Wall Street had its biggest drop in more than a year Monday as another leap for oil prices threatened to squeeze inflation’s grip on the global economy. 

The S&P 500 fell 3%, its biggest decline in 16 months, after a barrel of U.S. oil surged to $130 overnight on the possibility the U.S. could bar imports from Russia. Stocks around the world also fell earlier in the day, taking their cue from oil’s movements. 

The benchmark S&P 500 fell 122.78 points to 4,201.09. The Dow Jones Industrial Average fell 797.42 points, or 2.4%, to 32,817.38. 

The Nasdaq composite slid 482.48 points, or 3.6%, to 12,830.96. The tech-heavy index is now 20.1% below its record set in November. Such a decline means the index is now in what Wall Street calls a bear market. The S&P 500 is down a more modest 12.4% from the peak it set in early January. 

Gold and a measure of nervousness on Wall Street also rose, though not by quite as much as when oil prices hit their peak. The price of gold briefly rose above $2,000 an ounce before settling at $1,995.90, up 1.5%. 

“This could be something that drags on for a while as the tensions in Ukraine persist, as oil prices remain elevated,” said Sam Stovall, chief investment strategist at CFRA. “The higher and longer oil prices stay elevated, the greater the eroding impact that they will have on economic growth.” 

Oil prices have soared recently on worries that Russia’s invasion of Ukraine will upend already tight supplies. Russia is one of the world’s largest energy producers, and oil prices were already high before the attack because the global economy is demanding more fuel following its coronavirus-caused shutdown. 

U.S. House Speaker Nancy Pelosi said in a letter to her colleagues on Sunday that “the House is currently exploring strong legislation” to further isolate Russia because of its attack on Ukraine. That could include a ban on imports of Russian oil and energy products, she said. 

It’s a major step that the U.S. government has not yet taken, despite a long list of moves to punish Russia, as the White House has said it hopes to limit disruptions to oil markets. It wants to limit price jumps at the gasoline pump. 

Reports also said U.S. officials may be considering easing sanctions against Venezuela. That potentially could free up more crude oil and ease concerns about reduced supplies from Russia. 

A gallon of regular already costs an average of $4.065 across the country after breaching the $4 barrier on Sunday for the first time since 2008. A month ago, a gallon averaged $3.441, according to AAA. 

A barrel of U.S. crude oil settled at $119.40 per barrel, up 3.2%, after earlier touching $130.50. Brent crude, the international standard, settled at $123.21 per barrel, up 4.3%, after earlier topping $139. 

Meanwhile, smaller company stocks also fell sharply. The Russell 2000 index fell 49.57 points, or 2.5%, to 1,951.33. 

Markets worldwide have swung wildly recently on worries about how high prices for oil, wheat and other commodities produced in the region will go because of Russia’s invasion, inflaming the world’s already high inflation. In the United States, prices for consumers jumped last month from their year-ago level at the fastest rate in four decades. 

The conflict in Ukraine also threatens the food supply in some regions, including Europe, Africa and Asia, which rely on the vast, fertile farmlands of the Black Sea region, known as the “breadbasket of the world.” 

The war puts extra pressure on central banks around the world, with the Federal Reserve on course to raise interest rates later this month for the first time since 2018. Higher rates slow the economy, which hopefully will help rein in high inflation. But if the Fed raises rates too high, it risks forcing the economy into a recession. 

“Their reaction to geopolitics can’t really be measured, so there’s uncertainty around that,” said Sameer Samana, senior global market strategist at Wells Fargo Investment Institute. 

Some investors have seen the war in Ukraine as potentially pushing the Fed to go easier on rate increases. Investors love low rates because they tend to boost prices for stocks and all kinds of markets. 

But that may not necessarily be the case this time, Goldman Sachs economists wrote in a report. With prices for oil, wheat and other commodities potentially rising even more, the threat is higher for sustained, high inflation to settle on the economy. That could flip the Fed’s traditional playbook. 

“After several decades in which economic, financial, or political shocks invariably caused interest rates to fall, markets may have to relearn that the opposite can also be true,” Goldman Sachs economist Jan Hatzius wrote. 

