Chinese Business

Vodafone chief executive Nick Read is stepping down, the British telecoms group said Monday, after a four-year tenure marked by a steep fall in the company’s share price.

Read will leave his role at the end of December following more than 20 years at the group, a statement said.

He will be replaced on an interim basis by Vodafone’s chief financial officer Margherita Della Valle, who will continue her current role while Vodafone seeks out a permanent replacement.

His surprise resignation comes after Vodafone recently announced flat earnings for its first half and follows a near 20-percent drop in its share price this year.

“I agreed with the board that now is the right moment to hand over to a new leader who can build on Vodafone’s strengths and capture the significant opportunities ahead,” Read said in the statement.

He departs with Vodafone in talks over merging its UK operations with rival Three UK, owned by Hong Kong-based CK Hutchison.

Vodafone believes a combination would accelerate the rollout of 5G telecoms technology in the UK, which has been partly hampered by Britain banning Chinese giant Huawei from involvement in the technology offering faster downloads than 4G.

Vodafone’s share price was flat at 91 pence following Monday’s announcement.

“With the shares languishing at their lowest levels in more than 20 years it is hard to describe departing Vodafone CEO Nick Read’s tenure as anything other than a disappointment,” noted Russ Mould, investment director at AJ Bell.

“Read’s final set of results last month did him absolutely no favours, as Vodafone downgraded full-year guidance.”

He also came under pressure from major activist investor Cevian Capital, which recently slashed its stake in Vodafone.

However, Read “helped to steer the telecoms giant through the challenges of the pandemic, aiding connectivity when individuals and households were forced to stay home during strict lockdowns”, said Victoria Scholar, head of investment at Interactive Investor.

Turkey’s inflation slowed in November for the first time since May 2021, official data showed on Monday, delivering a boost to President Recep Tayyip Erdogan ahead of next year’s election.

The rate slowed to 84.39 percent, according to state statistics agency TUIK, down from 85.51 percent in October.

Turkey’s inflation has risen steadily since reaching a low of 16.6 percent in May 2021.

The emerging market’s troubled economy has turned into a major stumbling block on Erdogan’s path to a third decade in power in a presidential poll due by next June.

Erdogan’s approval rating began to suffer when he set off on an unusual economic experiment last year that tried to bring down chronically high consumer prices by lowering borrowing costs.

Conventional economic theory embraced by almost every other big nation pursues the exact opposite approach.

Turkey’s lira began to drop in value almost immediately, as consumers rushed to buy up dollars and gold to try and protect their savings.

The price of imports such as oil and gas soared, creating an inflationary spiral that the nominally independent central bank fed further by continuing to lower interest rates.

Erdogan has maintained that his unwavering focus on economic growth at all costs — achieved through cheap lending and state support — will eventually pay off.

“We will witness the rapid descent of inflation soon and we will see together that the dirty scenarios built on this trouble are torn and thrown away,” he repeated over the weekend.

Erdogan has blamed inflation on outside factors such as the global spike in food and energy prices caused by Russia’s invasion of Ukraine.

– Election strategy –

Erdogan’s much-criticised economic team hailed Monday’s announcement as vindication of their approach.

“As we have previously stated in various media, we have entered a downward trend in inflation, leaving the peak behind, unless there is an unexpected global development,” Finance Minister Nureddin Nebati tweeted.

Most economists believe that Turkey’s inflation rate will continue to slow but remain elevated for many months to come, unless Erdogan radically changes his approach.

An accompanying inflow of funding from the Kremlin and Turkey’s former rivals in the Middle East, which Erdogan secured through a major diplomatic reversal this year, will help the government prop up the lira, economists believe.

Erdogan’s strategy aims at “keeping the lira relatively strong this side of elections with foreign money”, Timothy Ash of BlueBay Asset Management said in a tweet.

“But that will destroy competitiveness with massive real appreciation.”

Yet many also question Turkey’s official statistics, which are produced by an agency whose leader has been replaced by Erdogan twice in the past year.

According to a respected monthly study released by independent economists from Turkey’s ENAG research institute, the annual rate of consumer price increases reached 170.70 percent in November.

A separate poll earlier this year showed the overwhelming major of Turks believing the ENAG figures over ones released by the government.

