foreign policy chief Federica Mogherini each reiterated this week that sanctions will remain intact so long as Russia continues to control Crimea.

Despite international outrage, support for Putin has increased since Russia’s annexation of Crimea. Recent polls found Putin’s approval rating at between 80 percent and 90 percent.

Putin said in a documentary that aired Sunday that he was “ready” to place Russia’s nuclear weapons on standby if other nations attempted to interfere in Crimea’s annexation. He added the military intervention was enacted in part to save Yanukovich’s life, according to Reuters.

Complete story at - Russia Won't Return Crimea To Ukraine Despite Threat Of Continued Sanctions, Kremlin Says

EU Unlikely to Extend Russia Sanctions at Upcoming Summit | Business | The Moscow Times

European Union leaders are unlikely to reach an agreement at their summit next week to prolong economic sanctions on Russia that expire in July, a senior EU official said Friday.

New sanctions on Russia are also off the table for now because EU governments want to give a chance to a fragile cease-fire in eastern Ukraine.

But some of the EU's 28 member states had pushed for an early decision on extending sanctions on Russia's financial, energy and defense sectors adopted in July last year over Russia's annexation of Crimea and support for separatists in eastern Ukraine.

While leaders will discuss sanctions at next week's summit, the senior EU official said a majority would probably want to hold over discussion of renewing the economic sanctions on Russia until July.

 "I don't think there is unanimity at all for the rollover of sanctions, the sanctions that are due in July," the official, briefing reporters on condition of anonymity, said.

 Slovak Prime Minister Robert Fico said Friday that new or extended EU sanctions against Russia would not help the cease-fire in eastern Ukraine.

 Complete story at - EU Unlikely to Extend Russia Sanctions at Upcoming Summit | Business | The Moscow Times

TASS: Russia - Western sanctions against Russia destabilize global economy — diplomat

HAVANA, February 6. /TASS/. Western sanctions against Russia over Ukraine violate the international law and destabilize the global economy, Russia’s Deputy Foreign Minister Vasily Nebenzya told a briefing in Havana on Thursday.

"The policy of West’s sanctions is not only a blow to Russia, but is also a major source of destabilization of global economy," the diplomat said after two-day consultations between the foreign ministries of Russia and Cuba.

"It is difficult to imagine a less suitable moment for sending a signal to the global business community that certain political forces can unilaterally change multi-lateral rules of the game, undermine the atmosphere of stability in international relations and cause damage to the existing business ties," Nebenzya said.

"Russia had to take countermeasures against certain export articles of countries that had imposed sanctions against us," he explained. "The irony is that now we can hear voices from these countries saying that it turns out Russia is violating basic rules and norms of the World Trade Organization," he said.

The deputy foreign minister said Russia was diversifying international ties, looking also to Latin America, but noted that Moscow "is not going to do this at the expense of cooperation with Europe". The development of ties with other states "comes in addition to traditional cooperation with European countries, with Europe that remains the main trade and economic partner of Russia," he said.

Complete story at - TASS: Russia - Western sanctions against Russia destabilize global economy — diplomat

TASS: World - EU looking at blacklisting about 15 more Russians and Ukrainians and 4 organizations

BRUSSELS, February 5. /TASS/. The European Union is looking at supplementing the blacklist of Russian and Ukrainian citizens with about 15 more names, a European diplomatic source told TASS late on Wednesday.

The source said it would be mostly leaders of self-defense forces in eastern Ukraine. Apart from that, the European Union might blacklist another four organizations.

The issue, according to the source, has been discussed by the Committee of Permanent Representatives in the European Union since the beginning of the week. A final decision is expected by the weekend. In this case supplements to the blacklist will be published before a meeting of the European Union’s Foreign Affairs Council due on February 9.

The diplomat also said that Greece, which opposed new sanctions against Russia, would not block the blacklist extension as move having no economic impacts.

Another European diplomat told TASS that new names to the blacklist would be made public on Saturday at the latest.

Greece will not block tougher sanctions against Russia that are to be agreed by European Union permanent representatives by the end of this week, a European diplomatic source told TASS late on Wednesday.

"Blocking of sanction is out of the question, since they have no economic effects," the source said.

Complete story at - TASS: World - EU looking at blacklisting about 15 more Russians and Ukrainians and 4 organizations

Most Russians Think Moscow’s Ukraine Policy Is Fine Despite Sanctions | Johnson's Russia List

(Moscow Times – themoscowtimes.com – Anna Dolgov – February 3, 2015) With the fallout of Western sanctions felt by a vast majority of Russians, one in five think that Moscow should make concessions in its policies toward Ukraine, but nearly seven in 10 believe that their country should continue its course, a respected Russian pollster said Tuesday.

