Stimulus Check Up | Sep 1, 2022 | 0
Shell says it will quit purchasing oil and gas from Russia.
Shell, Europe’s largest oil company, said Tuesday it would begin withdrawing from its involvement “in all Russian hydrocarbons,” including an immediate halt to all spot purchases of Russian crude and the shuttering of its service stations in the country.
The announcement comes just days after Shell was criticized for purchasing a tanker of Russian crude at a sharp discount. The company had said it was forced to make the purchase because it was unable to find alternative sources of oil for its customers, and that it would donate profits from the purchase to humanitarian causes.
The decision to purchase the fuel “was not the right one and we are sorry,” Ben van Beurden, the chief executive of Shell, said in a statement on Tuesday.
Shell’s announcement ratchets up the exit of Western oil companies from Russia. Last week, several of them, including Shell, said they would leave major investments in the Russian oil industry. But spurning Russia’s oil and gas — the country produces one in 10 barrels of oil globally and provides about one third of the European Union’s natural gas — will put a strain on alternate sources of both fuels, and inevitably push prices higher.
Shell said it could take several weeks to change its crude oil supply chain to cut out Russian volumes. But the process of shutting the service stations and quitting aviation fuel sales in Russia would begin immediately, the company said.
The move goes beyond the company’s recent announcements that it would exit the Nord Stream 2 pipeline project and exit its joint ventures with Gazprom, the Russian natural gas company. The German government said in February that it would halt the certification of the natural gas pipeline.
Shell said on Tuesday that it would begin the phased withdrawal from Russian petroleum products, pipeline gas and liquefied natural gas, but the process is a “complex challenge” that will also require actions from governments and customers. It would take even longer to transition to other energy supplies, Shell said.
“These societal challenges highlight the dilemma between putting pressure on the Russian government over its atrocities in Ukraine and ensuring stable, secure energy supplies across Europe,” Mr. van Beurden said in the statement. “But ultimately, it is for governments to decide on the incredibly difficult trade-offs that must be made during the war in Ukraine.”
BEIJING — American companies are increasingly worried about coronavirus restrictions, regulatory issues and trade tensions with China, but have been cautious so far about moving production elsewhere, new figures show.
American companies in China are as worried now about bilateral relations between the United States and China as they were when President Donald J. Trump’s trade war peaked in 2019, according to an annual survey released on Tuesday by the American Chamber of Commerce in China. A brief “Biden bump” in sentiment, when relations seemed like they might improve after President Biden’s inauguration a year ago, has disappeared, the chamber found.
China’s stringent measures to prevent the coronavirus from spreading have caused three-quarters of American companies to have trouble getting expatriates into China to run their operations, according to the survey. China has halted almost all international flights, cut back sharply on business visas, nearly halted dependent visas and mandated three-week quarantines for overseas arrivals in sometimes grimy facilities with few amenities.
But those difficulties have not translated into any rush for the exits. Exactly the same share of the chamber’s members, 83 percent, has said in each of the past three annual surveys that they have no plans to relocate operations to other countries.
The one exception seems to be the tech sector, which is very heavily reliant on China as the world’s dominant manufacturer of electronics. Some companies have been giving more contracts to factories elsewhere, and sometimes building new factories, even as they continue to rely mainly on China.
“They’re making duplicative investments in other parts of the world in order to manage the risk and uncertainty,” said Alan Beebe, the president of the American Chamber. The group’s survey was conducted late last autumn, long before the Russian invasion of Ukraine.
Instrumental, an American company that provides remote monitoring of assembly lines to a wide range of electronics companies, has found a sharp decline in the past two years in the share of new electronics manufacturing contracts awarded by multinationals to Chinese factories. These factories obtained 46 percent of new contracts last year, compared with 66 percent in 2019, before the pandemic began, said Anna-Katrina Shedletsky, Instrumental’s founder and chief executive.
The main winners have been Taiwan and Southeast Asian nations, as companies have become increasingly concerned that coronavirus travel restrictions are preventing them from seeing firsthand what is happening on factory floors in China, she said. Factories in North America, particularly Mexico, have gained a handful of contracts, but not enough for the change to be statistically significant, she added.
