Big European and American companies are trying to balance their business interests in Russia with growing pressure from their national governments to isolate Moscow, as tensions between the West and Russia rise over Ukraine.
In Italy, top business executives held a videoconference with Russian President Vladimir Putin on Wednesday, although some companies pulled out of the long-planned event following pressure from the Italian government.
In Washington, the American Petroleum Institute, the oil industry lobby group, said it recognizes the role of sanctions as a foreign policy tool, but urged policymakers to carefully target any new sanctions against Russia so as not to harm the competitiveness of American companies. .
Western sanctions against Russia since Moscow’s annexation of Crimea in 2014 have prompted many European companies to cut ties with Russia. But some big companies are still very present. Energy companies and commodity traders are among the most involved in Russia, given the country’s vast oil and gas reserves.
Mr Putin, in comments broadcast on Russian television, hailed Italy as one of Russia’s main economic partners. He said the value of trade between the two countries increased by 53.8 percent in the first 11 months of last year. The volume of gas shipped to Italy by Russian gas giant PAO Gazprom has also increased.
“We see serious prospects for expanding the Russian-Italian business partnership in other areas of the energy sector,” Putin said at the meeting.
Oil company Eni SpA, in which the Italian government has a stake, was among those to pull out at Rome’s request. Other major Italian companies, including tire maker Pirelli & C. SpA and pasta maker Barilla Group, joined in and said the government had not pressured them to pull out.
The European Union has often struggled to agree on a unified response to Mr. Putin’s aggressive actions in Eastern Europe. Many EU members rely heavily on Russian natural gas, especially during the winter months when heating demand increases, which prevents them from actively challenging Moscow’s decisions.
The Biden administration said this week it aims to boost gas and oil supplies to Europe from the Middle East, North Africa and Asia to help fill an energy gap if Russia turn off the taps, but it’s unclear whether the plan can be put in place quickly or is a viable long-term strategy if tensions with Russia continue.
“Corporate interests are not the driver of European politics, but rather the angle of the energy crisis,” said Nathalie Tocci, director of the Institute of International Affairs, a Rome-based think tank. “It’s not about company X, Y or Z trying to do something, but rather the overall energy relationship that Europe has with Russia.”
“Putin has clearly decided to act now when some European countries are particularly vulnerable to a gas supply cut,” Ms Tocci said.
However, Mr Putin sees the corporate sector as a channel through which he can further soften Europe’s policy response, Ms Tocci said. “He calculated that companies from certain countries are particularly invested in Russia and he identified Italy as a potentially weak link,” she said.
Western companies with significant exposure to Russia include privately held Trafigura Group Pte. Ltd., Russia’s largest oil exporter among major international commodity traders, according to people familiar with the matter. Vitol and Glencore PLC are also major exporters of Russian oil, according to industry insiders. Russia is one of the world’s largest oil producers, with a 12% market share, according to JPMorgan Chase.
BP PLC holds 20% of the capital of Rosneft Oil Co.
Swiss commodities giant Glencore has a 10.6% stake in EN+ Group PLC, a holding company that owns aluminum company United Co. Rusal PLC.
While Russia has some of the largest reserves of diamonds, precious metals, coal and other minerals, no major Western mining companies have a presence in the country.
Russian participants in Wednesday’s video conference, organized by the Italian-Russian Chamber of Commerce and the Italian-Russian Business Committee, included ministers of economic development, energy and finance. Igor Sechin, one of Mr Putin’s closest allies and the head of Russia’s biggest oil producer, state-controlled giant PJSC Rosneft, was also present, as was Dmitry Konov, chairman of the board. of the petrochemical giant Sibur.
Mr. Konov is co-chairman of the Italian-Russian trade committee. The other co-chairman, Pirelli’s managing director, Marco Tronchetti Provera, was also present.
Dmitry Peskov, a spokesman for the Russian government, dismissed suggestions that the meeting was aimed at rallying support ahead of possible Western sanctions related to the situation with Ukraine.
“It’s a twisted understanding,” he said. “These meetings are regular, not only with Italians but also with the biggest companies in other countries.”
The German Chamber of Commerce in Düsseldorf, in the northwest of the country where major German energy, steel and pharmaceutical companies are based, held an online conference on January 13 with its members and Russian diplomats.
In addition to talks about the Russian economy and business opportunities, senior leaders urged the German government to work toward a diplomatic resolution of tensions with Russia.
As German Foreign Minister Annalena Baerbock prepared to meet her Russian counterpart earlier this month, Germany’s business lobby urged the government to drop tough action against Russia and work harder to help negotiate a diplomatic solution to the simmering conflict over Ukraine and the North. Flow channeling 2.
“In this historical period marked by the pandemic and many limitations, there is a growing risk of anti-Russian rhetoric and Russia-phobia,” said Vincenzo Trani, president of the Italian-Russian Chamber of Commerce. “For us, it is fundamental to fearlessly stimulate the economic and commercial dialogue between Italy and Russia.”
On the video link, Mr Trani told Mr Putin in Russian that his group aims “to foster dialogue, including in times when all is not well”. He also said that the ties “between Italy and Russia, between our peoples, are older than the existence of our governments”.
UniCredit CEO Andrea Orcel was on the list of attendees. The bank did not confirm whether he was present.
UniCredit recently expressed interest in acquiring Russian bank PJSC Bank Otkritie Financial Corp. and planned to do due diligence on the lender, according to a person familiar with the matter. Otkritie Bank was bailed out by the Russian central bank in 2017.
Guido Barilla, president of the pasta company that bears his family name, attended the conference. Barilla has a pasta factory in Russia and a mill where it processes Russian grain.
—Giovanni Legorano in Rome and Joe Wallace in London contributed to this article.
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