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Press review: Where will Putin meet Trump and ‘sabotaged’ tankers raise Iran tensions

May 14, 13:00 UTC+3 MOSCOW

Top stories in the Russian press on Tuesday, May 14

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© Valeriy Sharifulin/TASS

 

Media: Japan or Finland seen as likely venues for Putin-Trump summit

Washington has offered to organize a meeting between US President Donald Trump and his Russian counterpart Vladimir Putin in Japan, a source close to the Russian Foreign Ministry told RBC. The summit may be held on the sidelines of the G20 meeting in Osaka set for late June. Russian Deputy Foreign Minister Sergey Ryabkov noted that arranging a new meeting between the two leaders could be discussed in Sochi during the upcoming talks between US Secretary of State Mike Pompeo and Russian Foreign Minister Sergey Lavrov and President Putin on Tuesday. The US president earlier said he would meet with Putin and Chinese President Xi Jinping at the G20 summit, Reuters reported. If the sides manage to find common ground during Pompeo’s visit, a summit between Trump and Putin in Japan is not ruled out, Director General of the Russian International Affairs Council (RIAC) Andrey Kortunov told the paper. "Both leaders seek this meeting, but they want it to be fruitful," the expert said.

Chairman of the Presidium of the Council for Foreign and Defense Policy Fyodor Lukyanov told the paper that the possibility of another Putin-Trump summit was not being discussed publicly, because previously the US president had backed out of the proposed meetings at the very last moment. It is also unclear how the Putin-Trump talks could overcome the current negativity in bilateral ties, he noted. Although tensions had subsided after the publication of the Mueller report, the issue of Russia’s alleged influence on the election has not disappeared from America's political narrative, Lukyanov stressed. "Besides, other pressing issues have emerged and it is difficult for Russia and the US to find a consensus on Iran and Venezuela," he said.

Another likely venue for the Putin-Trump summit is Helsinki, Izvestia writes. Finland is ready to organize talks between the Russian and US presidents, two Finnish diplomatic sources told the paper. Both diplomats stressed that a lot depends on the leaders’ political will and the desire to hold a dialogue. Given that in early May the leaders held a phone conversation and Pompeo is coming to Sochi, it’s highly likely that the summit will take place, the paper says. Meanwhile, Chairman of the Russian Federation Council's (upper house of parliament) Foreign Affairs Committee Konstantin Kosachev noted that there should be no rush about holding this summit. The preparations for it should be thorough so that this meeting could bear fruit, he stressed.

 

Izvestia: Moscow seeks to fully normalize ties with Kiev, diplomat says

Russia wants to normalize its relations with Kiev in full, but for this, the new Ukrainian authorities should take steps to remove barriers, which have been artificially created over the past five years, Russian Deputy Foreign Minister Grigory Karasin said in an interview with Izvestia.

"Moscow is taking into account the election's outcome. The viability and effectiveness of the new Ukrainian leadership will mainly depend on its readiness to adequately assess the current realities facing the country and to bear responsibility for the decisions that are made, including settling the Donbass crisis based on the Minsk agreements," Karasin said.

According to the high-ranking diplomat, the recent presidential campaign in Ukraine can hardly be called a democratic, free and independent expression of the people's will. "Most candidates, including incumbent head of state Pyotr Poroshenko, pursued rampant Russophobic rhetoric, trying to divert the public's attention away from the country's serious problems," he stressed.

By electing Vladimir Zelensky as president, Ukrainians have demonstrated their negative attitude towards Pyotr Poroshenko’s failed policies and their hope that the situation would change for the better, Karasin noted. He also emphasized that the future of Russian-Ukrainian relations depends on the steps taken by Zelensky and the country’s new leadership.

Progress in ironing out the crisis in Donbass is possible if the new Ukrainian leader does not avoid dialogue with his fellow citizens in the country’s east, Karasin said. He hoped that following the inauguration, Zelensky would outline his priorities for settling the crisis, noting that his earlier statements were contradictory and gave no real impression about his political program.

 

Nezavisimaya Gazeta: ‘Sabotaged’ tankers in Gulf of Oman fuel tensions around Iran

The surprise decision by US Secretary of State Mike Pompeo to cancel his visit to Moscow on May 13 and instead to fly to Brussels for talks with his European colleagues coincided with a military provocation in the Gulf of Oman, which has alarmed the Persian Gulf states. Four commercial vessels were subjected to "sabotage operations" in the territorial waters of the United Arab Emirates. Although the Gulf monarchies are not pointing fingers over the incident, there are all grounds to believe that the current situation is not beneficial for Iran, which is facing pressure from the United States, Nezavisimaya Gazeta writes.

