The European Union has reached a deal for a $60-per-barrel price cap on seaborne Russian oil, aimed at significantly reducing Moscow’s income and President Vladimir Putin’s ability to continue to finance the war in Ukraine.
On Friday, holdout Poland backed the deal, which stops countries paying more than $60 a barrel. In order to go through, it needed the agreement of all 27 EU states.
The details are due to be published in the EU legal journal on Sunday. The deal will be a vital step for Western sanctions that have aimed to reorder the global oil market to prevent price spikes.
After a last-minute flurry of negotiations, the EU presidency, currently held by the Czech Republic, tweeted that “ambassadors have just reached an agreement on price cap for Russian seaborne #oil.”
#COREPERII | ✅ Ambassadors have just reached an agreement on price cap for Russian seaborne #oil ????️. Written procedure follows, decision will enter into force on publication in the Official Journal. EU stays united and #StandWithUkraine. ???????????????? #EU2022CZpic.twitter.com/92vHTFDzxV
The price cap, an idea of the Group of Seven (G7) nations, aims to slash Russia’s revenues from selling oil, while preventing a steep increase in international oil prices after an EU embargo on Russian crude takes effect on December 5.
The introduction of the cap means that participating countries will only be allowed to buy oil and petroleum products transported via sea that are sold at or below the price cap.
As the most important shipping and insurance firms are based in G7 countries, the price cap would make it very difficult for Russia to sell its oil at a higher price.
EU sees significant hit to Russian revenues
European Commission President Ursula von der Leyen said the price cap would significantly reduce Russia’s revenues.
However, the chair of the Russian lower house’s foreign affairs committee told the state news agency TASS that the bloc was jeopardising its own energy security.
It was also violating the laws of the market, claimed Leonid Slutsky.
But von der Leyen, the head of the EU’s executive, said on Twitter that “it will help us stabilise global energy prices, benefitting emerging economies around the world”, adding that the cap would be “adjustable over time” to react to market developments.
The EU agreement on an oil price cap, coordinated with G7 and others, will reduce Russia’s revenues significantly.
It will help us stabilise global energy prices, benefitting emerging economies around the world. pic.twitter.com/3WmIalIe5y
The White House welcomed the news that the EU was “coming together” on the oil price cap.
“A price cap will help limit Mr Putin’s ability to profiteer off the oil market so that he can continue to fund a war machine that continues to kill innocent Ukrainians,” national security spokesman John Kirby told reporters.
‘Stopping Russia’s war machine’
Europe needed to set the discounted price that other nations will pay by Monday, when the EU embargo on Russian oil shipped by sea and a ban on insurance for those supplies takes effect.
Poland long held up the agreement, seeking to set the cap as low as possible. Following more than 24 hours of deliberations, when other EU countries signalled they would back the deal, Warsaw finally relented.
“Crippling Russia’s energy revenues is at the core of stopping Russia’s war machine,” Estonian Prime Minister Kaja Kallas said, adding that she was happy the cap was pushed down a few extra dollars from earlier proposals.
She said every dollar the cap was reduced amounted to $2bn less for Russia’s war chest.
I welcome the EU’s agreement on setting a price cap on Russian oil.
Crippling Russia’s energy revenues is at the core of stopping Russia’s war machine.
I engaged personally in the negotiations as drying up Russian resources to wage war is an existential matter to us. 1/
“It is no secret that we wanted the price to be lower,” Kallas added, highlighting the differences within the EU. “A price between 30-40 dollars is what would substantially hurt Russia. However, this is the best compromise we could get.”
The $60 figure sets the cap near the current price of Russia’s crude, which recently fell below $60 a barrel. There has been criticism that it is not low enough to cut into one of Russia’s main sources of income. It is still a big discount to international benchmark Brent, which slid to $85.48 a barrel on Friday, but could be high enough for Moscow to keep selling even while rejecting the idea of a cap.
Putin has previously warned that Russia would not sell oil under a price cap and would retaliate against nations that implement the measure.
Putin and Biden: Will they, or won’t they?
Meanwhile, it is unlikely that Putin and US President Joe Biden will be speaking anytime soon, about oil or the war in Ukraine.
Biden was not intending to speak to Putin right now, the White House said on Friday, a day after the US leader said he was willing to talk if his Russian counterpart was looking for a way to end the war.
Biden said on Thursday that he was prepared to speak with Putin “if, in fact, there is an interest in him deciding he’s looking for a way to end the war”. But he added that Putin “hasn’t done that yet”.
Kirby told reporters on Friday that “we’re just not at a point now where talks seem to be a fruitful avenue to approach right now”.
Kremlin spokesman Dmitry Peskov reiterated that Putin remains open to talks but the Western demand that Moscow first withdraws its troops from Ukraine is unacceptable.
TOKYO (AP) — Japanese technology group SoftBank swung back to profitability in the July-September quarter, boosted by positive results in its Vision Fund investments.
Tokyo-based SoftBank Group Corp. reported Tuesday a fiscal second quarter profit of nearly 1.18 trillion yen ($7.7 billion), compared with a 931 billion yen loss in the year-earlier period.