A total of 79 percent of respondents said sanctions have affected their lives, including 34 percent who said they experienced “serious problems,” according to a survey by the independent Levada Center pollster.

Slightly more than one in five Russians, or 21 percent, said Moscow should look for a compromise and make concessions to have the sanctions eased, but another 69 percent said their country should continue its course despite Western measures, the pollster said.

The poll was conducted on Jan. 23-26 among 1,600 people in 134 of Russia’s cities and towns, the pollster said, adding that the statistical margin of error was no more than 3.4 percentage points.

Another poll, conducted on the same dates and released by Levada Center on Monday, indicated that inflation, which has soared amid Western sanctions, has emerged as by far the strongest concern for many Russians.

Complete story at - Most Russians Think Moscow’s Ukraine Policy Is Fine Despite Sanctions | Johnson's Russia List

Russian Sanctions Might Be Obama’s Greatest Blunder | Johnson's Russia List

(oilprice.com – Robert Berke – January 25, 2015) One of the greatest foreign policy blunders of the Obama Administration was the push by the U.S. for economic sanctions against Russia. That led to Russia fleeing into the arms of China for refuge. In response, Russia, Europe’s largest and most populated country, is now intent on moving its vast storehouse of resources eastward, strengthening America’s largest emerging rival.

Over the last two years, the two countries have completed a $700 billion agreement for Russia to deliver energy to China, amounting to about 17% of Chinese annual supply, for a period covering twenty years, with China financing much of the initial costs of pipeline construction.

What Russia has done, in that one move, is to help repair a major hole in China’s military armor, making it invulnerable to a U.S. cut-off of sea bourn energy supplies, which until now was one of the greatest fears of Chinese military strategists.

From the Chinese perspective, this is a gift that fulfills its wildest dreams. It’s also a gift that could severely undermine the West’s plans to deliver expensive Liquified Natural Gas (LNG) to China and Asia, while already facing competition from Qatar and Australia LNG, will now also run up against Russian pipeline gas through China.

That can’t be wise policy for the U.S.

Consider the fact that prior to adoption of the sanction regime, Russia and China were not even military allies. Their histories are fraught with mutual distrust, competition, and border conflicts. Although Russia has often supplied China with military equipment, it has always held back on high-tech weapons because of mistrust. Why supply advanced weapons to a country that might one day become your adversary?

Now, things have changed drastically, with both countries developing an alliance clearly balanced against the West. Recently, Russia offered China its most advanced ballistic missile system, that China had long sought in order to offset US sea and airpower superiority. With that, China will become far more capable of countering America’s pivot to Asia.

Just this week (1.20.15), China agreed to finance a high-speed rail link between Beijing and Moscow, with an estimated cost of $242 billion.

Complete story at - Russian Sanctions Might Be Obama’s Greatest Blunder | Johnson's Russia List

Land Destroyer: The Impending "Russian Maidan"

December 21, 2014 (Tony Cartalucci - NEO) - The coordinated manipulation of global energy prices, a NATO build-up in Eastern Europe, and the rekindling of terrorism in Russia's southern Caucasus region all appear to be ever-increasing crescendos toward a much larger event - a "Russian Maidan."

The necessary components of a successful Western bid to overthrow the Russian political order include a political front protesting in Russia's major cities, as well as a full-spectrum economic war to put pressure on Russia's population, increasing dissent as well as swelling the ranks of staged protests Wall Street and Washington put in Russian streets. Another necessary component includes armed components to act under cover of "peaceful protesters" to escalate street demonstrations, prevent security forces from restoring order, and to carry out the actual physical overthrow of these security forces.

These elements could all be seen in neighboring Ukraine - a nation in which America and NATO's incessant meddling is a matter of long-standing public record. The Guardian would admit in its 2004 article, “US campaign behind the turmoil in Kiev,” that (emphasis added):

...while the gains of the orange-bedecked "chestnut revolution" are Ukraine's, the campaign is an American creation, a sophisticated and brilliantly conceived exercise in western branding and mass marketing that, in four countries in four years, has been used to try to salvage rigged elections and topple unsavoury regimes.

Funded and organised by the US government, deploying US consultancies, pollsters, diplomats, the two big American parties and US non-government organisations, the campaign was first used in Europe in Belgrade in 2000 to beat Slobodan Milosevic at the ballot box.

