As tensions between the West and Russia grow over the Crimean dispute, a series of harsh sanctions is expected to be imposed on Russia in the coming weeks. While most of the focus is on Russian government officials, it is also said to include travel bans for the well-connected CEOs of OAO Gazprom (NASDAQOTH: OGZPY) and OAO Rosneft.
Russian MPs aren't taking this lying down, and are threatening retaliatory sanctions against U.S. and European companies. The rest could well be a full-fledged sanction war, with t!t-for-tat sanctions spiralling out of control.
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The bottom line
Neither BP nor Shell is facing a threat as near the immediacy or import as E.ON, whose very profitability might be at risk if things turn sour. BP's stock is a bargain on paper, with a P/E of around 6.5, though investors should keep a cautious eye on what happens with their Rosneft relations.
Shell's risk is even smaller, and it is well-positioned to take advantage of some other geopolitical situations, though with a price near its 52-week high, caution again is probably warranted, and panic selling on a sanctions war could provide a buying opportunity.
Gazprom remains the biggest bargain of the bunch, and even though it's the primary target of these sanctions, it is ironically in the least danger. Its gas empire is simply irreplaceable to the global economy, and with a P/E around 2 after the recent sell-off, it is just ridiculously cheap.
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