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Press review: Russia's tit-for-tat sanctions looming and oil price hikes on the horizon

July 27, 13:00 UTC+3 MOSCOW

Top stories in the Russian press on Thursday, July 27

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© Yegor Aleyev/TASS

Kommersant: Russian tit-for-tat sanctions against US imminent

Moscow is likely to resort to a number of reciprocal moves in response to Washington’s decision to slap additional sanctions on Russia, Iran and North Korea, some sources in the Russian Foreign Ministry informed Kommersant. Moscow also warned that the actions by the US legislature bury any hope for normalizing bilateral relations and warned that the retaliatory measures would be painful.

US President Donald Trump earlier said on several occasions he is willing to establish dialogue with Moscow. However, the bill on fresh sanctions drafted by Congress actually shows that the future of Russian-American relations no longer depends on him, the paper notes.

Since the document virtually stonewalls the return of the Russian diplomatic property seized under the previous US administration, Russia can confiscate the American Embassy’s compound in Moscow and its warehouses.

As for other areas, the set of levers the Kremlin has is rather limited, experts admit. "Our trade, economic and investment ties with the US are not so well-developed to make it possible for us to harm our so-called American friends," said Alexander Shokhin, President of the Russian Union of Industrialists and Entrepreneurs. He noted that Russia could refuse to supply its RD-180 engines to the US and scale down cooperation on the International Space Station (ISS).

Meanwhile, Sergey Karaganov, Dean of the World Economy and International Affairs Department at the Higher School of Economics, described cooperation on the ISS as mutually beneficial in an interview with Kommersant but said there are areas where "Russia can inflict economic and psychological damage on the US."

Theoretically, Moscow’s economic sanctions against Washington can be reflected in a decline in trade turnover, restrictions on the work of American companies present in the country or withdrawal of investment in Russia in one form or another.

"Today there is a direct analogy with the American sanctions of the Cold War era," Andrey Baklanov, Deputy Chairman of the Association of Russian Diplomats, told the paper. "Back in those days, there was enormous pressure on the Europeans to make them curtail cooperation with Moscow. According to Baklanov, the difference is that, while during the Cold War era the US was guided by political considerations trying to put pressure on Moscow, now it has economic interests as well. He added that the Russian authorities need to "mobilize those forces in Europe - politicians, representatives of the business community and the public - who oppose US pressure."

 

Izvestia: Next Syrian de-escalation zone being hammered out

The second of the four de-escalation zones in Syria is beginning to take shape - this time in the Damascus suburb of East Ghouta, Izvestia writes. An agreement on a ceasefire in the region signed a few days ago includes some important provisions. Specifically, Russian military police will monitor compliance with the cessation of hostilities. In addition to that, a leading opposition group, Jaysh al-Islam, has joined the accord, while Egypt made a significant contribution to striking the deal, representative of Syria’s Tomorrow opposition movement Ahmed Oud told the paper.

He noted that this is the first precedent of this kind in the process of establishing the de-escalation zones. Prior to that, a ceasefire agreement in southern Syria was reached between Moscow and Washington, but the opposition did not sign it, he emphasized. Besides, Egypt acted as a mediator in this process for the first time, providing a platform for negotiations and making considerable efforts towards reaching the agreement, he added.

The fact that the Russian military police will monitor the situation on the ground has been confirmed by a high-ranking source in Syria’s law enforcement agencies.

"The possibility of the presence of Russian units in the country was provided to Moscow by the Syrian leadership. This decision regulates, in particular, the deployment of military police forces to East Ghouta where they will perform the function of separating the terrorists from the Syrian army," the source said.

The settlement in East Ghouta is of paramount importance, because this is, in fact, one of Damascus’ neighborhoods. The Syrian capital, including the area where the Russian Embassy is located, was shelled from this suburb. Besides, the fact that the Jaysh al-Islam group joined the agreement indicates it is committed to a political settlement. Moreover, the group’s representative Muhammed Alloush leads the opposition delegations at the talks in Astana and Geneva.

"Russia has enormous influence, and our soldiers’ presence in the region will help stabilize and transform the situation from military confrontation to the political settlement stage," Franz Klintsevich, First Deputy Chairman of Russia’s Federation Council (upper house of parliament) Defense and Security Committee, told Izvestia.

