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Press review: Iran’s bid to skirt US sanctions and Trump trade war may spark global crash

May 13, 13:00 UTC+3 MOSCOW

Top stories in the Russian press on Monday

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Iranian President Hassan Rouhani

Iranian President Hassan Rouhani

© Iranian Presidency Office via AP

Izvestia: Iranian ultimatum aimed at speeding up sanctions-busting EU payment tool

Iranian President Hassan Rouhani announced on May 8 that Tehran would resume its uranium enrichment activities and suspend the modernization of the Arak heavy water reactor unless participants of the nuclear deal fulfilled their commitments, primarily in the banking sector and Iranian oil trade. The 60-day ultimatum does not concern Russia, a high-ranking Iranian diplomatic source told Izvestia. According to him, the Iranian leader sent the same message to five parties to the deal (Russia, the United Kingdom, France, Germany and China), but Tehran draws a line between the positions of Russia and European countries. The Islamic Republic’s message is mainly aimed at the EU participants in order to make them launch the mechanism for trade with Iran bypassing the US as soon as possible.

Chairman of the Commission of the Federation Council (upper house of parliament) for Information Policy Alexei Pushkov told Izvestia that the Iranian ultimatum does not concern Moscow, which has been one of the most active supporters of the nuclear deal and strongly condemned Washington’s unilateral withdrawal from it. "The problem is that Russia cannot be the only guarantor of the deal’s implementation. As for European countries, they back the deal, but cannot suggest anything to counter the US decision on blocking Iranian oil trade," the senator said. So, they will verbally support the deal, but in terms of practical politics, the only thing they can do is to take steps to influence the Trump administration’s stance, he noted.

According to the senator, the major reason behind the Iranian ultimatum is the latest US sanctions against Tehran’s oil industry. On May 2, Washington fully banned imports of Iranian oil and canceled earlier exemptions for eight major importers of Tehran’s crude. Shortly after Rouhani’s announcement, French Defense Minister Florence Parly announced that her country could restore sanctions against Iran. However, Russia won’t follow the French example, Pushkov stressed. "Even if Tehran pulls out of the deal, Moscow won’t restore sanctions against it. If we choose this path, we will actually back the US in this conflict. And Russia won’t benefit from this step, but on the contrary it will ruin its ties with Iran, which have passed many tests over the past years and proved to be effective," the politician said. "Iran has fulfilled its part of the deal, and the US resorted to provocations."

The senator noted that another participant of the deal, China, would also back Russia and join the efforts in order to convince Trump not to take last-ditch steps. However, this won’t rescue the deal: in case a rift occurs among the nuclear deal’s guarantors, the Europeans will go with the US, he explained.

 

Nezavisimaya Gazeta: US-China trade war to spark global recession

Rather than dying down, tensions between Washington and Beijing are only heating up. US President Donald Trump has raised tariffs on Chinese goods from 10% to 25%, but Beijing has not responded to the move so far. Nevertheless, Washington has suggested that China should reach a trade deal now if it wants to avoid more serious consequences. Economists fear that the standoff between the two countries will trigger a global recession, and a collapse of oil prices and stock markets, Nezavisimaya Gazeta writes. "For Russia, escalation of the trade war does not bode well. In the future, global recession will result in the collapse of commodity currencies, including the ruble," experts say.

Economists from Moody’s believe that the US-China trade war will have serious consequences for the United States, China and the entire global economy. In particular, the American economy could slip into a recession by late 2020, when the presidential election is scheduled. Experts note that Trump's tariff hike will actually harm American companies.

Director of the Analytical Department at Loko-Invest Kirill Tremasov said that half of the imports targeted by the rising tariffs accounts for materials and components used by American companies for domestic production. The sectors in the US, which will be mostly targeted by the hikes on tariffs on Chinese goods, will be construction, transport, telecommunications, machinery, computers and electronics, he said, citing Moody’s analysis.

Russian Presidential Aide Andrei Belousov believes that the mounting US tariffs on Chinese goods could lead to the weakening of the ruble. The major danger here is not the ruble's depreciation, but uncertainty in the Russian currency’s fluctuations.

Experts told the paper that by exerting pressure on China, Trump wants to demonstrate that he is a strong leader in the eyes of his voters. However, the failed talks would stonewall global trade and raise the risks of a global recession, triggering the collapse of stock markets, oil prices, and in the future commodity currencies, including the ruble, senior analyst at BCS Premier Sergei Suvorov said. By introducing new tariffs against China, Trump will set off a domino effect in global trade, expert at the Russian Institute for Strategic Studies Vyacheslav Kholodkov said. Following Washington's example, third countries may start raising tariffs against each other’s goods and take other restrictive measures.

Director of the Alpari think-tank Alexander Razyvayev warned that the world could face a crisis similar to that of 2008, which had been triggered by the collapse of Lehman Brothers. The analyst did not rule out that oil prices could drop to $30-35 per barrel.

