These Four ETFs Could Feel A Pinch If The BP/Rosneft Deal Falls Apart

Tick tock goes the clock on the controversial $16 billion share swap announced by BP BP, Europe's second-largest oil company, and OAO Rosneft, Russia's largest oil producer, in January. At the time, the deal was heralded as a way for BP to gain access to precious oil reserves in the Arctic Circle while helping repair CEO Bob Dudley's tarnished image in oil-rich Russia. Fast-forward a few months and the deal is on the brink of collapse after TNK-BP, BP's joint Russian venture with oligarch investors, sued to block the tie-up with Rosneft. BP and Rosneft are scrambling to save, but the deadline for approving the deal is tomorrow, so the best option might be to get that extended and move forward from there. Even that would not result in any guarantees. Losing out on this arrangement is viewed as bad news for BP and it is, but what about Rosneft? It won't be good news for them either because Russian oil majors have started to warm to idea of working with Western rivals because companies like BP have better equipment and technology. Not to mention, Rosneft may see a Black Sea agreement with Chevron CVX fall apart as well. So while Rosneft isn't listed here in the U.S., exposure to the Russian oil giant can be had via ETFs and that makes these funds worth watching over the next couple of days for any news on the BP accord. 1) Market Vectors Russia ETF RSX: RSX, the king of Russia-specific ETFs, offers a weight of almost 8% to Rosneft, the largest of any ETF. Plus the energy sector accounts for over 40% of RSX's sector weight, so if this deal falls apart, the bad news for Rosneft could weigh on its rivals. 2) RSX rivals: That would mean the iShares MSCI Russia Capped Index Fund ERUS, which offers a weight of 4.12% to Rosneft, and the SPDR S&P Russia ETF RBL, which devotes 4.35% to Rosneft. 3) EGShares Emerging Markets Energy ETF EEO: Since EEO combines emerging markets and giant energy producers, many of its holdings are state-run firms, so there some Russian companies to be found in this ETF, including a 4.21% weight to Rosneft. 4) Global X Russell Emerging Market Value ETF EMVX: We highlighted EMVX in our "Checking In" segment on Tuesday. The ETF is still new and features light volume, but keep an eye on it for the rest of the week as Rosneft accounts for 2.35% of its weight.