More major businesses are joining the movement aimed at isolating Russia economically. Shell, GM, and BP are among the growing number of industry giants either pausing or ending their relationship with Russia.
Isolating Russia One Business At A Time
The steady exodus of businesses is now further isolating Russia from the international community. With some companies, decades of business ties with Moscow disappeared overnight without any clear resolution in the future.
A majority of the companies that severed their ties with Russia did so to comply with US and European sanctions. Western powers banned trade and choked off financial ties with Moscow over its decision to invade Ukraine.
Meanwhile, other companies broke off ties with Russia on their own for the same reason. According to Nick Tsafos of the Center for Strategic and International Studies think tank, some business relationships “just broke”.
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He said that companies are basically saying that “We don’t want to be part of this.’”
Shell Leaves Russia, Sheds Stakes in Joint Ventures with Gazprom
Among the major corporations that joined the movement isolating Russia is Shell. It became the third major oil company to announce its intention to leave Russia.
The company said its plans to withdraw from joint ventures with Russian gas giant Gazprom. The estimated value of these stakes is around $3 billion.
The ventures include Shell’s 27.5% stake in Sakhalin-2. This is a large oil and gas project off Russia’s Pacific coast. Since the 1990s, Shell made investments in various oil projects on Sakhalin Island.
In addition, Shell will also drop its interests in Nordstream 2, the inactive pipeline applying for German approval. According to CEO Ben van Beurden, Shell cannot and will not stand by Russia’s military aggression.
Other Companies Also Severing Ties
Earlier, BP announced that it will divest its stake in Russian energy company Rosneft at a loss. Estimates placed BP’s hit could reach up to $25 billion for giving up its stake in the Russian oil project.
A Norwegian oil company, Equinor, also said it will dump its joint venture projects with Russian companies.
For both companies, it remains unclear whether they will want to find buyers for their holdings. Or, will they simply drop the ventures and walk away.
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During an earlier meeting, BP CEO Bernard Looney made it clear the company’s investment in Rosneft is now untenable. According to a company insider, “There was only one decision we could make. The exit was the only viable way.”
GM Halting Car Imports
Meanwhile, US automotive giant General Motors announced that it will suspend all vehicle exports to Russia until further notice. This move will also impact the moves isolating Russia, as GM sells about 3,000 vehicles in Russia per year.
Most of the vehicles were originally manufactured in the United States. “Our thoughts are with the people of Ukraine at this time,” GM said in a statement. “The loss of life is a tragedy and our overriding concern is for the safety of people in the region.”
Other companies are expected to follow their country’s decision in isolating Russia. Danish shipping magnate Maersk will likely suspend Russian operations to comply with sanctions and airspace restrictions.
However, Maersk promised to deliver cargo that’s already on the water, especially perishable ones.
In addition, German automotive manufacturer Daimler Truck also announced it will suspend all its activities in Russia. This includes its supply of civilian truck components to its Russian partner Kamaz.
Watch the WION video reporting that Shell joins Equinor and BP in exiting Russia over Ukraine invasion:
Do you support moves by companies that help cut off Russia from the international market? Do you think this will help pressure Russia into giving up its plans to annex Ukraine?
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