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Europe divided over Russian oil sanctions

French president Emmanuel Macron – Anadolu Agency/Getty

EU leaders are deadlocked over whether to hit the Russian energy sector with crippling sanctions as fury mounts over the Kremlin’s “war crimes” in Ukraine.

The price of oil surged to nearly $115 a barrel on Monday as diplomats began a fresh push for an embargo on Moscow’s oil exports.

France, Ireland and Baltic states such as Lithuania signalled support for a tougher line, but they faced opposition from countries including Germany and Hungary.

The EU and its western allies have already inflicted punishing financial sanctions on Russian banks, businesses and individuals connected to president Vladimir Putin, in a major blow to the country’s economy.

But as the war grinds on and shocking reports of Russia’s siege and bombardment of Mariupol continue to emerge, pressure is growing for the bloc to go much further.

Josep Borrell, the EU’s foreign policy chief, and German foreign minister Annalena Baerbock said the Kremlin’s actions amounted to war crimes.

However, the EU has not followed the UK and US in imposing a ban on Russian oil imports, which critics say the Kremlin needs to finance the war.

It prompted Simon Coveney, the Irish foreign minister, to warn that the position was becoming increasingly untenable.

Lithuania’s foreign minister, Gabrielius Landsbergis, also said it was vital to keep the pressure on Mr Putin.

In another significant intervention, France, which holds the EU presidency, suggested it was open to targeting Russian oil and gas.

However, ditching Russian exports could be politically fraught, as it would potentially send prices even higher and inflict more misery on drivers.

The extent to which different EU states rely on Russia also varies considerably.

Germany and Hungary, which each import at least 30pc of their oil from Russia, are among countries who have pushed back against calls for a ban, for example.

The Netherlands has also reportedly said an oil embargo would cross a “red line”.

Ms Baerbock, Germany’s foreign minister, said: “The question of an oil embargo is not a question of whether we want or don’t want [it] but a question of how much we depend on oil.

“Germany is importing a lot but there are also other member states who can’t stop the oil imports from one day to the other. If we could we would do it automatically.”

Her comments were echoed by Dutch premier Mark Rutte, who said many European countries were simply unable to abandon Russian hydrocarbons “overnight”.

The European Commission has set out plans for the bloc to more gradually reduce its use of Russian oil and gas by 2027.

No decision was expected at Monday’s meeting, which comes ahead of a summit of Nato leaders and a European Council summit on Thursday in Brussels.

US President Joe Biden will attend both summits and is expected to put pressure on EU countries to follow Washington in banning oil and gas imports from Russia.

06:16 PM

Wrapping up

That’s all from us today, thank you for following! Before you go, check out the latest stories from the business team:

London house prices ’50pc overvalued’, sparking correction fears

Gazprom’s UK division faces nationalisation

Rishi Sunak’s four National Insurance options

Cost of charging electric cars on the street hits new high

China’s Hikvision embroiled in new row with Britain’s CCTV watchdog

06:12 PM

BT mulls cutting ties with Abramovich-backed operator

BT is considering cutting ties with a mobile operator backed by Roman Abramovich because of its close links to the sanctioned Russian oligarch. Ben Woods reports:

The telecoms giant is reviewing its relationship with Truphone following the Government’s clampdown on Mr Abramovich over Russia’s invasion of Ukraine.

The move comes less than two months after Truphone sealed a wholesale deal with BT’s mobile network, EE, to rent access to its 4G and 5G network.

The Telegraph understands that ongoing talks over Truphone supplying BT with embedded mobile sim cards known as e-sims could also be impacted.

Mr Abramovich’s investment firm Minden bought a 23pc stake in Truphone for £70m in 2013, but the company has escaped sanctions because his holding is less than 50pc.

05:54 PM

Apple services suffer outage

Apple is experiencing an outage on 12 of its services today, according to its website.

Users have reported issues on apps such as Apple Music, Apple Maps, iCloud, the App Store, iMessage, and Apple TV to dedicated website Downdetector.

The company was contacted for comment.

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05:34 PM

Credit Suisse vice chairman to leave board after string of scandals

Credit Suisse’s vice chairman, Severin Schwan, is stepping down from the board of directors as the Swiss bank continues a shakeup of its top supervisory body following a series of scandals.

Schwan, who is also chief executive of Swiss pharmaceutical giant Roche, had come under repeated criticism that his dual mandates don’t leave him enough time to fulfill his duties at the lender.

Credit Suisse is trying to recover from a string of scandals, including twin hits from Archegos Capital Management and Greensill Capital. Former chairman Antonio Horta-Osorio, brought in with help from Schwan to steady the ship, left after less than a year.

Christian Gellerstad will become vice chairman and also take over as head of the compensation committee from Kai S. Nargolwala, who like Schwan won’t stand for re-election at the annual general meeting next month.

05:15 PM

FTSE 100 propped up by commodity gains

The FTSE 100 has closed higher as surging oil prices boosted energy stocks, although concerns about inflation and several broker downgrades kept a check on its overall gain.

The commodity-heavy index rose 0.5pc to 7,442, hitting its highest level in more than two weeks, driven by gains in Shell and BP, which tracked a jump of more than $4 in the price of crude oil.

Danni Hewson at AJ Bell commented: “Rising prices might not be great for the consumer, but they’ve provided exactly the tonic the FTSE 100 needed to claw back all the losses incurred so far this year.

“Those rising prices are undoubtedly a double-edged sword, one cleaving deep into the budgets of UK households, and one that’s certain to be right at the heart of Number 11’s pre-spring statement discussions. How to best keep the economy moving forward, to help keep consumers spending and businesses clawing themselves towards a post-Covid recovery. Because inflation is eating away at confidence, every day seems to bring another demand on our dwindling cash supplies, more money to pay at the pump, on simple staples.”