 

Vedomosti: Experts point to likely oil price hikes amid US reserves reduction

Possibilities are on the horizon that oil prices will continue to increase against the backdrop of a decline in US oil reserves, Vedomosti quotes Aton analyst Alexander Kornilov and BKS analyst Kirill Tachennikov as saying. The latter reiterated the BKS forecast by the end of the year is $55-60 per barrel, which can be achieved by limiting production and increasing demand for fuel. Vacation season is now underway in the US, with many people travelling in their automobiles, which will clearly be stimulating demand, the experts stressed. Consumption in the US will surge up to and through September, Kornilov highlighted.

Oil prices crossed the psychologically barrier of $50 per barrel this week to reach $51 per barrel as of 16:00 Moscow Time on Wednesday. The reason for a 1.5-percent increase in prices on Wednesday was the reduction of strategic oil reserves in the US, according to the statistics provided by the Energy Information Administration (EIA). Oil reserves had decreased by 7.2 mln to 483.4 mln barrels over the past week, the agency said.

At the same time, production began to decline too. Oil production in the US, which peaked in July 2015, has dropped by 19,000 barrels per day over the past week.

The market is currently dangling on a fragile balance. It is unprofitable for producers of shale oil to increase production at a price below $50 per barrel, but, as soon as the demand on their part rolls back, oil prices begin to rise, Tachennikov said.

 

Izvestia: Donbass republics ready to receive US delegation

The self-proclaimed Donetsk and Lugansk people’s republics (DPR, LPR) are ready to ensure the security of US representatives, if they come to the Donbass region, local officials told Izvestia.

"We were visited by high-ranking officials from the UN, the OSCE and other international organizations. In all cases, we’ve been able to protect their security properly. If they opt to come here, we will ensure their safety," Eduard Basurin, Deputy Commander of the DPR army, informed the paper.

After assuming office, newly-appointed US Special Representative for Ukraine Negotiations Kurt Volker visited the Kiev-controlled zone of Donbass a few days ago to assess the situation in the region.

DPR and LPR officials noted they are interested in a US diplomatic visit, since this will make it possible for Washington to receive firsthand information about the situation on the ground in the areas that are not controlled by Kiev and get an impartial picture of the developments in eastern Ukraine.

"We are ready to receive any foreign delegation, including an American one, and show them what is really going on in Donbass. If representatives of Western countries want to get an impartial picture on what is happening here, they should take the initiative and visit this region," Vladislav Deinego, Deputy Chairman of the LPR People’s Council, said talking to Izvestia.

Meanwhile, Denis Pushilin, Chairman of the DPR People’s Council, noted that the Donetsk republic appreciates any efforts that could shed light on developments in eastern Ukraine and resolve the situation. "We see attempts by all political players to make their contribution to peacefully resolving the conflict in a positive light," he emphasized.

 

Nezavisimaya Gazeta: Generation Z to transform Russia’s education and consumer markets

Given the steady ageing of Russia’s population, radical changes in generational groups are likely to occur. Millennials of the 1990s will be replaced by a large Generation Z, that is, those born in the 2000s, Nezavismaya Gazeta writes. The echo of the past oil well-being will lead to an almost 37-percent increase in the number of young people aged between 15 and 19 years by 2030. In light of this, experts predict radical changes in the education and consumer markets.

"2016 and 2017 are a turning point in the dynamics of the population aged 15-24 years. The generation born in 1991-2000, which is small in number, will be replaced in high schools, colleges and universities by young people who were born in the digital age, the so-called Generation Z," the paper quotes experts of the Institute of Education at the Higher School of Economics as saying.

It’s noteworthy that the effects of the demographic decline will not be overcome completely. In 2030, the number of 15-19-year-olds will reach 74.7% compared to the 2005 level, the experts noted.

The most dynamic growth will be observed in Chechnya (124.2% compared to 2005), Tyva (110.7%), the Republic of Altai (108.4%), Ingushetia (97.9%) and the Tyumen region (91.9%).

On the other hand, the smallest increase is expected in Karelia (65.9%), the Vladimir Region (65.8%) and Primorye (62.2%).

"The growth in the number of young people aged 15-19 years can have a positive impact on the country’s economic performance within one or two decades. The appearance of a significant number of young people in the labor market will not only affect labor productivity, it could also reduce the pension system burden as well," the paper quotes Finam analyst Alexey Korenev as saying.

 

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

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