Most stocks rose on Monday as traders welcomed more easing of strict Covid containment measures in China that have hammered the world’s number-two economy.

The moves helped offset a forecast-busting US jobs report that dented hopes that the Federal Reserve will take a softer approach to hiking interest rates in its battle against inflation.

Investor sentiment has picked up considerably in recent weeks on indications the US central bank will slow down its monetary tightening as price rises appear to be slowing and the economy weakens.

That has come as Chinese leaders take a more pragmatic approach to fighting Covid after recent protests across the country that also called for more political freedoms.

The harsh zero-Covid strategy — which saw major cities including Shanghai locked down for months — has been blamed for a sharp slowdown in economic growth this year and sent shudders through markets.

The move to reopening helped fuel “market optimism about the tailwinds of a likely acceleration in growth in 2023 for China-sensitive assets”, said SPI Asset Management’s Stephen Innes.

“Although there have been several local changes to Covid policies, China has yet to shift away from the zero-Covid policy officially. Instead, they are trying to balance the expected reopening surge in Omicron cases against minimising economic and social costs.”

The brighter outlook lifted Asian markets with Hong Kong leading the way, jumping more than four percent while Shanghai put on more than one percent.

There were also gains in Tokyo, Sydney, Wellington, Singapore, Taipei and Manila.

London opened marginally higher, though Paris and Frankfurt inched down.

The prospect of the world’s number-two economy kicking back into gear helped traders overcome data on Friday showing far more jobs than expected were created in the United States in November.

A big jump in wages added to concerns that the economy remained hot, meaning the Fed still had plenty of work to do to get inflation down to its two percent target.

“If next week’s consumer price index data stays hot… then our forecast for the Fed funds rate to be raised by 50 basis points each in December and February to hit 4.75-5.00 percent may prove too low,” said Mansoor Mohi-uddin, of Bank of Singapore.

“If the Fed instead needs to keep hiking well into 2023 then the near-term outlook for risk assets will remain challenging for investors.”

Still, the dollar remained under pressure against its main peers as investors lower their expectations for US borrowing costs.

China’s yuan was among the best performers, breaking below the seven per dollar level for the first time in almost three months.

The reopening of China also lifted oil prices as demand expectations improved, while a decision by OPEC and top producers to not lift output also boosted the commodity.

Still, Innes added: “One major obstacle to prompt oil prices is that a widespread official reopening is unlikely to occur until spring. So, demand could remain exceptionally soft, including in the initial stages of a broader reopening of the economy.”

– Key figures around 0820 GMT –

Tokyo – Nikkei 225: UP 0.2 percent at 27,820.40 (close)

Hong Kong – Hang Seng Index: UP 4.5 percent at 19,518.29 (close)

Shanghai – Composite: UP 1.8 percent at 3,211.81 (close)

London – FTSE 100: FLAT at 7,556.74

Euro/dollar: UP at $1.0545 from $1.0531 on Friday

Dollar/yen: UP at 134.90 yen from 134.27 yen

Pound/dollar: UP at $1.2300 from $1.2296

Euro/pound: UP at 85.79 pence from 85.73 pence

West Texas Intermediate: UP 0.7 percent at $80.50 per barrel

Brent North Sea crude: UP 0.6 percent at $86.04 per barrel

New York – Dow: UP 0.1 percent at 34,429.88 (close)

Asian stocks rose and the dollar weakened further as traders welcomed more easing of strict Covid containment measures in China that have hammered the world’s number-two economy.

The moves helped offset a forecast-busting US jobs report that dented hopes that the Federal Reserve will take a softer approach to hiking interest rates in its battle against inflation.

Investor sentiment has picked up considerably in recent weeks on indications the US central bank will slow down its monetary tightening as price rises appear to be slowing and the economy weakens.

That has come as Chinese leaders take a more pragmatic approach to fighting Covid after recent protests across the country that also called for more political freedoms.

The harsh zero-Covid strategy — which saw major cities including Beijing and Shanghai face lockdowns for months — has been blamed for a sharp slowdown in economic growth this year and sent shudders through markets.

The move to reopening helped fuel “market optimism about the tailwinds of a likely acceleration in growth in 2023 for China-sensitive assets”, said SPI Asset Management’s Stephen Innes.

