London (CNN Business)Europe and the United States have banned Russia's oil imports to block the Kremlin's key source of income. But plans to hurt President Vladimir Putin and force him to rethink the war in Ukraine are not working
Russian government energy I'm making as much money from exports as before the invasion. Meanwhile, inflation is skyrocketing globally, increasing political pressure on heads of state such as US President Joe Biden, British Prime Minister Boris Johnson, and French President Emmanuel Macron.
"The goal here is to starve Russia, to starve Putin his main source of funding, and to help mitigate the effects of the war on Putin's pumps, the price of Russian oil. "Push down," a senior US government official told CNN.
Why it is needed: European customers have reduced imports from Russia even before the partial embargo on the block came into effect. However, increased exports to Asia have helped to make up for most of these losses. China took advantage of the significant price cuts to import 2 million barrels of Russian oil per day for the first time last month. India's imports also surged, staying close to 900,000 barrels per day in May.
According to the International Energy Agency, Russia's oil export revenues increased $ 1.7 billion in May to about $ 20 billion. This is well above the 2021 average of about $ 15 billion.
The United States may punish countries that continue to do business with Russia. But that will cause further turmoil in the oil market. Leaders are desperate to avoid as gasoline prices remain close to record highs.
If China and India have to find alternatives to Russian crude oil, oil prices can easily exceed $ 200 per barrel, DWS Commodity Portfolio Manager Darwei Kung said. Told me. It currently trades over $ 112 per barrel.
With a price cap, Russian oil barrels can theoretically still enter the global market, thereby avoiding further supply shortages, but Moscow makes a lot of profits. I can't keep raising it.
The Biden administration has recently lobbied for this option, and German authorities have shown their tolerance to discuss it. However, important details remain ambiguous.
What's missing: It's not yet known how, when, and how much Russia's oil prices can be capped. Authorities said the exact mechanism for achieving the cap has not yet been elucidated. It also requires a wide range of international support to be effective.
One way is to prohibit companies based in G7 countries from insuring petroleum cargo if the buyer pays above a certain price.
Still, Kung warned that adding complexity to the energy market could increase friction, make trading difficult, and prices could be higher than in other cases.
“The more complex the system, the more likely it is that problems will occur,” says Kung. "The market system works because it's very simple in a way. It's very efficient."
When an investor calls the Federal Reserve Board, the stock price Rising
This year's stock market will allow investors to think the federal reserves will do next and central banks to quickly curb inflation.
Optimistic views are creeping in as the second quarter approaches the end. The S&P 500 soared on Friday, recording the largest daily percentage increase in more than two years and a three-week streak. In pre-market trading on Monday, the index is rising again. The
But there was a lot of good news. Long-term expectations of inflation fell slightly from 3.3% in the middle of the month to 3.1%, improving slightly.
Federal Reserve Chair Jerome Powell said the first reading in June was "eye-catching."
This could mean that the Fed doesn't have to raise interest rates by another three-quarters at its next meeting. The half-percentage increase is still aggressive, but not so seismic.
However, much depends on future data. The Fed's favorite inflation indicator arrives on Thursday. If it is higher than economists predict, it can shake the calculus again.
What does it mean for the economy to overturn the Roe v. Wade case?
Family members who are not ready for childbirth may face financial difficulties, and mothers forced to give birth may have difficulty accessing higher education and climbing socio-economic ladders. There is sex. According to economists, this can impact the workforce and economic production, increasing the need for government support.
"This decision is most likely to have an abortion ban and is immediate economic in 26 states where people are already facing low wages, a reduced workforce and restricted access to health care. It will cause distress, "Heidi Sirholtz Institute for Policy Studies, President of Progressive Economy, said in a statement released Friday. "Roe's collapse will be an additional economic barricade."
Emotions were echoed by Treasury Secretary Janet Yellen. In her Senate testimony, she said limiting women's reproductive rights "has a very detrimental effect on the economy."
"Access to assisted reproductive technology, including the Roe v. Wade case and abortion, has helped increase the participation of the workforce," Yellen said. "It allowed many women to graduate from school. It increased their income potential. It allowed women to balance their family and career plans.
Next
Coming tomorrow: Investors will scrutinize US consumer confidence data in June for signs that inflation could reduce American spending.