Russia's resource capitalism—market vs political signalling

Since the early post-Soviet era, when many strategically important Russian oil and gas fields were sold on unfavourable terms, the state has been seeking to regain control of these strategic assets. With Putin's return to the Presidency in 2012, Russia's U-turn over oil and gas privatizations has again caused market consternation. We examine strategic asset acquisitions by Russian O&G companies during Putin's first terms as president and suggest that there should however, be few surprises. Under Putin, strategic deals in Russia are often informal, dominated by Russian partners, subject to internecine rivalries and, we show, are ‘somehow’ known by markets prior to promulgation. Findings suggest that in Russia deals of strategic substance are recognized by financial markets prior to the announcement of political policy.