“Although there have been several local changes to Covid policies, China has yet to shift away from the zero-Covid policy officially. Instead, they are trying to balance the expected reopening surge in Omicron cases against minimising economic and social costs.”

The brighter outlook lifted Asian markets with Hong Kong leading the way, jumping more than three percent while Shanghai put on more than one percent.

There were also gains in Tokyo, Sydney, Seoul, Singapore, Taipei and Manila.

The prospect of the world’s number-two economy kicking back into gear helped traders overcome data on Friday showing far more jobs than expected were created in the United States in November.

A big jump in wages added to concerns that the economy remained hot, meaning the Fed still had plenty of work to do to get inflation down to its two percent target.

“If next week’s consumer price index data stays hot… then our forecast for the Fed funds rate to be raised by 50 basis points each in December and February to hit 4.75-5.00 percent may prove too low,” said Mansoor Mohi-uddin, of Bank of Singapore.

“If the Fed instead needs to keep hiking well into 2023 then the near-term outlook for risk assets will remain challenging for investors.”

Still, the dollar remained under pressure against its main peers as investors lower their expectations for US borrowing costs.

The reopening of China also lifted oil prices as demand expectations improve, while a decision by OPEC and top producers to not lift output also boosted the commodity.

– Key figures around 0230 GMT –

Tokyo – Nikkei 225: UP 0.1 percent at 27,808.74 (break)

Hong Kong – Hang Seng Index: UP 3.6 percent at 19,349.17

Shanghai – Composite: UP 1.1 percent at 3,189.66

Euro/dollar: UP at $1.0564 from $1.0531 on Friday

Dollar/yen: DOWN at 134.25 yen from 134.27 yen

Pound/dollar: UP at $1.2324 from $1.2296

Euro/pound: UP at 85.75 pence from 85.73 pence

West Texas Intermediate: UP 2.0 percent at $81.55 per barrel

Brent North Sea crude: UP 2.0 percent at $87.31 per barrel

New York – Dow: UP 0.1 percent at 34,429.88 (close)

London – FTSE 100: FLAT at 7,556.23 (close)

Stock markets were mixed Friday after strong US jobs data raised concerns that the US Federal Reserve may continue to aggressively hike interest rates to tame inflation.

US government data showed that the world’s biggest economy added 263,000 jobs in November, with the unemployment rate remaining at 3.7 percent.

Government figures also indicated a bigger jump in hourly wages than analysts had benchmarked.

Indices in New York initially tumbled on the release as markets feared it would extend the period of ultra-aggressive Federal Reserve interest rate hikes to counter inflation.

But markets recovered throughout the day, with the S&P 500 ending down 0.1 percent.

Investors were unnerved by the jump in wages “because that tends to feed inflation,” said Quincy Krosby of LPL Financial

But traders also realize that “there’s a positive side to this,” she said. “The Fed has the luxury if you will to continue to raise rates, with smaller rate hikes. And the labor market remains resilient.”

The jobs data comes two days after Federal Reserve Chair Jerome Powell signaled the central bank could moderate its aggressive posture on interest rates as soon as this month.

Earlier, London finished flat, while Frankfurt gained modestly and Paris dipped.

Investors were also focused on the oil market, where prices finished lower amid focus on talks on a price cap to limit Russia’s oil revenues.

The G7 and EU agreed a $60-per-barrel price cap on Russian oil late Friday. Analysts were still assessing the effect of the price ceiling, but have said the impact on supply could be limited  because Russia currently sells some oil below this price level.

Traders are also focused on OPEC+, which may decide Sunday to slash oil production further to boost prices for its members, which include Saudi Arabia and Russia.

“There remains considerable uncertainty around the action OPEC+ will take when it meets,” noted OANDA trading platform analyst Craig Erlam.

Among individual companies, Boeing jumped 4.0 percent following a Wall Street Journal report that United Airlines is close to agreeing to order dozens of Boeing 787 Dreamliners. United shares were flat.