04:56 PM

Powell says Fed ready to raise rates faster if needed

Federal Reserve chairman Jerome Powell said the central bank will take the “necessary steps” to get inflation down even if that means increasing interest rates more rapidly than currently anticipated and eventually to levels that slow the broader economy.

Policymakers raised the benchmark lending rate by a quarter point last week, the first increase since December 2018, and signaled six more hikes of that magnitude this year. The rate is anticipated to reach 2.8pc in 2023, beyond the so-called neutral rate of about 2.4pc that neither speeds up nor slows down economic activity.

Powell said: “If we conclude that it is appropriate to move more aggressively by raising the federal funds rate by more than 25 basis points at a meeting or meetings, we will do so.

“And if we determine that we need to tighten beyond common measures of neutral and into a more restrictive stance, we will do that as well.”

04:39 PM

London house prices ’50pc overvalued’, sparking correction fears

Tower blocks under construction as part of the VNEB (Vauxhall, Nine Elms and Battersea) development in south London – Aaron Chown/PA Wire

The London property market is overvalued by as much as 50pc, raising fears of a looming correction, according to a leading global ratings agency. Ben Gartside has more:

S&P Global, part of Standard & Poor’s, used long-term average prices of properties and compared them with income data for its calculations.

Alastair Bigley, a researcher for the agency, warned that prices were likely to fall.

“A combination of low rates, the stamp duty holiday and excess savings amid the pandemic have driven property prices higher, particularly in London and the South East where overvaluation relative to income over the long-term is as much as 50pc,” he said.

Read the full story here

04:22 PM

Europe’s pivot on Russian gas boosts call for US LNG projects

Europe’s shift away from Russian natural gas means significantly more US export projects need a quick go-ahead from investors, according to research house Bernstein.

The US will need to make a final investment decision on as much as 80m metric tons per year of new LNG export capacity in the next year or two to help fill up the supply gap in Europe. Before Russia’s invasion of Ukraine, the US was expected to sanction no more than 40m tons per year in the next two or three years to meet rising global demand, analysts at Bernstein said.

There are signs that European utilities, which have vowed to reduce gas use by the next decade, may be more open to signing the 15-year supply contracts American LNG exporters typically need to unlock funding for new projects.

Still, it will take at least five years until most of the new capacity needed in the US to replace Russian gas is up and running, analysts noted.

04:04 PM

Handing over

Thanks for following today, I’m now handing over to my colleague Giulia Bottaro.

Stay tuned for more updates.

04:00 PM

Swiss authorities seize Russian oligarch’s luxury mountain pad


Swiss authorities have seized a luxury mountain home believed to be owned by a Russian oligarch, Reuters reports.

The Bern canton’s property office said it believed the flat belonged to Petr Aven, identified by Switzerland as a close confidant of President Vladimir Putin and a major shareholder of the group that owns Russia’s biggest private bank, Alfa.

The three-bed flat is on the fifth floor of a luxury complex at a golf resort in the picturesque Bernese Oberland, surrounded by snowy peaks, according to the NZZ am Sonntag newspaper.

Aven, 67, did not immediately respond to an email seeking comment. But last month he said he would contest “spurious and unfounded” European Union sanctions adopted by Switzerland.

03:46 PM

Boeing shares slide after China crash

Boeing plane

Boeing faces a new crisis after a 737 jet fell out of the sky in China with 132 people onboard, renewing concerns over its best-selling family of planes and sending its shares tumbling.

A so-called “next generation” version of the workhorse narrow-body operated by China Eastern Airlines crashed Monday, prompting the carrier to ground all of that model in its fleet.

Boeing’s shares fell 4.3pc in New York after opening.

The latest tragedy complicates the company’s efforts to regain the trust of regulators and the flying public after two fatal crashes in recent years of the 737 Max, the newest version of the plane.

The China Eastern crash did not involve a 737 Max or the flight-control software faulted in the earlier accidents.

03:33 PM

Oil approaches $115 a barrel amid talk of an EU embargo on Russian exports

The price of oil has surged 6pc higher today after Russia’s brutal siege of a Ukrainian city prompted EU leaders to reconsider a ban of the country’s energy exports.

Brent crude rose to almost $115 a barrel on Monday as Baltic countries including Lithuania, along with France and Ireland, were among those to call for tougher action against the Kremlin.

Pressure for more action, in addiction to financial sanctions already in place, is building because of Russia’s siege and bombardment of Mariupol port, which EU foreign policy chief Josep Borrell called “a massive war crime,”.

03:24 PM

Wall Street firms ordered to disclose climate change impacts

wall st

The American stock market regulator has unveiled a landmark proposal requiring US-listed companies to disclose climate-related risks and their carbon emissions.

As part of a push by Joe Biden’s administration to highlight the financial risks of climate change, the rules set out by the Securities and Exchange Commission (SEC) would mean companies have to tell investors how global warming will affect their business.

They would also require companies to disclose their own direct and indirect carbon emissions, known as Scope 1 and 2 emissions, respectively, as well as those generated by suppliers and partners, known as Scope 3 emissions, if material.

More broadly, they must disclose the “actual or likely material impacts” climate-related risks will have on the company’s business, strategy and outlook, which could include physical risks as well as new regulations such as a carbon tax.

02:59 PM

Hit Russian oil with 100pc tax, says hedge fund manager

For Europe, the biggest barrier to sanctioning Russian oil is the economic pain the continent would need to suffer. But one star hedge fund trader sees a way to soften the blow, Bloomberg reports.

Pierre Andurand, whose commodity fund made 109pc in the first three months of the year, said on Twitter that instead of banning Russian barrels outright, European governments could impose a tax of 100pc.