 

Nezavisimaya Gazeta: Washington declares oil war on Damascus

US Secretary of State Michael Pompeo, who is planning to pay a visit to Russia, is expected to discuss the Syrian conflict. The top American diplomat has said the US and Russia could find common ground in some areas, calling Syria "a good example." However, Washington has not yet clarified its real goals in the country, Nezavisimaya Gazeta writes.

Although nearly all Syrian provinces have been liberated from the Islamic State (terror group, outlawed in Russia) US forces remain in the country, supporting the opposition and cultivating separatism. Meanwhile, Washington labels the Iranian units, which back Damascus, as terrorists. According to the paper, during his visit to Russia, Pompeo may discuss Iran's presence in the region rather than the real problems of Damascus. The US Secretary of State has made it clear that "we would protect America’s interests."

Washington has demonstrated its real goals by continuing to block the export of Iranian oil to the Mediterranean region and curbing the flow of hydrocarbons from Syrian fields located on its occupied territories to the east of the Euphrates, the paper says. According to Kurdish and Syrian media, since Washington’s introduction of new sanctions against Iran, the US-led international coalition’s forces have not only started actively blocking Iranian oil entering the Syrian ports of Tartus and Latakia, but also exports of Syrian oil from Kurdish territories.

Ahead of Pompeo’s visit, US Special Representative for Iran Brian Hook said Washington had blocked Iranian crude imports because these sales helped Tehran fund its military sector and forces under its control in the Middle East, namely Shiite units loyal to Assad. According to the US leadership, the lack of Syrian oil produced at the fields in Deir ez-Zor occupied by the US, should weaken the power of Damascus. However, this is not happening now. Syria’s deal with Russia on leasing the port of Tartus for 49 years will enable it to get oil from Moscow without any hurdles. It is not ruled out that this factor has become one of the reasons for the US increased activity in dialogue with Russia on Syria.

 

Kommersant: Dozens of SSJ 100 flights grounded after Sheremetyevo tragedy

Throughout the week following the deadly crash landing of a Sukhoi Superjet 100 passenger plane, which claimed 41 lives, Russia’s Aeroflot has canceled nearly 50 flights of this aircraft. The airline has not commented on the reasons behind the cancellation. Sources in the aviation sector told Kommersant that the Sukhoi Superjet flights were canceled more often than those of Boeing and Airbus. Experts believe that the massive cancellations could be linked to increased security measures by both Aeroflot and the crews since the causes of the tragedy are not yet clear.

Executive Director of Aviaport agency Oleg Panteleyev notes that numerous media reports about the delays and cancellations of SSJ 100 flights have emerged amid mounting media scrutiny over the aircraft after the crash. "It never occurred that the aircraft had had any problems before and after a certain date [May 5 tragedy] they suddenly emerged."

According to the expert, some flight cancellations may be linked to the pilots’ reaction that media blamed the crew for the deadly crash. "In this situation, some pilots take precautionary measures and refuse to perform a flight if there is any sign of a malfunction, even if a flight can be performed," he noted.

Head of Infomost Boris Rybak has not ruled out that after the crash at Sheremetyevo, Aeroflot could have imposed more serious requirements on the SSJ 100 planes than usual and started cancelling flights if there was any sign of a malfunction. "Before the crash, many flights had been cancelled and many SSJ 100 planes had been replaced. Aeroflot sought to sweep this under the carpet, but up to one-third of the airplanes were grounded," the expert said. According to him, the aircraft’s reliability had been low ever since it entered service, mainly due to its technical characteristics. Speaking on the causes of the crash, he said: "The plane could have a flawed design, and in this case we could say that the certifying bodies had overlooked this, or either the manufacturer let the flaw through when this aircraft was assembled," Rybak said.

 

Kommersant: Chinese hackers targeted Russian state structures for years

Positive Technologies and Kaspersky Lab have uncovered a cyber group allegedly originating from China, which had attacked more than 20 Russian companies and state structures for several years, with the goal of stealing information, Kommersant writes. The group has been operating for at least nine years. The codes used by the perpetrators include the names of Chinese software developers, and during some attacks, the hackers used IP-addresses from China.

In all cases, the group employed similar scenarios and tools, Positive Technologies said. The group was labeled TaskMasters as it created certain tasks in a task planner, which makes it possible to perform executive directives and launch a software at a certain moment. After entering a local network, the hackers would study the infrastructure and vulnerabilities and upload malicious software, using it for espionage, Director of Expert Security Center at Positive Technologies Alexei Novikov told the paper.

Kaspersky Lab says it has been tracking the activity of this group, which it calls BlueTraveler, since 2016. Major targets of its attacks are state structures, namely from Russia and former Soviet states, the company notes, confirming that the hackers speak Chinese.

The breaches by the Chinese hackers use sophisticated techniques and can remain unnoticed by antiviruses and information security services for years. Hackers upload Gbytes of information, files, documents and designs on their servers, Head of Department for Dynamic Analysis of Malicious Code at Group-IB Rustam Mirkasymov said. The usage of a task planner is a popular method, which is also linked to Cobalt and MoneTaker groups attacking the banking sector, he noted.

 

TASS is not responsible for the material quoted in the press review

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