– Key figures around 2200 GMT –

New York – Dow: UP 0.1 percent at 34,429.88 (close)

New York – S&P 500: DOWN 0.1 percent at 4,071.70 (close)

New York – Nasdaq: DOWN 0.2 percent at 11,461.50 (close)

London – FTSE 100: FLAT at 7,556.23 (close)

Frankfurt – DAX: UP 0.3 percent at 14,529.39 (close)

Paris – CAC 40: DOWN 0.2 percent at 6,742.25 (close)

EURO STOXX 50: DOWN 0.2 percent at 3,977.90 (close)

Tokyo – Nikkei 225: DOWN 1.6 percent at 27,777.90 (close)

Hong Kong – Hang Seng Index: DOWN 0.3 percent at 18,675.35 (close)

Shanghai – Composite: DOWN 0.3 percent at 3,156.14 (close)

Euro/dollar: UP at $1.0531 from $1.0520 on Thursday

Dollar/yen: DOWN at 134.27 yen from 135.33 yen

Pound/dollar: UP at $1.2296 from $1.2247

Euro/pound: DOWN at 85.73 pence from 85.90 pence

Brent North Sea crude: DOWN 1.5 percent at $85.57 per barrel

West Texas Intermediate: DOWN 1.5 percent at $79.98 per barrel

burs-jmb/bgs

Austria has cut its dependence on Russian gas but it must keep up efforts to diversify its supplies for the next cold season, the head of Austrian energy group OMV told AFP.

Europe has sought to reduce its reliance on Russian oil and gas since Moscow invaded Ukraine. Russia in turn has slashed gas deliveries, causing energy prices to spike across Europe.

Austria imported 80 percent of its gas from Russia before the war broke out in late February.

By October, Russia accounted for just 23 percent of Austria’s gas imports, according to the government, as the country has filled up storage tanks and sought to buy the fossil fuel elsewhere.

Experts, however, say the Alpine nation of nine million is still dependent on it in the long run.

“I think we can be more confident for this winter, for this season, than we were maybe six months ago,” OMV CEO Alfred Stern told AFP on Friday in his modern office with a view over Vienna.

“But the work must go on now, also with a view to the next season,” he added.

He said the energy and chemicals group, which employs more than 22,000 people worldwide, had just signed an agreement in Abu Dhabi to try to secure gas deliveries for next winter.

– Russian exit –

Following European sanctions on Moscow, OMV froze its investments in Russia and has withdrawn from the Nord Stream 2 gas pipeline project.

“Because of the changed situation, we have decided Russia will no longer be a core region for us. This means we will not invest further there and we will consider all options including sale and exit,” said Stern, the firm’s 57-year-old CEO since September 2021.

An EU embargo on Russian crude goes into effect on Monday, while the bloc also agreed on a $60-a-barrel ceiling on Russian oil exports on Friday.

The embargo will prevent shipments of Russian crude by tanker vessel to the EU, which accounts for two thirds of imports, the rest arriving by pipeline.

OMV — known for its ties with the former Soviet Union from 1968 and for working closely with Russian giant Gazprom until the invasion of Ukraine — operates 1,800 petrol pumps in 10 European countries.

It also develops and produces oil and gas in Europe, the Middle East, Africa, the North Sea and the Asia-Pacific region.

– ‘Immorally’ high profits –

The energy giant announced in October that it recorded a high third-quarter profit thanks to soaring energy prices — with Stern describing OMV’s performance as “outstanding”.

Greenpeace and other activists have slammed the company’s “immorally” high profits.

Stern said profits supported the company as it seeks to reduce its carbon footprint and develop alternatives to oil and gas, saying such changes “didn’t happen overnight”.

He said in the meantime OMV was increasing its investment in gas as a “stopgap measure”, including considering developing an offshore gas field in the Black Sea off Romania.

“I actually see us as part of the solution (on climate change), because large and financially strong companies are necessary to implement such major challenges,” he said.

Stock markets stumbled on Friday after strong US jobs data raised concerns that the US Federal Reserve may continue to aggressively hike interest rates to tame inflation.

Oil prices, meanwhile, were stable as investors awaited an output decision by OPEC and its Russia-led allies and tracked Western plans to cap Russian crude prices.

Stock markets are focused on the next moves of the US central bank.

While Fed chief Jerome Powell signalled on Wednesday that the central bank could start “moderating” the pace of rate hikes as soon as December, investors were unnerved by Friday’s jobs figures.

US government data showed that the world’s biggest economy added 263,000 jobs in November, with the unemployment rate remaining at 3.7 percent.

