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Press review: Saudis’ Ukraine talks make little dent and time runs out for Niger ultimatum

Top stories from the Russian press on Monday, August 7th
Supporters of Niger's ruling junta AP Photo/Sam Mednick
Supporters of Niger's ruling junta
© AP Photo/Sam Mednick

MOSCOW, August 7. /TASS/. Saudis’ Jeddah talks on Ukraine settlement produce statements but few results; time runs out on West African group’s ultimatum to Niger’s military coup leaders; and Tehran pursuing military buildup amid looming escalation with US. These stories topped Monday’s newspaper headlines across Russia.


Media: Saudis’ Jeddah talks on Ukraine settlement produce statements but few results

Consultations on reaching a peaceful settlement to the conflict in Ukraine have taken place in Jeddah, Saudi Arabia. The meeting brought together more than 40 countries, but Russia was not among them, having not been invited. Western media outlets reported, citing sources, that the delegates agreed on the need to support the territorial integrity of sovereign countries and reaffirmed their determination to continue work on the platform by holding another such meeting without Russia in the coming weeks, Vedomosti writes.

The main goal that the West sought to achieve in Jeddah was to show that the international community, including Russia’s partner countries, shares a common viewpoint on resolving the Ukrainian crisis, said Oleg Barabanov, program director at the Valdai Discussion Club. Hence the statements about support for Ukraine’s territorial integrity and references to the UN Charter. The Jeddah platform could become a convenient tool for the West to exert political pressure on Russia, Barabanov noted. Engaging BRICS nations in talks without Russia will almost certainly lead to them taking part in "a global peace summit," although perhaps only at the ministerial level.

According to Vasily Kashin, director of the Center for Comprehensive European and International Studies at the Higher School of Economics (HSE University), the Jeddah meeting was an event designed to promote a dialogue on Ukraine between the US and its partners, on the one hand, and the countries of the Global South on the other. He added that the meeting was formally presented as a dialogue between Ukraine and its international partners on the prospects for resolving the conflict. Declining the invitation to attend would have meant taking a side in the conflict, and thus was not an option for China and other countries. However, in the expert’s words, the meeting hosted by Saudi Arabia was not binding for its participants because no one demanded that they sign on to the plan put forward by Ukrainian President Vladimir Zelensky, nor is the future of the Jeddah platform clear.

Ivan Bocharov, program coordinator at the Russian International Affairs Council, told Izvestia that, "Saudi Arabia, just like other Arab countries, is interested in resolving the Ukrainian crisis." "One of the most important reasons - but not the only one - is because it is interested in diversifying its external economic ties and would like to boost economic cooperation with both Russia and the United States, along with the European Union, while the current confrontation is hampering these efforts," the expert explained. In addition, Saudi Arabia is also seeking to burnish its image as a mediator.


Media: Time runs out on West African group’s ultimatum to Niger’s military coup leaders

August 6 marked the deadline for the ultimatum that the member states of the regional group Economic Community of West African States (ECOWAS) issued to the leaders of Niger’s military coup, demanding that ousted President Mohamed Bazoum be reinstated in office. The organization announced at a summit in Nigeria that ECOWAS nations would take every measure to restore constitutional order in Niger, Vedomosti writes.

On July 31, the foreign ministers of ECOWAS countries issued a joint statement, saying that Nigeria, Senegal and Ivory Coast were ready to dispatch troops to Niger. However, the parliament of Nigeria refused to approve the proposed foreign intervention. Meanwhile, France, which imports 15% to 17% of the uranium it needs for its nuclear power industry from Niger, has actually backed the intervention plan. Foreign Minister Catherine Colonna stated that Paris resolutely supported ECOWAS’ efforts.

France is coordinating its actions with ECOWAS, said Grigory Lukyanov, an expert at the Russian Academy of Sciences’ Institute of Asian and Eastern Studies. Paris does not want to lose its longstanding position in the region and a critical supplier of vital resources. Initially, the proposal was more for a purely special military operation in Niger, the expert added. However, the situation has become more complicated now that the Nigerien coup leader has secured the support of civilians in addition to the rebels’ base in the military.

The ECOWAS ultimatum was an attempt to intimidate Niger as the plan was not to carry out a full-scale intervention, Rakhimbek Bobokhonov, researcher at the Center for Civilizational and Regional Studies of the Russian Academy of Sciences’ Institute for African Studies, pointed out. ECOWAS simply does not have a mechanism for promptly assembling a military force and coordinating its deployment. For its part, Paris will attempt to preserve its military presence in Niger but French forces will have to leave the country eventually; it is just a matter of time, the analyst noted.

"Tensions in the region are rising but it’s difficult to talk about a full-scale military operation against Niger at this point. Every diplomatic effort is more likely to be made and there is also a possibility of minor armed clashes in border areas, as well as precision missile attacks and airstrikes on critical military facilities," Alexander Rudoy, international cooperation expert at the State University of Management, told Izvestia. According to him, there should be no expectations of a quick resolution to the Niger crisis, while further developments will largely depend on whether the countries of the region are capable of agreeing to settle the issue peacefully.


Nezavisimaya Gazeta: Tehran pursues military buildup amid looming escalation with US

Iran’s Islamic Revolutionary Guard Corps (IRGC) Navy has received a batch of new military equipment. IRGC Commander-in-Chief Major General Hossein Salami stated that the entire world ocean was now within Tehran’s reach. The handover of additional weapons to the IRGC should be viewed within the context of a potential naval showdown between Iran and the United States. In recent months, the US has been paying more attention to the situation around the Persian Gulf, increasing its military presence off the coastlines of its regional allies, Nezavisimaya Gazeta writes.