That way, countries that don’t find alternative supplies would buy Russian cargoes at a discount of 50pc – curtailing Russia’s revenues while tempering the squeeze global oil markets face from the loss of barrels.

Customers elsewhere like China and India could offer discounts of 45pc.

Of course, any steps to pull Russian supply from the market could benefit bulls like Andurand, who sees prices surging as high as $200 a barrel this year.

Andurand offers another mechanism for crimping Moscow’s proceeds: European buyers could pay just 30pc of the bill directly to Russia, with the remaining 70pc to be transferred to an escrow account for the reconstruction of Ukraine.

“If there is anything left, that would come back to Russia once they behave,” he tweeted.

02:45 PM

Russia bans “extremist” Facebook and Instagram

A Moscow court has banned Meta Platforms’s Facebook and Instagram in Russia, in what is the first use of the country’s sweeping law on “extremism” against a foreign technology company.

The presiding judge backed the prosecutor’s request to ban the social networks with immediate effect ruling them “extremist” organizations, alongside the likes of Islamic State and the Taliban.

The prosecutor argued that Meta’s policies were directed against Russia and its army.

A lawyer for Meta said the Russian court didn’t have the authority to rule in the case because Meta is a foreign-registered company without a domestic presence.

It marks the latest escalation against the company since President Vladimir Putin invaded Ukraine. Regulators blocked access to Facebook and Instagram earlier this month.

02:30 PM

EU leaders debate Russian oil embargo in Brussels

EU meeting

Foreign ministers from the EU are debating a possible embargo on Russian energy exports, though the bloc remains split on what action – if any – to take.

Russia’s siege and bombardment of Mariupol port, which EU foreign policy chief Josep Borrell called “a massive war crime,” is increasing pressure for action.

But targeting Russian oil, as the UK and US have done, is a divisive choice for the 27-nation EU, which relies on Russia for 40pc of its gas.

At a meeting in Brussels on Monday, some European diplomats – including those of Ireland and Lithuania – argued the EU can no longer avoid such a step. France has also said there should be “no taboos”.

However Germany and Italy, which depend on Russian gas, have warned against acting too quickly because of already high energy prices.

Sanctions on coal are a red line for countries including Germany, Poland and Denmark, diplomats told Reuters. For others, such as the Netherlands, oil is untouchable.

Moscow itself has warned that such sanctions could prompt it to close a gas pipeline to Europe.

02:23 PM

Will Russia be able to pay its debts?

Russia’s creditors are keeping a close watch on a bond payment due Monday as questions persist over whether the government will continue to meet its debt obligations in the face of stringent sanctions.

It’s one of a number of payments coming up in a busy schedule for Russia on debt issued to foreign investors.

Fears of a default eased last week after $117 million of interest started reaching international investors.

But with central bank reserves held overseas frozen, there’s ongoing speculation about how long Russia will keep servicing its debt.

The payment due Monday is a $66 million coupon on a 2029 dollar bond.

02:02 PM

‘Impossible’ for EU to kick Russian oil and gas addiction, Kremlin claims

Alexander Novak, Russia’s deputy prime minister, has claimed that oil prices could reach $300 a barrel if Russian crude is shunned by the West but claimed the scenario is unlikely anyway, according to Reuters.

Some buyers have been wary of taking Russian barrels to avoid becoming entangled in Western sanctions imposed because of the Ukraine crisis, while EU foreign ministers are today mulling an oil embargo once again.

But Novak claimed it was impossible for Europe to avoid buying Russian oil and gas for now, saying European calls to halt purchases were political gestures to attract attention.

“For now it’s impossible” for Europe to reject Russian hydrocarbons, he said. “We will see how it goes in the future.”

01:53 PM

Russian brain drain: ‘I don’t want to live in a bigger North Korea’


Not only is Russia’s economy crumbling under Western sanctions and corporate boycotts, but a crippling “brain drain” is set to starve it of growth, workers and entrepreneurs, my colleagues Tom Rees, Genevieve Holl-Allen and Andrew Quinn report today.

“There’s basically no way left to get a good income unless you’re into corruption, connections, or straight out crime,” one young person tells them.

“There’s rumours of Russia being disconnected off the internet. If that happens, I’m done with this country. I don’t want to live in a bigger North Korea.”

Read their brilliant piece in full here.

01:47 PM

French oil giant’s headquarters spray-painted over Russia links

Pressure is mounting on French firm Totalenergies over its ties to Russia as activists spray-painted its Paris headquarters.

The blue chip company, one of the world’s top oil producers, has become increasingly isolated among oil majors as it holds on to interests in Russia despite the latter’s invasion of Ukraine.

For example, Totalenergies owns a 20pc stake in state-owned Russian gas producer Novatek.

Other firms including BP and Shell are pulling out and selling their interests.

On Monday environmental activists, led by the French group “Les amis de la terre” (Friends of the Earth), said they had sprayed black paint on the glass doors at the entrance of TotalEnergie’s building in the La Defense business district:

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01:40 PM

Australian alumina ban heaps pressure on Russian metals giant

Australia’s ban on alumina exports to Russia is heaping more pressure on aluminum giant Rusal and pushing up prices of the most widely used base metal, Bloomberg reports.

Aluminium jumped and Moscow-based Rusal’s shares dropped after Australian prime minister Scott Morrison announced the immediate ban on Sunday.

Australia supplies almost 20pc of Russia’s alumina – the key ingredient for producing aluminum – and its exports of aluminum ores, including bauxite, to the country have also been prohibited.

While aluminum hasn’t been targeted by sanctions, Rusal, which needs bauxite and alumina to feed its plants, faces disruption to its supply chains as Russia becomes isolated from the world economy.