Strong job gains raise concerns among investors, as a healthy economy could convince the Fed it still has room to deliver more sharp rate increases to fight inflation.

“The report itself is good news from an economic standpoint, yet the market sees it as bad news, thinking it will push out any eventual pivot by the Fed with its monetary policy,” said Briefing.com analyst Patrick O’Hare.

Wall Street’s main indices were down in late morning trades while Paris finished lower and London closed flat. Frankfurt bucked the trend as it ended in the green.

– OPEC+ –

The focus was also on OPEC+, which may decide Sunday to slash oil production further to boost prices for its members, which include Saudi Arabia and Russia.

“There remains considerable uncertainty around the action OPEC+ will take when it meets…, although there’s every chance that the meeting will be delayed or that discussions take longer than normal, as a result of the price cap being finalised by the EU,” noted OANDA trading platform analyst Craig Erlam.

Beyond the economic gloom, the big unknown in the oil equation currently is Russian oil, as Western nations seek to decouple themselves from Moscow’s energy supplies as fast as possible.

The EU has decided to ban member states from buying Russian oil exported by sea from Monday, “putting at risk over two million barrels per day,” according to estimates by ANZ analysts.

Investors are also scrutinising EU plans to join G7 powers in imposing a $60-per-barrel price cap on Russian oil after Poland, which had pushed for a lower ceiling, dropped its objection.

Oil prices did not budge much after Poland’s announcement.

Prices have fallen heavily in recent weeks on expectations of weaker Chinese demand.

There are signs, however, that China is edging towards a pivot from its draconian Covid-zero strategy, which has seen the lockdown of tens of millions and strangled the giant economy this year.

The move came after widespread protests across the country earlier in the week against almost three years of heavy-handed containment measures and calls for more political freedoms.

Observers say they expect officials to signal a shift in priorities at a key meeting later this month, with a focus turning to kickstarting the economy, though with vaccination rates low the move will likely be gradual.

Asian stock markets closed in the red.

– Key figures around 1645 GMT –

New York – Dow: DOWN 0.1 percent at 34,365.14 points

London – FTSE 100: FLAT at 7,556.23 (close)

Frankfurt – DAX: UP 0.3 percent at 14,529.39 (close)

Paris – CAC 40: DOWN 0.2 percent at 6,742.25 (close)

EURO STOXX 50: DOWN 0.2 percent at 3,977.90

Tokyo – Nikkei 225: DOWN 1.6 percent at 27,777.90 (close)

Hong Kong – Hang Seng Index: DOWN 0.3 percent at 18,675.35 (close)

Shanghai – Composite: DOWN 0.3 percent at 3,156.14 (close)

Euro/dollar: DOWN at $1.0518 from $1.0529 on Thursday

Dollar/yen: DOWN at 134.93 yen from 135.34 yen

Pound/dollar: UP at $1.2280 from $1.2251

Euro/pound: DOWN at 85.63 pence from 85.91 pence

Brent North Sea crude: DOWN 0.2 percent at $86.69 per barrel

West Texas Intermediate: UP 0.1 percent at $81.30 per barrel

burs-lth/jj

The World Health Organization has cheered China’s loosening of its zero-Covid policy, with cities across the country making further moves towards unwinding some restrictions after days of unprecedented protests against the measures.

President Xi Jinping suggested the spread of the less lethal Omicron strain might allow China to pull back from its hardline strategy of lockdowns and mass testing, senior EU officials reported Friday.

Discontent with Beijing’s uncompromising pandemic response spilled onto streets last weekend and expanded into calls for more political freedom, in widespread demonstrations not seen in decades.

China’s vast security apparatus has moved swiftly to smother the rallies, deploying a heavy police presence while boosting online censorship and population surveillance.

In his first known comments on the protests, Xi told European Union chief Charles Michel the demonstrators were “mainly students or teenagers in university” fed up with Covid restrictions when the pair met Thursday in Beijing, senior officials speaking on condition of anonymity said.

Xi complained “that after three years of Covid that he had an issue because people were frustrated”, they said.

They added Xi had told Michel that given most cases in China were now of the Omicron variant, that “opens the way for more openness of the restrictions than what we have already seen in some regions”.

