Raphael Stevens

In the 1970s Arab states used the “oil weapon” of embargoes to punish Western governments for supporting Israel. On May 30th the heads of the 27 eu member governments agreed to turn the weapon on themselves, as part of their latest round of sanctions against Russia following its invasion of Ukraine. As well as cutting off Sberbank, Russia’s largest bank, from the swift cross-border payment system, the package will also ban purchases of Russian crude oil and refined petroleum products, such as diesel, by the end of the year. There would, the eu said, be a “temporary” exemption for oil delivered through pipelines. The price of Brent crude oil surged above $120 per barrel on the news, its highest level since March.In principle, the decision is highly significant. As well as being a demonstration of unity, and the bloc’s willingness to bear economic pain to punish Russia, it cuts one of the few remaining trade ties with the Kremlin. It also imperils one of Russia’s most lucrative sources of foreign-currency earnings. The eu is Russia’s biggest market for crude, buying about half the country’s oil exports. There are reasons, however, to be sceptical that the move will deprive Kremlin of much foreign currency. For a start, the embargo applies only to seaborne oil, transported via tankers. That is the price of unity: excluding oil delivered by pipelines was necessary to find a compromise with Hungary, which is both more sympathetic to Russia than most eu countries and critically dependent on the Soviet-era Druzhba pipeline (a name meaning “friendship” in Russian). Hungary imports about 65% of its crude from Russia.Seaborne oil makes up a similar proportion of Europe’s imports from Russia. But the ban is likely to have a limited impact on the oil market. Many tankers are already subject to so-called self-sanctioning in parts of the West. Dockworkers have refused to unload ships carrying Russian cargoes and oil majors have been worried about the hit to their reputations from accepting shipments. Western financiers are stepping back from writing insurance contracts. Although maritime insurers based in Russia’s allies could partly replace them, they have far shallower pockets. A big question is whether Russian seaborne crude, once placed under sanctions, will go unsold. So far Russia’s oil exports have increased even as the country has come under sanctions. According to analysts at JPMorgan Chase, a bank, Russian crude exports have risen since the invasion of Ukraine. Much of it has gone to India, which has not issued sanctions of its own. Another question is whether Europe does eventually ban piped Russian oil, which is harder to redirect to other countries. Poland and Germany have said that they will cease imports via the Druzhba pipeline. Yet it is hard to imagine Hungary dropping its opposition to a wider ban. Viktor Orban, the country’s populist prime minister, has demonstrated his willingness to block eu decisions before. Thanks to a hefty discount on Russian crude—the Urals benchmark is trading significantly below Brent—mol, a Hungarian oil group, reports “skyrocketing” margins.Partial though the embargo may be, such is the tightness of the oil market that prices have still leapt. Demand for fuel is strong as the pandemic subsides and consumers start driving and flying again, and as governments take steps to shield voters from the impact of higher energy costs. China’s easing of coronavirus restrictions in recent days has also added to the thirst for oil. The prices of industrial metals, including iron ore and copper, have rallied, too. Meanwhile, the Organisation of the Petroleum Exporting Countries (opec) and its allies, which include Russia, have shown little sign of increasing production just yet. At a meeting on June 2nd the group is not expected to announce any changes to its plans to gradually increase supply to levels seen before the pandemic (although it is reported to be mulling a plan to exclude Russia from its production targets, allowing Saudi Arabia and others to pump more to make up for any cutbacks in Russia). Combine tight supply and increased demand, and the consequence for consumers at the pump is higher prices. To make matters worse, a shortage of refinery capacity in America has raised the prices for petrol and diesel even further than the cost of crude. Francisco Blanch of the Bank of America points out that the surging dollar adds to costs for Europe and emerging markets. None of this is welcome news in an already-inflationary environment. According to figures published on May 31st, for instance, inflation in the euro area rose to 8.1% in the year to May, higher than economists had expected.The Arab embargoes of the 1970s caused short-term pain for the West, but also spurred a drive for fuel efficiency that ultimately reduced its reliance on oil. European governments today may also find themselves hoping that the short-term pain for consumers is worth the long-term gain of energy security. ■Read more of our recent coverage of the Ukraine crisis More