Supplies of the metal that’s used in everything from cans to airplanes to window frames were already running low before the Ukraine war threw commodity markets into turmoil.

01:28 PM

Irish minister: “Appetite” in EU for more Russia sanctions, including energy

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01:20 PM

Risk of recession rises in Germany as factory costs surge

Costs for German factories jumped at a record pace last month, raising the risk of recession even before the invasion of Ukraine sent energy prices soaring even further, my colleague Tim Wallace reports.

Producer prices rose more than a quarter in February compared to the same month in 2021, according to the Federal Statistics Office, and by 1.4pc compared to January.

Mounting energy bills powered the increase, with the price of electricity up more than two-thirds on the year, underlining the crisis facing European economies and Germany in particular as it is heavily reliant on Russian energy imports.

Aluminium rose by more than 50pc, with ferrous metals up almost as much and as other commodities also feeling the squeeze.

Fertilisers cost 70pc more in February than a year earlier, with wood and paper products up by between half and two-thirds.

Russia’s war in Ukraine is expected to worsen the situation as oil and gas prices have boomed on global markets with intense pressure on businesses and governments to cut off as much trade with the pariah state as possible.

01:14 PM

Taxpayer-owned OneWeb joins forces with Elon Musk

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01:10 PM

Delayed: Boris’ new energy strategy

Boris Johnson’s spokesman has insisted he will set out Britain’s revamped energy strategy when it is ready, thank you very much.

The Prime Minister vowed on March 16 to set out a new national strategy by this week, as Russia’s invasion of Ukraine continues to drive up energy prices.

Asked if this was still the plan or if it had been delayed, his spokesman told journalists on Monday:

This is something that it’s right to take the time to make sure we have a detailed, comprehensive strategy, and we’ll set out our plans when it’s ready but it’s something we’re working on at speed.

01:05 PM

Telegram messaging app overtakes WhatsApp in Russia


Telegram has overtaken WhatsApp to become Russia’s most popular messaging tool, according to mobile operator Megafon.

Russians have been flocking to the service as Moscow restricts some digital services.

WhatsApp parent Meta Platforms – the company that also owns Facebook – is embroiled in a Russian court case, with prosecutors seeking to label it an “extremist organisation”.

Authorities have instead actively promoted Telegram as they have banned other foreign platforms.

Megafon, one of Russia’s four main telecoms operators, said its analysis of mobile internet traffic showed that Telegram’s share had jumped to 63pc in the first two weeks of March from 48pc in the first two weeks of February.

WhatsApp’s share dropped to 32pc from 48pc.

12:48 PM

US markets expected to fall on open

US equity futures ticked lower while a selloff in bonds has gathered pace as traders braced for spiraling inflation from surging oil prices.

S&P 500 and Nasdaq 100 contracts swung from modest gains to losses Monday after the underlying indexes posted their best five-day streak since November 2020.

In premarket trading, Boeing dropped about 6pc after a China Eastern Airlines plane – a Boeing 737 – carrying 132 people crashed in southwestern China.

Nielsen Holdings shares dropped almost 18pc after it rejected an acquisition proposal from a private equity consortium.

Trading in New York is due to kick off at 9.30am (1.30pm GMT).

12:37 PM

BT challenger seeks £3.5bn for broadband upgrade to 8m homes

BT challenger CityFibre is seeking to raise more than £3.5bn to turbocharge its plans to bring faster full-fibre broadband to millions of homes, my colleague Ben Woods writes.

The network builder is understood to have hired advisers from Natwest and Societe Generale to pursue a debt deal that would underpin its efforts to upgrade 8m homes to ultra-fast speeds.

Such a move is expected to test the appetite of institutional investors when it comes to backing Britain’s broadband upgrade that has already attracted billions of pounds of investment from pension funds, sovereign wealth and private equity.

CityFibre is among a new breed of telecoms operators trying to battle the might of BT’s infrastructure builder Openreach and Virgin Media O2, which are racing to meet Boris Johnson’s pledge of upgrading 85pc of the country to gigabit speeds by 2025.

12:27 PM

Facebook owner accused of “extremism” in Russia

Nick Clegg

Facebook owner Meta Platforms could join the likes of the Taliban and Islamic State and be labelled an “extremist organisation” in Russia.

The company, which counts former UK deputy prime minister Nick Clegg as its president of global affairs, has unsuccessfully tried to get charges against it dismissed after state prosecutors went to court to ban its activities.

Russia has already banned Facebook for restricting access to Russian media while Instagram has been blocked as well.

Victoria Shagina, Meta’s lawyer, said in court that Meta was not carrying out extremist activities and stood against Russophobia, Interfax reported.

But authorities became enraged when Meta said it would allow social media users in Ukraine to post messages urging violence against Russian President Vladimir Putin and troops Moscow sent into Ukraine.

Meta later changed the guidance to prohibit calls for the death of a head of state and said its guidance should never be interpreted as condoning violence against Russians in general.

12:11 PM

European steel prices surge back to record highs

European steel prices surged back to a record as Brussels prepares to ban imports from Russia as part of more sanctions, threatening to further tighten supply, Bloomberg reports.

Benchmark rates for hot-rolled coil in northern Europe jumped 10pc to €1,435 a ton on Friday, according to weekly data from Kallanish Commodities. Prices for rebar also rose to a fresh all-time high.

New measures banning finished Russian steel products from entering the European Union are expected to take effect soon and traders have hiked prices as they brace for reduced supply.

The EU is a key market for Russian steelmakers – most of which are owned by Russian billionaires – and officials are trying to further pressure Moscow following the invasion of Ukraine.

The market was already dealing with the loss of Ukraine’s exports, normally the fifth-biggest supplier to Europe.

