When you examine the economy of Russia, its economy is dominated by the oil and gas sector and after Russia invaded the Ukraine, Europe and America imposed sanctions including cutting back on oil and gas imports. It is slightly easier to cut imports in the summer, for oil and gas to be used, the infrastructure of pipelines and refineries must exist. Both cost billions of dollars and are long term projects or it is difficult to turn on a dime and use another countries oil and gas. The supplier or Russia has other options.
In an article by Austin Ramzy of the New York Times News Service, Russia went knocking on the door of China and President Vladimir Putin and Xi Jinping, China’s leader said there was no limits to their nations’ friendship. There are some limits but not when it counts to improving the economy.
Russia has surpassed Saudi Arabia to become China’s largest source of petroleum. in data released by China’s General Administration of Customs in May, China imported 8.4 million metric tons of crude oil from Russia versus 7.8 metric tons from Saudi Arabia. The reason Russia received less money as China paid Saudi $6.3 billion and paid Russia $5.7 billion.
Linking to dividend paying stocks, all profitable companies tend to be diversified although they will depended on one area or sector more than others. It is a function of where the company is based but if the area where it is based faces a downturn, the company can reach out to its other areas and try to sell more. In the example above Russia is based in Europe and then reached out to China, as long as revenues come in to be profitable and pay dividends, economically that is a good thing. Do you know where your company investments have their greatest dependence in and how flexible they were in past downturns?
There are more questions than answers, till the next time – to raising questions.