online profiles of current and former Concord employees.

Wall Street bankers and hedge fund managers who have interacted with Concord and its founder, Michael Matlin, said it oversaw between $4 billion and $8 billion.

It isn’t clear how much of that belongs to Mr. Abramovich, whose fortune is estimated at $13 billion.

Mr. Abramovich has not been placed under sanctions. His spokeswoman, Rola Brentlin, declined to comment on Concord.

Over the years, Concord has steered its clients’ money into marquee financial institutions: the global money manager BlackRock, the private equity firm Carlyle Group and a fund run by John Paulson, who famously anticipated the collapse of the U.S. housing market. Concord also invested with Bernard Madoff, who died in prison after being convicted of a vast Ponzi scheme.

panel focused on European security, requested that the U.S. government impose sanctions on Mr. Abramovich and seize the assets at Concord, “as this blood money presents a flight risk.”

The work performed by law, lobbying and public relations firms often plays out in public or is disclosed in legal or foreign agent filings, but that is rarely the case in the financial arena.

While Russian oligarchs make tabloid headlines for shelling out for extravagant superyachts and palatial homes, their bigger investments often occur out of public view, thanks to a largely invisible network of financial advisory firms like Concord.

Hedge fund managers and their advisers said they were starting to examine their investor lists to see if any clients were under sanctions. If so, their money needs to be segregated and disclosed to the Treasury Department.

Some hedge funds are also considering returning money to oligarchs who aren’t under sanctions, fearful that Russians might soon be targeted by U.S. and European authorities.

Paradise Papers project, involved the files of the Appleby law firm in Bermuda. At least four clients owned private jets through shell companies managed by Appleby.

When sanctions were imposed on companies and individuals linked to Mr. Putin in 2014, Appleby jettisoned clients it believed were affected.

The Russians found other Western firms, including Credit Suisse, to help fill the void.

Ben Freeman, who tracks foreign influence for the Quincy Institute for Responsible Statecraft, said Russians were likely to find new firms this time, too.

“There is that initial backlash, where these clients are too toxic,” Mr. Freeman said. “But when these lucrative contracts are out there, it gets to be too much for some people, and they can turn a blind eye to any atrocity.”

David Segal contributed reporting. Susan Beachy contributed research.

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LME suspends nickel trading after prices soar past $100,000, article with image

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  • LME’s biggest crisis in decades
  • Says considering closing for several days
  • Big long and big short positions clashed -broker
  • China’s Tsingshan Holding Group held short position -sources
  • Shanghai raises nickel trading fees, warns investors

LONDON, March 8 (Reuters) – The London Metal Exchange (LME) was forced to halt nickel trading and cancel trades after prices doubled on Tuesday to more than $100,000 per tonne in a surge sources blamed on short covering by one of the world’s top producers.

The LME’s shock move came as Western sanctions threatened supply from major producer Russia and marked the biggest crisis to hit the 145-year-old exchange in decades.

In the 1990s a rogue Sumitomo trader tried to corner the copper market and tin trading was stopped for five years in the 1980s.

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“The current events are unprecedented,” the LME said in a notice to members. “The suspension of the nickel market has created a number of issues for market participants which need to be addressed.”

Amid market panic sparked by Russia’s invasion of Ukraine, buyers are scrambling for the metal crucial for making stainless steel and electric vehicle batteries.

Traders said some position holders have also been struggling to pay margin calls.

China’s Tsingshan Holding Group, one of the world’s top nickel and stainless steel producers, had been building a short position in nickel since last year, betting prices would fall, three sources familiar with the matter said. read more

Prices rocketed as Tsingshan bought large amounts of nickel to reduce those short bets and its exposure to costly margin calls, they said.

Tsingshan and the LME declined to comment.

The LME raised margin requirements for nickel contracts by 12.5% to $2,250 a tonne and suspended nickel trading on all venues for at least the rest of the day. read more

The LME announced that all trades will be voided from midnight until 8:15 a.m. on Tuesday when trading stopped and added that it was considering a closure of several days.

“People will be asking if this really a functioning market… This is meant to be a market of last resort and people can’t get inventories to deliver against positions,” said Colin Hamilton, managing director of commodities research at BMO Capital Markets.

The LME also deferred physical delivery of maturing contracts and announced it would temporarily stop publishing official and closing nickel prices. read more

“The LME will actively plan for the reopening of the nickel market, and will announce the mechanics of this to the market as soon as possible.”

PRICES DOUBLE IN HOURS

Three-month nickel on the LME more than doubled to $101,365 a tonne before the LME halted trade on its electronic systems and in the open outcry ring.

