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Press review: Energy crisis spreads and Russia-Hungary gas deal sparks Ukraine fury

Top stories from the Russian press on Wednesday, September 29th

Izvestia: Russia-Hungary gas deal sparks tensions with Ukraine

Ukraine should resolve all energy issues directly with Russia, and not make claims to European countries that cooperate with it in this area, the Russian State Duma commented to Izvestia on the scandal between Kiev and Budapest over the gas supply contracts that Hungary signed with Gazprom for 15 years. The Ukrainian leadership believes that routes bypassing its territory endanger the future transit of Russian gas. Moscow sees no reason for concern - it is ready for negotiations not only on extending transit, but also on direct gas supplies to Kiev.

Kiev promised to retaliate - the first step was to postpone the meeting of the Joint Intergovernmental Ukrainian-Hungarian Commission on Economic Cooperation, which was set for September 29-30. According to Ukrainian Foreign Minister Dmitry Kuleba, Kiev will not stop there - there will be other measures. The European Commission told Izvestia that these agreements would not be ignored.

Rather than bear resentment about gas contracts between Russia and Hungary, Ukraine should begin to address controversial energy issues through direct dialogue with Moscow, the State Duma commented on Kiev's statements about new gas agreements between Gazprom and Hungary’s MVM.

"When Ukrainian representatives speak, it seems that everybody - Europe, the United States, Russia - owe them, and they owe nothing to anyone. Instead of interacting on gas issues with Russia and Gazprom, they are trying to appeal to other countries. Still, our proposals for cooperation come up against a wall of silence," Head of the State Duma energy committee Pavel Zavalny told Izvestia.

At the same time, Moscow believes that there is no need to expect a fair examination of gas issues from Brussels. "The European Commission has long ceased to work within the legal framework. We can recall its decision regarding Nord Stream 2 - to limit the volume of supplies through a gas pipeline that is not even in the European Union," Zavalny added.


Kommersant: Vladimir Putin and Recep Tayyip Erdogan will hold talks in Sochi

The first face-to-face meeting of the presidents of Russia and Turkey, Vladimir Putin and Recep Tayyip Erdogan, in a year and a half will be held in Sochi on Wednesday against yet another exacerbation of the situation in northern Syria. Erdogan expects Moscow to change its approach to resolving the Syrian issue, but he also said he hoped that the meeting in Sochi would result in an important decision regarding relations between the two countries, Kommersant writes. He did not, however, specify whether it would be related to Syria.

Putin and Erdogan have not met for a whole year and a half due to the pandemic. The agenda of the talks will also include the situation in Libya, Afghanistan, and Transcaucasia, as well as other issues of bilateral cooperation. However, the Syrian issue remains one of the most difficult for them, the newspaper writes. It is in Syria that the Turkish and Russian military are constantly at risk of a direct clash. However, so far, Russian and Turkish politicians have emphasized that, despite all the disagreements, they know how to negotiate, according to Kommersant.

The Turkish president is also going to Sochi expecting a new compromise with Russia. According to Erdogan, all difficult moments with the development of events in Syria are being resolved by the two sides through negotiations and Ankara is striving to bring bilateral relations with Russia to a new level, the newspaper writes.

Researcher at the Center for Middle East Strategic Studies (ORSAM) in Ankara Oytun Orhan told Kommersant that the most important topic at the talks will be the situation in Syrian Idlib. According to him, Russian pressure is growing in Idlib, and there are more and more airstrikes - Turkey will try to de-escalate the situation and Russia will ask for something in return.


Kommersant: Russia, US make progress in cybersecurity consultations

In just a few months of consultations on cybersecurity, Moscow and Washington have managed to resume cooperation in areas that had been frozen for many years, Russian sources told Kommersant. As a result, the parties have hit the cyber groups Evil Corp., TrickBot, and REvil. However, despite progress, US officials continue to call for collective pressure on Russia in cyberspace.

Interaction between Russia and the United States on information security issues was frozen in 2014 against the conflict in Ukraine. However, several informed sources from the Russian side told Kommersant that recently the situation has changed radically. Over the past three months, the parties have managed to achieve progress in three areas, sources said.

