The G7 leaders agreed to weigh various options for introducing price caps not only for Russian oil supplies, but also for gas. In theory, it is easier to limit gas, since it is delivered through pipelines, and Gazprom, unlike Russian oil companies, does not have the opportunity to immediately redirect the goods to Asian markets. However, analysts interviewed by Kommersant, believe that the introduction of a price cap may provoke a halt in supplies to Europe under Gazprom’s contracts, and therefore consider the introduction of the mechanism unlikely.
Regarding the mechanism of oil restrictions, the officials explained that they are considering the possibility of imposing a ban on transportation if the goods are sold above the price cap. The idea is to tie financial services, insurance, and oil transportation to a price cap. Thus, if a shipper or importer wants to receive these services, they will have to agree to the sale of Russian oil no higher than the established price ceiling.
Prices paid by EU buyers for Russian gas under Gazprom's contracts are determined by formulas and are believed to be largely pegged to European hubs such as TTF and NCG, Katya Yafimava from OIES noted. She believes that any mechanism that can be devised to limit the gas prices payable to Gazprom under long-term contracts, either by legally limiting the price of TTF/NCG (which is extremely problematic), or simply by paying less money than included in the contracts with Gazprom, would allow the gas giant to declare non-payment and, therefore, a breach of contracts.
As a result, Yafimava believes, the European Union may simply lose gas supplies from Russia. Since this will only exacerbate the current crisis, the expert considers the introduction of any price cap mechanism unlikely.
Kommersant: Turkey opens the door to Sweden, Finland joining NATO
The first major announcement at the Madrid-hosted NATO summit was Turkey's move to no longer block Sweden and Finland's entry to the US-led military bloc. Within the next two days, the parties will agree on specific steps that would allow NATO to grow to 32 members. According to the memorandum, which was concluded on Tuesday evening, the two Nordic nations and Turkey have agreed to provide full support in the battle against threats to each other's security. As a result, on the first day of the summit, Turkish President Recep Tayyip Erdogan emerged as the man of the hour, pushing the alliance to negotiate with him, Kommersant writes.
According to the office of Recep Tayyip Erdogan, Turkey got what it wanted. The countries agreed to full cooperation with Turkey in the fight against the Kurdistan Workers' Party and its offshoots. The embargo on the supply of defense industry products will be lifted, and cooperation in this direction will be expanded. A structured cooperation mechanism will be set up for exchanging intelligence in the fight against terrorism.
NATO Secretary General Jens Stoltenberg said on Tuesday evening, the accession of the two Scandinavian countries to NATO will be the fastest in the military bloc’s history.
The unexpected conclusion of the first day of the summit made President Erdogan the chief newsmaker, and as a result this has enabled Turkey to try to boost its international standing as a self-sufficient independent center of power, standing above the struggle between the West and the East, Kommersant writes. One of Ankara's latest initiatives was a proposal to act as an intermediary in reaching an agreement between Moscow and Kiev on creating a corridor for exports of Ukrainian grain from the Black Sea ports. This would require developing a security zone outside Ukrainian waters.
Nezavisimaya Gazeta: West sparked food crisis through its sanctions
G7 leaders are assuring the international community that their sanctions do not impede agricultural production or food trade. However, it was Western countries that imposed sanctions against Belarusian fertilizers, and also significantly complicated export payments for food supplies from Russia, Nezavisimaya Gazeta writes. Meanwhile, the G7 was focused on controlling export channels for Ukrainian grain. Experts told the newspaper they believe that the anti-Russian sanctions are a significant hindrance to Russian grain producers.
G7 members said they would continue to ensure that sanctions do not affect the food sector or hinder its unfettered supplies, including those from Russia. The Western club also urged not to profiteer from the food crisis and food prices, and to avoid excessive food stocks.
Meanwhile, Russia in the new agricultural year (which will begin on July 1) can increase grain exports to 50 mln tonnes from 37 mln tonnes, according to President Vladimir Putin. On Tuesday, officials talked about plans to boost exports to Africa.
"This is all empty talk, sanctions are hitting the entire food supply chain from Russia," vice president of the Russian Grain Union Alexander Korbut told Nezavisimaya Gazeta, commenting on the G7’s assurances. "Payments are complicated, the EU still bans freight transfer across its territory, there is a ban on Russian ships entering other ports, and freight prices have risen - and this is just for exports. However, to sell grain, it must first be produced; but sanctions limit the options even here. Equipment and spare parts are not supplied, and the repair of Russian equipment is especially problematic due to a ban on the sale of bearings. The same issue arises in railcar repair," he added.
Quickly establishing the production of fertilizers is also a pipe dream, the expert believes. "Deposits of potash fertilizers, for example, are only in five countries: Russia, Belarus, China, the US and Canada.
Izvestia: What’s Russia pursuing in the Caspian?
The Caspian countries will expand cooperation in the region, Russian Foreign Minister Sergey Lavrov announced after negotiations with his colleagues from the Caspian "quintet". The diplomats met in Ashgabat to set the stage for the 6th Caspian Summit to be held in the Turkmen capital the following day. For 22 years, the five regional powers have sought to adopt a convention on the status of the Caspian Sea. They did this in 2018, and now it all boils down to securing the signed norms. According to experts interviewed by Izvestia, given the new geopolitical realities for Russia, cooperation in the Caspian direction is particularly important.
The expert community drew attention to the fact that, because of the Western sanctions imposed against Russia, Moscow seeks to develop new areas, including in the Caspian region.
"We see great potential for cooperation. Currently, the southern direction for Russia is acquiring strategic importance. The main roads run along the Caspian Sea - along its western and eastern coasts and directly across the sea itself," Director of the Center for South Caucasus Studies Farhad Mammadov told Izvestia.
The convention will enter into force after it is ratified by the parliaments of the five signatories. To date, everyone has done it except Iran. "There are certain difficulties with Iran. I think this issue will be raised at the summit, since the country has a new president and there is an understanding that cooperation should be intensified. It is impossible to fully do this without Iran's ratification" Senior Researcher at the Center for Post-Soviet Studies at IMEMO Stanislav Pritchin told Izvestia.
Vedomosti: How embargoing Russian gold will affect the market and producers
The West is making new attempts to limit Russia's export revenues in order to increase pressure on Moscow over the special operation in Ukraine. On June 28, the US imposed a ban on imports of physical gold mined in Russia and goods made from it in Russia. Three G7 countries are also planning to join the United States: the UK, Japan, and Canada. They hope that the rest - Germany, France, and Italy - will support the embargo during the June 26-28 G7 summit in Germany, Vedomosti writes.
The ban on imports of Russian gold should not significantly affect the price of gold on the world market, experts told the newspaper. Although in 2021 Russia ranked second in the world in its production after China, its share in world gold production was only 9.2%. For the global market, this loss will not be critical and can be made up for by other countries, analyst at Veles Capital Elena Kozhukhova believes.
Gold prices will not rise due to sanctions, because the countries of Asia and the Middle East have the opportunity to buy gold directly from Russia, and not through the London Stock Exchange, investment strategist at VTB My Investments Ivan Malina noted.
The ban on the purchase of Russian gold will not boost the domestic market, rather there will be a refocus on Asian and Eastern countries, analyst at Veles Capital Sergey Zhitelev told the newspaper. On the other hand, financial analyst at Otkritie Management Company Oleg Fedorovich believes that sanctions can become an incentive for the development of gold trading on Russian platforms. Gold prices may be under pressure on the local market, so rising gold purchases for Russian reserves can be expected, the expert said.
TASS is not responsible for the material quoted in these press reviews