Nickel had pared gains to $80,000 a tonne when trading was halted, up 66% on the day and a staggering 177% since Monday.

In China, the Shanghai Futures Exchange raised fees for nickel trading and urged investors to “fend off risks, invest rationally, and work together to maintain market stability”.

Nickel on the Shanghai exchange hit its upward limit in night trading at a record 267,700 yuan ($42,380.39) per tonne and also reached the 15% limit up early on Tuesday.

CITIC Futures, China’s biggest futures company, warned clients that if nickel prices continued to jump on Wednesday, the Shanghai exchange could take action, including forced position cuts, an internal notice seen by Reuters showed.

LME nickel suspended after it doubles

MARKET BATTLE

The explosive gains, which have seen prices quadruple over the past week, resulted from two major players facing off, said Malcolm Freeman of Kingdom Futures, who declined to identify them.

One entity has control of between 50% and 80% of LME inventories, LME data shows.

“There’s a very big short and a very big long who’ve been sparring. And because of their sparring, it’s brutalised so many other shorts,” said Freeman.

Some small industrial users have been caught in the crossfire, having taken positions to get physical delivery but then hit with margins calls costing millions of dollars, he added. read more

The uncertainty caused by Russia’s invasion and resulting sanctions has added to an already bullish nickel market due to low inventories, which have halved on the LME since October.

Russia not only supplies about 10% of the world’s nickel but Russia’s Nornickel is the world’s biggest supplier of battery- grade nickel at 15%-20% of global supply, said JPMorgan analyst Dominic O’Kane.

The LME is owned by Hong Kong Exchanges and Clearing Ltd.

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Additional reporting by Praima Desai and Zandi Shabalala in London, Eileen Soreng in Bengaluru, Meg Shen in Hong Kong, Emily Chow in Beijing; editing by Jason Neely

Our Standards: The Thomson Reuters Trust Principles.

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Factbox: Commodity supplies at risk after Russia invades Ukraine, article with image

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LONDON, March 4 (Reuters) – Russia’s invasion of Ukraine and the imposition of new Western sanctions against Russia have fuelled fears about supplies of key commodities produced and exported by Russian companies.

See for a Factbox on commodity price gains since the close on Feb. 23, the day before the invasion started.

Following are some details about Russia’s major commodity exports.

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CRUDE OIL

Russia is the world’s third largest oil producer after the United States and Saudi Arabia with output of 11 million barrels per day (bpd).

It rivals Saudi Arabia for the title of the world’s largest oil exporter with around 7 million bpd of crude and oil products exported abroad, of which Asia takes around a half while Europe, the United States and the rest of the world take the rest.

GAS

Russia is the world’s second largest gas producer after the United States and the largest exporter, with flows going predominantly to Europe and covering 40% of the continent’s gas needs.

COAL

Russia is the world’s sixth largest coal producer with output of 400 million tonnes of coal, amounting to more than 5% of global production.

It is the world’s third largest exporter, shipping more than half its output overseas, with China being the main destination.

ALUMINIUM

Most Russian metal producers have so far escaped sanctions imposed by the West since Moscow annexed the Crimea in 2014.

One exception is the world’s largest aluminium producer outside China, Rusal , under sanctions imposed by the United States between April 2018 and early 2019.

Rusal produced 3.8 million tonnes of aluminium in 2021, about 6% of the estimated world production.

Europe, Asia and North America are Rusal’s main markets. Miner and commodity trader Glencore (GLEN.L) has a long-term deal running until 2025 to buy primary aluminium from Rusal.

COBALT

Data from U.S. Geological Survey (USGS) shows Russia produced 7,600 tonnes of cobalt last year, more than 4% of the global total.

Russia was the second largest producer, far behind the Democratic Republic of Congo which produced 120,000 tonnes.

Nornickel (GMKN.MM) is the largest producer in Russia, selling 5,000 tonnes in 2021. Nornickel sells most of its output to Europe.

COPPER

Russia produced 920,000 tonnes of refined copper last year, about 3.5% of the world total, according to USGS, out of which Nornickel produced 406,841 tonnes.

Asia and Europe are the main export markets.

NICKEL

Nornickel is the world’s top producer of refined nickel. It produced 193,006 tonnes in 2021 or about 7% of global mine production estimated at 2.7 million tonnes. It sells to global industrial consumers under long-term contracts.

PALLADIUM AND PLATINUM

Nornickel is also the world’s largest producer of palladium and a major producer of platinum.

It produced 2.6 million troy ounces of palladium last year or 40% of global mine production and 641,000 ounces of platinum or about 10% of total mine production.