ZURICH — Swiss officials were applauded last week when they broke with the country’s tradition of neutrality by joining the United States, the European Union and others in imposing sanctions on Russia for its invasion of Ukraine. But there was a large loophole in the joint effort.
Switzerland is one of the world’s major hubs for trading commodities, and the government estimates 80 percent of Russia’s raw material and resources, such as oil, metals and grains, are traded in Switzerland, making the Alpine nation central to the sale of Russian exports.
Although the country closely adopted the European Union’s sanctions on banking and trade, commodities trading has been allowed to continue. It’s a significant industry in Switzerland, employing around 10,000 people and accounting for over 4 percent of its economy, according to the State Secretariat for Economic Affairs.
Major commodity and energy trading companies including Glencore, Gunvor and Mercuria have their headquarters in Geneva and the city of Zug. Rivals, like Singapore-based Trafigura, have major offices in Switzerland.
Trafigura was in the spotlight last weekend because, according to S&P Global Commodity Insights, it sold Shell a cargo of Russian crude oil at a sharp discount. The sale did not appear to violate any sanctions, but criticism was hurled at Shell after it said last week that it was pulling its energy business out of Russia.
Shell later said it had made a “difficult decision” to buy the Russian oil because alternative sources would not have arrived in time to serve its customers, and it said profits from the purchase would go toward humanitarian efforts to help the people of Ukraine. “We have been in intense talks with governments and continue to follow their guidance,” Shell said Saturday.
News of the Shell deal came amid mounting calls to increase the regulation of Switzerland’s commodities traders and introduce a supervisory authority that could monitor the placement of sanctions.
Oliver Classen, spokesman for Public Eye, a nonprofit campaigning for greater oversight of the commodities market, said that trading occurred in Switzerland with “mild to no regulation,” making it hard to know who the people were behind the companies involved in the trades and deals. “It is a black box,” he said.
Besides monitoring compliance with sanctions, a supervisory authority could help mitigate other concerns, such as human rights abuses, environmental violations and corruption — three issues the industry is often associated with, Mr. Classen said.
But while Russia’s commodities trading is permitted to continue, Swiss bankers and lenders have essentially already curtailed it.
“Some banks are not willing to finance trade with Russia at the moment,” said Florence Schurch, secretary general of the Swiss Trade and Shipping Association.
Commodity trading is a capital-intensive industry, relying heavily on financing to make deals happen. Ms. Schurch said banks’ restrictions had made it difficult for trading companies to open new trades involving commodities from Russia. Last week traders shunned Russian oil, fearing they would get ensnared in the Western sanctions.
“At the moment there is undoubtedly huge reputational damage connected with being seen doing business with Russia,” said Giacomo Luciani, an energy economist who teaches at the University of Geneva. He said the country’s trading sector was undergoing a quick undoing of a network of ties with Russia that started in the 1970s.
In addition to oil and gas, Russia is a major supplier of commodities including metals, such as aluminum, and grains. With Ukraine, the two countries account for over a quarter of global wheat exports, provoking fears of supply issues.
Elisabeth Bürgi Bonanomi, a commodities trading expert at the University of Bern,
said it was too early to say what impact the conflict would have over Switzerland’s sector, but she expected some of the trade with Russian commodities to move to a different international hub, such as Dubai. And she said Russian banks that had been barred from using the SWIFT global financial messaging system might turn to Chinese alternatives.
“At the moment, the cards are being reshuffled,” she said.
This interview is part of our latest Women and Leadership special report, which highlights women making significant contributions to the major stories unfolding in the world today. The conversation has been edited and condensed.
Jill Hazelbaker, 40, a former political spokeswoman, is the senior vice president of marketing and public affairs for Uber.
You joined Uber in 2015 when it was under scrutiny for a workplace culture where sexual harassment against women and discrimination were said to be common. Did that factor into the release of Uber’s first Safety Report in 2019 addressing incidents of sexual assaults and other safety issues on rides?