In the 1970s Arab states used the “oil weapon” of embargoes to punish Western governments for supporting Israel. On May 30th the heads of the 27 eu member governments agreed to turn the weapon on themselves, as part of a fresh round of sanctions against Russia following its invasion of Ukraine. As well as cutting off Sberbank, Russia’s largest bank, from the swift cross-border payment system, the package will also ban purchases of Russian crude oil and refined products, such as diesel, by the end of the year. There would, the eu said, be a “temporary” exemption for oil delivered through pipelines. The price of a barrel of Brent crude leapt above $120 on the news, its highest level since March.In principle, the decision is highly significant. As well as demonstrating unity, and the bloc’s willingness to bear economic pain to punish Russia, it cuts one of the few remaining trade ties with the Kremlin. It also imperils one of Russia’s most lucrative sources of foreign-currency earnings. The eu is Russia’s biggest market for crude, buying about half the country’s oil exports. There are reasons, however, to be sceptical that the move will deprive the Kremlin of much foreign currency. For a start, the ban applies only to seaborne oil, transported via tankers. That is the price of unity: excluding oil delivered by pipelines was necessary to find a compromise with Hungary, which is both more sympathetic to Russia than most eu countries and critically dependent on the Soviet-era Druzhba pipeline (a name meaning “friendship” in Russian). Hungary imports about 65% of its crude from Russia.Seaborne oil makes up a similar share of Europe’s imports from Russia. But the ban is likely to have a limited impact on the oil market. Many tankers are already subject to “self-sanctioning” in parts of the West. Dockworkers have refused to unload ships carrying Russian cargoes and oil majors have been worried about the hit to their reputations from accepting shipments. Western financiers are stepping back from writing insurance contracts. Insurers based in Russia’s allies could partly replace them, but have shallower pockets. A big question is whether Russian seaborne crude, once placed under sanctions, will go unsold. So far Russia’s oil exports have risen even as the country has come under sanctions. According to analysts at JPMorgan Chase, a bank, much of the increase has gone to India, which has not issued sanctions of its own. Another question is whether Europe does eventually ban piped Russian oil, which is harder to redirect to other countries. Poland and Germany have said they will cease importing via the Druzhba pipeline. Yet it is hard to imagine Hungary’s dropping its opposition to a wider ban. Viktor Orban, the country’s populist prime minister, has demonstrated his willingness to block eu decisions before. Thanks to a hefty discount on Russian crude—the Urals benchmark is trading significantly below Brent—mol, a Hungarian oil group, reports “skyrocketing” margins.Partial though the embargo may be, such is the tightness of the oil market that prices still surged. Demand for fuel is strong as the pandemic subsides and consumers start driving and flying again, and as governments try to shield voters from the impact of higher energy costs. China’s easing of coronavirus restrictions in recent days has also added to the thirst for oil. The prices of industrial metals, including iron ore and copper, have rallied, too. Meanwhile, the Organisation of the Petroleum Exporting Countries (opec) and its allies, which include Russia, have shown little sign of increasing production just yet. The group was due to meet on June 2nd, as we went to press, and was not expected to depart from its plan to gradually increase supply to levels seen before the pandemic (although prices dipped on reports that it was mulling a plan to exclude Russia from its production targets, allowing Saudi Arabia and others to pump more to make up for any lost output). Tight supply and robust demand together translate into higher prices for consumers at the pump. To make matters worse, a shortage of refinery capacity in America has raised prices for petrol and diesel even further than the cost of crude. The surging dollar adds to costs for Europe and emerging markets, notes Francisco Blanch of Bank of America. None of this is welcome news in an already inflationary environment. According to figures published on May 31st inflation in the euro area rose to 8.1% in the year to May, higher than economists had expected.The Arab embargoes of the 1970s caused short-term pain for the West, but also spurred a drive for fuel efficiency that ultimately reduced its reliance on oil. European governments today may find themselves hoping that the short-term pain for consumers similarly gives way to the long-term gain of energy security. ■Read more of our recent coverage of the Ukraine crisis.For exclusive insight and reading recommendations from our correspondents in America, sign up to Checks and Balance, our weekly newsletter. More

Nio began deliveries of its new ET7, an upscale electric sedan, on Monday, March 28, 2022.

Check out the companies making headlines in midday trading.
Marathon Oil, Diamondback Energy — Energy stocks rose along with oil prices after an agreement from European Union leaders to ban most crude imports from Russia stoked inflation fears. However, they pulled back later in the day on a news report that OPEC was considering suspending Russia from an oil-production deal. Shares of Marathon Oil gained 1.2%. Shares of Diamondback Energy declined 0.4%.

