Key Takeaways:
- Russian Ruble tumbles alongside Gazprom stock.
- The currency has a history of dropping amid Kremlin-initiated conflicts.
- Is US winning the energy war?
YEREVAN (CoinChapter.com) – Russian ruble and in-house stocks continue to deteriorate as the war in Ukraine rages on. After a turbulent week, the ruble slumped to $0.015, a possible support line for the currency.
Rouble Doesn’t Do Well in Conflicts
Meanwhile, as CoinChapter reported at the start of the war, the RUB/USD exchange rate has a history of reflecting Russia’s involvement in international conflicts. The chart below shows that the Ruble plunged three times in the previous two decades. The 2008 conflict in Georgia slashed 32% off the ruble value, while the first Ukrainian conflict in 2014 cut the RUB/USD rate in half.
Dmitry Polevoy, head of investment at Locko Invest, commented on the matter. He asserted that the rouble’s weakening “may have been facilitated by the conversion of bond payments into foreign currency and geopolitical news.”
According to recent news, Russia initiated bombed the capital, Kyiv, and other cities, as a response to the attack on the Crimea bridge. Meanwhile, Kremlin’s actions dug a deeper hole not only for the Ruble but for vital stocks as well.
Gazprom Pays The Price
For example, Russian multinational energy corporation Gazprom (GAZP) saw its stock crumble over 20%, which led the Moscow Exchange to stage a discrete auction of the energy giant’s shares. However, as GAZP tumbled lower, another big player in the market developed an erratic inverse correlation with its Russian counterpart.
According to Forbes, the US was poised to become the world’s leading Liquified Natural Gas (LNG) exporter by the year’s end, which seems to have played out. For example, Cheniere Energy, Inc., an LNG company headquartered in Houston, Texas, benefitted from the European energy crisis greatly.
In February 2016, it became the first US company to export liquefied natural gas. In 2018, it was a Fortune 500 company. And in 2022, the company’s shares (ticker: LNG) soared against Gazprom right after the war in Ukraine started.
Another American energy giant Exxon Mobil Corporation (XOM), with a market value north of $290 billion, rose alongside Cheniere stocks.
Also read: Credit Suisse will buy back $3 billion in debt amid talks of a Lehman Brothers-like crash.
What About the Energy Bills?
As the world plunges deeper into a war between the West and Russia, the US seems to win the veiled conflict of energy interests. Energy prices have soared across the globe. And while the big fish eat each other, the small fish are stuck paying the quadrupled bills.
Ben van Beurden, the CEO of British multinational oil and gas company Shell, proposed to tax the rich to solve that problem.
One way or another, there needs to be government intervention… that somehow results in protecting the poorest. And that probably means governments need to tax people in this room [of energy companies] to pay for it – I think we just have to accept [that] as a societal reality.
said the executive.