12:07 PM

Oil and Gas Authority’s new name reflects “evolving role”

In a full statement, the UK’s Oil and Gas Authority has explained in more detail why it is being renamed to the ‘North Sea Transition Authority’:

In 2021, the OGA revised our strategy to put net zero at the heart of our work alongside the important role of stewarding production. In March last year the North Sea Transition Deal between government and industry set out an ambitious programme for this path and the crucial role that the UK’s oil and gas industry should play.

The new name embraces this new context and our expanding role in energy transition, including as the carbon storage licence and permitting authority, monitoring of emissions, assessing a net zero test for new developments, and stewarding domestic production.

The role of oil and gas will reduce over the coming years, but they currently provide about 75pc of the UK’s energy needs and will remain an essential part of the energy mix for some time to come.

However, the government has signalled its intention to reach net zero greenhouse gas emissions by 2050 (2045 in Scotland) and the North Sea has a vital part to play in reaching that goal.

At the same time, ongoing global and geopolitical events have made it clearer than ever that security of supply remains important as the transition is achieved.

12:04 PM

What’s in a name?

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11:37 AM

Diplomats in new push for EU embargo on Russian oil and gas

EU diplomats are making a fresh push for an embargo on Russian oil and gas this week, with countries including France, Ireland and Lithuania calling for the move to be considered.

A ban on Russian energy exports has previously been vetoed by countries including Germany and Hungary, which are hugely reliant on them.

But this morning a French presidential source told Reuters there should be “no taboos” on future rounds of sanctions should Russia’s invasion of Ukraine intensify.

The bloc has already imposed a raft of punishing financial sanctions but there is division among leaders on whether to target energy – which would arguably hurt the Kremlin most.

However, the humanitarian crisis in the besieged port city of Mariupol is increasing pressure on Europe to do more.

Speaking ahead of a meeting of EU leaders, Simon Coveney, the Irish foreign minister, said: “Looking at the extent of the destruction in Ukraine right now, it’s very hard to make the case that we shouldn’t be moving in on the energy sector, particularly oil and coal.”

11:23 AM

Ukraine gas network operator “still in control”

Ukraine’s state-run gas transmission system operator said on Monday that it had full control of the network.

“The company retains operational and technological control,” it said in a statement.

Gas flows from Russia through Ukraine remain near the full booked capacity, transparency data shows.

11:19 AM

Antofagasta to exit controversial Pakistan project

Mining giant Antofagasta is to exit its contentious project in Pakistan in a $900m (£684 million) deal.

The FTSE 100 firm said it has agreed a deal with Canadian partner Barrick Gold Corp and authorities in Pakistan to end its involvement in the Reko Diq copper and gold mine project.

It comes after work at the site was suspended in 2011 due to a dispute over the legality of the licensing process.

Shares in the company rose by more than 5pc on Monday.

11:13 AM

UK, US embargo of Russian oil largely symbolic – but an EU ban would bite

A ban on buying Russian oil in Britain and the US will have little impact on Moscow because they only buy small amounts anyway, Russian state media has claimed.

Interfax quoted Russian deputy prime minister Alexander Novak Novak as saying his country is in the process of resolving logistical issues linked to its oil shipments abroad and that the country’s oil and gas production was continuing as usual despite sanctions.

But his comments come as EU countries – which buy more than half of Russia’s oil exports – are looking again at a possible oil embargo.

The foreign ministers of Lithuania and Ireland are among those pushing such a move, at the start of a week of intense diplomacy.

11:06 AM

Poland planning ramp up of defence spending

F-35 jet

The Polish government wants to amend the constitution so that it can raise defence spending, a government spokesman said on Monday.

The Defence of the Fatherland Act adopted this month says that Poland’s defence spending will increase to 3pc of GDP, which could result in exceeding budgetary thresholds enshrined in the constitution.

“The Polish army must be immediately equipped to the highest standards, therefore one of the proposed changes to the constitution will be the exclusion of expenditure on the army and armaments from the public debt threshold,” a government spokesman said.

Changes to the constitution require a two-thirds majority in the lower house of parliament and an absolute majority in the opposition-dominated Senate, so the government’s proposals need to be supported by other political parties.

10:41 AM

Germans urge oil-rich Gulf states not to “profiteer” from Ukraine war

Robert Habeck

A top German minister has urged Gulf states not to “profiteer” from Western sanctions on Russia following the invasion of Ukraine.

Speaking on a visit to the United Arab Emirates, economy minister Robert Habeck said: “I’m not asking that they join the sanctions….but I ask not to be a profiteer of European and US sanctions.”

He is visiting the region to discuss long-term energy supplies as Berlin scrambles to wean itself off Russian gas.

Earlier, on Sunday, Habeck announced a new partnership with Qatar on supplies of liquefied natural gas.

In Abu Dhabi, he said German firms would sign five memoranda of understanding concerning hydrogen research and development.

10:32 AM

Swiss told: Confiscate assets of Russian oligarchs

Switzerland must freeze the accounts of Russian oligarchs in the country and confiscate their assets, the Polish prime minister said on Monday.

Mateusz Morawiecki was speaking as he welcomed Swiss president Ignazio Cassis to Warsaw.

“They must be frozen, the assets of Russian oligarchs in Switzerland must be confiscated and I called on the president to see to it that Switzerland approaches this topic decisively,” Morawiecki told a news conference.

Cassis said Switzerland had already adopted European Union sanctions against hundreds of people, including many oligarchs.

“They cannot dispose of their assets,” he said.

In a bid to force a Russian military withdrawal from Ukraine, Western countries have imposed numerous sanctions, including freezing the Russian central bank’s assets.

