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Press review: Mideast’s fate hinges on US voters and Iran faces fallout from Boeing crash

Top stories in the Russian press on Thursday, January 9
Boeing 737 plane wreckage in Tehran EPA-EFE/ABEDIN TAHERKENAREH
Boeing 737 plane wreckage in Tehran

Izvestia: Middle East’s future lies in the hands of Trump voters

The United States refrained from using military means to respond to Iran’s missile strikes against US bases in Iraq, but it is preparing to impose "powerful sanctions" against Tehran, Donald Trump said in his address to the nation. At the same time, the American leader — apparently recalling the upcoming election campaign — emphasized that as long as he is president, Iran will not be able to get nuclear weapons. According to Trump, the Islamic Republic understands that Washington is ready for any development of events, and this is a "good sign." Experts interviewed by Izvestia explained that the further development of the situation in the Middle East would largely depend on the course of the elections in the United States and voters’ expectations.

Earlier on Wednesday, Iran delivered a missile barrage against at least two military facilities in western Iraq, where US troops are deployed, as a response to the death of Commander of the Quds Force of the Islamic Revolutionary Guards Corps (the elite wing of the Iranian military) General Qasem Soleimani in a US airstrike.

According to Vitaly Naumkin, scientific director of the Institute of Oriental Studies of the Russian Academy of Sciences, with the strike, Iran demonstrated the ability to bypass the US missile defense system, as well as the fact that they know the location of US bases well. "If Washington attacks Iran in response to the attack (even if only control centers are targets), this will be the beginning of a major war. The conflict would be protracted and the Middle East would be redrawn, and first and foremost the entire Levant would collapse," the expert explained to Izvestia. According to him, if the US "endures" what happened now, further escalation of the conflict can be avoided and negotiations might begin.

Neither Turkey nor Israel, despite close relations with the United States would intervene in the war between the two powers, RIAC Program Director Ivan Timofeev told Izvestia.

In addition, both American society and the White House do not want a war with Iran, Director of the US Franklin Roosevelt Foundation for United States Studies at Moscow State University Yuri Rogulev told the newspaper. "Trump does not need a big war as far as the election campaign is concerned, as the American presidential race will be held this coming November. Therefore, I hope that the situation will remain at the level of symbolic accusations, attacks, but will not morph into a full-blown conflict," he said.

The situation in the Middle East is hostage to the domestic policy of the US presidential administration, Deputy Chairman of the Federation Council committee Andrei Klimov said. In his opinion, the future of how the conflict will unfold depends on it.


Kommersant: Air carriers turn away from Iran after Ukrainian jetliner crash

The crash of a Ukraine International Airlines Boeing 737 plane during take-off from Tehran Imam Khomeini Airport was the largest disaster in the history of Ukrainian aviation. All passengers and crew were killed in the incident. The Iranian authorities said that the cause of the tragedy had been an engine fire and the inability of the crew to take control of the situation. However, other versions were also voiced, Kommersant wrote, including a terrorist attack. Meanwhile, several countries have decided to suspend or limit civilian flights over Iran and Iraq.

Following in the footsteps of foreign airlines, Russian carriers also changed their flight paths over Persian Gulf airspace. According to Kommersant, Aeroflot will operate flights to Dubai bypassing Iran from the west through Turkey, Egypt and Saudi Arabia. However, the Moscow-Tehran route still remains in place.

According to Kommersant’s sources in one of the major carriers, the airlines received a telegram from the State Corporation for the Organization of Air Traffic "on behalf of the Federal Air Transport Agency" to review routes in the Persian and Oman Gulfs.

Friendly Avia Support CEO Alexander Lanetsky noted that a one-hour flight by a Boeing 737 and an Airbus A320 jetliner costs about $10,000, while an hour-long flight on an A330 costs about $15,000. "Airline losses in the event of a direct ban on flights will be huge, but flight safety should come first," the expert noted. Head of Infomost Boris Rybak agreed that performing civilian flights in the face of uncertainty in the Middle East threatens the lives of passengers.

Meanwhile, a possible ban on air traffic will close the Iranian market to Russian tourists, Kommersant wrote. However, Iran is not very popular: according to the border service, 16,870 Russians visited the country in the first three quarters of 2019. By comparison, 4.5 mln Russian tourists visited Turkey over the same period.


