Russia’s Largest Shipping Group Forced to Sell Up to One-Third of Its Ships

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The EU and the UK have imposed various sanctions on Russia: Banks must stop all Sovcomflot operations after May 15.

Under the terms of sanctions imposed by the UK and EU governments, banks have a grace period to withdraw from Russian contracts.

The sanctions imposed on Russia by the United States and its European allies, which now include a U.S. ban on imports of Russian energy, are among the toughest ever imposed on a major economic power by the United States and its European ally Russia.

Russian Foreign Minister Sergey Lavrov also criticized the sanctions, saying the U.S. Congress was “simply overwhelmed” by “doing everything possible to sabotage” relations with the United States.

Russian shipping company Sovcomflot plans to sell a third of its ships to pay off loans before Western sanctions take effect, Lloyds List said on Monday. According to Lloyds List, Sovcomflot wants to sell a third of its vessels before the imposition of sanctions.

Maersk, the global shipping giant, has suspended Russian reservations; ExxonMobil said it was pulling out of a major oil and gas project in Russia and would not make new investments in Russia; BP is giving up its nearly 20% stake in Rosneft, with an expected loss of $25 billion; Shell is losing ties with Gazprom, although it recently bought Russian oil on the open market. Russian state-owned companies, including Russia’s largest bank and oil and gas giant Gazprom, are now also blocked from accessing the US bond and equity markets.

Russian shipping firm Sovcomflot is planning to sell up to one-third of its vessels to pay back loans before Western sanctions come into effect, Lloyd’s List reported on Monday.

Sovcomflot has been in negotiation talks with clientele from Dubai and China about selling at least 40 of its 121 ships, a senior industry official familiar with the deals told Lloyd’s List.

The European Union and the UK have imposed various sanctions against Russia — one details that banks must cut all transactions to Sovcomflot after May 15. The shipping giant has to send all unpaid loans to the relevant banks and financiers before May 15.

This has prompted Sovcomflot to put around a third of its vessels on the market, Lloyd’s List reported.   “

Banks will have to receive all outstanding loans by May 15, prompting RUSSIAS oil giant Sovcomflot to sell a significant portion of its fleet quickly to any buyer willing to go beyond international sanctions. Major power state media touted the exit of Shell and BP from Russia as a business opportunity for Chinese companies.

Europe and America sold about $490 billion worth of goods to the major power last year, six times more than Russia sells to China. Russia is the third-largest supplier of gas, and in 2020 China bought almost a third of Russia’s crude oil exports.

Not so long ago, Russian leaders feared becoming dependent on China, a neighbor with an economy and a population ten times the size of Russia (see chart). Russia has agreed to sell a large amount of high-quality equipment, including missile systems and fighter jets, on the condition that China buys them in bulk to allow Russia to make a healthy profit before the better equipment is inevitably copied. 

I believe what President Zelenskyy said, “Sanctions alone will not do it” so with that said, I can almost feel in my bones this is going to spill over onto the United States and its NATO allies’ front door. Nuclear warfare has become a reasonable reality. I hope and pray it doesn’t come to that.

God Bless America, God Bless the Veterans

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