Russias fossil fuel export revenues fell 17% last month to their lowest level since before the war began, according to a study published Wednesday by the Centre for Research on Energy and Clean Air (CREA), an independent think tank based in Finland that focuses on energy and pollution. 

After the EU imposed new restrictions on Russian energy in December, Russias net energy export revenues declined 160 million ($172 million) a day. Russia continues to rake in huge amounts from its fossil fuel tradearound 640 million ($689 million) dailybut the study found that even stricter policies against Russian energy would deal a devastating blow to the countrys economy, and potentially weaken Putins ability to maintain his costly war in Ukraine.

The short-term windfall generated to Russia by sky-high fossil fuel prices in 2022 is starting to wear out, the studys authors wrote. Further cuts to Kremlins revenue will therefore materially weaken the countrys ability to continue its assault and help bring the war to an end.

Stricter measures

The decline in Russian fossil fuel revenues was partly a result of global consumption declining due to high prices, the CREA study found, but also because the EU expanded its sanctions to directly target Russian energy exports.

As of Dec. 5, EU vessels can no longer transport Russian crude oil. The ban will be extended to all petroleum products on Feb. 5, which will slash Russias oil revenues by another 120 million a day, CREA estimated.

The sanctions have already dug deep into Russias oil revenues, as crude oil exports fell 12% in December while crude oil revenues fell by a whopping 32%, the study found. The decline comes as a massive blow to Putin, as oil was among his biggest cash cows at the beginning of the war, while fossil fuel revenues constituted the financial bloodline for Putins war, Svitlana Romanko, founder of Razom We Stand, an organization seeking a full embargo on Russian fossil fuels, said in a statement accompanying the CREA study. 

A June study from CREA found that, of the 93 billion in fossil fuel revenues Russia collected during the first 100 days of the war, half came from crude oil and around two thirds from all oil products. 

Russias government has long relied on oil and gas sales, which in 2021 made up 45% of the federal budget. The worlds desperate need for energy last year meant that Russias fossil fuel export revenues exceeded what the country was spending in Ukraine.

But European nations, historically the largest buyers of Russian fossil fuels, have been able to wean themselves off Russian energy imports by switching to alternative suppliers and by reducing their energy consumption, first because of high prices and now largely due to unusually mild winter weather. 

A crushing price cap

But the damage to Russias economy and war efforts could be even greater if the EU continues investing in renewable energy to replace Russian fossil fuels, and if the bloc approves even more ambitious controls on Russian energy exports. 

Last month, the EU imposed a price cap on Russian oil at $60 a barrel thereby freezing transactions for Russian oil in markets covered by the cap at any price over that limit. The price cap has so far helped limit Russian oil revenues, the CREA study found, but the authors added that lowering the cap to $25 to $35 a barrel would create even more problems for Russia, while still keeping prices above what it costs to produce and transport Russian oil.

Other strategies Western nations could take to reduce Russias revenues include imposing fines on countries selling oil tankers to Russia, which producers could use to circumvent the price cap, and leveraging non-compliance penalties for violating the price cap. Taken together, all these measures could cut Russias fossil fuel revenues by another 200 million per day, the study said.

The EUs oil ban and the oil price cap have finally kicked in and the impact is as significant as expected, Lauri Myllyvirta, lead analyst at CREA, said in a statement. Its essential to lower the price cap to a level that denies taxable oil profits to the Kremlin, and to restrict the remaining oil and gas imports from Russia.

Russian officials have opposed the oil price cap, and last month banned oil sales to countries participating in the cap. Putin has also threatened production cuts in retaliation to the cap that could send the global price of oil surging.

But production cuts may be a double-edged sword for Putin and Russias economy. Energy historian Daniel Yergin warned last month that remaining buyers of Russian oil including China and India could walk away under the scenario of Russian production cuts, further depleting Russias revenues. Centrocredit Bank economist Yevgeny Suvorov also said this week that a strict oil price cap would be a catastrophe for Russias budget and economy.

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Microsoft is even in talks with Open AI, the creator of the popular AI chatbot called ChatGPT that took the internet by storm a few weeks ago to invest as much as $10 billion in the company, Bloomberg first reported this week, citing unnamed sources. Wedbush tech analyst Dan Ives called ChatGPT one of the most innovative AI technologies in history, and a potential game changer for Microsoft, in a Wednesday note to clients. 

We believe this strategic investment is a smart poker move in this AI arms race that is taking place globally, he wrote, arguing Microsoft is becoming a core AI play for investors.

Microsoft stock is up nearly 3% this week, but remains down roughly 25% over the past year amid broader bear market. But Ives said that OpenAIs tech will have broad applications at the tech giant, and he believes it will be fully integrated into the entire product suite over the next decade.

This isnt Microsofts first time jumping into the AI space. The tech giant has been developing its own AI tech for years (check out VALL-E, the AI that can clone your voice after listening to a three second audio clip) and even invested $1 billion in OpenAI back in 2019 in order to build new AI-enabled supercomputing technologies for its cloud platform, Azure. Now, with OpenAI raising funds at a $29 billion valuation and luring over 1 million users to ChatGPT less than a week after its release in early December, Microsoft is reportedly taking another bite of the apple as welland Ives believes its the right move.

