On Tuesday, Russian Defense Minister Sergey Shoigu held talks with Israeli Prime Minister Benjamin Netanyahu in Tel Aviv. Kommersant writes that the sides focused on the Iranian military’s participation in the Syrian campaign and Iran’s nuclear program. At the meeting, Netanyahu stressed that he would not allow the creation of any Iranian bases in Syria and also called for revising the Iranian nuclear deal. According to Kommersant, the Israeli special services believe that Tehran is boosting its military potential under the guise of monitoring groups for a further attack on the Jewish state.
The Russian delegation tried to allay Israel’s fears about Iran’s plans in Syria, outlining the prospect of a peaceful settlement to the Syrian crisis, but it failed to change Tel Aviv’s mind on this issue. Valdai International Discussion Club Member Yuri Barmin said that not only Iran, but Tehran-backed Hezbollah also poses a threat to Israel. "During the Syrian civil war, the organization extended its tentacles and entered Syrian territory," he noted.
According to Kommersant, the conversation on Iran’s nuclear program was also a great challenge. At the talks, the Israeli prime minister said that if the terms of the deal were not changed, "in eight or ten years, Iran would have a nuclear arsenal." He believes that the 2015 deal with six world powers allowed Iran to broaden its support of ‘satellites’ across the Middle East, including military groups in Lebanon, Syria and Yemen. However, for Moscow the deal meant a historic diplomatic victory and Russian military brass could not agree with Netanyahu.
As Shoigu was holding talks in Tel Aviv, the Syrian opposition announced the liberation of Raqqa, considered to be the capital of the Islamic State (terror group, outlawed in Russia), the paper writes.
The restoration of the Iraqi army’s control over Kirkuk and its outskirts with participation of Iran demonstrated Washington’s failure to implement its own strategy on combating the expansion of the Islamic Republic in the region, Nezavisimaya Gazeta writes. The US, despite having close contacts with the Kurds, took a neutral stance as they were forced out of the province. Experts explain that the latest events in Kirkuk are beneficial for Washington given the damage that may be inflicted on Russian energy projects in Kurdistan.
The swift exit of Kurdish military units from Kirkuk may have become the result of agreements with Baghdad, said Anton Mardasov, head of the Department of Middle Eastern Conflicts at the Institute for Innovative Development.
"Most likely, Kirkuk became a bargaining chip," Mardasov said. "The Kurds will benefit if air links were restored. All actions by regional players towards them are solved with the surrender of Kirkuk and other disputable regions. Certainly, they are unlikely to get a status, but possibly, economic pressure on the region will be eased. It is not ruled out that Baghdad will resume payments to Erbil. Some progress on the banking system is possible. In principle, the Americans would benefit if these tensions were eased."
The expert said the Russian factor may be crucial in Kirkuk’s situation. The authorities of Iraqi Kurdistan signed significant deals with Russia’s energy companies, making Moscow one of the major investors in the region, which has been ardently fighting for independence.
After the Iraqi authorities restored control over Kirkuk, the Russian Foreign Ministry said Moscow was ready to defend the security of domestic companies working in the region, namely Rosneft, Gazprom Neft and Lukoil.
Russian experts say Iran’s steps in Kirkuk are in line with its policy on the Kurdish issue. "Amid the Kurdish independence referendum, the Iranians closely coordinated their steps with Turkey and Iraq," Yuliya Sveshnikova, Research Associate at the Higher School of Economics, told the paper.
China has been ramping up purchases of Russian hydrocarbons, Izvestia writes. In the first seven months of 2017, Russia’s supplies to China grew 38.5%. In general, Russian sales of fuel and energy products to countries of the Asia-Pacific Economic Cooperation (APEC) surged by 33.1%, the Analytical Center for the Government of the Russian Federation said in its monitoring, according to the paper.
Overall trade between Russia and China more than doubled to $45.8 bln in the first seven months of the year, according to the Federal Customs Service. This type of growth has not been seen since 2011. China’s benefit from buying Russian oil since it is cheap and expenses on logistics are low, and in the future the supplies to Asian-Pacific countries will surge, experts say.
China is seen as a premium market for oil producers. Local manufacturers are ready to buy raw materials at higher prices to secure beneficial long-term contracts, leading expert at the National Energy Security Fund Stanislav Mitrakhovich told the paper.