Richard Miles, the US ambassador in Belgrade, played a key role. And by last year, as US ambassador in Tbilisi, he repeated the trick in Georgia, coaching Mikhail Saakashvili in how to bring down Eduard Shevardnadze.

Ten months after the success in Belgrade, the US ambassador in Minsk, Michael Kozak, a veteran of similar operations in central America, notably in Nicaragua, organised a near identical campaign to try to defeat the Belarus hardman, Alexander Lukashenko.

That one failed. "There will be no Kostunica in Belarus," the Belarus president declared, referring to the victory in Belgrade.

But experience gained in Serbia, Georgia and Belarus has been invaluable in plotting to beat the regime of Leonid Kuchma in Kiev.

The operation - engineering democracy through the ballot box and civil disobedience - is now so slick that the methods have matured into a template for winning other people's elections.

The Blockade...

Already at work is a coordinated manipulation of world oil prices. Revealed among plunging oil prices is that the entire industry is centrally manipulated not by market forces but by political agendas involving the US and its partners in the Middle East, most notably the enduring dictatorship in Riyadh, Saudi Arabia. While any nation possesses the ability to weather such economic measures in the long-term as Iran and Cuba have proven, in the short-term, economic instability is one of the harbingers of political subversion where ranks of street demonstrations can be swelled by those who perceive such economic instability as the fault of the current government, rather than an economic attack from abroad.

Complete story at - Land Destroyer: The Impending "Russian Maidan"

Russia expels Ukrainian guest workers | Ukraina.ru

Russia will tighten control over the entry of migrant workers from Ukraine. The latter’s loss is estimated at $11-13 billion.

This statement was made by Russian Prime Minister Dmitry Medvedev.

"From January 1, 2015, Ukrainian workers in Russia with off-the-books income that constitute the majority cannot be employed without a permit," the Prime Minister explained.

Russia will tighten control over the terms of stay for migrant workers from Ukraine. According to the Prime Minister, Ukrainian nationals will be allowed to stay in Russia no more than 90 days within a period of six months. Previously, one could leave the country and return to continue working another three months. Now border guard officers will be on the alert for such ‘travelers,’ the Prime Minister promised.

"The reduction in remittance by Ukrainian immigrant workers will lead to losses for Ukraine. Currently, nearly 400,000 workers, including highly qualified specialists and those having a work permit are working in Russia," Mr. Medvedev said.

The total number of Ukrainian guest workers in Russia exceeds the official statistics significantly. On June 20, 2014, Secretary of Russia’s Security Council Nikolai Patrushev reminded Kiev that 6 million Ukrainian nationals are currently employed in Russia.

Complete story at - Russia expels Ukrainian guest workers | Ukraina.ru

The Vineyard of the Saker: Confusion about AngloZionist sanctions against Russia

There seems to be a lot of confusion about the effectiveness of sanctions against Russia and I think that this is a good time to clarify a few things about my take on them.

First, the original sanctions were a total joke. However, the latest sanctions (including the denial of credit) are definitely hurting Russia.

Second, next to the official sanctions, there are unofficial ones, such as the carefully orchestrated drop in the prices of oil which itself triggers a fall in the value of the Ruble against the Dollar and the Euro.

Third, there is also a great deal of speculation against the Ruble which itself does also contribute to the problem.

Fourth and last, but not least, the three factors above contribute to a nervousness and lack of trust into the Russian currency and economy which becomes a self-fulfilling prophecy.

However, the thing which those who stick to a simplistic assessment of the sanctions are missing are the following:

1) Whom are these sanctions hurting more, Russia or the West?
2) What is the Russian staying power to put up with these sanctions?
3) Will time make these sanctions harder or easier for Russia to put up with?

I would argue that these sanctions are much more damaging to the the US European colonies (known as the "EU") than for Russia. I would argue that the Russian people have a formidable resistance to hardship and that western societies are, in comparison, soft, hedonistic, lazy, spoiled and generally weak. Russians have a staying power which is simply unimaginable for a west European person (the horrible siege of Leningrad lasted 900 days!!!). Lastly, I believe that time will allow Russia to take adaptive measures to basically render these sanctions irrelevant.

