Media: Russian fuel market faces pressure from Europe amid coronavirus

Oil prices hit a new low on Monday amid the coronavirus pandemic and the situation is unlikely to improve in the near future, Western analysts forecast. This week, the world’s oil consumption will decline by 26 bln barrels, or 25%, since the measures of social distancing to battle the coronavirus already affect some 92% of the global GDP, Goldman Sachs says. Analysts highlight that in this new reality inland production of such countries as the United States, Canada and Russia will be the most vulnerable, Nezavisimaya Gazeta writes.

Besides the uncertainty over the spread of the coronavirus, the ongoing price war at OPEC is also dealing a big blow to the market. By this June, oil is expected to hit rock bottom, experts told the paper. "It’s highly unlikely that we will see oil prices above $40 again," head of the Klopenko Group consulting company Yegor Klopenko said. "The global economy will have to adjust and this new reality concerns everyone, including Russia, which will have to focus on other economic sectors at last," the analyst said.

Kommersant business daily writes that Russia’s fuel market could return to the 1990s, beginning to import petrol from abroad. Now petrol in Europe is much cheaper than in Russia due to a decline in oil prices. Meanwhile, Russian oil companies cannot decrease domestic prices as they pay into the budget under the damper mechanism. Experts believe that this mechanism cannot be applied when oil prices are so low and needs to be adjusted, although this will cut budget revenues. However, the Finance Ministry told the paper that this option was not considered.

Russia’s fuel market could come under pressure from imported petrol, mainly from Europe. According to Sergei Ezhov, an analyst at Vygon Consulting, imports are inevitable unless the government adopts urgent measures. The situation seems fantastic as this was seen only in the 1990s when Russia lacked its own petrol, Ivan Khomutov, an analyst at Petromarket, told the paper. Although fuel imports will be certainly advantageous, the expert sees a range of obstacles here, including logistic restrictions and the lack of infrastructure.

 

Kommersant: Russia’s coal production immune to coronavirus

The coronavirus pandemic’s impact on Russia’s coal industry has been mixed so far and possible negative consequences for production are likely to have a delayed effect. As of early March, coal shipments from the Kuznetsk Basin in southwestern Siberia, one of the largest coal mining areas in Russia, have at least not declined, sources in coal companies told Kommersant business daily. One of the sources said producers were not facing an oversupply and were not reducing the output volume. Sources in two major coal companies confirmed this.

According to industry insiders, the shipments depend more on the capability of sending coal by railways to the ports in Russia’s Far East than on foreign customers. If coal reaches the ports, buyers will be found. Meanwhile, supplies to China by railway are almost impossible but they can be carried out via sea routes. Most exports are under long-term contracts signed earlier and those customers have not backed out of them, the sources said.

However, the situation could change if gas prices plunge on long-term contracts in Europe and Asia, taking a cue from oil. This will weaken coal’s positions in the fuel rivalry for electricity generation.

Coal prices have slightly gone up since March’s sales, according to Maxim Khudalov from the ACRA rating agency. "The reason is rains in Australia and a low supply from the US. Besides, during the quarantine, the Chinese apparently cut their own production. This resulted in some deficiencies on the market. So, it’s early to talk about the problems of exports to China. Moreover, amid the quarantine in the US and Australia, there is even a chance that the shortfall of imported coal supplies will rise," the expert noted.

 

Izvestia: Houthis flex muscles ahead of talks with Saudi Arabia

Riyadh has come under a missile attack for the first time since the summer of 2018. Saudi Arabia’s air defense system failed to repel the strike carried out by the Houthis on its capital overnight to March 29, sources familiar with the situation told Izvestia. Experts believe that this strike pursued political rather than military goals. The Houthis are flexing their muscles ahead of the upcoming talks with Saudi Arabia and are testing whether its air defenses are ready to repel massive strikes on the kingdom’s infrastructure facilities.

Sources from both sides share view that the recent strike was not massive and the Houthis used only several missiles and nearly a dozen drones. The previous strikes were much more powerful. This could signal that the goal of this attack was not to achieve a maximum military effect.

Military expert Vladislav Shurygin told Izvestia that of late Yemeni rebels have obtained access to more advanced ballistic missiles.

Vice President of the Academy of Geopolitical Problems, Col. Vladimir Anokhin, told the paper that on the one hand, the Houthis’ strikes seem to be a risky move, but on the other hand, this is a rather well-thought-out step. "Tensions between the rebels and the Saudis have been on the rise and this should have been settled," he stressed. "Amid the coronavirus pandemic, Saudi Arabia is facing problems on the energy market and Europe and the US have refused to buy their oil even at lower prices," he noted.

According to the expert, right now Riyadh is facing a challenging economic situation, so military activity is not a priority for Riyadh in the near future. The Houthis are taking advantage of this situation. The Saudis cannot fight on two fronts (economic and military) at the same time. Therefore, the rebels have stepped up their activity. But it’s difficult to predict the outcome, Anokhin noted.

 

Kommersant: Moscow to use facial recognition to control self-isolation regime

Moscow’s authorities will monitor the self-isolation regime amid the coronavirus pandemic by using a facial-recognition system, which is based on NTechLab technologies. This latest innovation will be installed on 175,000 cameras in the city, a source in the mayor’s office told Kommersant. The company is 100%-owned by a Cypriot structure, in which 12.5% of the shares belong to Rostec, 25% to a fund belonging to Ruben Vardanyan and the rest to Artem Kukharenko and four other founders of the company as well as the Impulse VC fund, according to data for 2018.

A source familiar with the situation explained how this system will work to control the self-isolation regime in the city. First, the photos of quarantine violators and people with mild symptoms of the coronavirus, who are currently undergoing treatment at home, can be uploaded to it in order to conduct continual monitoring. "Medical masks won’t stonewall the system’s operation: it can identify individuals even if up to 40% of their faces are covered," the source told the paper. According to him, the authorities are unlikely to monitor all Muscovites since it would be unreasonable.

Second, cameras will enable the authorities to monitor full quarantine in certain areas, including crowded places and entrances to the parks. Cameras will also gather statistics to designate areas and houses where the flow of people has not stopped in order to understand the particular reasons.

The equipment has been purchased but has not been fully installed so far, one of the sources said. The authorities also want to use data provided by mobile operators. Moscow will use the same technology as in Europe, Director General of Infosecurity Kirill Solodovnikov noted.

 

Izvestia: Coronavirus quarantine breeds dog-walking business

The self-isolation measures introduced in Moscow are not an obstacle for venturesome citizens, who are eager to earn money even during the Covid-19 quarantine, Izvestia writes. Advertisements posted on websites offer plenty of avenues for a "legal" exit from home, ranging from a pass for free movement in Moscow for 100 rubles ($1.26) and lending dogs for a walk.

Moscow’s authorities have earlier announced introducing a regime of special passes to enable citizens to leave their home during the quarantine. The rules of issuing these documents should be approved and announced in the coming days. Although it is unknown how they will exactly look like, Izvestia has found some advertisements on issuing these permissions.

The dog owners are also ready to lend their pets for walks to strangers. Earlier, Moscow Mayor Sergey Sobyanin allowed citizens to walk their pets at a maximum radius of 100 meters from home. The price of borrowing dogs for those willing to do so will be some 800 rubles ($10) or 1000 rubles ($13) per hour. Besides, the dog walkers will have to pay a deposit of between 3,000 and 5,000 rubles.

Meanwhile, citizens in countries where quarantines had been introduced found the opportunity to go for a walk despite the ban. In Milan, people go outside with toys looking like animals hoping that police would not see the difference from a far distance.

 

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