10:23 AM

Fuel duty cut will still leave Sunak with tens of billions to ease cost of living crisis

Rishi Sunak’s plans to ease pain at petrol pumps by cutting fuel duty is set to cost £2.5bn – but would only represent a fraction of the possible £75bn war chest available to the Chancellor as tax revenues soar.

The Treasury is said to be mulling a 5p per litre reduction in fuel duty after prices at the pump soared to their highest level on record last week.

Fuel duty has been frozen for over a decade at 57.95p per litre but the proposed cut would cost the Chancellor around £2.5bn, my colleague Tom Rees reports.

Mr Sunak is facing mounting pressure to splash out on measures to help shield households from the fastest rise in living costs for 30 years.

10:14 AM

Zara owner hit by Spanish truck driver strikes

A Spanish truck-driver strike going on for the last week is now delaying deliveries by Inditex, the world’s largest clothing retailer.

Inditex is warning clients that buy products on its Zara website that shipments could suffer delays due to the strike.

The strike over fuel prices has been disrupting supply chains in the country.

Last week, a dairy industry trade group said that the protests had interrupted the supply of raw materials and distribution to retail chains.

German carmaker Volkswagen will also halt production Monday at its plant in the northern Spanish region of Navarra as it lacks some of the components needed due to the strike, Europa Press reported Friday.

10:11 AM

Putin warns Europe: Oil embargo will hurt you more than Americans

Kremlin spokesman Dmitry Peskov

The Kremlin on Monday said Europe would be hit hard in the event of an embargo on Russian oil but would not affect the United States.

Some European Union foreign ministers are pushing for an oil embargo as part of further sanctions against Russia, in an effort to punish Moscow over events in Ukraine.

But Dmitry Peskov, Vladimir Putin’s spokesman, pictured above, told reporters the question of any oil embargo was a very complex topic.

Meanwhile, as European leaders prepared for a summit with US President Joe Biden on Thursday, Dutch premier Mark Rutte stressed the EU could not cut itself off overnight.

“Too many refineries in the eastern and western part of Europe still completely depend on Russian oil and with gas it’s even worse”, he said after a meeting with Lithuanian President Gitanas Nauseda in Vilnius.

10:03 AM

Michael Gove attacks “cartel” of house builders

Our lead story in today’s paper, by reporter Ben Gartside, reports how Michael Gove has been further distancing himself from the “cartel” of British housing developers.

In comments likely to add to the Levelling Up Secretary’s feud with builders, he told Tory activists:

I’m not a poster boy [for developers]…I’m not particularly popular with developers at the moment because of some of the steps we’ve taken in respect of building safety and some of the other changes we want to make as well.

There are 101 changes we want to make, that we’ve essentially got a cartel of volume housebuilders who operate in a particular way, and there are all sorts of unhappy consequences.

As I mentioned, all of their incentives are essentially to swallow up virgin greenfields, rather than to think hard about regeneration.

Read the full story here.

09:59 AM

Energy giants buoy Footsie as oil price rises

The FTSE 100 rose on Monday as surging oil prices boosted shares of energy majors, although concerns about inflation and a handful of brokerage downgrades checked overall market gains.

The commodity-heavy index advanced 0.5pc, hitting its highest level in more than two weeks.

Both Shell and BP gained about 2.5pc, tracking a jump of more than $3 in Brent crude prices after news that European Union governments will consider whether to impose an oil embargo on Russia over its invasion of Ukraine.

Miners such as Glencore and Anglo American also edged higher as London aluminium prices leaped nearly 5pc after Australia banned exports of alumina and aluminium ores to Russia.

Higher commodity prices this year have driven up mining and energy stocks, which have a big weight on the FTSE 100, helping the index outperform its peers.

“This resilient performance has helped to put the UK back on the map for overseas investors looking to diversify their holdings,” said Russ Mould, investment director at AJ Bell.

09:56 AM

Are days of boozing and laddish banter over for City traders?

For decades, male City traders thought boozing and banter would win them a badge of honour.

But the finance sector is now changing, my colleague Lucy Burton argues in a comment piece today:

It is not just women who suffer from loutish behaviour which normalises sexism and turns overt abuse into a joke. Men who want to work in sectors, such as finance and insurance, should not have to feel that toxic masculinity and mindless nights’ out is their fast-track ticket to getting ahead.

There is more than one way to be a man. The hard-drinking version typically associated with lad culture isn’t the majority. Even the rugby captain who once poured vomit over his own head at university may now be ready to move on.

09:50 AM

House prices jump by nearly £6,000 in a month

House prices have hit a fresh record high, jumping by nearly £6,000 in a single month amid a rush to buy ahead of rising mortgage costs, my colleague Melissa Lawford writes for Telegraph Money.

The average British home now costs £354,564, according to property website Rightmove, marking the first time asking prices have risen above £350,000.

It came as homeowners increased their price tags by 1.7pc to an average of £5,760 in March, the largest monthly rise during spring since 2004.

Sellers are taking advantage of an extreme shortage of homes up for sale, as well as buyers rushing to purchase before rising interest rates bring an end to the era of cheap debt.

The Bank of England last week made its third consecutive increase to the Bank Rate since December, to 0.75pc.

Read the rest here.

09:46 AM

Italy’s biggest utility firm to quit Russia

Enel, Italy’s largest utility, will exit from its Russia operations in a matter of months, chief executive Francesco Starace said on Monday.

“We are on the process of selling thermal generation, this is a process we had time ago,” Starace told Bloomberg. “With regret, I think we have to fold.”

Established in 2004, Enel Russia PJSC contributes just over 1pc of the company’s overall gross operating profit.

On Friday, Starace said that Enel would reduce its exposure to Russia but wasn’t planning a full exit.