GOLD

Russia is the world’s third largest producer of gold after Australia and China and accounts for about 10% of global mine production, which according to the World Gold Council totalled 3,500 tonnes last year.

Russian gold is produced by companies that include Polyus (PLZL.MM) and Polymetal (POLYP.L). Russian miners mainly sell their gold to the country’s commercial banks which then export it.

TITANIUM

Russia’s VSMPO-Avisma (VSMO.MM) supplies titanium to Boeing and Airbus. read more

Data from USGS shows Russia produced 27,000 tonnes of titanium sponge and Ukraine 5,400 tonnes last year, 15% of the global total at 210,000 tonnes.

STEEL

Russia produced 76 million tonnes of steel or nearly 4% of the global total, according to the World Steel Association.

Severstal (CHMF.MM), NLMK (NLMK.MM), Evraz (EVRE.L), MMK (MAGN.MM) and Mechel (MTLR.MM) are Russia’s main producers. They export about half of their production, mainly to Europe.

DIAMONDS

State-controlled Alrosa (ALRS.MM), the world’s largest producer of rough diamonds, produced 32.4 million carats in 2021, about 30% of the global total. It exports mostly to Belgium, India and the United Arab Emirates.

FERTILISERS

Russia is a major producer of potash, phosphate and nitrogen containing fertilisers – key crop and soil nutrients. It produces more than 50 million tonnes a year of the fertilisers, 13% of the global total.

Phosagro (PHOR.MM), Uralchem, Uralkali, Acron (AKRN.MM) and Eurochem are the biggest players.

They export to Asia and Brazil.

GRAINS/OILSEEDS

Russia and Ukraine are both major wheat suppliers, accounting for a combined 29% of global exports, the bulk of which go through ports in the Black Sea.

The movement of vessels on the smaller Azov Sea has already been suspended and if shipments are disrupted from the Black Sea it will leave major importers, particularly in the Middle East and North Africa, scrambling to find alternative supplies.

Ukraine is one of the world’s top four corn (maize) exporters along with the United States, Argentina and Brazil.

The two countries also account for about 80% of global exports of sunflower oil.

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Reporting by Pratima Desai, Moscow newsroom, Nigel Hunt and Dmitry Zhdannikov;
Editing by Susan Fenton

Our Standards: The Thomson Reuters Trust Principles.

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Rising Gas Prices Have Drivers Asking, ‘Is This for Real?’

After months of working from home, Caroline McNaney, 29, was excited about going back to work in an office, even if her new job in Trenton, N.J., meant commuting an hour each way.

But when she spent $68 filling the tank of her blue Nissan Maxima this week, she felt a surge of regret about switching jobs.

“Is this for real?” Ms. McNaney recalled thinking. “I took a job further from home to make more money, and now I feel like I didn’t do anything for myself because gas is so high.”

The recent rise in gas prices — which the war in Ukraine has pushed even higher — has contributed to her sense of disappointment with President Biden. “I feel like he wants us to go out and spend money into the economy, but at the same time everything is being inflated,” she said.

higher heating bills. Natural gas reserves are running low, and European leaders have accused Russia’s president, Vladimir V. Putin, of reducing supplies to gain a political edge.

While oil prices worldwide have shot up since the Russian invasion of Ukraine, President Biden and Democrats, who hold control of Congress, have faced consumers’ ire.

Cat Abad, 37, who lives in the San Francisco area, where prices have hit nearly $6 for the highest-grade gas, said she saw stickers on the pumps at one local station saying that Mr. Biden was responsible for the rise. She took the stickers off, she said, believing that he was not at fault.

Still, she said, “It’s a good time to have a Prius,” as she filled up for her commute down the peninsula to Foster City.

Inflation is already proving a perilous issue for Mr. Biden and fellow Democrats as the midterm elections approach, with many voters blaming them for failing to control the rising cost of living. The higher gas prices add further political complexity for Mr. Biden, who has vowed to curb the nation’s dependence on fossil fuels.

In light of the war in Ukraine, the energy industry is pushing the Biden administration to support more domestic oil production by opening up drilling in federal lands and restarting pipeline projects.

“This moment is a reminder that oil and natural gas are strategic assets and we need to continue to make investments in them,” said Frank Macchiarola, a senior vice president at the American Petroleum Institute, a trade group.

There is a chance that the strain on consumers may be temporary as global oil supply and demand are rebalanced. And, in the near term, lower consumer spending may have some benefits. Reduced spending could help constrain inflation, but at the expense of slower economic growth.

Even before Russia invaded Ukraine, rapidly rising energy prices were contributing to the fastest inflation in 40 years. Energy prices — including not just gasoline but home heating and electricity as well — accounted for more than a sixth of the total increase in the Consumer Price Index over the 12 months ending in January.

