Izvestia: Russia, OPEC+ reach oil cuts deal, await final word from G20
The new OPEC+ deal will help stabilize the oil market, although a substantial increase in the price for the black gold should not be expected, experts told Izvestia. There are no official details of the agreement yet, but it is already clear that basic agreements have been reached as a whole and that production will be reduced by 10 mln barrels per day. According to analysts, any decline in volumes, under conditions of low demand and amid the COVID-19 pandemic, will save oil prices from an even greater plunge. It is expected that OPEC+ countries will seek an additional cut in production from G20 nations, whose ministerial meeting will be held on Friday.
Production cuts of 10 mln barrels per day can last for two months, from May to June, Izvestia wrote. From July to December 2020, it will be 8 mln barrels per day, and from January 2021, 6 million barrels. Presumably, the agreement itself will be valid until April 2022, the newspaper said. The main stumbling block between the parties was raised over specific volumes for each of the states. Media reports note with reference to the draft agreement that Russia and Saudi Arabia agreed to reduce oil production by 2.5 mln barrels per day in May-June.
According to Izvestia, it is not yet clear whether the OPEC+ agreements will depend on the G20. The group might seek an additional cutback in production of up to 5 mln barrels per day from its members. On Friday, G20 energy chiefs are going to hold talks.
Experts interviewed by Izvestia agree that given the current situation, any reduction in production can be considered positive. "These are specific steps to restore the market’s balance at least for the period of reviving world oil demand. However, not only is an oral agreement important, but also the execution of the deal itself, as we have repeatedly seen during the previous deal that countries had periodically violated the agreements," Vyacheslav Abramov, director of the BCS Broker sales office, told Izvestia.
The question on what is going to happen to prices remains open, but it is already obvious that the new agreements will not let them slide even more, Izvestia wrote. "The main issue will be a decrease in demand over these months, if it is within 20-25 mln barrels per day, then we can expect some stabilization of the market in the region of $35-40 per barrel," expert at Energy Center at Skolkovo Ekaterina Grushevenko said.
Kommersant: Kiev, Donbass to exchange prisoners prior to April 19
Kiev and the self-proclaimed republics of Donbass agreed to complete a prisoner swap before April 19. Meanwhile, both Russian and Ukrainian diplomats are dissatisfied with the work of the trilateral contact group and want to change it. Kommersant’s sources in Kiev, in turn, argue that the video communication format, in which the group is forced to function due to the pandemic diminishes the confidence of the parties in each other, and therefore the quality of negotiations.
This time only 37 people will return home. Donetsk and Lugansk will return to Kiev 8 and 11 people, respectively, and in return they will receive 10 and 8, correspondingly. The exact date of the exchange is not yet known, but it is alleged that this will happen "before Easter," that is, before April 19.
Meanwhile, according to the Ministry of Foreign Affairs of the self-proclaimed Donetsk Republic, even this agreement was not easy. "Representatives of Ukraine, instead of agreeing on a specific exchange date, returned to specifying the lists that were already agreed on by the parties for this meeting," the department said. Natalia Nikonorova, Minister of Foreign Affairs of the republic, told the newspaper the list may change, but not significantly.
Kommersant’s source, aware of the state of affairs in the office of the President of Ukraine said that a much larger exchange was originally planned, but at the last moment, the plans had to be reviewed. The reason was the video conferencing format, which does not allow the discussion of some sensitive issues. "The negotiation process has always been uneasy. You cannot talk on Skype about things that are being said in a low voice even behind closed doors. Therefore, it was decided to exchange the prisoners that have been already agreed on," the source said.
The newspaper’s source in the office of the President of Ukraine also lamented about the fact that in the context of closed borders, it became impossible to hold informal consultations with Russian diplomats, which had previously often been held in European capitals.
Izvestia: Saudis announce ceasefire in Yemen due to coronavirus
The Saudi-led coalition announced a unilateral ceasefire in Yemen starting on April 9, pointing to the difficult situation with COVID-19 as the reason. Experts interviewed by Izvestia do not rule out that Saudi Arabia is simply buying time to regroup its forces for a conflict that is unfolding with the Houthis’ Ansar Allah, because it does not believe a sustainable peace can be achieved in the region.
