Russia's isolation deepens as European summer gas prices surge on supply fears
The moves by shipping lines MSC and Maersk mean that Russia, the world's 11th largest economy and supplier of one-sixth of all commodities, is now effectively cut off from a large chunk of the globe's shipping capacity.
The world's biggest shipping lines MSC and Maersk suspended container shipping to and from Russia, deepening the country’s isolation as its invasion of Ukraine sparks an exodus of international companies.
It comes as fears over Russia turning off supplies sent European wholesale gas prices for delivery this summer surging by over 25%.
The West has imposed heavy restrictions on Russia to close off its economy and block it from the global financial system, pushing companies to halt sales, cut ties, and dump tens of billions of dollars worth of investments.
The moves by MSC and Maersk mean that Russia, the world's 11th largest economy and supplier of one-sixth of all commodities, is now effectively cut off from a large chunk of the globe's shipping capacity.
To stem the stampede, Moscow said it would temporarily curb foreign investors from selling Russian assets but energy firms BP and Shell have already decided to abandon their Russian businesses, while leading banks, airlines, carmakers, and more have cut shipments and ended partnerships.
Austria's Raiffeisen Bank International is looking into leaving Russia, sources told Reuters, a move that would make it the first European bank to do so since the invasion.
"The corporate world is building up a fortress to isolate Russia from the international community," said Hargreaves Lansdown senior investment and markets analyst Susannah Streeter.
French oil and gas group Total Energies said it would no longer provide capital for new projects in Russia, while Exxon Mobil has begun removing US employees working there.
In a matter of weeks, Russia has turned from a lucrative bet on surging oil prices to a financial pariah with a central bank hamstrung by sanctions, major banks shut out of the international payments system, and capital controls choking off money flows.
US payment card firms Visa and Mastercard have blocked multiple Russian financial institutions from their network.
Major car and truck makers, including Volvo, General Motors, Harley-Davidson, and Jaguar Land Rover, have also cut off exports to Russia.
Finnish telecoms equipment firm Nokia joined rival Ericsson in saying it will stop deliveries to Russia to comply with sanctions. Big tech companies are juggling calls to shut services in Russia with what they see as a mission to give voice to dissent and protest.
Facebook parent company Meta Platforms Inc FB.O will restrict access to Russian state media outlets RT and Sputnik on its platforms across the EU. YouTube is also blocking channels connected to RT and Sputnik across Europe.
Russia calls its actions in Ukraine a "special operation" that it says is not designed to occupy territory but to destroy its southern neighbour's military capabilities and capture what it regards as dangerous nationalists.
Airlines are bracing for lengthy blockages of east-west flight corridors after the EU and Moscow issued airspace bans, which are estimated to affect 20% of global air cargo.
- Reuters. Additional reporting, Irish Examiner
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