Complete story at - The Vineyard of the Saker: Confusion about AngloZionist sanctions against Russia

Russia’s Vulnerability to EU – US Sanctions and Military Encroachments, by James Petras

The US-EU sponsored coup in the Ukraine and its conversion from a stable Russian trading partner, to a devastated EU economic client and NATO launch pad, as well as the subsequent economic sanctions against Russia for supporting the Russian ethnic majority in the Donbas region and Crimea, illustrate the dangerous vulnerability of the Russian economy and state. The current effort to increase Russia’s national security and economic viability in the face of these challenges requires a critical analysis of the policies and structures emerging in the post-Soviet era.

Pillage as Privatization

Over the past quarter century, several trillion dollars worth of public property in every sector of the Russian economy was illegally transferred or violently seized by gangster-oligarchs acting through armed gangs, especially during its ‘transition to capitalism’.

From 1990 to 1999, over 6 million Russian citizens died prematurely as a result of the catastrophic collapse of the economy; life expectancy for males declined from 67 years during the Soviet era to 55 year during the Yeltsin period. Russia’s GNP declined sixty percent – a historic first for a country not at war. Following Yeltsin’s violent seizure of power and his bombing of the Russian parliament, the regime proceeded to ‘prioritize’ the privatization of the economy, selling off the energy, natural resources, banking, transport and communication sectors at one-tenth or less of their real value to well-connected cronies and foreign entities. Armed thugs, organized by emerging oligarchs “completed” the program of privatization by assaulting, murdering and threatening rivals. Hundreds of thousands of elderly pensioners were tossed out of their homes and apartments in a vicious land-grab by violent property speculators. US and European academic financial consultants “advised” rival oligarchs and government ministers on the most “efficient” market techniques for pillaging the economy, while skimming off lucrative fees and commissions –fortunes were made for the well-connected. Meanwhile, living standards collapsed, impoverishing two thirds of Russian households, suicides quadrupled and deaths from alcoholism, drug addiction, HIV and venereal diseases became rampant. Syphilis and tuberculosis reached epidemic proportions – diseases fully controlled during the Soviet era remerged with the closure of clinics and hospitals.

Of course, the respectable western media celebrated the pillage of Russia as the transition to “free elections and a free market economy”. They wrote glowing articles describing the political power and dominance of gangster oligarchs as the reflection of a rising “liberal democracy”. The Russian state was thus converted from a global superpower into an abject client regime penetrated by western intelligence agencies and unable to govern and enforce its treaties and agreements with Western powers. The US and EU rapidly displaced Russian influence in Eastern Europe and quickly snapped up former state-owned industries, the mass media and financial institutions. Communist and leftist and even nationalist officials were ousted and replaced by pliant and subservient ‘free market’ pro-NATO politicians. The US and EU violated every single agreement signed by Gorbachev and the West: Eastern European regimes became NATO members; West Germany annexed the East and military bases were expanded right up to Russia’s borders. Pro-NATO “think tanks” were established and supplied intelligence and anti-Russian propaganda. Hundreds of NGOs, funded by the US, operated within Russia as propaganda and organizing instruments for “subservient” neo-liberal politicians. In the former Soviet Caucuses and Far East, the West fomented separatist sectarian movements and armed uprisings, especially in Chechnya; the US sponsored dictators in the Caucuses and corrupt neo-liberal puppets in Georgia. The Russian state was colonized and its putative ruler, Boris Yeltsin, often in a drunken stupor, was propped up and manipulated to scratch out executive fiats . . . further disintegrating the state and society.

Complete story at - Russia’s Vulnerability to EU – US Sanctions and Military Encroachments, by James Petras

"De-Dollarizing" Russia Pays Down Near-Record $53 Billion In Debt In Third Quarter | Zero Hedge

Despite the reassuring narrative from The West that Russia faces "costs" and is increasingly "isolated" due to sanctions for its actions in Ukraine, the most recent data suggests reality is quite different. First, capital outflows slowed dramatically in Q3 (from $23.7 billion in Q2 to $13 billion in Q3) with September seeing capital inflows for the first time since Sept 2013. Second, Russia's current account surplus was significantly stronger than expected ($11.4 billion vs $8.8 billion expected) driven by increased trade. Third, and perhaps most crucially, Russia paid down a massive $52.8 billion in foreign debt as Putin "de-dollarizes" at near record pace, reducing external debt to the lowest since 2012.

As Goldman explains, Trade and income improved notably...

The current account balance for Q3 came in at a surplus of US$11.4bn, above consensus expectations of US$8.8bn and up sharply from a small deficit of US$0.7bn in Q3 2013.