Sources familiar with the situation told Izvestia, that simultaneously with the offer of a ceasefire, Saudi Arabia is conducting a large-scale regrouping of its forces on its soil. The kingdom is beefing up its air defenses for its oil production facilities within Houthi reach. In turn, Ansar Allah has already demanded a complete withdrawal of foreign troops from the country and the end of its sea, air and land blockade as a prerequisite for meaningful peace negotiations.
"During the armistice, Saudi Arabia will strengthen military formations, both its own and those of its allies. Perhaps there will be preparation for air strikes. But the rebels will not sit idly by and will build up their forces," Senior Researcher at the Center for Arab and Islamic Studies at RAS Boris Dolgov told Izvestia. According to the Mideast expert, a violation of the truce is possible.
Vice President of the Academy of Geopolitical Problems Vladimir Anokhin suggests that the Houthis will soon begin to strike again. "The Saudis realized that they were facing a loss. They are well aware of their position on the economic, political and military fronts. That’s why they concocted the coronavirus as a reason. How will they use this pause? Surely they will build up their armed forces," the expert told Izvestia.
Nezavisimaya Gazeta: National Projects face coronavirus reformatting
The Russian Accounts Chamber uncovered holdups and glitches in financing the National Projects, which until recently were considered the main vector of the country's development. According to the auditors, the federal budget’s expenditures for the implementation of the projects and the Comprehensive Plan for the modernization and expansion of the main infrastructure for the first three months of 2020 were only 15.7% fulfilled. With the growing global economic crunch, many pre-crisis plans by the authorities may become irrelevant, Nezavisimaya Gazeta wrote.
According to the Accounts Chamber, expenditures on the Healthcare nation project were 40.5% completed, Housing and urban environment saw a 32.7% fulfillment, and the Culture sector: 20.8%. The least successful National Projects were Safe and High-Quality Roads, Digital Economy, International Cooperation and Export, and Ecology.
Meanwhile, the Ministry of Finance does not see any particular problems in these figures. The ministry’s press service told Nezavisimaya Gazeta that assessing the execution of the federal budget’s expenditures for the first quarter is not indicative.
Now it’s important to save the economy and the people, and nowadays the pre-crisis National Projects are fading into the background, member of the State Duma’s budget and tax committee Mikhail Shchapov told the newspaper. "These are long-term strategic projects, and in theory, this crisis should not affect them in any way. But everything will depend on how the global economy changes after the crisis. Perhaps, the goals and objectives of the National Projects will need to be corrected," Schapov said.
"The crisis does not just provide an opportunity for economic restructuring, it rigidly dictates such restructuring as necessity. We already see the weaknesses of our economic model, its vulnerability and we understand that full-scale economic reforms are needed," he added. "The economy is primarily people and economic relations between them. We need to once again shift the focus of the bureaucratic apparatus to the interests of people," the lawmaker said.
Kommersant: Market for used electronics grows during self-isolation
Amid falling incomes due to the lockdown, Russians began to sell older smartphones more often and became more interested in used and refurbished devices. Demand for such electronics has grown by 40% in recent weeks, according to a SmartPrice report. This may lead to a situation where sellers and buyers of smartphones in the gray market will once again occupy a significant share of the segment, experts told Kommersant.
Founder of SmartPrice (sells refurbished electronics) Vladislav Ovchinnikov noted that Moscow leads in terms of rising demand among other regions. According to him, the reasons for such a boom include expectations of a deficit due to limited supplies from China and surging prices due to the ruble’s depreciation, as well as the closure of a large number of retail outlets in recent days. "We are only at the beginning of the crisis, and customers still have money," Ovchinnikov told Kommersant. But if this self-isolation continues, demand will begin to decline due to reduced incomes, he added.
Also, the number of Russians wishing to urgently sell old smartphones or exchange them for new ones has increased, founder of DamProdam (trades-in Apple and Samsung devices) Elena Bogatyreva said. According to her, in March, the number of such transactions increased by 250%. "People began to change older models for new ones. They don’t want to take risks and then buy the same models for more, so they decided to do it now," she told the newspaper.
At the moment, the secondary market in Russia is growing faster than the market for new smartphones. By the end of 2019, the volume of the secondary market had grown by about 8% and the number of devices to 7 mln, and by 17% in monetary terms to 35 bln rubles ($473.83 mln), as previously estimated by SmartPrice. At the same time, the market for new devices for the same period, according to an M.Video-Eldorado report, grew only by 1.5% in volume and by 7% in terms of money, to 30 mln units and 495 bln rubles ($6.7 bln), respectively.
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