First, a regular expert dialogue was resumed - at least four rounds of bilateral consultations were reported. Second, the interaction was restored within the framework of the 1999 US-Russian Treaty on Mutual Legal Assistance in Criminal Cases. As a result, the US provided materials for the criminal procedural suppression of the activities of a number of international cyber groups, in particular Evil Corp., TrickBot, and REvil, sources told Kommersant. And third, a source told the newspaper that "contacts between the national centers for responding to computer incidents, previously ignored by the US, were activated." According to Kommersant's sources, the main result of this systematic work "was launching mechanisms for bilateral interaction."

However, US officials have so far been very restrained in their comments on the results of consultations with their Russian counterparts. US National Cyber Director Chris Inglis stated that in recent months there have been fewer attacks on US resources by hacker groups based in Russia, adding, however, that the US is not confident that this trend will continue.


Izvestia: Energy crisis is spreading to more and more industries

The energy crisis that hit the European continent has already surpassed the oil shock of the 1970s in scale, Izvestia writes. There is a serious danger that it could spill over to other markets and to other energy sectors. However, the world most likely will not face a shortage of oil this winter, according to experts. Nevertheless, oil prices are likely to rise significantly, and OPEC+ might not be able to do anything about this.

On Tuesday, September 28, spot gas prices in Europe surpassed $1,000 per 1,000 cubic meters for the first time in history. At the same time, Brent crude oil in London exceeded $80 per barrel, a three-year high. The simultaneous growth in prices clearly demonstrates a full-fledged energy crisis, which can only get worse this winter, Izvestia writes. A similar situation also started to develop in China.

Prices for crude oil, gasoline, and diesel fuel, as well as electricity, are growing quite naturally against galloping inflation when most consumer enterprises feel that tomorrow's energy may cost even more, Chief analyst at TeleTrade Petr Pushkarev told the newspaper. "The inflationary spiral, not gas, is a much more significant reason for the further growth of oil prices. The gas market is essentially also the ‘victim’ of inflation and deficits, all over the world we are dealing with parallel processes," he said.

In any case, a sharp rise in oil and other energy prices is unlikely to lead to an adjustment in the OPEC+ position, which this week predicted that pre-crisis oil demand will recover only by the end of 2022 - which means that there is no need to accelerate lifting oil production quotas.

"OPEC's plans to increase production allow commercial reserves to stay a minimum level at least until Q1 2022," Senior consultant at VYGON Consulting Ekaterina Kolbikova told Izvestia, adding "This should support prices at about $70 per barrel."


Vedomosti: Revenues of hotel business in Russia surpass pre-pandemic level

Revenues of the hotel business in Russia in Q2 2021 exceeded the pre-pandemic level of 2019, according to the Russian State Statistics Service. The revenue of the hotel sector in the reporting period amounted to 70.7 bln rubles ($970.7 mln), which is 13.6% more than in 2019, the statistics department noted. Experts told Vedomosti that the revenues of the hotel complex were also affected by the temporary cancellation of flights to Turkey.

At the same time, the revenues of tour operators and travel agencies in Russia lag behind the 2019 figure by about 30%. The volume of services provided by tour operators in Q2 is 31.4% lower than the same period in 2019 at 30 bln rubles ($411.9 mln). The tourist flow has not yet recovered either - the number of people staying in hotels and other tourist accommodation facilities in Q2 amounted to 15.2 mln people (-12.1% compared to Q2 2019).

Canceled flights with Turkey influenced the revenues of hotels in Q2, representative of Intourist tour operator Daria Domostroeva told the newspaper. "Europe is mostly closed to tourists, and air tickets to open countries are too expensive," she said. According to her, against this background, Russia looks more reliable.

The tourist cashback program could be another strong factor, Domostroeva added "The program happened right during the period when flights with Turkey were closed, and people had no choice - they could exchange vouchers to Turkey for vacations in Russia," she told the newspaper.

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