The recent jump in energy prices will only make the problem worse. Forecasters surveyed by FactSet expect the February inflation report, which the Labor Department will release on Thursday, to show that consumer prices rose 0.7 percent last month, and are up 7.9 percent over the past year. The continued run-up in gasoline prices over the past week suggests overall inflation in March will top 8 percent for the first time since 1982.

Some drivers said the higher gas prices were a necessary result of taking a hard line on Mr. Putin.

Alan Zweig, 62, a window contractor in San Francisco, said: “I don’t care if it goes to $10 a gallon. It’s costing me dearly, but not what it’s costing those poor people in Ukraine.”

Destiny Harrell, 26, drives her silver Kia Niro hybrid about 15 minutes each day from her home in Santa Barbara to her job at a public library. She is now considering asking her boss if she can spend some days working from home.

She said the rise in prices has contributed to her anger at Mr. Putin and his decision to invade Ukraine.

“It’s super frustrating that a war that shouldn’t even really affect us has global reach.”

Ben Casselman, Coral Murphy Marcos and Clifford Krauss contributed reporting.

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Western Sanctions Aim to Isolate Putin by Undermining the Ruble

By targeting Russia’s central bank with sanctions, experts said, American and European leaders have taken aim at what could be one of President Vladimir V. Putin’s greatest weaknesses: the country’s currency.

In Russian cities, anxious customers started lining up on Sunday in front of A.T.M.s, hoping to withdraw the money they had deposited in banks, fearful it would run out. The panic spread on Monday. To try to restore calm, the Bank of Russia posted a notice on its website: “The volume of bank notes ready for loading into A.T.M.s is more than sufficient. All customer funds on bank accounts are fully preserved and available for any transactions.”

Even before the sanctions were announced over the weekend, the ruble had weakened. On Monday it plunged further, with the value of a single ruble dropping to less than 1 cent at one point. As the value of any currency drops, more people will want to get rid of it by exchanging it for one that is not losing value — and that, in turn, causes its value to drop further.

In Russia today, as the purchasing power of the ruble drops sharply, consumers who hold it are finding that they can buy less with their money. In real terms, they become poorer. Such economic instability could stoke popular unhappiness and even unrest.

nuclear forces on a higher level of alert. The United States, the European Commission, Britain and Canada agreed to remove some Russian banks from the international system of payments known as SWIFT and to restrict Russia’s central bank from using its storehouse of hundreds of billions of dollars’ worth of international reserves to undermine the sanctions.

Kicking banks out of SWIFT has gotten the most public attention, but the measures taken against the central bank are potentially the most devastating. Ursula von der Leyen, the president of the European Commission, said it would “freeze its transactions” and “make it impossible for the central bank to liquidate its assets.”

On Monday, the U.S. Treasury Department offered more details on how the sanctions would work, saying they would paralyze the Bank of Russia’s assets in the United States and stop Americans from engaging in transactions involving the central bank, Russia’s National Wealth Fund or the Russian Ministry of Finance. As expected, there are exemptions for transactions related to energy exports, on which Europe relies.

British government banned transactions with the Russian central bank, the foreign ministry and the sovereign wealth fund.

But if the allies were to impose a full-fledged freeze of the vast amount of dollars, euros, pounds and yen that are owned by Russia but held in Western banks, it could devastate the Russian economy, causing spiraling inflation and a severe recession.

At the heart of the move to restrict the Bank of Russia are its foreign exchange reserves. These are the vast haul of convertible assets — other nations’ currencies and gold — that Russia has built up, financed in large part through the money it earns selling oil and gas to Europe and other energy importers.

Lenin himself reportedly made more than a century ago, which was repeated by the economist John Maynard Keynes: “There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency.”

The Bank of Russia can try to prop up the value of the ruble by using its reserves to buy up rubles that people are selling. But it can do that only as long as it has access to foreign reserves.

dizzying spikes in prices for energy and food and could spook investors. The economic damage from supply disruptions and economic sanctions would be severe in some countries and industries and unnoticed in others.

Yet the central bank has just about $12 billion of cash in hand — an astonishingly small amount, he said. As for the rest of Russia’s foreign exchange reserves, roughly $400 billion is invested in assets held outside the country. Another $84 billion is invested in Chinese bonds, and $139 billion is in gold.

took steps on Monday to restore confidence, and more than doubled interest rates to 20 percent from 9.5 percent in order to offset the rapid depreciation of the ruble. The bank also released an additional $7 billion worth of reserves that had been set aside as collateral for loans and closed down the Moscow stock exchange for the day. Meanwhile, the foreign ministry moved to order companies to sell 80 percent of their foreign currencies, in a bid to gin up demand for rubles and prevent them from stockpiling dollars and euros.