Alibaba, JD, Baidu — A slew of Chinese stocks listed in the U.S. rallied after the country’s Covid-19 lockdown measures eased. Alibaba jumped 2.8%, while JD advanced 4.6%. Internet giant Baidu edged up 0.9%. The lockdown in Shanghai was announced in March and had been an overhang for the Chinese stock market.
Unilever — The consumer products company saw its shares jump 9.9% after it named activist investor Nelson Peltz to its board. The CEO and founding partner of Trian Fund Management acquired a 1.5% stake in the company, and his new role will become effective July 20.
DexCom — Shares jumped 3.1% after DexCom denied a Bloomberg report citing unnamed sources that it is in talks to acquire medical device company Insulet. “It is generally our policy not to comment on rumors or speculation, however…. we wish to confirm that Dexcom is not in active discussions regarding a merger transaction at this time,” read a Tuesday statement from the company. Meanwhile, shares of Insulet plunged more than 10%.
Yamana Gold — The miner’s shares jumped 3.7% after Yamana Gold agreed to be acquired by Gold Fields in a $6.7 billion all-stock transaction.
Credit Suisse — The bank’s shares dropped 4.1% after Credit Suisse denied a Reuters report that it is deliberating ways to raise capital after its recent losses. The news report, citing two unnamed sources, said Credit Suisse is mulling over options including selling shares to existing shareholders or selling a business unit such as its asset management arm.

Sanofi — Shares dropped 3.5% after the pharmaceutical company’s trial for the over-the-counter version of its erectile dysfunction drug Cialis was put on hold by the FDA. Sanofi said the trail was halted “due to matters surrounding the protocol design,” and it will continue to work with the FDA on next steps.
Nio — Shares jumped 5% following a note from Morgan Stanley that said the China-based electric vehicle maker could rebound as soon as the next 15 days. Analysts said Nio is set for a boost as China lifted some Covid restrictions over the weekend.
American Eagle Outfitters — The apparel retailer’s shares slid 7.5% after Morgan Stanley downgraded the stock to underweight and said further downside could come. The bank cited risks to margins and sales among the reasons for the downgrade.
Dish Network — The telecom company’s shares added 2.4% after Truist upgraded the stock to buy from hold. Truist cited Dish’s push into 5G coverage as a potential upside play for the company.
— CNBC’s Yun Li, Tanaya Macheel, Jesse Pound and Samantha Subin contributed reporting.

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The U.K. government has proposed amending existing rules to manage the failure of stablecoin firms that may pose a “systemic” risk.
It comes after the collapse of terraUSD, a so-called stablecoin that was meant to always be worth $1.
Regulators are worried about the risks posed by stablecoins to the broader financial system.

The world’s biggest stablecoin, tether, saw more than $10 billion in redemptions in May, fueling fears of a 2008-style “bank run.”
Justin Tallis | AFP via Getty Images

Britain wants to make sure stablecoins don’t end up threatening the wider financial system following the collapse of controversial crypto project Terra.
The government on Tuesday proposed amending existing rules to manage the failure of stablecoin firms that may pose a “systemic” risk. The proposal is separate from previously announced plans to regulate stablecoins under laws governing electronic payments.

“Since the initial commitment to regulate certain types of stablecoins, events in cryptoasset markets have further highlighted the need for appropriate regulation to help mitigate consumer, market integrity and financial stability risks,” the government said in a consultation paper setting out its proposals.
“The government considers that it is important to ensure existing legal frameworks can be effectively applied to manage the risks posed by the possible failure of systemic DSA [digital settlement asset] firms for the purposes of financial stability.”
Stablecoins are cryptocurrencies whose value is pegged to a traditional asset, most often the U.S. dollar. TerraUSD, a so-called “algorithmic” stablecoin, was meant to follow this arrangement using a mix of code and partial backing from bitcoin and other digital tokens. But it imploded earlier this month, taking an associated token called luna tumbling with it. Panic over the debacle has erased hundreds of billions of dollars from the entire crypto market.
That has, in turn, caused concern for regulators, who are worried about the risks posed by stablecoins to the broader financial system. Tether, the world’s biggest stablecoin, saw more than $10 billion in redemptions in the weeks following Terra’s collapse, fueling fears of a 2008-style “bank run” with knock-on effects for other financial markets. Though Tether says its token is fully backed by assets held in a reserve, critics remain unconvinced and have called for a full audit.
The government is looking to implement additional safeguards to existing legislation around insolvency of firms operating key financial market infrastructure. Such a provision would take into account the return or transfer of the private keys that protect users’ funds. The Bank of England would serve as the lead regulator enforcing the rules. A consultation on the proposal is currently underway and will close on Aug. 2.

Glen Goodman, a crypto advisor to eToro, said the proposal was “pretty dramatic.”
The government has “effectively accepted that some stablecoins may become as systemically important as banks and so should be treated as special cases and assisted if they’re failing,” he said.