Other major energy companies, including BP, Shell and Italy’s Eni, have already announced plans to exit their investments in Russia following the invasion of Ukraine.

09:43 AM

Chinese jet crashes with 132 on board

A China Eastern Airlines plane carrying 132 people has crashed in China’s southwestern province of Guangxi, Bloomberg report.

According to FlightRadar24, flight MU5735 – a Boeing 737 plane – was traveling from Kunming to Guangzhou when radar tracking showed a sudden steep descent.

Eyewitness videos posted to social media showed a mountainous crash that sparked a fire, with flames and smoke billowing from the scene.

china flight – Twitter/@JackyAviation

China Eastern’s website, mobile app and some of its social media platforms were turned to black and white in a sign of mourning.

The crash was confirmed by the Civil Aviation Administration of China, which said there were 123 passengers and nine crew members on board.

China Eastern lost contact with the aircraft over Wuzhou, CAAC said. China’s aviation regulator said it has initiated its emergency response and dispatched a working group to the scene.

Representatives for China Eastern and Boeing weren’t immediately available for comment.

Shares of Boeing fell 6.8pc to $179.97 in pre-market U.S. trading.

09:29 AM

Russia facing more debt default tests

Russia’s ability to stave off default will be tested again today as it faces the first of several deadlines for debt payments worth more than $2.6bn (£1.97bn).

Moscow narrowly avoided its first external bond default – when a country cannot or will not pay back national debts – in more than a century as it began making payments of $117m on two dollar bonds last week.

But the pressure will ramp up further from Monday – the deadline for a fresh $66m debt interest payment.

It is the first of multiple due this month which are worth a total $615m, before Russia then faces a $2bn bond payment on April 4.

09:17 AM

Moscow airport furloughs 7,000 staff as Russia sanctions bite

Moscow’s biggest airport has put around 7,000 employees on furlough and slashed their pay in a sign that Russia is preparing for a prolonged period of international isolation, my colleague Simon Foy writes.

Sheremetyevo Airport, which was the country’s busiest international transport hub prior to the invasion of Ukraine, furloughed 40pc of its staff last week and cut their pay by a third, according to local media reports.

Mikhail Vasilenko, the airport’s general director, wrote to staff saying the decision was “out of the control of the employer and employees” and connected to the “critical decrease in passenger traffic” triggered by Western sanctions, the reports said.

Mr Vasilenko did not specify when the furlough period would end, heightening speculation that the airport was preparing for months of disruption.

It comes after Western countries, including the UK, US and EU, imposed a slew of harsh sanctions against the Kremlin following its invasion of Ukraine, including closing their airspace to Russian-owned and Russian-registered aircraft.

This has resulted in Russia only having permission to operate direct flights to a handful of countries, such as Belarus, Serbia and the United Arab Emirates.

Before furloughing staff, Sheremetyevo had already mothballed two terminals at the airport since the outbreak of the war.

09:06 AM

“Gung ho” Boris to hold meeting with nuclear bosses

Boris Johnson is expected to meet nuclear industry bosses today as he seeks to rally investment in new UK projects.

The Prime Minister, who according to the Financial Times is “gung ho” for nuclear power, is set to host a roundtable event to discuss how to build a new generation of plants more quickly and cheaply.

Nuclear power forms a key pillar of the Government’s strategy to reach “net zero” carbon emissions by 2050, as it provides a stable baseload of energy to complement intermittent renewable sources such as wind and solar.

However, in recent decades the proportion of energy generated by nuclear power has fallen in Britain.

Kwasi Kwarteng, the Business Secretary, has said that has to change for the country to hit green targets.

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08:54 AM

Elsewhere, Hong Kong to ease draconian travel restrictions next month

hong kong – REUTERS/Tyrone Siu

Hong Kong has said it will relax anti-Covid-19 measures in April, lifting a ban on flights from nine countries including Britain, reducing quarantine for international arrivals and reopening schools.

The moves, announced on Monday by chief executive Carrie Lam, come after a backlash from businesses and residents who see the rest of the world shifting to “living with the virus”.

Residents in the Chinese ruled territory have become increasingly frustrated with the stringent measures, many of which have been in place for over two years.

A ban on flights from Australia, Britain, Canada, France, India, Nepal, Pakistan, Philippines and the United States will be lifted from April 1.

Meanwhile, hotel quarantine for arrivals could be cut to seven days from 14 if residents tested negative, and schools are set to resume face-to-face classes from April 19.

Hong Kong’s border has effectively been shut since 2020, with businesses and the city’s economy left reeling from widespread closures.

08:46 AM

North Sea oil and gas regulator tees up new licensing round

The UK is preparing to issue the first new North Sea drilling licences since 2020 as ministers scramble to firm up energy supplies that have been disrupted by Russia’s invasion of Ukraine.

According to the Financial Times, the Oil and Gas authority is teeing up a new licensing round, having previously put them on hold to devise a new framework that would incorporate climate targets.

Andy Samuel, the regulator’s boss, said drilling licences for existing discoveries were now “pretty much ready to go”.

Boris Johnson has backed increasing domestic production of oil and gas as a way of reducing dependence on foreign imports.

But it is likely to spark a fresh row with green campaigners, who have called for no new fossil fuel extraction to be commenced.

08:34 AM

Saudi Aramco reports $110bn profit, pledges to boost

Saudi Arabia’s state oil company Aramco pledged on Sunday to hike investments by around 50pc this year as it reported a $110bn annual profit, Reuters reports.

Under pressure from the West to boost output amid soaring prices, Aramco said it would boost capital spending from $31.9bn to $40-50bn this year.

Asked if the company would pump more oil to fill gaps in the market left by the war in Ukraine, chief executive Amin Nasser said:

We recognise energy security is paramount for billions of people around the world, which is why we continue to make progress on increasing our crude oil production capacity, executing our gas expansion programme and increasing our liquids to chemicals capacity.