Mr. Bernstam warned that the West’s attack on the Russian ruble needed to be handled with care. “We don’t want to destroy them,” he said. “We don’t want the political system to collapse.”

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Why the Chinese Internet Is Cheering Russia’s Invasion

The countries’ friendship has “no limits,” they declared.

Given that the leaders met just weeks before the invasion, it would be understandable to conclude that China should have had better knowledge of the Kremlin’s plans. But growing evidence suggests that the echo chamber of China’s foreign policy establishment might have misled not only the country’s internet users, but its own officials.

My colleague Edward Wong reported that over a period of three months, senior U.S. officials held meetings with their Chinese counterparts and shared intelligence that detailed Russia’s troop buildup around Ukraine. The Americans asked the Chinese officials to intervene with the Russians and tell them not to invade.

The Chinese brushed the Americans off, saying that they did not think an invasion was in the works. U.S. intelligence showed that on one occasion, Beijing shared the Americans’ information with Moscow.

Recent speeches by some of China’s most influential advisers to the government on international relations suggest that the miscalculation may have been based on deep distrust of the United States. They saw it as a declining power that wanted to push for war with false intelligence because it would benefit the United States, financially and strategically.

Jin Canrong, a professor at Renmin University in Beijing, told the state broadcaster China Central Television, or CCTV, on Feb. 20 that the U.S. government had been talking about imminent war because an unstable Europe would help Washington, as well the country’s financial and energy industries. After the war started, he admitted to his 2.4 million Weibo followers that he was surprised.

Just before the invasion, Shen Yi, a professor at Fudan University in Shanghai, ridiculed the Biden administration’s predictions of war in a 52-minute video program. “Why did ‘Sleepy Joe’ use such poor-quality intelligence on Ukraine and Russia?” he asked, using Donald Trump’s favorite nickname for President Biden.

Earlier in the week, Mr. Shen had held a conference call about the Ukraine crisis with a brokerage’s clients, titled, “A war that would not be fought.”

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Russia and China Cemented Economic Ties Before Ukraine Invasion

“If they don’t comply with the U.S., they’re in trouble with the U.S., but if they don’t comply with China, they could also face penalties in China,” he said.

Of course, collecting fines from companies that are unwilling to pay and monitoring whether businesses comply with the rules could be difficult, Mr. Chorzempa added. “It’s already proving difficult to monitor the things that are already controlled, and if you expand that list, that’s going to be a real challenge to verify what’s going to Russia,” he said.

The Biden administration’s export controls apply to goods produced in any country as long as they use U.S. technology — including chip makers like Taiwan Semiconductor Manufacturing Company and the Shanghai-based Semiconductor Manufacturing Industry Corporation.

Both of those companies continue to rely on the United States for certain components and manufacturing technology, said Gabriel Wildau, a managing director at Teneo, a consulting firm. If they continue supplying to Russia, SMIC and other Chinese companies could be cut off from U.S. technology, the same kind of penalty that crippled Huawei. On Friday, Taiwan Semiconductor said it was committed to complying with the export controls.

“If Beijing is viewed as Moscow’s enabler, pressure will rise in the U.S. Congress to extend these restrictions,” Mr. Wildau wrote in a note to clients. Beijing would also face the risk that other major technology exporters, like Japan, South Korea and the Netherlands, “would adopt Washington’s tougher line,” he said.

China’s state-owned banks could also face risks for continuing to lend to Russia. China and Russia have been settling more of their trade using the renminbi and the ruble. Beijing has also been trying to develop the digital use of its currency as an alternative to the dollar, which could help Russia limit the effect of financial sanctions.

But Chinese banks are still deeply reliant on the U.S. dollar. While major Chinese banks already appeared to be pulling back their financing for Russia, Mr. Wildau said, Beijing could choose to support Russia using smaller state-owned banks that don’t do a lot of international business that requires the use of the dollar.

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Why the Toughest Sanctions on Russia Are the Hardest for Europe to Wield

The punishing sanctions that the United States and European Union have so far announced against Russia for its invasion of Ukraine include shutting the government and banks out of global financial markets, restricting technology exports and freezing assets of influential Russians. Noticeably missing from that list is the one reprisal that would cause Russia the most pain: choking off the export of Russian fuel.

The omission is not surprising. In recent years, the European Union has received nearly 40 percent of its gas and more than a quarter of its oil from Russia. That energy heats Europe’s homes, powers its factories and fuels its vehicles, while pumping enormous sums of money into the Russian economy.

a third of the national budget. But a cutoff would hurt Europe as well.