Earlier in the month, the IRGC Navy held demonstration naval drills in the Persian Gulf. The IRNA news agency reported that the goal of the exercise was to show "the authority and combat readiness of the IRGC Navy to ensure security in the Persian Gulf and on the Iranian islands." The US earlier announced measures to strengthen its military presence in the Gulf area. Washington declared that the move was aimed at countering Iran. The media reported that the Pentagon had started considering the option of stationing US troops on commercial vessels passing through the Strait of Hormuz as Washington accused Tehran of trying to seize civilian tankers.

"The IRGC Navy received a large amount of various weapons and equipment, primarily all kinds of coastal missile systems with anti-ship cruise missiles," said Yury Lyamin, senior researcher at the Center for Analysis of Strategies and Technologies. "The majority of these systems are equipped with already-known Iranian missiles, such as Nasir anti-ship missiles with a range of up to 90 kilometers and Ghadir missiles with a range of up to 300 kilometers. However, a ground-based launcher for Iran’s most advanced Abu Mahdi anti-ship cruise missiles was also spotted, a system that was said to have been put into service in late July," he added.

According to the expert, these missiles have a claimed range of more than 1,000 kilometers. "Consequently, they dramatically expand the radius in which the IRGC coastal defense forces can hit naval targets from Iran’s coastline," Lyamin pointed out. "The IRGC Navy was provided with more batches of various unmanned aerial vehicles (UAVs), from small reconnaissance and kamikaze drones to large Mohajer-6 reconnaissance and attack drones," he noted. The analyst emphasized that UAVs played a huge role in Iran’s asymmetric maritime defense strategy.


Rossiyskaya Gazeta: Russia could delink oil prices from Brent, other foreign benchmarks

Russia’s benchmark Urals oil blend exceeded the price ceiling of $60 per barrel in July, which will surely prompt those countries that initiated sanctions against Moscow to raise the issue of tightening sanctions rules or even reducing the price cap. In either case, there is a risk that such a move would serve to once again increase Russian crude’s discount to the global Brent benchmark, Rossiyskaya Gazeta writes.

The goal of sanctions was to worsen Russia’s economic situation by introducing restrictions, said Vyacheslav Mishchenko, head of the Center for Analysis of Strategy and Technologies for the Development of the Fuel and Energy Complex at the Gubkin Russian State University of Oil and Gas. In addition, Russian exporters were forced to deal with thorny issues involving insurance, freight, bank transactions and the entry of Russian-flagged ships to European ports. However, after the market structure changed - with Russia establishing new supply chains and creating a new oil trading system - the buyers’ risks declined. As a result, the oil discount saw a sharp decrease.

The common problem for both the initiators of sanctions and Russia is that the price of Urals oil as determined by the Russian Finance Ministry is as far from reality as is the Urals price based on the cost of its delivery to European ports, as no such deliveries have been made since December 5, 2022. It is highly difficult to calculate the contract value of Russian oil at this point because there is no single reference point and prices vary for different customers, Andrey Kochetkov, lead analyst at Otkritie Investment, noted.

What is making the situation worse is that the prices of Russian oil blends are determined at foreign platforms and are linked to quotes of foreign benchmarks. Kochetkov highlighted the need to try to trade Russian oil for rubles on a Russian trading platform. However, restrictions on the movement of capital currently make such a plan impossible. For now, trading in Russian oil futures could be launched in Chinese yuan in Shanghai, which is where the main buyers of Russian oil are located. This option is also relevant in view of efforts to abandon the US dollar as a unit of pricing for commodities. The Brent price situation does not always reflect the real situation in Asian markets. This is why, at least, the ESPO (Eastern Siberia Pacific Ocean) oil blend could become a new benchmark, which is supplied in sufficient volumes both via pipelines and tanker ships. The blend has all the necessary commercial qualities; it is in demand in Asia and reflects the overall supply and demand situation.

Mishchenko believes that the focus should be on the domestic oil market as the price benchmark should be formed in a Russian exchange for the domestic market. It would then be feasible to gradually promote this new benchmark through various economic unions, namely the Union State of Russia and Belarus and the Eurasian Economic Union. Later, it could be expanded to other countries.


Media: Experts expecting Russian gas revenues to recover by 2030

The loss of access to the European Union market may cause Russian gas production to fall by 30 bln cubic meters in 2023, compared to the 2022 level, and by 120 bln cubic meters compared to the 2021 mark, Kommersant writes, citing research by analysts from Yakov and Partners (formerly McKinsey in Russia). It will be possible to make up for such losses in the next five to seven years, provided Russia will be able to reroute gas exports, find new buyers in Asia and increase the potential of the domestic market.

Russia started to significantly cut gas production in 2022 after pipeline gas exports to Europe dropped amid military activities in Ukraine. Offsetting the reductions will require developing petrochemical and LNG export projects, as well as increasing domestic gas consumption, particularly by industry. Sergey Kondratyev of the Institute of Energy and Finances believes that the main question is what investment it will take to implement the projected plans to increase the export of gas and petrochemical products, and whether it is possible given the current tax regime and domestic oil prices.

Finam analyst Sergey Kaufman told Vedomosti that the aforementioned measures are the main gas monetization methods and they are already being applied. However, in order to make a profit and be able to implement ambitious investment programs, gas exports need to be diversified and reoriented towards new external markets, said Dmitry Kasatkin, partner at Kasatkin Consulting. Stimulating domestic demand and developing the petrochemical industry is also important but, in terms of consumption volumes and revenues, it is less crucial than the recovery of exports, Kaufman agreed.

Kasatkin expects the share of gas in global energy consumption to continue to grow until 2030. Kaufman also noted that China’s gas demand will keep increasing in the next 10-15 years, and Russian pipeline gas is "one of the most attractive" export options for China. According to the expert, exports can also be increased through Turkey’s hub, given its favorable geographical position.

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