By Geoffrey Smith
Investing.com -- The European Union has exempted two of Russia's largest banks from the sanctions it announced last week, in an attempt to ensure that European buyers can still pay for Russian commodity exports.
According to details published in the EU's Official Journal on Wednesday, state-controlled Sberbank and Gazprombank will be allowed to continue operating through SWIFT. However, banks such as VTB and VEB will be banned from using the global payment messaging network, as will the smaller Promsvyazbank, Otkritie, Rossiya, and Novikombank.
A lack of clarity over the detail of Western sanctions has led buyers to hold off from transacting at all with Russian counterparties in recent days, and instead chase alternative sources of supply. For commodities where Russia is a globally significant exporter, such as oil, natural gas, and wheat, generated massive price spikes. According to Saxo Bank analysts, independent oil traders struggled to find anyone willing to buy Urals crude - the main Russian export blend - on Tuesday, despite offering it at nearly $20 a barrel below Brent crude. The differential between the two blends is rarely more than a couple of dollars.
It's unclear to what extent the details published on Wednesday will mitigate such behavior.