While ChatGPT is naturally a high cash burn situation today, we view this as a strategic step for Nadella & Co. to double down on its artificial intelligence strategy as more use cases boost unprecedented demand for AI solutions, he wrote, referencing Microsoft CEO Satya Nadella.

Ives said that Microsoft will be able to incorporate ChatGPT into the Office suite, and threaten Googles search engine dominance by using the technology to improve search results for customers. Bing currently represents just 3% of the global search engine market compared to Googles 93%, according to Statcounter.  But Ives believes that could change if the company is able to offer more advanced search capabilities and language models.

Ives also argued that Microsoft may be able to use OpenAIs tech in its video gaming division. Microsoft is currently in the process of acquiring Activision Blizzard, the one of the largest gaming companies in the world, for $69 billion. But theyve hit roadblocks with both the UK Competition and Markets Authority (CMA) and the U.S. Federal Trade Commission (FTC), which argue that the acquisition would suppress competition in the gaming industry.

This is another step for the company to double down on its gaming initiatives with this technology finding more applications within the video gaming and digital art industry, Ives wrote, arguing that Microsoft will ultimately be successful in its battle with the FTC.

But not everyone is so bullish on AIs potentially game changing moment. Some critics have called ChatGPT dangerous, and teachers have begun to wonder whether the chatbot means the end of the college essay. Tesla CEO Elon Musk, who was himself one of OpenAIs early backers, has previously described AI on the whole as summoning the demon in a 2014 interview.

Musk called ChatGPT scary good in a Dec. 3 tweet after its release, adding that we are not far from dangerously strong AI. But for investors, Ives believes that AI advancements could be a gold mine, and Microsoft will be one of the beneficiaries. He holds an Outperform rating on the stockakin to a buy ratingand a $290, 12 month price target.

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The streaming giants director-level executivessenior managers who are neither C-suite execs nor vice presidentshave long had the ability to see their colleagues salaries. Now theyre in the same boat as the rest of us, the Wall Street Journal reported Wednesday. 

According to the Journals sources at Netflix, the walkback stemmed from the vast expansion of director-level hires in recent years, some of whom demanded explanations for their pay discrepancies. Despite rounds of layoffs, Netflix employed 11,300 full-time workers at the end of 2021, representing a nearly 60% headcount growth from 2018.

The move comes as an embattled Netflix attempts to tighten its belt after hemorrhaging subscribers in the first half of 2022. The revoke of access, instituted late last year, is a contradictory move by a company that, as the Journal puts it, has heretofore offered a rare degree of transparency to its workforce. That was mainly thanks to its co-CEO Reed Hastings, who has said transparency is vital to a healthy company culture. 

Transparency has become [our employees] biggest symbol of how much we trust them to act responsibly, Hastings wrote in his 2020 book, No Rules Rules. Netflix has historically relied on a laissez-faire approach to leadership and management, he wrote, which necessitated increasing organizational transparency and eliminating company secrets.

Theres also the fact that Netflix, like many Fortune 500 companies, must comply with new salary transparency requirements in places like Washington, Colorado, California, and New York City. Like many companies, theyve been taking a backhanded approach, putting enormously wide bands on their job postings. One software engineer job provided a salary range of $90,000 to $900,000.

The push and pull of salary transparency

Transparency laws going into effect across the country have breathed new life into the debate about their efficacy. Data suggests the answer is simple. A vast research initiative from University of Utahs David Eccles School of Business found conclusively that knowing what your coworkers make substantially reduces the gender pay gap, as well as other forms of pay inequity. 

When institutions increased wage transparency in a centralized way like Netflix did, the Utah researchers saw the gender pay gap close by 50%, and wage adjustment policies substantially changednamely by granting bigger pay increases to historically underpaid groups.

Sharing salaries also has the potential to spur collective action. In a study from the Journal of Economic Behavior & Organization, James Flynn, an economics Ph.D. candidate at the University of Colorado, found that workers respond to perceived pay unfairness not by withholding effortor, to use the term du jour, quiet quittingbut rather by shifting their effort to better align with what pays more. 

Companies that pay their workers low wages, Flynn writes in his conclusion, have a strong incentive to keep salary information secret, while higher-paying firms could benefit from policies designed to increase salary transparency. 

The kind of transparency shock that comes with seeing what your coworkers are paying shouldnt make anyone nervousexcept bosses who know theyre earning inexcusably more than their workers. That may well be the case at Netflix, where Hastings total compensation in 2021 exceeded $34 million. (For co-CEO Ted Sarandos, that figure jumped to $40 million.)

Despite removing the pay transparency perk, Netflix employees still enjoy more high-level insights than many public companies of similar size, including access to strategic documents, the Journal wrote. Netflix didnt respond to Fortunes request for comment on what, exactly, those are.