The May 13 meeting of the European Union’s Council at the level of foreign ministers focused on the Iranian problem. After Washington stepped up sanctions against Iran and Tehran retaliated by suspending its commitments under the nuclear deal, other signatories faced the task of keeping the agreement afloat. The United Kingdom, Germany and France have called on Iran to fully comply with the deal, but at the same time condemned the US extraterritorial restrictions. However, there is no single strategy on how to offset the US leadership’s pressure. Pompeo’s surprise visit to Belgium on May 13 did not calm the European ministers.

The report that four commercial vessels flying different flags came under fire in the UAE’s waters came as a surprise, the paper says. The incident occurred near the port of Fujairah located just 140 km from the Strait of Hormuz, which Iran had repeatedly vowed to block in case Washington used disproportionate force. Recently, the US decided to beef up its military presence near Iran’s borders.

Experts believe that if the report about deliberate provocations is true, the number of possible perpetrators is not that large. "If we assume that information about the sabotage is true and is not a strange cover for creating an artificial crisis around Iran, what Washington is doing right now, the theory about the role of the Houthis [Yemeni rebels allegedly loyal to Iran], which certain Arab activists voice on social networks, can be rejected," expert from the Russian International Affairs Council Anton Mardasov told the newspaper.

"This area is in the Gulf of Oman, far away from Yemen. Apparently, there is a hint at the Iranian forces, both the Navy and the Islamic Revolutionary Guard Corps, as this area is their joint zone of responsibility. The Iranians may carry out such acts of sabotage, but the question is why do they need this right now. Although in theory, they are certainly ready to raise the stakes in the current situation, and this is confirmed by the constant threats to block the Strait of Hormuz," he said.

The analyst recalled that joint Russian-Iranian military drills are scheduled to be held not far away from the scene of the incident. "I don’t believe that this was an attempt to disrupt them [the exercises] but someone will probably voice this theory," he said. Another question is why Iranian media were among the first to report about the explosions on the tankers. "Probably, this situation is aimed at advancing the domestic agenda in Iran," he said.

 

RBC: Russia’s Central Bank explains record foreign investment slump

Foreign investment into Russia’s economy hit a ten-year rock-bottom low in 2018, plunging to $8.8 bln, the Central Bank said. The net outflow of investments reached $23.1 bln, a record high figure since 2014. The regulator’s analysts link this the fact that the years-long trend when capital returned to the economy through offshores, most notably from Cyprus, has hit the brakes. In the third quarter of 2018, Russian investments to the tune of $7.9 bln were channeled to Cyprus, the regulator said.

Outgoing investment into foreign non-banking companies in 2018 reached more than $30 bln, while incoming investment into Russia’s non-banking sector was estimated at less than $6 bln. This allows the Central Bank’s analysts to conclude that the funds moving to offshores are not returning to Russia like they were earlier.

According to Oleg Shibanov, Academic Director of the Research Center for Financial Technologies and Digital Economy at Skolkovo-New Economic School, the issue of deoffshorization is not that important now for direct foreign investments, which used to be high in 1998-2008 when offshores were not widely discussed. Now, as governments around the world have clamped down on offshores, they have lost ground. "Russia is growing more slowly than other developing countries and its market is not that interesting. In addition, slower inflow and even outflow of investments will affect all developing countries amid the crisis in US-China relations," he noted.

Before Western sanctions and the state campaign for deoffshorization, between 60% and 80% of direct foreign investments in Russia accounted for offshores, where they had moved from Russia, economist at the Russian Academy of Sciences Boris Kheyfets said.

 

Kommersant: Russia fulfills OPEC+ deal thanks to dirty oil crisis

For the first time since early 2019, Russia has fully complied with its commitments under the OPEC+ deal on cutting oil output. This comes after a sharp reduction of oil output at Surgutneftegaz in early May, which is believed to have been caused by oil contaminated with organic chloride. Experts say this is a temporary cutback. The company may compensate for this after the deal on freezing output expires in late June, Kommersant writes.

Raiffeisenbank analyst Andrei Polischuk believes that the dirty oil crisis won’t affect the Russian company’s annual revenues, because it can boost production, given that the OPEC+ deal is unlikely to be extended for the second half of the year. "Even if the oil cut occurred due to oil contamination at the Druzhba pipeline, the figures of Surgutneftegaz will be included in Russia’s share that it needs to reduce," he said.

Under the current high oil price and growing demand there is no reason for this, the analyst said. Given the sanctions against Iran, other producers will have to compensate for the volume, which will disappear from the global market, the analyst explained.

According to Executive Director at Skolkovo’s Energy Center Vyacheslav Mischenko, tensions in the Persian Gulf, Iran’s threats to block the Strait of Hormuz and potential conflicts in the regions may contribute to an oil price surge of $80 per barrel. He also believes that the OPEC+ deal is unlikely to be prolonged and so Russian oil companies will get the opportunity to compensate for the short-term reduction in oil output by the year-end.

 

TASS is not responsible for the material quoted in these press reviews

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