The UK, Russia And The Effect On Business
Over the last few days we have seen a major escalation in the war or words between the UK authorities and Russian President Mr Putin. Not only have we recently seen a tit for tat ejection of foreign diplomats from each country, but it appears that UK business will not be well received in Russia in the future.
There is speculation that rather than hit the UK with heavy sanctions and risk a fall out with the rest of world, the Russian authorities are looking to hit UK businesses in Russia. The likes of BP have already seen their standing in the country reduced with a number of “deals†forced upon them by the authorities who are slowly working their way back to the old style of government. While foreign investment was vital in rebuilding the old Russia, now that the situation has improved it seems that foreign investment is no longer required.
While many may not be aware, Russia has control of some of the worlds largest gas pipe lines, some of which flow into the European pool, and then on into the UK. Last year there were actions by the Russian authorities which saw many gas pipes closed down until new pricing structures could be agreed - i.e. an increase in the cost to overseas countries.
There is speculation that the Russian authorities may well repeat such a move later this year, effectively holding the European market to ransom, with an inevitable further increase in the cost of gas.
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