'A cornered Putin' isn't done with economic retaliation and could cut oil exports to Europe before embargo kicks in, RBC Capital's Helima Croft says

Russian President Vladimir Putin.REUTERS/Shamil Zhumatov
Vladimir Putin is cornered and dangerous, increasing the chances of further economic retaliation, RBC Capital's Helima Croft told CNBC on Wednesday.
The commodities strategist warned that Russia could cut oil supplies before December if the EU's partial embargo takes effect.
"A cornered Putin is a very dangerous Putin and we should brace ourselves for very destabilizing, escalating moves by this regime."
According to Helima Croft, head of global commodities strategy at RBC Capital Markets, Russian President Vladimir Putin can still crack down on the European economy with a surprise cut in oil exports.
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After his military recently suffered devastating defeats in Ukraine, Putin announced early Wednesday that he would mobilize an additional 300,000 troops and hinted at the use of nuclear weapons. He can't stop there.
"A cornered Putin is a very dangerous Putin, and we should prepare for very destabilizing, escalating moves by this regime," Croft told CNBC on Wednesday, though she noted that traders were more concerned about the Federal Reserve than this week seem concerned about Russia.
For example, Putin could move to cut oil exports ahead of the December 5 start date of Europe's partial embargo on Russian crude, she warned.
Oil is Moscow's main source of income, but cutting supplies could be a way to tighten global markets and boost prices.
"It's not like Vladimir Putin is going to zero, but he's already facing the prospect of being locked out of Europe by December 5," Croft claimed. "All he has to do is retire early and essentially say to Europe, 'You're going to cut me off on December 5? I'm going to cut you off now.'”
Meanwhile, Russian sea oil exports fell to their lowest level in a year as Europe cuts while Asian customers fail to make up the difference. In the first two weeks of September, exports totaled 3.03 million barrels per day, down about 314,000 barrels per day from August, Kpler data shows.
Last month, Rystad Energy forecast that Russian oil production would soon fall by over 1 million barrels a day as demand from China and India eases and the EU ban begins.
Nonetheless, according to Croft, if Russia made the decision to cut crude supplies, it would ultimately up the ante in the running game of brinkmanship.
"I think there are many more cards Putin can play and I'm not sure he's done in any way on the economic front," she said.
Read the original article on Business Insider

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