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The White House initially said that there was no evidence of a cyberattack behind the outage that ruined travel plans for millions of passengers. President Joe Biden said Wednesday morning that he directed the Department of Transportation to investigate.

The outage showed how dependent the worlds largest economy is on air travel, and how much air travel depends on an antiquated computer system to generate alerts called NOTAMs or Notice to Air Missions to pilots and others.

Before a flight takes off, pilots and airline dispatchers must review the notices, which include information about weather, runway closures or construction and other information that could affect the flight. The system was once telephone-based, with pilots calling dedicated flight service stations for the information, but has moved online.

The NOTAM system broke down late Tuesday and was not fixed until 9 a.m. Eastern on Wednesday, leading to about 1,200 flight cancelations and more than 7,800 delays by early afternoon on the East Coast, according to flight-tracking website FlightAware.

Even after the Federal Aviation Administration lifted the order grounding planes, the chaos was expected to linger. More than 21,000 flights were scheduled to take off in the U.S. Wednesday, mostly domestic trips, and about 1,840 international flights expected to fly to the U.S., according to aviation data firm Cirium.

Airports in Chicago, Los Angeles, New York and Atlanta were seeing between 30% and 40% of flights delayed.

There was a systems issue overnight that led to a ground stop because of the way safety information was moving through the system, Transportation Secretary Pete Buttigieg said at a press conference. That was resolved, which allowed the ground stop to be lifted at 9 this morning, but through the day were going to see the effects of that rippling through the system.

Buttigieg said his agency was now turning to understand what caused the NOTAM system to go down.

Longtime aviation insiders could not recall an outage of such magnitude caused by a technology breakdown. Some compared it to the nationwide shutdown of airspace after the terror attacks of September 2001.

Periodically there have been local issues here or there, but this is pretty significant historically, said Tim Campbell, a former senior vice president of air operations at American Airlines and now a consultant in Minneapolis.

Campbell said there has long been concern about the FAAs technology, and not just the NOTAM system.

So much of their systems are old mainframe systems that are generally reliable but they are out of date, he said.

John Cox, a former airline pilot and aviation safety expert, said there has been talk in the aviation industry for years about trying to modernize the NOTAM system, but he did not know the age of the servers that the FAA uses.

Ive been flying 53 years. Ive never heard the system go down like this, Cox said. So something unusual happened.

According to FAA advisories, the NOTAM system failed at 8:28 p.m. Eastern on Tuesday preventing new or amended notices from being distributed to pilots. The FAA resorted to a telephone hotline to keep departures flying overnight, but as daytime traffic picked up it overwhelmed the telephone backup system.

The FAA ordered all departing flights grounded early Wednesday morning, affecting all passenger and shipping flights.

Some medical flights could get clearance and the outage did not impact any military operations or mobility.

Flights for the U.S. militarys Air Mobility Command, were not affected.

Biden said Wednesday morning that he was briefed by Buttigieg.

I just spoke to Buttigieg. They dont know what the cause is. But I was on the phone with him about 10 minutes, Biden said. I told him to report directly to me when they find out.

Buttigieg acknowledged the flight delays and cancellations caused by the outage, but emphasized the main thing I want everybody to understand is that every step of the way safety is going to be our north star, as it always is.

We are now pivoting to focus on understanding the causes of the issue, he said.

Passengers scrambled to rearrange trips. Many said they had trouble finding out information about how long the delays would last.

There is just a lot of frustration, a lot of confusion, said Ryan Ososki, who was trying to fly from Washington, D.C., to California for a work conference. Im back to an hour and a half delayed (and) still unclear as to whether or not I should be boarding because Id now miss my connection flight.

Julia Macpherson was on a United Airlines flight from Sydney to Los Angeles on Wednesday when she learned of possible delays.

As I was up in the air I got news from my friend who was also traveling overseas that there was a power outage, said Macpherson, who was returning to Florida from Hobart, Tasmania. Once she lands in Los Angeles, she still has a connection in Denver on her flight to Jacksonville, Florida.

She said there have been no announcements on the flight about the FAA issue.

Macpherson said she had already experienced a delay in her travels because her original flight from Melbourne to San Francisco was canceled and she rebooked a flight from Sydney to Los Angeles.

Similar stories came out of Chicago, Washington, Atlanta and other major U.S. airports.

European flights into the U.S. appeared to be largely unaffected. Carriers from Irelands Aer Lingus to Germanys Lufthansa said there was no impact on their schedules.

It was the latest headache for travelers in the U.S. who faced flight cancelations over the holidays amid winter storms and a breakdown with staffing technology at Southwest Airlines. They also ran into long lines, lost baggage, and cancelations and delays over the summer as travel demand roared back from the COVID-19 pandemic and ran into staffing cutbacks at airports and airlines in the U.S. and Europe.

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Koenig reported from Dallas and Chapman reported from New York. AP writers Zeke Miller and Tara Copp in Washington, D.C., Kelvin Chan in London, Tom Krisher in Detroit and Freida Frisaro in Miami contributed to this report.