Russian Roulette

Russia’s conflict with Ukraine can have major repercussions

Russia has accumulated troops along the border with Ukraine and there is widespread concern that Russia may invade its neighbor.  We do not have any particular insight into the likelihood of a conflict, but we thought it would be interesting to think about the potential implications for the energy and shipping markets if an invasion indeed happens.  Both the U.S. and the E.U. as well as the U.K. have threatened Russia with sanctions if it moves against Ukraine.

Most of the sanctions that are being discussed are not specifically targeting Russia’s energy exports, but what would happen if they did?  What if the U.S. and Europe imposed sanctions on Russia similar to those that were applied to Iran?  What if Russian banks were cut off from the U.S. financial system and Russian energy exports were targeted?

In this weekly opinion we will look at the possible impact of sanctions targeting Russian oil exports.

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