The oil embargo will wait for Macron, default is getting closer, Sberbank freezes hiring

The embargo on Russian oil, which is now being developed by the European Union, resembles restrictions on the import of Russian coal - that is, it will be phased and with a transitional period. Its timing is directly affected by the intra-European political context.

According to The New York Times, the embargo will not be brought up for discussion by member countries until at least April 24, the day of the second round of the French presidential election. This is done so as not to hurt Emmanuel Macron's chances for re-election and to prevent his rival, right-wing populist Marine Le Pen, from the trump card in the form of rising gas prices.

• Le Pen lived up to her reputation as a "threat to European unity" this week by promising France's withdrawal from NATO command structures if she wins and opposing a Russian energy ban. According to the latest consolidated polls , Macron leads 52.9% to 47.1%, but the candidates only face a key debate on April 20. It was they who secured Le Pen's defeat in the last elections.
• Taking into account the Easter holidays, it is more likely that the discussion of the embargo will begin in early May, and all 27 EU countries should come to a consensus before the summit on Ukraine scheduled for the end of May.
• An important aspect of the oil embargo is that it is not tied to some kind of trigger like the events in Bucha, and therefore its introduction looks inevitable, the newspaper writes. Now, according to her, the discussion is around the needs of Germany, which receives from Russia a third of the oil it needs and has already warned that an immediate refusal would entail a severe shock in the world's fourth economy. Economics Minister Robert Habek said back in March that a complete rejection of Russian oil would take at least until the end of 2022, and Germany is likely to receive this period, writes NYT.
• The embargo itself, according to the newspaper, will separate pipeline (going in large part to German refineries) and tanker oil - the latter will be banned more decisively and faster. The transitional period for all countries will be at least a month.
• Like previous sanctions, the measures are being prepared in an atmosphere of heightened secrecy to prevent leaks and prevent Russia from preparing for them, the NYT notes. The development takes place in the office of the President of the European Commission, Ursula von der Leyen, under the leadership of her chief of staff, Bjorn Siebert.

How Russia intends to respond became clear from yesterday's meeting of Vladimir Putin on the situation in the oil and gas sector. Losses from the probable shutdown of the European oil pipeline "Druzhba" are proposed to be compensated by the development of the eastern direction - the ESPO oil pipeline system. True, this will not be fast or cheap, and will also make Russia even more dependent on the uncontested buyer - China. ESPO-1 to China was under construction for four years, and the oil pipeline system started operating at full capacity only after 10 years. The second stage of the expansion of ESPO-1 and ESPO-2 (approximately corresponds to the capacity of Druzhba, 36 million tons per year) cost more than 100 billion rubles in 2014-2019 prices, Kommersant experts remind.

Default is closer

Moody's rating agency has not yet downgraded Russia's credit rating, but has warned that if no payment is made in the currency of the loan before May 4, when the grace period for Eurobonds redeemed by Russia on April 4 in rubles expires, "this could be considered a default on definition of Moody's. Thus, the positions of the entire "Big Three" in relation to the Russian public debt practically coincided. S&P already rated Russia's foreign-currency bonds as "selective default" last week, and Fitch warned that failure to repay foreign-currency debt would mean default.

Russia's line of defense will be similar to what Russian Railways is doing now, which is in default on one of the Eurobond issues, Bloomberg suggests. The company that fell under the sanctions refused to recognize the default, saying that it had fulfilled its obligations, but the money did not reach the recipients due to the fault of the intermediary banks that blocked the payments.

What else

• The Finnish bakery holding Fazer, which is leaving Russia, is looking for a buyer, but it does it in a peculiar way: the company wants potential buyers to offer their price and expects them to pay in euros to a European company, Kommersant . writes Fazer has valuable assets, in which the company has invested 300 million euros, and both agricultural companies and players in the bakery market have indicated interest. But the terms of the sale are now almost impossible to fulfill - the newspaper's source even suggests that the company wants to collect market estimates and demonstrate to regulators the impossibility of a deal.
• Sberbank, which fell under blocking sanctions, has frozen the hiring of new employees for positions not related to IT and the provision of services, writes Forbes. The State Bank, with almost 300,000 employees, is one of the country's largest employers, but the situation is similar in other state-owned banks, and investment divisions are especially affected.
• The Russian government instructed to work out restrictions on the export of coking coal. Since November, coke prices have grown six times, and its share in the cost of ferrous metal producers can reach 40% - in this way, the government expects to limit the rise in prices for rolled metal. It is not expected to block exports at all, especially since they go mainly to Asia, but quotas or export duties are possible.

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