Economic Fallout Is Swift, and Global, for Russia

BP is cutting ties with Russia's state-owned oil firm, among many other companies backing away
By Evann Gastaldo,  Newser Staff
Posted Feb 28, 2022 12:56 AM CST
BP Dumping Stake in Rosneft
In this Oct. 18, 2012 file photo, a plaque of Rosneft is seen outside its headquarters in Moscow, Russia.   (AP Photo/Mikhail Metzel)

BP is "exiting" its 19.75% stake in Russian state-owned oil firm Rosneft, the British oil giant announced Sunday after facing increasing pressure from UK lawmakers to do so. As the New York Times reports, this is "one of the first large companies to abandon Russia after its invasion of Ukraine," and other companies could be inspired to make similar moves. It's not clear how BP will offload its shares, nor who might purchase them—with the price plummeting recently, Russian state entities or perhaps state-owned companies from other countries, including China, could be the only interested buyers. What is clear is that BP's CEO and his predecessor will leave their seats on Rosneft's board. Rosneft's chairman is a close ally and friend of Russian President Vladimir Putin, the BBC reports. Similar moves that have taken place recently:

  • Norway's sovereign wealth fund will freeze and divest its Russian investments.
  • Norwegian energy giant Equinor will begin to divest from its joint ventures in Russia.
  • FedEx and UPS have suspended services into and out of Russia.
  • Russian state TV channel RT is being dropped from the lineups of Canada's two largest media companies, the AP reports.
  • Western nations moved to block Russian banks from the SWIFT global payment system, leading the ruble to sink 26%, the AP reports.
  • An Austria-based subsidiary of Russia’s state-owned Sberbank has been ruled likely to fail after depositors fled.
  • The Massachusetts Institute of Technology is cutting ties with a Russian research university it helped to establish in 2011, the AP reports.
  • Europe and Canada have closed their airspace to Russian airplanes, the AP reports.
  • However, FIFA has so far refused to expel Russia from World Cup qualifying. Athletes are also calling for Russia's Olympic and Paralympic committees to be suspended.
(More Russia-Ukraine war stories.)

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