Izvestia: TurkStream may become more lucrative than Ukraine’s gas route

The TurkStream gas pipeline is an example of interaction and cooperation for the benefit of Europeans and the whole world, Presidents of Russia and Turkey Vladimir Putin and Recep Tayyip Erdogan announced on January 8 during the project’s launch ceremony in Istanbul. According to experts interviewed by Izvestia, commissioning the new gas pipeline will allow Russia not to depend on Ukrainian transit any longer, and this route of supplies to Europe may ultimately become the most profitable option.

The TurkStream pipeline consists of two lines, each with a capacity of 15.75 bln cubic meters of gas. The first is intended for the supply of Russian gas to Turkish consumers, while the second is set for supplying gas to Southern and Southeastern Europe. The construction of the offshore section began in May 2017, and in November 2018 the deep-sea pipe-laying of both lines was completed. On November 19, 2019, both Turkish Stream lines were filled with gas. Gazprom estimated the price tag for its construction at $7 bln.

Senior Analyst at BCS Premier Sergey Suverov believes that this gas pipeline will pay off in five years at minimum. When Gazprom makes a decision on investments, it usually focuses on a rate of return of 15% of the invested capital, an expert told Izvestia.

Vyacheslav Kulagin, department head of the Institute for Energy Research of the Russian Academy of Sciences, told Izvestia that the new pipeline makes it possible to directly supply all the necessary volume of Russian gas to Turkey and not through Ukraine. "Soon, we will supply no more than 20-25% of gas through any export route. This ensures reliable supplies and makes work on the market flexible," Kulagin explained to Izvestia.

According to the newspaper, upon reaching full capacity, it will reduce Ukrainian transit by 31.5 bln cubic meters per year.


Vedomosti: Moscow, Minsk tangle over price of Russian oil

Russian oil companies cut off oil supplies to Belarus on January 1. They failed to reach a deal with Belarus’ state energy firm Belneftekhim because of disagreements over the price of raw materials. Over the past few years, Belarusian refineries have been buying oil on terms comparable with those for Russian independent refineries. Russian companies proposed maintaining these conditions without exacerbating them, but the Belarusian side rejected the oil deliveries, Vedomosti wrote.

On January 4, supplies resumed, but so far, this concerns only one plant. Belarus was able to get rid of the premium on the price of duty-free oil supplies of $10 per tonne of oil. Thus, the savings can reach about $200 mln per year, Fitch’s Dmitry Marichenko said. "But as the export duty decreases (it should be zeroed out by 2024), the price Minsk pays for Russian oil will rise if some additional adjustments are not included in the settlement mechanism," he added.

If Belarus decides to get raw materials from other countries, oil will cost $70-80 more than oil from Russia, because it will be purchased at the full global price and would have to be transported to Belarus. This means that oil supplies from Russia at market prices in 2019 turn out to be cheaper for Belarus by at least $1.6 bln a year than buying oil on the world market, a source told Vedomosti.

Meanwhile, Belarusian oil refineries have enough oil to continue working with a reduced load during the negotiations, a source close to one of the parties to the negotiations told Vedomosti.


Kommersant: Yandex may launch its own mobile virtual network operator

Yandex is exploring the possibility of entering the mobile market with its own virtual operator project (MVNO), two market sources told Kommersant. In addition to communications, the company may offer access to its other services, including music and video streaming. Experts interviewed by Kommersant said that the project would not be profitable, but important for building an ecosystem. Meanwhile, Yandex itself has not yet confirmed such plans.

According to one of the newspaper’s sources, Yandex’s MVNO will operate using Tele2’s network. Another source claimed that Yandex subscribers would be able to switch between operators. The company will be integrated with Yandex.Plus subscription with unlimited access to music and movies on the company's platforms, one of the sources said.

Yandex told Kommersant that the company had no plans to launch any MVNO right now. Meanwhile, the newspaper’s inside source confirmed that Yandex is negotiating with telecom operators on various projects, explaining that there are no specific agreements yet. However, Tele2 declined to comment.

The project would be a logical step in the development of Yandex’s ecosystem, Alexander Chachava, managing partner at Leta Capital Venture Fund told Kommersant. The company will be able to sell communication services by entering into partnership agreements with retailers or on online platforms, and if eSIM technology in Russia becomes legal, it will not be necessary to sell physical SIM cards to Yandex at all, Chachava believes.


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