Beyond sanctions brought on Russia by governments because of its invasion of Ukraine, companies are also levying their own punishments. The list of companies exiting Russia has grown to include Mastercard, Visa and American Express, as well as Netflix. 

The value of the Russian ruble continued to slide amid all the financial pressure, falling 12% to 0.7 cents. 

Treasury yields climbed. The 10-year yield rose to 1.78% from 1.72%. 

 
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Chocolate makers are expected to raise prices this year due to higher costs of cocoa from exporters like Ivory Coast, the world’s largest cocoa producer.

Hershey, the largest producer of chocolate products in the United States, said last month it will raise prices on its products across the board due to the rising cost of ingredients.   

Meanwhile, chocolate makers like Dana Mroueh said they are seeing cocoa prices rise in Ivory Coast, the world’s biggest cocoa producer.  

“We’ve noticed the price of cocoa is going up these few years, especially organic cocoa. So, from the beginning to today, those five years, we can say the price has risen 20 percent,” Mroueh said.  

Demand for chocolate in America increased during the COVID-19 pandemic, and cocoa producers in Ivory Coast are struggling to keep up with that demand.   

Experts say one reason is the impact of climate change.  

Harvard University says that by 2030, parts of West Africa will be too hot and dry to adequately produce cocoa. The West African countries of Ghana and Ivory Coast alone produce 70 percent of global supply.  

Cocoa farmer Raphael Konan Kouassi took VOA to his plantation, a shady orchard where fat green and yellow cocoa pods hung from tree trunks. He said trees are yielding less due to rising temperatures and poor rains.  

“Almost all of the young plants die in the high season. If you have not been able to get water to them, you have no cocoa,” he said.  

Kouassi receives government assistance in the form of cocoa trees, which are more resilient to the fluctuations of climate change, but he said government distributions happen at the wrong time of year for the saplings to survive.  

Christian Bunn of the Consortium of International Agricultural Research Centers, a global scientific organization, said information about how the climate is changing can inform farmers on how to better nurture their crops.  

“What we’re seeing is that the onset of both dry and wet season can change. It’s less reliable. During the season, there may be breaks in terms of rain during the dry season, or there’s a dry spell during the wet season, and the overall distribution or amounts of rainfall they’re receiving may change,” Bunn said.  

The data shows it may be better for farmers to stop producing cocoa and diversify into other crops, he said.   

However, Olga Yenou, the CEO of an Ivorian company that supplies The Hershey Company, said higher prices for cocoa could be welcomed by farmers.  

“My opinion is that these farmers should have better prices, should earn more, because they work hard. Most are poor,” Yenou said.  

Her wish appears to be coming true. As climate change continues to bite, prices continue to surge.  

 
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A delegation of senior U.S. officials visited Venezuela Saturday for talks with members of President Nicolas Maduro’s government to explore the possibility of easing U.S. sanctions against the major oil producer. 

White House press secretary Jen Psaki said Monday the U.S. delegation discussed a range of issues, including energy security, as well as the health and welfare of detained U.S. citizens. 

She said those two issues were “separate paths and conversations.” 

Sources who participated in the talks told media outlets the discussions had been in the works behind the scenes for months but took on new urgency with the Russian invasion of Ukraine.  

Venezuela’s oil production has plummeted over the last two decades, down from roughly 3 million barrels per day in 2002 to fewer than 800,000 barrels per day at the start of this year, according to OPEC. Even so, the country’s crude exports could offset the fallout from a possible oil embargo against Russia. The South American country is also Russian President Vladimir Putin’s strongest ally in the Western Hemisphere. 

The U.S. under former President Donald Trump broke off diplomatic relations with Venezuela in 2019, after the U.S. recognized opposition leader Juan Guaidó as the country’s legitimate president, accusing Maduro of rigging the presidential reelection. The Trump administration also blocked all U.S. revenue to Venezuela’s national oil company.  

The Wall Street Journal reports that in recent weeks, some U.S. investors have called on the Biden administration to lift sanctions on Venezuela so it can send more crude oil into the market. That would fill the gap if Western nations decide to impose a boycott on Russian oil. Chevron has also lobbied the administration to modify its license to accept and trade oil in Venezuela.  