37 percent of its global trade in 2020. About 70 percent of Russian gas exports and half of its oil exports go to Europe.

The flip side of mutual interest is mutual pain.

European leaders are caught between wanting to punish Russia for its aggression and to protect their own economies.

halt Nord Stream 2 — the completed gas pipeline that directly links Russia and northeastern Germany — is among the most consequential that Europe has taken, said Mathieu Savary, chief European investment strategist at BCA Research.

Russia shrank its pipeline exports by close to 25 percent compared with a year earlier, according to the International Energy Agency. Europe’s reserves stand at just 30 percent, and Europeans are already paying exorbitant prices for energy.

The conflict is occurring when supplies of both oil and natural gas have been tight for months, driving up prices.

“There are serious concerns” that Moscow will tighten exports further and send prices higher, said Helima Croft, head of commodities at RBC Capital Markets, an investment bank.

Germany, Russia’s largest trading partner in Europe, gets 55 percent of its supply from Russia. Italy, the second-biggest trading partner, gets 41 percent. At a forum in Milan last week, the Russian ambassador Sergey Razov said President Vladimir V. Putin had told the Italian prime minister, Mario Draghi, that “if Italy needs more gas we are ready to supply it.”

Mr. Putin also made a point of saying that roughly 500 Italian businesses have operations in Russia and that bilateral investments are worth $8 billion.

Austria, Turkey and France are large consumers of Russian natural gas. In central and Eastern Europe, Hungary, Poland, the Czech Republic and Slovakia are the biggest customers, the Russian energy giant Gazprom said.

250,000 barrels a day from Russia that move through Ukraine to Hungary, Slovakia and the Czech Republic. That amount is relatively small in a global market that consumes 100 million barrels a day, but its loss could create severe shortages in those countries.

dizzying spikes in prices for energy and food and could spook investors. The economic damage from supply disruptions and economic sanctions would be severe in some countries and industries and unnoticed in others.

The money that Russia makes from energy exports could also be reduced if shippers, wary of the growing complexity of transporting Russian crude and supplies, raise what they charge Moscow, Mr. Goldwyn said.

He added it was possible that the White House would ban imports of Russian crude to the United States. Such a move, experts said, would force American refiners to rely on other suppliers and Moscow to find other buyers for around 700,000 barrels a day. China would most likely be one, after the two countries pledged to “strongly support each other.”

Flows of L.N.G. from elsewhere, mostly the United States, have exceeded Russian gas volumes to Europe in recent weeks. Such measures would probably help Western European countries like Germany and Italy more than those in southern and Eastern Europe with fewer alternatives to Russian gas.

Even without a clear cutoff of fuel by Moscow or a disruption by war, there is a substantial risk that extraordinarily high gas and electricity prices will continue, squeezing hard-pressed consumers and, possibly, pushing more businesses to scale back their operations. In recent months, some energy-intensive businesses, including fertilizer makers, have announced closures because of high gas costs.

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Federal Reserve Not Likely to Change Course After Ukraine Invasion

Federal Reserve officials are turning a wary eye to Russia’s invasion of Ukraine, though several have signaled in recent days that geopolitical tensions are unlikely to keep them from pulling back their support for the U.S. economy at a time when the job market is booming and prices are climbing rapidly.

Stock indexes are swooning and the price of key commodities — including oil and gas — have risen sharply and could continue to rise as Russia, a major producer, responds to American and European sanctions.

That makes the invasion a complicated risk for the Fed: On one hand, its fallout is likely to further push up price inflation, which is already running at its fastest pace in 40 years. On the other, it could weigh on growth if stock prices continue to plummet and nervous consumers in Europe and the United States pull back from spending.

The magnitude of the potential economic hit is far from certain, and for now, central bank officials have signaled that they will remain on track to raise interest rates from near-zero in a series of increases starting next month, a policy path that will make borrowing money more expensive and cool down the economy.

invasion could disrupt the post-Cold War world order and warned that the jump in energy prices and fallout from sanctions “will complicate the ability of central banks on both sides of the Atlantic to engineer a soft landing from the pandemic inflation surge.”

Economists have been warning that a “soft landing” — in which central banks guide the economy onto a sustainable path without causing a recession — might be difficult to achieve at a time when prices have taken off and monetary policies across much of Europe and North America may need to readjust substantially.

“The shock of war adds to the enormous challenges facing central banks worldwide,” Isabel Schnabel, an executive board member at the European Central Bank, said during a Bank of England event on Thursday. She added that policymakers are monitoring the situation in Ukraine “very closely.”