The World Health Organization was “pleased to learn that the Chinese authorities are adjusting their current strategies,” balancing control measures with the lives of communities who have “suffered”, WHO emergencies director Michael Ryan told reporters Friday.

Chinese government officials had signalled a broader relaxation of the zero-Covid policy could be in the works.

Speaking at the National Health Commission Wednesday, Vice Premier Sun Chunlan said the Omicron variant was weakening and vaccination rates were improving, according to state-run Xinhua news agency.

The WHO was pleased to see China’s vaccination rates rising, Ryan said.

A central figure behind Beijing’s pandemic response, Sun said this “new situation” required “new tasks”.

She made no mention of zero-Covid in those remarks or in another meeting Thursday, suggesting the approach, which has disrupted the economy and daily life, might soon be relaxed.

– Home quarantine? –

Several cities have now begun loosening coronavirus restrictions, slowly moving away from daily mass testing and compulsory central quarantine — a tedious mainstay of life under zero-Covid policy.

But sporadic localised confrontations have continued to flare up.

Social media footage posted Thursday night and geo-located by AFP showed dozens of people clashing with health workers in hazmat suits outside a school in Yicheng, in central China’s Hubei province.

The post’s author said the video showed parents of students who had tested positive for the virus and had been taken to quarantine. 

Parents are seen kneeling before the school gate, pleading to take their children home. Another video showed at least a dozen police officers at the scene.

But signs have emerged of a possible shift in the policy of sending positive cases to central quarantine facilities.

An analysis Friday by state-run newspaper People’s Daily quoted health experts supporting local government moves to allow patients to quarantine at home, which would be a marked departure from current rules.

When called Friday, some officials in Beijing’s Chaoyang district said people who tested positive there would no longer have to go to central quarantine.

Authorities in southern factory hub Dongguan said Thursday those who meet “specific conditions” should be allowed to isolate at home. They did not specify what those conditions would be.

Shenzhen, a southern tech hub, rolled out a similar policy Wednesday.

– Testing loosens –

The southwestern metropolis of Chengdu from Friday no longer required a recent negative test result to enter public places or ride the metro, instead only demanding a green health code on an app confirming people have not travelled to a “high-risk” area.

Beijing also announced Friday that using city public transport would no longer require a negative PCR test taken within 48 hours.

The day before, capital health authorities called on hospitals not to deny treatment to people without a 48-hour test.

In January, a pregnant woman in Xi’an miscarried after being refused hospital entry for not having a PCR result.

China has seen a string of deaths after treatment was delayed by Covid restrictions, including the recent death of a four-month-old baby stuck in quarantine with her father.

Those cases became a rallying cry during the protests, with a viral post listing names of those who died because of alleged negligence linked to the pandemic response.

Many other cities with virus outbreaks are allowing restaurants, shopping malls and even schools to reopen, in a clear departure from previous tough lockdown rules.

In the northwestern city of Urumqi, where the fire occurred that killed 10 people and became the catalyst for the anti-lockdown protests, authorities announced Friday that supermarkets, hotels, restaurants and ski resorts would gradually reopen.

The city of more than four million in far-western Xinjiang region endured one of China’s longest lockdowns, with some areas shut from early August.

Austria has cut its dependence on Russian gas but it must keep up efforts to diversify its supplies for the next cold season, the head of Austrian energy group OMV told AFP.

Europe has sought to reduce its reliance on Russian oil and gas since Moscow invaded Ukraine. Russia in turn has slashed gas deliveries, causing energy prices to spike across Europe.

Austria imported 80 percent of its gas from Russia before the war broke out in late February.

By October, Russia accounted for just 23 percent of Austria’s gas imports, according to the government, as the country has filled up storage tanks and sought to buy the fossil fuel elsewhere.

Experts, however, say the Alpine nation of two million still is dependent on it in the long run.

“I think we can be more confident for this winter, for this season, than we were maybe six months ago,” OMV CEO Alfred Stern told AFP on Friday in his modern office with a view over Vienna.

“But the work must go on now, also with a view to the next season,” he added.

He added the energy and chemicals group, which employs more than 22,000 people worldwide, had just signed an agreement in Abu Dhabi to try to secure gas deliveries for next winter.

– Russian exit –

Following European sanctions on Moscow, OMV froze its investments in Russia and has withdrawn from the Nord Stream 2 gas pipeline project.