"Despite all of China’s attempts to boost generation from alternative energy sources such as wind mills and solar batteries, the Chinese invest much more funds in new gas and oil pipelines to Russia," the expert said. "Given that mutual investment between both countries is on the rise, the Chinese are actively buying up Russia’s oil and gas projects, and the supplies will only surge."
In the future, Russia has chances to enter the markets of other countries in the region, namely India, where Russian oil giant, Rosneft recently bought 49% in Essar Oil, which owns a large oil refinery plant, Mitrakhovich pointed out. Thailand and Indonesia are also promising markets, analyst at Moody’s Analytics Chris Lafakis noted.
According to the latest forecasts, by 2030 China plans to ramp up oil and gas imports and this may serve to boost prices.
Croatian President Kolinda Grabar-Kitarovic is paying an official visit to Russia on Wednesday. Kommersant writes that her visit is far beyond the framework of an ordinary protocol event. The relations between the two counties have been semi-frozen over the past decade and the Croatian president’s visit is set to change this situation. However, Croatian experts note that Zagreb will always shape its relations with Moscow with an eye towards Berlin and Washington.
Russian-Croatian relations soured after the republic joined NATO in 2009, and Zagreb has been supporting all US and EU measures against Moscow. In fact, over the past two years there has been no Croatian ambassador in Moscow. The situation started improving only recently, and an experienced diplomat, Tonchi Stanichich, was appointed as the country’s envoy to Russia.
The key goal of the visit is to carry out the inventory of bilateral ties and define promising areas of cooperation, the paper writes. The sides are expected to discuss the problem of Croatian food and retail giant Agrokor which bought retail chains in practically all Balkan countries, but is now on the verge of collapse. The company’s has racked up debts to the tune of $6.5 bln, six times higher than its assets.
Russia’s top lender Sberbank issued a loan of around 1 bln euros to the Croatian company and rumors started swirling that its regional retail chains could pass over to Russian control, although Sberbank has dismissed these stories. The fate of Agrokor will be one of the key issues at the talks with Russian President Vladimir Putin, sources familiar with the visit’s preparations told Kommersant.
Besides, the Croatian president’s visit coincided with the supply of six MiG-29 fighter jets to Serbia. Zagreb is not hiding its concerns over growing military cooperation between Serbia and Russia. "Croatia is afraid that enhancing the military potential of Belgrade will force it to take the same path, and this will not only aggravate Croatian-Serbian relations, but will put both countries at the forefront of a new standoff in Europe," Croatian analyst and commentator for Jutarnji List Vlado Vurushich said. Croatian sources told Kommersant that the MiG issue will certainly be discussed at the upcoming talks.
During last week’s bilateral meeting between Russian and Syrian diplomats and officials in Sochi, Damascus suggested the Russian Railways and other Russian companies take part in several projects on developing its transport infrastructure, the republic’s director of the railways department Najib Fares told RBC.
"We proposed that Russian Railways participate in a project on restoring a railway line going between Tartus through Homs to the phosphate mines," he said. Russian Railways is indeed closely reviewing the Syrian proposals on infrastructure projects, a source in the company told the paper, without giving any more details.
The project concerns the restoration of a 290-km railway line linking Syria’s coast with its phosphate deposits in the eastern part of the country. According to Najib Fares, head of Syrian railways, this is one of the most important transport projects in Syria and this line is needed due to the growing volume of cargo in this direction. In the future, this part of the line may be linked to Iraq’s railway system.
Director of the railways in Tartus Mudar al-Araj told RBC some agreements "in general terms" were reached in Sochi on developing the transport system, including the ports and railways, but no particular contracts were signed. The sides also discussed projects for suburban traffic in Damascus and the modernization of locomotives and railroad cars.
RBC earlier reported citing Syria’s Main Department of Geology and Mineral Resources that Stroytransgaz, a Russian company controlled by Volga Group owner Gennady Timchenko, was developing two phosphate deposits in Syria - Al-Sharqiyah and Khunayfis, located near Palmyra and some 300 km away from Tartus. Production there stopped in late May 2015, after the territory was seized by the Islamic State (terror group, outlawed in Russia).
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