The sources say the U.S. delegation to Venezuela was led by Juan Gonzalez, National Security Council senior director for the Western Hemisphere; James Story, ambassador to Venezuela; and Roger Carstens, special presidential envoy for hostage affairs. Carstens was the top U.S. diplomat in Caracas when the Trump administration broke off relations with Maduro in 2019.  

Carstens previously traveled to Caracas in December and met in jail with six oil executives from Houston-based Citgo, former U.S. Marine Matthew Heath and two former Green Berets arrested in connection with a failed raid aimed at toppling Maduro that was staged from neighboring Colombia.  

The U.S. State Department and Venezuela’s Information Ministry declined direct comment on the talks. But Reuters reports little progress was made as both sides made what were characterized as “maximalist demands,” reflecting longtime tensions between the Western Hemisphere’s main power and one of its biggest ideological foes.  

Some information for this report came from The Associated Press and Reuters. 
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За словами співзасновниці мережі, для потреб ЗСУ та територіальної оборони з її торгових центрів відвантажуються тонни товарів
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Крім того, за словами голови держави, відтерміновується сплата податків для всіх підприємств, які не спроможні їх заплатити
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Переговори щодо відновлення ядерної угоди 2015 року між Іраном та світовими державами ускладнилися 6 березня після оприлюднення вимог Росії до США
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Уряд Південної Кореї заявив, що оприлюднить деталі після консультацій із відповідними державними установами
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Libya’s national oil company said Sunday that an armed group has shut down two crucial oil fields, causing the country’s daily production of oil to drop by 330,000 barrels.

The state-run National Oil Corporation said the group closed pump valves at the Sharara field, Libya’s largest, and el-Feel, effectively stopping production in both areas. Before the shutdown, Libya’s production of oil was at around 1.2 billion barrels per day.

Company head Mustafa Sanallah announced a force majeure, a legal maneuver that lets a company get out of its contracts because of extraordinary circumstances.

He said the closures cost Libya more than $160 million ($34.6 million) per day in lost revenues.

Sanallah said the NOC has urged public prosecutors “to take deterrent measures” and reveal “the planners, executors and the beneficiaries” of the shutdown. The same militia disrupted oil production at both fields in 2014 and 2016, he added.

An oil official in the capital Tripoli said the militia that shut down the fields is from the mountainous town of Zintan, around 136 kilometers (over 84 miles) southwest of Tripoli.

Tribal leaders in the area were negotiating with the militia leaders to allow the resumption of oil production, said the official, who spoke on condition of anonymity because he was not authorized to brief the media.

The shutdown came as the Russian invasion of Ukraine has shaken markets worldwide, causing crude oil prices to soar above $115 per barrel.

Libya has the ninth-largest known oil reserves in the world, and the biggest oil reserves in Africa.

The dizzying developments in Libya’s oil fields have come amid a mounting standoff between two rival governments which threaten to again drag the country into chaotic infighting.
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As international sanctions on Moscow have triggered a decrease in the ruble’s value, North Korean workers in Russia are struggling to meet the remittance quotas set by Pyongyang, according to multiple sources in Russia and official North Korean documents obtained by VOA’s Korean Service.

North Korea is believed to use the hard currency to fund development of its weapons.

North Koreans working at Pyongyang’s entities and front companies contracted with enterprises in Russia are paid in rubles. As of 2020, there were 1,000 North Koreans working in Russia, according to the Russian Foreign Ministry.

Because the regime prefers dollars to rubles, the North Koreans convert their rubles before remitting them to Pyongyang. The sharp drop of the ruble has slashed the amount of dollars North Korean workers can send back to Pyongyang. When Russia invaded Ukraine on Feb. 24, $1 was worth 84.05 rubles. On March 4, $1 was worth 106.47 rubles.

VOA’s Korean Service is in regular contact with several sources in Russia who are familiar with the situation of North Korean workers there. Only the most trusted North Koreans are allowed to work in Russia and elsewhere outside their country.

