Izvestia: Markets hold breath as OPEC+ talks set to begin

The much-awaited OPEC+ meeting of leading oil producers, set for April 9 via teleconference, is expected to turn into a heated debate. The sides will discuss cutting oil output by 10 mln barrels per day. The reduction in production will be for at least three months — from May until late July 2020. It’s highly likely that Saudi Arabia will account for 3 mln barrels, Russia for 1.5 mln and the other participants for 5.5 mln, experts told Izvestia. However, it is not ruled out that the efforts to reach a deal could fail. The looming risk is that the United States, Canada and Norway won’t join the agreement and Russia won’t accept this. The Saudis could again demand much greater cuts from Russia, and this would be inappropriate for Moscow, the paper writes.

Russia is ready to cut oil output by 1.6 mln barrels per day, a source close to the Energy Ministry told Izvestia. Director General of the National Energy Security Fund Konstantin Simonov pointed out that a major oil output cut would be very sensitive for Russia. The suspension of production at oil wells would be "a real disaster for Russia, mainly due to climate conditions," he said, explaining that Russia could not work like the so-called swing producers such as the Saudis and US shale oil companies, who could halt production if needed.

According to Iranian Oil Minister Bijan Namdar Zangeneh, OPEC members have not yet reached an agreement on the terms of the deal. Analysts are also uncertain in their forecasts on the meeting’s outcome.

"The key issue is whether a broad range of oil producing countries will agree to join the cut. This concerns the US, Canada, Norway and others. There is an opinion that without this, Russia won’t be willing to join the deal," said stock market expert at BCS Broker Konstantin Karpov. If the deal is clinched, oil will get serious support and probably the Brent price could exceed $30, but it is unlikely to rebound to $40-$45 without relaunching the global economy, the expert noted.

The current oil market situation is the worst in history, the International Energy Agency noted in its review on April 1. Meanwhile, recently China’s oil demand has revved up and it has increased oil purchases from Russia. However, China alone cannot fully compensate for the market plunge in Europe and the US.

 

Nezavisimaya Gazeta: Coronavirus pandemic fails to reconcile US and Iran

Iranian President Hassan Rouhani has requested a $5-bln loan from the International Monetary Fund (IMF) to fight the coronavirus. Meanwhile, the United States intends to block Iran’s bid since Washington believes that Tehran seeks to use these funds for other purposes. The US is also not letting the European Union provide a full-fledged humanitarian aid package to Iran as millions of Iranians are suffering.

Nezavisimaya Gazeta writes that Iran has not received the IMF’s aid package since 1960 and President Rouhani believes that due to this, the country’s chances to obtain such help are high. At the moment, Iran has officially reported 67,200 COVID-19 cases, including more than 4,000 deaths. However, on Saturday some businesses will be allowed to partially resume work. This signals that the economic situation in Iran, severely hit by US sanctions, is desperate, according to the paper.

Meanwhile, US authorities fear that the IMF’s loan could be spent on providing assistance to Iran’s sanctioned economic sectors or on its military operations in the Middle East, the Wall Street Journal wrote. Earlier, the US offered to send medical supplies to Iran, but Tehran had rejected this assistance. Iran’s Supreme Leader Ali Khamenei said that he did not trust Washington, not ruling out that the US could have created the coronavirus.

Washington’s sanctions policy is not expected to subside under President Donald Trump, Senior Researcher at the Russian Academy of Sciences’ Institute of Oriental Studies Vladimir Sazhin noted. "It’s very regrettable that the coronavirus did not become a factor for building at least temporary bridges between Washington and Tehran. The US could at least expand the list of humanitarian cargo supplied under the INSTEX system, which has finally started working. As for the loan, US intelligence doubts that the money will be really used for fighting COVID-19 and reach ordinary people but rather end up in the pockets of middlemen because corruption in Iran is very high," the expert told the paper. However, the US decision to block the loan to Iran would deprive its citizens of a chance to get assistance.

 

Izvestia: Russian NGOs seek government’s assistance amid coronavirus

Russia’s NGOs have requested a range of anti-crisis measures to support them amid the COVID-19 pandemic. These could include deferments on loan payments and a moratorium on fines for failing to fulfill state contracts. This proposal was outlined in a letter by Deputy Speaker of the Russian Federation Council (upper house) Andrei Turchak to Prime Minister Mikhail Mishustin.

President of the Russian Chamber of Commerce and Industry Sergei Katyrin sent a similar request to First Deputy Prime Minister Andrei Belousov, noting that the risks that NGOs could go bankrupt have significantly mounted. The organizations have reported huge financial losses.