There is no question that things happened in the company that were not OK. We needed to get our house in order internally and then fix it externally. I took it as an opportunity to try to make a profound impact.
Can you explain the report’s methodology?
We examined data from 2017 and 2018, when an average of 3.1 million trips took place daily in the U.S. We looked at serious safety incidents reported on the platform from riders and drivers, including significant crashes, sexual assaults and physical assaults. And we also collaborated with outside experts and third-party organizations.
The report revealed that Uber is safe, and statistically speaking, incidents are rare: 99.9 percent of Uber trips ended without any safety-related issue, and 0.0003 percent of trips had a report of a critical safety incident.
But even one incident is too many, so it was about what new approaches we could take.
And what were some of those approaches?
One of the big issues is confirming who your driver is, so Verify Your Ride allows riders to verify each ride with a four-digit PIN that they verbally provide to their driver, who must enter it into their own app in order to start the trip. We also have an In App Emergency Button that connects riders and drivers to 911. In some cities, trip details and location can be shared automatically with first responders, or riders and drivers can send a text message to 911.
Another feature is Share My Trip, where riders and drivers can share with family members or friends who can follow their journey in real time and know when they’ve arrived.
You have said that you are going to update the report. Can you be more specific about when?
We’ve committed to releasing Safety Reports every two years. We rely on data from the federal government, which has been delayed but is expected to be released soon. Once that data is released, we’ll finalize and issue our next report, likely this spring.
You also said you would seek a way to share the names of drivers who were accused of rape with competitors, so that they don’t merely move to another hailing service.
Yes, since the report was released, we launched the Industry Sharing Safety Program. This enables companies to exchange basic information about drivers and delivery people who have been deactivated for serious safety incidents to help prevent these individuals from operating on another platform.
You’ve steered Uber through growth, challenging moments and one of the largest tech initial public offerings in history (in May 2019). What is the biggest challenge you see for Uber?
I think a major challenge and opportunity is to meaningfully improve the status quo for people who work on platforms like ours. Today, Uber is one of the largest sources of work — of any kind — in the world. From 2016 to 2021, more than 31 million people earned $177 billion on Uber, drawn by the independence and flexibility of the work.
That kind of flexibility is something more people have come to appreciate during the pandemic, but drivers and couriers have always understood that being independent shouldn’t mean being on your own. That’s why our policy teams across the world are fighting for a better deal for gig economy workers; you can still be independent, but you also get benefits and protections.
We’ve made a lot of progress, but it’s going to take time. Ultimately, I believe we’ll succeed because it’s what the drivers and delivery people themselves tell us that they want.
How important are Uber Eats and Uber’s other services?
Pre-pandemic, our delivery business was growing at a healthy rate but was still very much the “little sibling” to our mobility business. As Covid hit, and people stopped moving around their cities, we really leaned in, and Uber Eats became even larger than our global mobility business was before the pandemic began. Now we’re leaning in again to transform delivery into other categories such as grocery, convenience, alcohol, pharmacy and more.
Before Uber, you had a career in politics in which you served as the press secretary to Mayor Michael R. Bloomberg of New York and as the national communications director for Senator John McCain’s presidential campaign. You also worked for Google and Snap. What do you think attracts you to politics and aggressive business environments?
I like being at the center of the action because that’s where the impact is — and that’s where change is born. It’s easy to criticize from the sidelines, but it’s no substitute for getting in the game yourself.
What is your advice to women who might choose your path and pursue high-stakes jobs?
Be easy on yourself. And do the things that bring you joy. These are hard jobs that require great energy and focus. You’re not going to get it right 100 percent of the time, and if you can’t laugh along the way, you’ll drive yourself absolutely crazy.
As a parent of three children under the age of 6, you’ve advocated for women in tech. What advice do you give to mothers who want to take on leadership roles?
In my time at Uber, I’ve had six rounds of [fertility treatments] and three children. My family and my career bring me immense joy, but I’m not going to pretend that at points it hasn’t been unbelievably hard. We’ve glamorized this idea of “having it all” when, I think, we should be much more transparent about the reality: “Balance” requires a lot of support and is often elusive.