On our estimates, on a seasonally-adjusted basis, this now puts the current account at 3.8% of GDP, up from a low point of 1% in Q2 2013 and 1.6% for the full-year 2013.

The improvement in the current account came from both the trade balance, where imports have contracted (due to slowing domestic demand and the weaker Ruble), and from the income balance.

In our view, the latter could be due to either cyclical or structural factors, which are difficult for us to pinpoint, but risks to our current account balance forecasts nonetheless remain to the upside.

Complete story at - "De-Dollarizing" Russia Pays Down Near-Record $53 Billion In Debt In Third Quarter | Zero Hedge

Martin Armstrong Warns The West "Sanctioning Russia Is A Big Mistake" | Zero Hedge

Judging from the plunge in stocks and the Ruble and along with proclamations that Russia is "isolated" (when it is clearly not), The West's sanctions appear to be achieving their goals (propaganda-wise). However, Martin Armstrong warns "politicians just keep making the same mistakes over and over again," as he explains, to the people of Russia, "sanctions only make Putin stronger for they allow him to point to the West as the evil empire."

Via Armstrong Economics,

Politicians just keep making the same mistake over and over again.



They perpetually turn to sanctions bankrupting private business with no respect whatsoever as the USA is wiping out farmers in Europe.

But worst of all, there is not a single incident where sanctions have EVER worked even once. They often remain in place beyond a decade even as in Iran, but there is no change in politics.

Sanctions only make Putin stronger for they allow him to point to the West as the evil empire that covertly toppled the Soviet Union with a CIA plot.

Complete story at - Martin Armstrong Warns The West "Sanctioning Russia Is A Big Mistake" | Zero Hedge

The Week in Food Sanctions: Emergency Aid for EU Farmers as Russia Clamps Down on Smugglers - Russia Insider

The EU-Russian food sanctions duel - summed up nicely by disgruntled French farmers burning down their local tax office - continues to heat up. Here's your weekly food sanctions round-up:

Russian Food Import Ban to Hurt 9.5 Million European Farmers: "Russia's restrictions on food imports from the European Union can potentially hurt some 9.5 million European farmers, according to the estimates by the European Parliament." (RIA Novosti)

Young EU Farmers Struggle as Russian Sanctions Bite: "'These political decisions have nothing to do with simple citizens,' Lambertini told the Thomson Reuters Foundation in an interview at his farm north of Rome. 'We farmers are the ones paying for this situation.'" (Reuters)

EU Steps Up Emergency Farmers' Aid as Sanctions Stay in Place: "The EU released a new emergency aid package totalling €165m (£128m, $208m) on Tuesday 30 September, to be distributed among producers of fruit and vegetables who have had their profits hit as a result of a Russian ban on the import of fresh food from Europe." (International Business Times)

Complete story at - The Week in Food Sanctions: Emergency Aid for EU Farmers as Russia Clamps Down on Smugglers - Russia Insider

Sanctions Backfire! Exxon May Miss Out on Huge Arctic Oil Find - Russia Insider

The recent oil discovery in the Arctic which we reported on today -- characterized as one of the largest finds in history -- is welcome news at the Kremlin, all the more so because Western sanctions have once again shown themselves to be imprudent.

Exxon, which partnered with Rosneft to drill the Universitetskaya-1, is now effectively barred from futher development or exploration in the region. The Moscow Times elaborates:

The sanctions, introduced by the United States and European Union, effectively freeze access by Russian companies to foreign technology and ban Western companies from cooperating in the Arctic, as well as in shale exploration and deep-water drilling.

...

The prospect of sanctions on Russia has been a big issue for Exxon this year. It spent $6 million on lobbying the U.S. government in the first half of 2014 and listed Russian sanctions as one of its lobbying issues, according to disclosures filed to the U.S. Senate.

Exxon also paid about another $170,000 to four outside firms for lobbying in the second quarter, largely tied to Russian sanctions, the disclosures show.
Considering that Rosneft boss Igor Sechin has been personally targeted by the sanctions, it's no surprise that Exxon is frantically trying to restore normal relations with Russia.

Complete story at - Sanctions Backfire! Exxon May Miss Out on Huge Arctic Oil Find - Russia Insider

Why the Kremlin is not very concerned with energy sanctions | Russia Direct

The new energy sanctions imposed by the West could force Russia to turn to other partners or technologies to compensate for the lost potential of Arctic and shale prospecting projects.

On Sept. 12, the EU and U.S. published a new list of energy sanctions, this time targeting Russian state oil companies Rosneft and Gazprom Neft, as well as the privately owned Lukoil and Surgutneftegaz. It also marked energy giant Gazprom’s first appearance in the list, but only in regard to oil projects.