Inflation is high around much of the world, and though it is slightly less pronounced in Europe, and E.C.B. policymakers are reacting more slowly to it than some of their global counterparts, recent high readings there have prompted some officials to edge toward policy changes.

dizzying spikes in prices for energy and food and could spook investors. The economic damage from supply disruptions and economic sanctions would be severe in some countries and industries and unnoticed in others.

“The current situation is different from past episodes when geopolitical events led the Fed to delay tightening or ease because inflation risk has created a stronger and more urgent reason for the Fed to tighten today,” researchers at Goldman Sachs wrote in an analysis note.

Plus, with wages rising and consumers increasingly expecting high inflation in the coming years, the fact that the conflict has the potential to further elevate prices could strike the central bank as problematic.

“Further increases in commodity prices might be more worrisome than usual,” they wrote.

Some economists warned that the Russian invasion in some ways echoed the inflationary episode of the 1970s: Back then, price increases were already rapid, and a sharp oil price increase pushed inflation up further and made it stick around. The Arab oil embargo of 1973-74 and the Iranian revolution of 1979 both contributed to an oil supply shortage.

“There is something eerily reminiscent of the 1970s and the surge in energy prices associated with Russia’s invasion of the Ukraine,” Diane Swonk, chief economist at Grant Thornton, wrote on Twitter Thursday. “It couldn’t happen at a worse time as it is pouring fuel over an already kindled fire of inflation.”

Economists have released varying estimates of how much an oil price shock could bolster inflation in the coming months.

If oil increases to $120 per barrel by the end of February, past the $95 mark it hovered around last week, inflation as measured by the Consumer Price Index could climb close to 9 percent in the next couple of months, instead of a projected peak of a little below 8 percent, said Alan Detmeister, an economist at UBS who formerly led the prices and wages section at the Fed.

The Goldman researchers said that as a rule of thumb, a $10 per barrel increase in the price of oil would increase headline inflation in the United States by about a fifth of a percentage point, and lowers gross domestic product growth by just under 0.1 percentage point.

“The growth hit could be somewhat larger if geopolitical risk tightens financial conditions materially and increases uncertainty for businesses,” they wrote.

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What’s at Stake for the Global Economy as Conflict Looms in Ukraine

After getting battered by the pandemic, supply chain chokeholds and leaps in prices, the global economy is poised to be sent on yet another unpredictable course by an armed clash on Europe’s border.

Even before the Kremlin ordered Russian troops into separatist territories of Ukraine on Monday, the tension had taken a toll. The promise of punishing sanctions in return by President Biden and the potential for Russian retaliation had already pushed down stock returns and driven up gas prices.

An outright attack by Russian troops could cause dizzying spikes in energy and food prices, fuel inflation fears and spook investors, a combination that threatens investment and growth in economies around the world.

However harsh the effects, the immediate impact will be nowhere near as devastating as the sudden economic shutdowns first caused by the coronavirus in 2020. Russia is a transcontinental behemoth with 146 million people and a huge nuclear arsenal, as well as a key supplier of the oil, gas and raw materials that keep the world’s factories running. But unlike China, which is a manufacturing powerhouse and intimately woven into intricate supply chains, Russia is a minor player in the global economy.

spikes in heating and gas bills, which are already soaring. Natural gas reserves are at less than a third of capacity, with weeks of cold weather ahead, and European leaders have already accused Russia’s president, Vladimir V. Putin, of reducing supplies to gain a political edge.

United Nations report. Russia is the world’s largest supplier of wheat, and together with Ukraine, accounts for nearly a quarter of total global exports. For some countries, the dependence is much greater. That flow of grain makes up more than 70 percent of Egypt and Turkey’s total wheat imports.

This will put further strain on Turkey, which is already in the middle of an economic crisis and struggling with inflation that is running close to 50 percent, with skyrocketing food, fuel and electricity prices.

And as usual, the burden falls heaviest on the most vulnerable. “Poorer people spend a higher share of incomes on food and heating,” said Ian Goldin, a professor of globalization and development at Oxford University.

Ukraine, long known as the “breadbasket of Europe,” actually sends more than 40 percent of its wheat and corn exports to the Middle East or Africa, where there are worries that further food shortages and price increases could stoke social unrest.

Lebanon, for example, which is experiencing one of the most devastating economic crises in more than a century, gets more than half of its wheat from Ukraine, which is also the world’s largest exporter of seed oils like sunflower and rapeseed.