The company has said it plans to raise its crude oil “maximum sustainable capacity” to 13 million barrels a day by 2027, and wants to increase gas production by more than 50pc by 2030.

It produced about 12.3 million barrels of oil per day last year.

08:27 AM

As oil price rises, Chancellor eyes cut to fuel duty

Rishi Sunak – Kirsty O’Connor/PA Wire

As the rising oil price puts upwards pressure on petrol forecourt prices – already at record highs – Rishi Sunak is eyeing a cut in fuel duty, our correspondents Charles Hymas and Tony Diver write today.

Expectations that the levy could be reduced by 5p a litre have been raised ahead of the forthcoming Spring Statement after the Chancellor pledged to “stand by” hard-pressed householders facing “prohibitively expensive” petrol prices.

Such a move is also said to have the backing of Boris Johnson, who “pushing” for a cut for motorists.

Mr Sunak told the BBC’s Sunday Morning programme: “We recognise the importance of people being able to fill their cars up, and that not being prohibitively expensive.”

08:20 AM

How would the West cope without Russian oil?

Global markets could be denied 2.5 million barrels a day of Russian oil starting in April as sanctions take hold and buyers shun Russian supplies, the International Energy Agency (IEA) recently warned.

Another 500,000 barrels a day may be “shut in”, or kept back despite supplies being available.

The agency said a move by its member countries to release 63m million barrels from emergency stocks would initially provide a buffer for markets but these could not address long-term supply issues.

Only Saudi Arabia and the United Arab Emirates, two members of the Opec cartel, have the spare capacity to offset the potential supply shortfall markets are facing.

But for now they are sticking to only modest production increases agreed by Opec.

Boris Johnson recently visited the region to try and persuade the Saudis to turn on the taps, but came away empty-handed.

08:12 AM

Frances pushes for “no taboos” on Russia sanctions

France is among EU countries pushing for “no taboos” when it comes to Russian sanctions, as the bloc continues to weigh up an embargo on the country’s oil.

President Emmanuel Macron has said that if the situation worsens in Ukraine – where thousands have been killed, over 5 million have been displaced and cities devastated by shelling – then no measures should be ruled out, according to Reuters.

For example, a Russian chemical weapons attack in Ukraine or heavy bombardment of the capital Kyiv, could be a trigger for an oil embargo, adding to a panopoly of already-punishing financial sanctions.

Reuters quotes a French presidency official saying:

These sanctions are meant to force President Putin into a new calculation. Among our partners and among the countries trading with Russia, there are some who are more sensitive on the issue of oil and gas. Nevertheless, the president (has) said, there is no taboo.

Moscow has warned that EU sanctions on Russian oil could prompt it to close a major gas pipeline to Europe. The EU relies on Russia for 40pc of its gas, with Germany among the most dependent of the EU’s large economies.

Germany is also the largest EU buyer of Russian crude and has spoken against imposing an embargo.

All EU sanctions decisions require consensus but France, which heads the EU’s six-month presidency, will likely prove crucial.

08:05 AM

Ukraine war sends oil rising for third day as Chancellor mulls cut to fuel duty

Good morning.

Oil prices are climbing for the third session in a row as EU countries continue to weigh an embargo on Russian supplies ahead of a meeting with US President Joe Biden.

With the Ukraine conflict showing little sign of easing, brent crude rose by more than 3pc to about $111 per barrel on Monday as traders bet that the market would continue to stay tight.

It comes as a cut in fuel duty has been signalled by Boris Johnson and Rishi Sunak, as they seek to ease the cost of living crisis facing families in the Spring Statement.

It comes as EU governments are considering an oil embargo on Russia its invasion of Ukraine, on top of a punishing collection of sanctions already imposed.

They had previously backed away from such a move but Baltic countries including Lithuania are still pushing for it, according to Reuters. Biden is due to arrive in Brussels for a Nato summit on Thursday.

5 things to start your day

1) Gove attacks ‘cartel’ of big property developers The Levelling Up Secretary opened a new front in his war with housebuilders amid a row over building safety.

2) M&S chairman warns of price rises Retailer’s chairman says clothes and food will become more expensive after the war in Ukraine pushed up energy costs.

3) Chancellor breaks with Cabinet colleagues in P&O freeports row Rishi Sunak says involvement of ferry company’s Dubai-based parent is separate to furore over sackings.

4) Go-Ahead expected to retain Govia Thameslink rail line Joint venture likely to continue running Britain’s biggest rail franchise despite being booted off Southeastern and £26m fine

5) Russia facing fresh debt default test Despite making payments last week, Moscow still has $40bn of bonds outstanding and key payments are approaching.

What happened overnight

Asian share markets started the week in a sober mood on Monday as fighting in Ukraine raged on with no sign of stopping, leaving investors clutching at hopes for an eventual peace deal.

Investors were also anxiously waiting to see if Russia would meet more interest repayments this week. It must pay $615 million in coupons this month while on April 4, a $2 billion bond is due.

Trade was sluggish with Japan on holiday, leaving S&P 500 stock futures down 0.3pc and Nasdaq futures 0.4pc. EUROSTOXX 50 futures dipped 0.1pc and FTSE futures edged up 0.1pc.

MSCI’s broadest index of Asia-Pacific shares outside Japan was flat. Japan’s Nikkei was shut, but futures traded around 200 points above the cash close.

Chinese blue chips firmed 0.1pc, with investors waiting on further details of possible stimulus from Beijing.

Coming up today

Corporate: Photo-Me International, Raven Property Group (full-year results); SThree (trading statement)

Economics: Producer price inflation (Germany)

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