The new sanctions prohibit the West’s largest oil companies, including America’s ExxonMobil, Anglo-Dutch Shell, France’s Total, and Norway’s Statoil, from partnering with Russia in deep-sea and shale prospecting projects, as well as upstream operations in the Arctic. They also mean that Western companies will be forced to halt exports to Russia of high tech equipment used in oil exploration and production.

Complete story at - Why the Kremlin is not very concerned with energy sanctions | Russia Direct

Russian Domestic Manufacturing is Booming - Russia Insider

In the first 7 months of 2014 imports were down 5.1% (almost all of which are manufacturing and machinery) compared to domestic production of the same produce which was up 2.4%.

The reasons for this are two-fold; first, a weaker ruble actually stimulates the industrial part of the Russian part economy while for many years has been crowded out by an over-valued exchange rate, and second, the long-term dynamics of domestically producing has attracted a raft of investment.

For instance, the auto market shows an enormous divergence between domestic and imported growth rates. Domestic car production has fallen by 0.7% in the first seven months of the year as a result of poor demand, but this is nothing compared to the more than 30% fall in imports. Domestically made cars are simply more cost competitive.

The trend is set to continue even as the demand side of the market recovers, domestic car production is expected to expand by 2.5% next year while imports are expected to fall a further 7.2%.

Complete story at - Russian Domestic Manufacturing is Booming - Russia Insider

The US-EU-Russia sanctions puzzle — RT Op-Edge

Whatever Russia does, doubt does not even enter the equation. The answer is sanctions. So here we go again. The US Treasury-EU latest sanction package targets Russian banking, the energy industry and the defense industry.

The sanctions are mean. The sanctions are nasty. And there’s no euphemism to describe them; they amount to a declaration of economic war.

Sberbank, Russia’s largest won’t be able to access Western capital for long-term funding, including every kind of borrowing over 30 days. And the current 90-day lending bans affecting six other large Russian banks – a previous sanctions package - will also be reduced to 30 days.

On the energy front, what the US-EU want is to shut down new Russian exploration projects in Siberia and the Arctic, barring Western Big Oil from selling equipment and technology to offshore, deepwater or shale gas projects.

This means Exxon and Shell, for instance, are frozen in their operations with five top Russian oil/gas/pipeline companies: Gazprom, Gazprom Neft, Lukoil, Surgutneftegaz, and Rosneft.

No one ever lost money betting on the stupidity of the usual, unknown “senior US officials” – who are now spinning the latest sanction package is to force Moscow to “respect international law and state sovereignty.” A cursory examination of the historical record allows this paragraph to be accompanied by roaring laughter.

Complete story at - The US-EU-Russia sanctions puzzle — RT Op-Edge

European Court Of Justice Introduces The Anti-Rasmussen Rule — Sanctions Cannot Be Imposed By Reason Of Fabrication, Lies, Disinformation | Dances With Bears

By John Helmer, Moscow

Anders Fogh Rasmussen departs in two weeks from the North Atlantic Treaty Organization (NATO), where he has been secretary-general since 2009, with a present from the General Court of the European Union Court of Justice. It’s a golden tongue depressor.

In a judgement issued in Luxembourg on Thursday, September 18, the court ruled that the European Union (EU) cannot lawfully introduce sanctions against states, corporations, state organizations, or individuals without stating reasons which can be substantiated in evidence to a standard of proof tested in court.

Rasmussen, a former Danish politician, has been the most active European advocate of sanctions against Russia on claims that Russian forces have mounted an invasion of eastern Ukraine. The evidence Rasmussen has offered has included hearsay intelligence reports and a display of satellite photographs, which NATO published on August 28.

In accompanying text, the photographs were interpreted to “show a significant escalation in both the level and sophistication of Russia’s military interference in Ukraine… These latest images provide concrete examples of Russian activity inside Ukraine, but are only the tip of the iceberg in terms of the overall scope of Russian troop and weapons movements… Also released were images showing substantial activity inside Russia in areas adjacent to the border with Ukraine. NATO believes this activity is being conducted in direct support to forces operating inside Ukraine, and is part of a highly coordinated and destabilising strategy.”

Complete story at - European Court Of Justice Introduces The Anti-Rasmussen Rule — Sanctions Cannot Be Imposed By Reason Of Fabrication, Lies, Disinformation | Dances With Bears