“Because of the changed situation, we have decided Russia will no longer be a core region for us. This means we will not invest further there and we will consider all options including sale and exit,” said Stern, the firm’s 57-year-old CEO since September 2021.

An EU embargo on Russian crude goes into effect on Monday, while European leaders also debate a $60 a barrel ceiling on Russian oil exports.

The embargo will prevent shipments of Russian crude by tanker vessel to the EU, which accounts for two thirds of imports, the rest arriving by pipeline.

OMV — known for its ties with the former Soviet Union from 1968 and for working closely with Russian giant Gazprom until the invasion of Ukraine — operates 1,800 petrol pumps in 10 European countries.

It also develops and produces oil and gas in Europe, the Middle East, Africa, the North Sea and the Asia-Pacific region.

– ‘Immorally’ high profits –

The energy giant announced in October that it recorded a high third quarter profit thanks to soaring energy prices — with Stern describing OMV’s performance as “outstanding”.

Greenpeace and other activists have slammed the company’s “immorally” high profits.

Stern said profits supported the company as it seeks to reduce its carbon footprint and develop alternatives to oil and gas, saying such changes “didn’t happen overnight”.

He said in the meantime OMV was increasing its investment in gas as a “stopgap measure”, including considering developing an offshore gas field in the Black Sea off Romania.

“I actually see us as part of the solution (on climate change), because large and financially strong companies are necessary to implement such major challenges,” he said.

Russia’s invasion of Ukraine has driven countries across the world to boost energy efficiency, creating “huge potential” to tackle high prices, security and climate change, the IEA said on Friday.

Governments have scaled up fossil fuel subsidies to cushion the impact of rising energy costs on households in the wake of the Ukraine conflict, which has disrupted gas supplies and stoked prices.  

But a new report from the International Energy Agency found that it had also prompted policymakers and consumers to shrink their power use, causing record investment in energy efficiency measures, like building renovations, and infrastructure for public transport and electric cars.

IEA executive director Fatih Birol said after the oil shocks of the 1970s, governments pushed “substantial improvements” in energy efficiency, particularly in cars, appliances and buildings. 

“Amid today’s energy crisis, we are seeing signs that energy efficiency is once again being prioritised,” he said.

“Energy efficiency is essential for dealing with today’s crisis, with its huge potential to help tackle the challenges of energy affordability, energy security and climate change.”

According to the IEA research, governments, industry and households invested a record $560 billion this year in energy efficiency measures.

Preliminary IEA data for 2022 also suggests that the global economy used energy two percent more efficiently than it did in 2021, almost double the rate of the past five years. 

Annual improvements would need to rise to four percent to meet decarbonisation goals by mid-century, the IEA said. 

But it said if current trends continue to improve, 2022 “could mark a vital turning point” for efficiency, adding that developments this year have “changed the dynamics of energy markets for decades to come”.

Recent government initiatives to boost efficiency in buildings, cars and industry have included legislation in Europe, Japan and the United States that add up to hundreds of billions of dollars in spending. 

– ‘Hyper-efficient and climate-friendly’ –

The IEA said that one in every eight cars sold globally is now electric. 

Building codes are also being updated across the world, it said, while there is growing energy efficiency awareness among consumers. 

In Southeast Asia, all governments were developing policies for efficient cooling, which the IEA said was “vital for a region with one of the fastest rates of growth in electricity demand”.

Meanwhile, global sales of heat pumps are expected to hit record levels in 2022, driven by surging demand in Europe, where almost three million are expected to be sold this year — up from 1.5 million in 2019. 

“Heat pumps are an indispensable part of any plan to cut emissions and natural gas use, and an urgent priority in the European Union today,” said Birol in a press statement this week.

If governments meet all their energy and climate targets, the IEA said “hyper-efficient and climate-friendly” heat pumps could meet nearly a fifth of global heating needs in buildings by 2030, up from a tenth in 2021.

Its first special report on the future of heat pumps, released Wednesday, said the technology, if powered by low-emissions electricity, was “central” to the global transition to sustainable heating. 

The report estimated that heat pumps have the potential to reduce global carbon dioxide emissions by at least 500 million tonnes in 2030 — equal to annual CO2 pollution from the cars in Europe today.