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There have been 10,905 bias instances reported by Asian Americans and Pacific Islanders from the start of the pandemic through the end of 2021, according to Stop AAPI Hate.
Women account for 62% of reported incidents, according to the group, which was created in early 2020 to document the surge in Covid-related harassment and violence.
“As the city started to open up, I’ve had so many conversations: ‘I’m expected to be at work, and I’m scared. I’m scared to ride the subway,’ ” said Jo-Ann Yoo, executive director of the Asian American Federation.

An attendee identified as Emily, left, holds a candle during a candlelight vigil for Michelle Go at Portsmouth Square in San Francisco, Calif. Tuesday, Jan. 18, 2022.
Stephen Lam | Getty Images

Sometime after Deloitte consultant Michelle Go was shoved to her death underneath a moving R train in January, another New York City resident swore off taking the subway.
Instead of taking the No. 6 train to her desk at Dime Bank in midtown Manhattan, the woman, an Asian American manager in her late 30s, walks to work. The fear she can’t quite shake, she said, is that she will be alone on a platform with an unhinged person, and she will suffer the same fate as 40-year-old Go.

“You don’t feel like the city cares or is willing to do anything about it,” said the woman, who requested anonymity to speak candidly. “You don’t feel safe. I don’t want to be the next headline, so I walk.”
One of the many things lost since the coronavirus pandemic began more than two years ago is a sense of safety in public spaces. Asian Americans have felt that loss more acutely because of a surge in bias incidents. There have been 10,905 instances reported by Asian American and Pacific Islanders from the start of the pandemic through the end of 2021, according to advocacy group Stop AAPI Hate.
Women account for 62% of reported incidents, according to Stop AAPI Hate, which was created in early 2020 to document the surge in Covid-related harassment and violence.
As employers — especially those in financial services, consulting and law — attempt once again to summon workers back to offices this year, a sense of dread is common among AAPI women, according to Jo-Ann Yoo, executive director of the Asian American Federation.
“As the city started to open up, I’ve had so many conversations: ‘I’m expected to be at work, and I’m scared. I’m scared to ride the subway,’ ” Yoo said.

Random brutality

The onset of the coronavirus in 2020 brought a surge of seemingly random attacks against Asian Americans. Some were captured on grainy surveillance videos, enabling the incidents to go viral and gain local news coverage.
Then, after eight people were murdered in an Atlanta area shooting spree in March 2021 — most of them female AAPI spa employees — the worrisome trend gained national attention. While the incidents helped galvanize a new generation of activists, more attacks would follow. Weeks after Go’s death in January, Christina Yuna Lee, a 35-year-old creative producer, was stabbed to death in her Chinatown apartment.
Then in March, seven AAPI women were assaulted during a two-hour spree in Manhattan. Sixty-one-year old GuiYing Ma, who had been hit in the head with a rock while sweeping her sidewalk in Queens, succumbed to her injuries and died. And a 67-year-old Yonkers woman was pummeled 125 times in the head in the vestibule of her apartment building.
The attacks brought national attention to AAPI concerns for the first time in decades: Senseless, seemingly random murders and assaults on women like in these incidents amount to evidence of racial and gender bias that is hard to dispute.
“This is a bittersweet time, because our issues are finally getting some attention,” said Cynthia Choi, a San Francisco-based activist who co-founded Stop AAPI Hate. “There is a part of me that’s like, ‘Why do Asian women have to die for us to take these issues seriously?’ ”

Chinese for Affirmative Action co-executive director Cynthia Choi speaks during a press conference with Gov. Gavin Newsom and other Bay Area Asian American and Pacific Islander community leaders amid the rise in racist attacks across the country, on March 19, 2021, in San Francisco, Calif.
Dai Sugano | Medianews Group | Getty Images

The biggest category of incidents tracked by Stop AAPI Hate involve verbal harassment (67%), while the second largest involves physical assault (16%). Roughly half occur in public spaces, including in the street, mass transit and parks, according to the organization.
“We have to recognize that we have a problem with street harassment and violence against women,” said Choi. “This is something we have to navigate from very early on. What’s perhaps different is the unprecedented levels of hate, based on our race or gender, or both, that’s been exacerbated by Covid-19.”
More than 70% of Asian Americans surveyed by the Pew Research Center last month said they worry that they may be threatened or attacked because of their ethnicity, and most of those surveyed said that anti-AAPI violence was increasing.

