BP to exit Russian State Owned Rosneft Stake

While the battlegrounds of Ukraine's cities remain the front line, the financial markets have also become a key battleground as leaders move to exclude Russia from the markets needed to finance Putin's war machine.

Over the weekend, a range of new sanctions were announced. A joint EU/US/UK/CA statement confirmed "selected" Russian banks will be expelled from SWIFT and committed to "impose restrictive measures" on the Russian Central Bank to prevent the liquidation of reserves.

Under growing pressure from the UK government, BP PLC announced over the weekend that its involvement with Russian State-Owned Rosneft "simply can not continue". The company has not clarified whether it is looking to sell its 20% stake in Rosneft or write it off in a move that could cost as much as $25 billion.

The decision ends a three-decade history of BP operating in Russia. Its initial involvement coming after the collapse of the Soviet Union has attracted additional scrutiny in recent weeks as the chairman of Rosneft, Igor Sechin is aligned with President Putin, and Rosneft supplies fuel to the Russian army.

BP's latest annual results showed Rosneft accounted for $2.7bn (£2bn) of BP's profits, about a fifth of its total. While its still very early days, if attempts to manage a sale fail and extrapolate the loss of Rosneft's profit contribution into the BP share price, the share price of BP might fall by as much as 20%, towards £300, giving back all and more of its year to date gains.

Source Tradingview. The figures stated areas of Feb 28, 2022. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation

Open a Forex.com account, or log in if you’re already a customer.
Search for the pair you want to trade in our award-winning platform.
Choose your position and size, and your stop and limit levels.
Place the trade.

The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex, commodity futures, or digital assets, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to FOREX.com or GAIN Capital refer to StoneX Group Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.

Please note that foreign exchange and other leveraged trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved, seeking independent advice if necessary.

The products and services available to you at FOREX.com will depend on your location and on which of its regulated entities holds your account.

FOREX.com is a trading name of GAIN Global Markets Inc. which is authorized and regulated by the Cayman Islands Monetary Authority under the Securities Investment Business Law of the Cayman Islands (as revised) with License number 25033.

FOREX.com may, from time to time, offer payment processing services with respect to card deposits through StoneX Financial Ltd, Moor House First Floor, 120 London Wall, London, EC2Y 5ET.

GAIN Global Markets Inc. has its principal place of business at 30 Independence Blvd, Suite 300 (3rd floor), Warren, NJ 07059, USA., and is a wholly-owned subsidiary of StoneX Group Inc.