Quarterly sales edged up about 6% to nearly 1.77 trillion yen ($11.5 billion).
SoftBank credited income from royalties and licensing related to its holdings in Arm, a computer chip-designing company, whose business spans smartphones, data centers, networking equipment, automotive, consumer electronic devices, and AI applications.
The results were also helped by the absence of losses related to SoftBank’s investment in office-space sharing venture WeWork, which hit the previous fiscal year.
WeWork, which filed for Chapter 11 bankruptcy protection in 2023, emerged from Chapter 11 in June.
SoftBank has benefitted in recent months from rising share prices in some investment, such as U.S.-based e-commerce company Coupang, Chinese mobility provider DiDi Global and Bytedance, the Chinese developer of TikTok.
SoftBank’s financial results tend to swing wildly, partly because of its sprawling investment portfolio that includes search engine Yahoo, Chinese retailer Alibaba, and artificial intelligence company Nvidia.
SoftBank makes investments in a variety of companies that it groups together in a series of Vision Funds.
The company’s founder, Masayoshi Son, is a pioneer in technology investment in Japan. SoftBank Group does not give earnings forecasts.
Shopify Inc. executives brushed off concerns that incoming U.S. President Donald Trump will be a major detriment to many of the company’s merchants.
“There’s nothing in what we’ve heard from Trump, nor would there have been anything from (Democratic candidate) Kamala (Harris), which we think impacts the overall state of new business formation and entrepreneurship,” Shopify’s chief financial officer Jeff Hoffmeister told analysts on a call Tuesday.
“We still feel really good about all the merchants out there, all the entrepreneurs that want to start new businesses and that’s obviously not going to change with the administration.”
Hoffmeister’s comments come a week after Trump, a Republican businessman, trounced Harris in an election that will soon return him to the Oval Office.
On the campaign trail, he threatened to impose tariffs of 60 per cent on imports from China and roughly 10 per cent to 20 per cent on goods from all other countries.
If the president-elect makes good on the promise, many worry the cost of operating will soar for companies, including customers of Shopify, which sells e-commerce software to small businesses but also brands as big as Kylie Cosmetics and Victoria’s Secret.
These merchants may feel they have no choice but to pass on the increases to customers, perhaps sparking more inflation.
If Trump’s tariffs do come to fruition, Shopify’s president Harley Finkelstein pointed out China is “not a huge area” for Shopify.
However, “we can’t anticipate what every presidential administration is going to do,” he cautioned.
He likened the uncertainty facing the business community to the COVID-19 pandemic where Shopify had to help companies migrate online.
“Our job is no matter what comes the way of our merchants, we provide them with tools and service and support for them to navigate it really well,” he said.
Finkelstein was questioned about the forthcoming U.S. leadership change on a call meant to delve into Shopify’s latest earnings, which sent shares soaring 27 per cent to $158.63 shortly after Tuesday’s market open.
The Ottawa-based company, which keeps its books in U.S. dollars, reported US$828 million in net income for its third quarter, up from US$718 million in the same quarter last year, as its revenue rose 26 per cent.
Revenue for the period ended Sept. 30 totalled US$2.16 billion, up from US$1.71 billion a year earlier.
Subscription solutions revenue reached US$610 million, up from US$486 million in the same quarter last year.
Merchant solutions revenue amounted to US$1.55 billion, up from US$1.23 billion.
Shopify’s net income excluding the impact of equity investments totalled US$344 million for the quarter, up from US$173 million in the same quarter last year.
Daniel Chan, a TD Cowen analyst, said the results show Shopify has a leadership position in the e-commerce world and “a continued ability to gain market share.”
In its outlook for its fourth quarter of 2024, the company said it expects revenue to grow at a mid-to-high-twenties percentage rate on a year-over-year basis.
“Q4 guidance suggests Shopify will finish the year strong, with better-than-expected revenue growth and operating margin,” Chan pointed out in a note to investors.
This report by The Canadian Press was first published Nov. 12, 2024.
TORONTO – RioCan Real Estate Investment Trust says it has cut almost 10 per cent of its staff as it deals with a slowdown in the condo market and overall pushes for greater efficiency.
The company says the cuts, which amount to around 60 employees based on its last annual filing, will mean about $9 million in restructuring charges and should translate to about $8 million in annualized cash savings.
The job cuts come as RioCan and others scale back condo development plans as the market softens, but chief executive Jonathan Gitlin says the reductions were from a companywide efficiency effort.
RioCan says it doesn’t plan to start any new construction of mixed-use properties this year and well into 2025 as it adjusts to the shifting market demand.
The company reported a net income of $96.9 million in the third quarter, up from a loss of $73.5 million last year, as it saw a $159 million boost from a favourable change in the fair value of investment properties.
RioCan reported what it says is a record-breaking 97.8 per cent occupancy rate in the quarter including retail committed occupancy of 98.6 per cent.
This report by The Canadian Press was first published Nov. 12, 2024.