`Even in broad daylight’

The experiences of a half-dozen AAPI women living in New York, Chicago and San Francisco varied widely. Some felt little concern on a daily basis, owing to car-based commutes or offices that went fully remote. Others felt that the pandemic only highlighted concerns that they always had as minority women.
Most had adjusted their lives in one way or another to deal with the anxiety. My An Le, a New York-based recruiter, says she rarely leaves her apartment; when she does, she’s armed with pepper spray.
“It really sucks, because I used to walk everywhere with AirPods on, listening to serial killer podcasts,” Le said. “Now If I go out, I have to have mace in my pocket at all times, even in broad daylight.”
“I never felt scared in Manhattan before the attacks,” she added.
Another woman, an Aetna employee who commutes from Park Slope, Brooklyn, to her company’s offices in downtown Manhattan, said that she began taking Krav Maga self-defense classes after an AAPI attack last year. The training “helps you feel more confident,” she said.
Others have been undeterred by the attacks. A 45-year-old investment banker said she takes extra precautions while taking the subway from SoHo to her firm’s Times Square headquarters. She says she is “hyper vigilant” on the train and has her phone handy in case she needs to make an emergency call.
While that hasn’t stopped her from commuting uptown three or four times a week, she says that makes for a near-daily reminder of Michelle Go’s death.
“Michelle was in finance and consulting and she died in my subway station,” the managing director said. “But I had the same sickening reaction to all of [the incidents].”
The AAPI attacks are also part of a larger story of American violence. Last year, 12 cities set new records for murders. In the past two weeks alone, a Goldman Sachs employee was murdered in broad daylight on the subway, 10 people were shot to death in a racially-motivated attack in a Buffalo supermarket, and 19 children and two teachers were murdered in the mass shooting at a Uvalde, Texas, elementary school.

‘Hard to go back’

The decline in public safety is one factor complicating employers’ push to get more workers back in offices. The continued spread of the latest coronavirus variants is another. And finally, as perks like hybrid work become standard, employees with options won’t accept full-time office positions, according to the Dime executive.  
“Once you taste the flexibility, it’s hard for people to go back,” she said. “We’d be recruiting for positions, and when you’d tell people it had to be full time in-person, you lost a lot of candidates.”
As a result, just 8% of Manhattan office workers are back full time, according to the Partnership for New York City. Employers have begrudgingly adopted the hybrid work model, resulting in 38% of employees being at the office on the average weekday.
But that means that the city’s subways are still well below pre-pandemic ridership levels, which contributes to safety concerns, she said.
“The city’s not as safe as it used to be,” the Dime executive said. “If it’s nighttime, I’m taking an Uber, that’s all there is to it.”

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Check out the companies making headlines before the bell:
Yamana Gold (AUY) – The Canadian gold producer agreed to be acquired by Gold Fields (GFI) in an all-stock deal valued at $6.7 billion. Yamana Gold shareholders will receive 0.6 Gold Field shares for each share they now hold. Yamana surged 14.9% in the premarket while Gold Fields tumbled 11.8%.

Credit Suisse (CS) – Credit Suisse denied a Reuters report that it is mulling various options to raise capital after a series of losses. Two people with knowledge of the matter told Reuters the bank was in the early stages of weighing options, such as a share sale or selling a business unit. Credit Suisse lost 3.8% in premarket action.
Unilever (UL) – Unilever jumped 6.4% in premarket trading after the consumer products company named activist investor Nelson Peltz to its board. Peltz’s Trian Fund Management holds a roughly 1.5% stake in Unilever.
Sanofi (SNY) – The drug maker’s shares slipped 3.7% in the premarket after the FDA put a trial related to its erectile dysfunction drug Cialis on hold. The trial was to evaluate the conversion of the prescription treatment to “over the counter” status, with Sanofi saying the halt was related to how the trial had been designed.
Nio (NIO) – Nio shares jumped 5.1% in the premarket after Morgan Stanley added the China-based electric vehicle maker’s stock to its “tactical idea” list. Morgan Stanley thinks the shares are set to rise as Covid restrictions are eased in the Shanghai region, and as the company benefits from new subsidies for electric car buyers.
Zoom Video Communications (ZM) – The videoconferencing company’s stock received a double upgrade at Daiwa Securities, which raised its rating to “outperform” from “underperform”. Daiwa said the recent tech pullback presents upside opportunity, and that growth expectations for Zoom now seem more realistic. Zoom added 1.6% in premarket trading.

American Eagle Outfitters (AEO) – The apparel retailer’s stock slid another 5.7% in the premarket after a post-earnings tumble of 6.6% Friday. The stock was downgraded to “underweight” from “equal-weight” at Morgan Stanley, which feels reduced guidance from American Eagle management may still be too optimistic.
Sherwin-Williams (SHW) – The paint company’s shares slipped 2.3% in premarket trading after Credit Suisse initiated coverage with an “underperform” rating. The firm said rising interest rates could impact residential and commercial paint demand.

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