In this interview with Mohamed Fateh from Asharq Business Bloomberg, Christof Rühl, member of the Advisory Board of Crystol Energy and a Senior Fellow at the Center on Global Energy Policy at Columbia University, discusses the impact of the exit of international oil companies (IOCs) from Russia amid its conflict with Ukraine.
The exit of IOCs from Russia will have a ripple effect on its economy. The more companies exit the country, the bigger the hole they will create. After each of Exxon Mobil, Shell and BP announced their exits, two questions arise. First, will traders follow the same steps and conduct their trading activities outside the country? And what will OPEC+’s reaction to the current geopolitical tensions be: stick to the current plan or shift their strategy?
However, the exit of these companies will also have a profound effect on their positions as they have to compensate for the amount of capital spent in Russia as well as maintain the value of their share prices. In this respect, the picture is still not clear.
Russia is a significant exporter of weapons, crude oil and other commodities, but not a big consumer market, and for these reasons Russia was able to accumulate significant foreign currency reserves throughout the years. However, this is the first time that sanctions are imposed on a Central Bank of a G20 country and will have significant impact on the economy.
Watch the full discussion (in Arabic):
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