Evening Briefing: Europe

The oil revenues of Iran, Russia and Venezuela have come into the crosshairs of President-elect Donald Trump, who is preparing a wide-ranging sanctions package that could have dramatic effects on energy markets. While plans are still in the early stages, advisers say the measures are being formulated to blunt three diplomatic thorns that have stuck in the side of multiple US administrations. Trump wants to end Russia’s war on Ukraine, which next month enters its fourth year. He said last week he’s open to meeting Vladimir Putin and getting a deal done. Trump is also keen on increasing pressure over Iran’s nuclear work, while punishing Venezuela because of its anti-democratic turn. But imposing new sanctions on three of the world’s largest oil producers would be challenging. Crude already jumped after Joe Biden’s administration hit the Kremlin with new measures earlier this month, and some analysts suggest prices could rise much higher if more oil is throttled before reaching global markets. Click here to read a Bloomberg live blog with details about more potential sanctions measures. --Jonathan Tirone

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BP is planning to eliminate 5% of its workforce, or 4,700 jobs globally, after the London-based energy giant fell further behind its peers. More cost-cutting efforts are planned this year and beyond, Chief Executive Officer Murray Auchincloss told staff. The company has stopped or paused 30 projects since last June to focus on ones that make the most money. A digitization drive, including pushing artificial intelligence, is key to the new plans. BP has slowed compared to fellow oil companies during the CEO’s tenure, and is now worth less than half as much as Shell Plc. Shares rose a little more than 1% on news of the job cuts.

Bonuses at HSBC might be a little disappointing this year, with the bank set to buck industry trends and cut them. Some employees in areas such as the corporate and institutional banking arm have been warned to expect lower payouts this year, according to people familiar with the situation. While no final decision has been reached, internal guidance so far is that the bonus might be less than hoped. Better news for workers at other banks including Barclays and Deutsche Bank, where bonuses will be as much as a fifth higher than last year.

War’s eaten up almost a quarter of Russia’s liquid assets over the last year. Finance Ministry data show the Kremlin spending from the national-wealth fund reserves to keep its economy finance its invasion of Ukraine. The National Wellbeing Fund remained largely unchanged in 2024 at around 12 trillion rubles ($117 billion), but its holdings of cash and investments that can be easily liquidated shrank by 24% to 3.8 trillion rubles as of Jan. 1 compared to the start of last year.

https://www.bloomberg.com/news/articles/2025-01-16/war-ate-up-almost-a-quarter-of-russia-s-liquid-assets-in-2024?sref=zr5Avzr1

Green bond standards the European Union is pushing won’t be followed by a key part the bloc itself. The EU’s flagship green bond program won’t abide by the bloc’s new rules for environmentally-friendly debt. The bloc started selling environmentally-friendly debt in 2021 — before the voluntary European Green Bond Standard was finalized — in order to fund projects to 2026. It’s a blow for proponents of the EU label, which lawmakers touted as a “gold standard” that would help stamp out greenwashing in the burgeoning market.

European red tape must be cut if its economy is to narrow the gap with the US technology and telecommunications sectors, according to Ericsson Chief Executive Officer Börje Ekholm. Instead, Europe is on track to add new regulations, while the US appears poised to liberalize. “So that delta is highly likely to increase, unless we’re very careful,” Ekholm said. Only four of the world’s top 50 tech companies are currently based based in the EU.

Jared Kushner’s next big bet is a Trump hotel he wants to build in Serbia with the help of an Emirati billionaire. Affinity Partners, the investment firm Kushner founded after leaving the White House, and Emirati billionaire Mohamed Alabbar will develop a luxury hotel and apartment complex in Belgrade, on the site of the former Yugoslav defense ministry. Trump considered a similar idea before running for president in 2016. The Serbia project marks their initial business foray together, though Kushner said in an interview with Bloomberg that he hopes it’s the “first of many projects.”

Rendering of the Trump Hotel Belgrade. Photographer: Studio Genesis

The top 10 defense-technology startups to watch this year include companies that make hypersonic planes and sprawling drone factories. In an industry long-dominated by a few established players, changing battlefield technology has spurred the US Department of Defense to take a closer look at young tech companies. A few tech companies have already hit it big: Palantir Technologies Inc. and Elon Musk’s SpaceX, both heavily involved in defense, are each worth more than Lockheed Martin. and RTX, formerly Raytheon. While most upstart contenders won’t reach those heights as they are stymied by technological challenges and labyrinthine government contracting rules, venture capitalists see a big opportunity.

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In 2025 the most luxurious new hotel room may be on wheels as a growing number of opulent, artist-created train suites crisscross Europe. This luxury rail renaissance “reflects a structural shift in how people want to spend their time,” says Samy Ghachem, general manager of La Dolce Vita Orient Express, a new luxury train outfit. Travel advisers agree. Some of the most sought-after journeys are already sold out for the entirety of 2025 and booking well into 2026.

A rendering of a room on La Dolce Vita Orient Express Photographer: Dolce Vita Orient Express

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