Energy sanctions ratchet up, Russia close to default?

This week’s announcement that the EU will ban the import of Russian coal from mid-August will not have a major impact on Russian export revenues, but it marks a clear shift in the EU’s aim to target Russia’s energy sector ahead of talks on apossible embargoon Russian oil importsnext week. Meanwhile, the possibility of aRussian government default is now looking increasing likely following the US Treasury’s decision to restrict Russia’s central bank from using reserves held at US financial institutions. Some Russian corporates have also reported problems with paymentso if the government does default, corporates may be next.