As the European Union steps up its response to Russian president Vladimir Putin’s annexation of Crimea, German companies are urging caution lest sanctions harm their business ties -- and Europe’s shaky economic recovery.
Unprecedented natural gas reserves in Europe, record global grain output and the threat of mutual economic calamity from oil sanctions are cushioning commodity prices even as the Ukraine-Russia conflict spurs a gold rally.
Saipem SpA, Italy’s largest oil- service provider, rose the most in a week in Milan trading after signing a 2 billion-euro ($2.8 billion) contract to build the first link in the South Stream natural gas pipeline to Europe.
Vladimir Putin’s play to wrest control of Ukraine is accentuating divisions in the European Union over how to balance climate and energy policies, driving a wedge between Germany and its eastern neighbor Poland.
Europe’s biggest stockpiles of natural gas since at least 2009 are damping the threat of any potential disruptions in supplies from Ukraine, the main transit route of Russian fuel to consumers in the west.
Nord Stream AG expects to start formal talks with banks “shortly” on borrowing 2.5 billion euros ($3.2 billion) for the expansion of a gas pipeline under the Baltic Sea to Germany, after delays this year.