How sanctions are impacting Russia’s energy sector

With the price of crude oil and natural gas reaching near-record levels and the possibility of more sanctions we take a closer look at Russia's energy sector and a wider view of what is happening on the ground. NewsHour Special Correspondent Ryan Chilcote reports from Moscow.

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  • Judy Woodruff:

    And for more not only on Russia's energy sector and the possibility of sanctions, but on the wider view from Moscow, let's turn now to special correspondent Ryan Chilcote, who is in the Russian capital.

    So, Ryan, hello.

    We are hearing more and more talk here in the west of an embargo on Russian oil. You have looked into this. What could that mean for the world and for Russia?

  • Ryan Chilcote:

    Well, I think we saw the answer to that in part on the markets today. So we saw the price of oil go to almost $140 a barrel for Brent. That is the benchmark for oil around the world.

    You know, just a month or two ago, people were questioning whether oil would go through $100 a barrel. And here we are, an extraordinary increase in price. And you and I were talking about this on Friday. If Russia is unable to export its, let's say, 7.5 million barrels, when you take in all the various kinds of crude products, that doesn't necessarily mean that, if it can't, let's say, export that to the United States and Europe, that it couldn't export it elsewhere.

    What the market told us today is, it doesn't think it can. It thinks that much oil is going to stave off the market, or at least a portion of that oil. Remember, NATO countries buy about half of those 7.5 million barrels, and so less oil on the market, higher price.

    So all we saw was people on the market today basically trying to predict the future, and it looked pretty bleak when it comes to energy prices.

    Inside Russia, kind of the same story. The ruble plummeted. We went — well, basically the ruble lost almost — has lost almost 100 percent, if you can imagine, of its value since the beginning of the year. It went at one point down to 170 rubles today. Came back to 130 to the dollar.

    That is people here in Russia, traders saying, hey, we're not sure we're going to be able to sell those barrels of oil abroad. That is bad news for the Russian economy. What it means for Russians is that everything they have to buy from outside of the country is now going to cost that much more.

    In other words, goods that, let's say, cost 100 rubles just a month ago are now going to cost 200 rubles. In other words, you have got 100 percent inflation in just a matter of a couple of weeks.

  • Judy Woodruff:

    Dramatic, dramatic changes.

    Ryan, let me turn you back to the battlefront. Now, today was scheduled the third round of talks between the Ukrainians and the Russians. What do we know about what has come out of those talks?

  • Ryan Chilcote:

    Well, they made a little bit of progress, hopefully, on humanitarian corridors out of some of these conflict zones.

    But, as you know, Judy, that has not been easy-going. Big picture, though, very little progress made. We heard from the Kremlin today that this, as they call it here in Russia, special military operation in Ukraine will end the moment that the Ukrainians agree to recognize Crimea and the two separatist republics in the east of the country, agree not to join NATO and effectively put down their arms and stop fighting.

    And those are, quite simply — or at least have been — nonstarters for the Ukrainians.

  • Judy Woodruff:

    And, finally, Ryan, I know you are talking to folks every day. You are there in Moscow.

    What is your sense of what ordinary Russian citizens think about what is going on in Ukraine?

  • Ryan Chilcote:

    I think you have got a really divided society here.

    Sunday, we had the single largest number of arrests in any day in Russian history, people turning out to protest, and almost immediately getting arrested. They are obviously against what is going on in Ukraine.

    On the other hand, tomorrow is a holiday here. It is International Women's Day. There's people out in the streets everywhere. You know, if they're concerned about what is going on in the Ukraine, you certainly can't tell it. The restaurants are packed. People seem to be, to a large extent, ignoring this, for whatever reason.

    Maybe they don't think that they can change what is going on. Maybe they support it. Maybe they believe what they have been hearing about what's going on in Ukraine. There could be a number of reasons.

    But it's not as if everyone is against what is happening in Ukraine. There actually appears to be a significant amount of apathy or support.

  • Judy Woodruff:

    No doubt all that connected to how much they know, how much they have been allowed to know about what is going on.

    Ryan Chilcote reporting for us from Moscow.

    Thank you, Ryan.

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