On Monday, the White House responded to Mr. Putin’s decision to recognize the independence of two Russian-backed territories in the country’s east by saying it would begin imposing limited sanctions on the so-called Donetsk and Luhansk People’s Republics. Jen Psaki, the White House press secretary, said Mr. Biden would soon issue an executive order prohibiting investment, trade and financing with people in those regions.

range of scenarios from mild to severe. The fallout on working-class families and Wall Street traders depends on how an invasion plays out: whether Russian troops stay near the border or attack the Ukrainian capital, Kyiv; whether the fighting lasts for days or months; what kind of Western sanctions are imposed; and whether Mr. Putin responds by withholding critical gas supplies from Europe or launching insidious cyberattacks.

“Think about it rolling out in stages,” said Julia Friedlander, director of the economic statecraft initiative at the Atlantic Council. “This is likely to play out as a slow motion drama.”

As became clear from the pandemic, minor interruptions in one region can generate major disruptions far away. Isolated shortages and price surges— whether of gas, wheat, aluminum or nickel — can snowball in a world still struggling to recover from the pandemic.

“You have to look at the backdrop against which this is coming,” said Gregory Daco, chief economist for EY-Parthenon. “There is high inflation, strained supply chains and uncertainty about what central banks are going to do and how insistent price rises are.”

at 7.5 percent in January, and is expected to start raising interest rates next month. Higher energy prices set off by a conflict in Europe may be transitory but they could feed worries about a wage-price spiral.

“We could see a new burst of inflation,” said Christopher Miller, a visiting fellow at the American Enterprise Institute and an assistant professor at Tufts University.

Also fueling inflation fears are possible shortages of essential metals like palladium, aluminum and nickel, creating another disruption to global supply chains already suffering from the pandemic, trucker blockades in Canada and shortages of semiconductors.

The price of palladium, for example, used in automotive exhaust systems, mobile phones and even dental fillings, has soared in recent weeks because of fears that Russia, the world’s largest exporter of the metal, could be cut off from global markets. The price of nickel, used to make steel and electric car batteries, has also been jumping.

It’s too early to gauge the precise impact of an armed conflict, said Lars Stenqvist, the chief technology officer of Volvo, the Swedish truck maker. But he added, “It is a very, very serious thing.”

“We have a number of scenarios on the table and we are following the developments of the situation day by day,” Mr. Stenqvist said Monday.

The West has taken steps to blunt the impact on Europe if Mr. Putin decides to retaliate. The United States has ramped up delivery of liquefied natural gas and asked other suppliers like Qatar to do the same.

negotiations to revive a deal to curb Iran’s nuclear program. Iran, which is estimated to have as many as 80 million barrels of oil in storage, has been locked out of much of the world’s markets since 2018, when President Donald J. Trump withdrew from the nuclear accord and reimposed sanctions.

Some of the sanctions against Russia that the Biden administration is considering, such as cutting off access to the system of international payments known as SWIFT or blocking companies from selling anything to Russia that contains American-made components, would hurt anyone who does business with Russia. But across the board, the United States is much less vulnerable than the European Union, which is Russia’s largest trading partner.

Americans, as Mr. Biden has already warned, are likely to see higher gasoline prices. But because the United States is itself a large producer of natural gas, those price increases are not nearly as steep and as broad as elsewhere. And Europe has many more links to Russia and engages in more financial transactions — including paying for the Russian gas.

Oil companies like Shell and Total have joint ventures in Russia, while BP boasts that it “is one of the biggest foreign investors in Russia,” with ties to the Russian oil company Rosneft. Airbus, the European aviation giant, gets titanium from Russia. And European banks, particularly those in Germany, France and Italy, have lent billions of dollars to Russian borrowers.

“Severe sanctions that hurt Russia painfully and comprehensively have potential to do huge damage to European customers,” said Adam Tooze, director of the European Institute at Columbia University.

Depending on what happens, the most significant effects on the global economy may manifest themselves only over the long run.

economic ties to China. The two nations recently negotiated a 30-year contract for Russia to supply gas to China through a new pipeline.

“Russia is likely to pivot all energy and commodity exports to China,” said Carl Weinberg, chief economist at High Frequency Economics.

The crisis is also contributing to a reassessment of the global economy’s structure and concerns about self-sufficiency. The pandemic has already highlighted the downsides of far-flung supply chains that rely on lean production.

Now Europe’s dependence on Russian gas is spurring discussions about expanding energy sources, which could further sideline Russia’s presence in the global economy.

“In the longer term, it’s going to push Europe to diversify,” said Jeffrey Schott, a senior fellow working on international trade policy at the Peterson Institute for International Economics. As for Russia, the real cost “would be corrosive over time and really making it much more difficult to do business with Russian entities and deterring investment.”

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