Today, more than 1,000 private kindergartens and over 800 private schools for at least 100,000 children are in jeopardy. These educational institutions employ more than 18,000 teachers, who could face the risk of not getting paid, the association of non-state kindergartens, children clubs and schools in Russia said. "Our market share was nearly 2.3% and by the end of this year it was projected to rise to 3.6%. But now it will plunge to 1.2%-1.5%. Some 20% of schools and kindergartens will survive," the organization’s chair, Marina Shilkina, told the paper.

In his letter sent to the prime minister on April 8, Turchak noted that amid the spread of COVID-19, the role of civil society in Russia "is growing like never before." Socially-oriented NGOs and volunteers have been providing active support to the Russian authorities by helping citizens across the country. Some 85 volunteer regional centers set up by the United Russia party employ some 85,000 volunteers, who deliver medication and food to elderly citizens, help doctors and distribute protective gear.

"Unfortunately, the further deterioration of the crisis will inevitably impact socially oriented NGOs, which will negatively affect their activities and, as a result, the development of civil society. The current objective difficulties do not allow them to complete all mandatory procedures on time, which risk their activities coming to a halt," the document says.

The State Duma (lower house) Committee for the Development of Civil Society estimates that the government should provide assistance to nearly 130,000 social NGOs and the particular volume of assistance is yet to be counted.

 

Nezavisimaya Gazeta: Russian Central Bank dumps gold in favor of dollar

The major domestic buyer of gold, the Bank of Russia, has encouraged a large-scale export of the precious metal, giving banks more advantageous terms. The regulator reduced and then suspended gold purchases for state reserves. Experts attribute this to a growing demand for foreign currency, Nezavisimaya Gazeta writes. Last year, gold exports grew seven-fold by volume and eight-fold in price, according to Russia’s customs statistics. In January-February, Russia exported some 17 tonnes of gold to the tune of nearly $854 mln, and the United Kingdom received nearly 90% of this volume.

However, experts say that the quarantine restrictions could deal a blow to these exports. The Union of Gold Producers of Russia is urging the Finance Ministry to allocate funds to replenish the State Fund in order to rescue the sector.

According to the Union, in 2015-2019, Russia boosted gold output, "securing third place in the world in terms of gold production for the sixth year in a row." In 2015, Russia produced 255 tonnes of gold and in 2019, its output reached 329.5 tonnes.

As of January 1, 2020, the Bank of Russia had 2,271.3 tonnes in gold reserves, Chairman of the Union of Gold Producers Sergei Kashuba told the paper. However, since April 1, 2020, the regulator has stopped buying gold on the domestic market and this put Russia’s gold production sector "in limbo."

Financial analyst at BCS Premier Sergei Deineka sees the regulator’s steps as very pragmatic. "The drivers of gold exports are the prices amid the increased demand for the metal and the need to compensate for the decreasing export revenues," he noted. Amid the coronavirus pandemic, the global demand for gold and its prices is on the rise, while Russia’s currency reserves started declining over the reevaluation of foreign currency (including the Chinese yuan and the euro) and the falling price of debt assets.

 

Kommersant: Moscow eyes surveillance system to track foreign tourists

The Moscow mayor’s office seeks to keep an eye not just on its native citizens. The city authorities have shown an interest in creating a surveillance system to track the movements of tourists around the Russian capital using data from mobile phone operators. This measure should help control the coronavirus disease and locate any hotbeds of its spread once the borders are re-opened, Kommersant business daily writes. Yandex, the Russian tech giant, which shares data on transportation flows to the authorities and monitors the self-isolation regime in Moscow, could put up a bid for the contract.

The surveillance system is expected to track the number of foreigners coming to Moscow through their SIM cards and locate areas where they spend most of their time, a source in the mayor’s office told the paper. Moscow’s Department for Information Technologies plans to sign this contract with only one provider. The Russian capital will need to monitor tourists in order to control the disease once the restrictions on movement between countries are lifted, another source familiar with the authorities’ plans said.

This new technology would allow the authorities to analyze the flows of people into the city and make decisions on developing infrastructure, Anna Nikitova, an adviser at Yakovlev and Partners, told the paper. "But the pinpoint monitoring of citizens excludes any depersonalization of this data. And information on clients to third parties can be provided only with their consent," she noted. Therefore, the authorities are expected to issue new instructions for implementing this system, the legal guru mentioned, noting that it should also comply with the EU’s General Data Protection Regulation.

 

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