Workers are “feeling extreme pressure from their supervisors” at North Korean enterprises operating in Russia, said one source who said the workers fear further devaluation of the ruble and are in a panic-driven rush to convert rubles to dollars.

The service has verified the credibility of the sources in Russia and to protect their identities, cannot reveal further information about them.  The sources provided several documents including the list of monthly remittance quotas and instructions for meeting them.

Devalued ruble

The ruble plunged below $0.01 in value this week after the U.S. and European countries imposed sanctions against Russia on Feb. 26 to financially isolate and punish Moscow for invading Ukraine.

Included in the sanctions was a ban on several Russian banks from accessing the SWIFT global bank payment system.

Eager for foreign currency, Pyongyang has long dispatched North Korean workers to Russia to make money. The U.S. estimated 30,000 were in Russia before the U.N. issued sanctions in December 2017 banning countries from authorizing work permits to North Koreans. Many remain in Russia and work using student or travel visas.

North Koreans work in various sectors but most are employed on construction or logging projects.

From January to August 2022, each North Korean construction worker was expected to remit $6,500 in dollars, according to a monthly list of quotas set by Pyongyang and obtained by VOA’s Korean Service.

That was equivalent to 710,000 rubles using the current exchange rate of 110 rubles per dollar. In October 2021, $6,500 was equivalent to 460,000 rubles when the exchange rate was 70 rubles per dollar.

This means North Koreans must now earn 30% to 40% more to fulfill the required remittance quotas.

North Korea “doesn’t need rubles and requires the payments in dollars only,” said a source.  “It won’t reduce the quota amounts that were ordered to be submitted unconditionally” despite the ruble’s fall.

A copy of a document obtained by VOA’s Korean Service included instructions for workers to meet quotas “unconditionally.”

In addition to the money destined for Pyongyang, each worker must earn approximately 30,000 rubles per year to pay to Russian universities to obtain a student visa.

Financial pressure

In December, the U.S. ostracized Moscow-based university European Institute Justo and its provost for sponsoring student visas for North Korean workers whose income the Treasury Department said supported Pyongyang’s weapons program.

Additionally, the SWIFT ban on Russian banks restricted North Korean workers from sending money to Pyongyang. The dollar-based SWIFT global messaging network is used by more than 11,000 financial institutions in 200 plus countries to send and receive information about cross-border transactions.

North Korean workers in Russia now “can’t send money” using their old method, said Heo Kang Il, a former manager of a North Korean restaurant in China, who spoke with VOA’s Korean Service.

Heo said North Korean entities in Russia used to deposit their earnings to North Korean banks operating secretly in Russia. Then the banks would wire the money to a global online payments system using online accounts created under pseudonyms in China. From there, the money was sent to Pyongyang.

VOA’s Korean Service contacted the North Korean mission to the U.N. to obtain Pyongyang’s position on the economic impact the drop in the ruble’s value is expected to have on Pyongyang but did not get a reply.

William Brown, a former CIA analyst who closely monitors the North Korean economy, said difficulties faced by heavily sanctioned countries like North Korea and now Russia could lead them to forge closer trade and financial relations.

“They are going to create a sort of an island of sanctioned countries – North Korea, Russia now, and Iran,” said Brown.

“So the more this island gets bigger, the more they’ll trade and invest within that group,” he said. “In the Cold War era, we didn’t do much business with any of the bloc [made of] China, Russia, Eastern Europe, all those countries. There were essentially two separate financial systems. They did a lot of trade finance amongst themselves.”

Bradley Babson, a former World Bank adviser and current advisory council member of the Korea Economic Institute of America, said Pyongyang will now forge even closer economic ties with its top trading partner China.

The North Koreans “are going to have to rely almost entirely on China for whatever economic benefits that they can get out of opening up their trade relationship and whatever remittances they might be able to receive from North Koreans working in China as opposed to Russia.” 
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Раніше в уряді озвучили тезу про перехід на «економіку воєнного стану»
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«Постанова ухвалена, щоб захистити інтереси людей у період воєнного стану, і стосується всіх комунальних послуг без винятку»
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