Press review: What Putin, UAE leader discussed and Russian strikes cut off Ukrainian power

Press Review October 12, 2022, 13:00

Top stories from the Russian press on Wednesday, October 12th

Vedomosti: Russian, UAE leaders talk Ukraine, Syria and oil

Russian President Vladimir Putin held talks with his counterpart from the United Arab Emirates Mohammed bin Zayed Al Nahyan, lauding his willingness to play a role in resolving the conflict in Ukraine. The parties also discussed the activities within OPEC+ and the situation in Syria, Vedomosti writes.

"The UAE used to engage in mediation efforts only in issues related to the Arab world," Senior Researcher at the Moscow State Institute of International Relations Yury Zinin noted. "Given the country’s increased activities in terms of the Ukrainian crisis, one can say that the UAE has apparently decided to raise its status, taking advantage of its certain equidistance from the West, Russia and China," he explained. As for the Ukrainian conflict, the UAE may be a more preferable mediator than Turkey, who is a NATO member and has close ties to the West, Zinin noted.

However, Professor at Moscow State University’s Institute of Asian and African Studies Vladimir Isayev believes that Al Nahyan is an unacceptable figure for Ukraine as he is considered to be relatively "pro-Russian" because of his close contacts with Moscow in the past. According to Isayev, it’s more likely that Russia will become a mediator in the conflict in Yemen, where the UAE and Saudi Arabia have been opposing Moscow’s actual close partner Tehran since 2015.

Like other Arab countries, the UAE believes that the sanctions on Russian energy resources mean that the West and the US may later want to apply restrictions to them, too, Isayev pointed out. The UAE and Saudi Arabia have been pressured to increase output all this year, the expert emphasized. "The Arab world views Russia as a counterbalance and a tactical ally, while China has never supported these countries in their economic and political activities," Isayev stressed.

 

Media: Moscow’s strikes on Ukrainian infrastructure trigger blackouts and suspension of power exports to Europe

The Russian Armed Forces’ high-precision strikes on Ukraine’s strategic energy facilities have led to massive electricity outages and forced Kiev to suspend power exports to Europe, Rossiyskaya Gazeta writes.

For Ukraine, electricity exports are primarily a source of budget revenues. Kiev exports power to four countries, namely Poland, Slovakia, Romania and Moldova, Macroeconomic Analysis Chief at Finam Olga Belenkaya explained. According to her, the export amounts are hardly critical for Europe but given the current energy crisis, any relatively cheap electricity supplies are vital. As for Ukraine, additional energy-generating capacity will matter a bit later, when the cold weather sets in and consumption rises.

Meanwhile, military expert Vladislav Shurygin told Izvesita that Russia’s armed forces had started fighting the way they should have from the very beginning. "We are now targeting the country’s infrastructure," he explained. "First of all, energy and communication facilities and railways are coming under attack. All these targets are vulnerable and we have every opportunity to hit them. By leaving the enemy without electricity, we will deprive them of power and the means of communication, as well as of normally working railways. This sort of combat needs to be continued. This is what the West fears, which is why they are making such a fuss," Shurygin said.

The expert pointed out that electricity issues would disrupt all of the Ukrainian military’s logistics, including the movement of personnel, military equipment, ammunition and related cargo, as well as the activities of defense and repair factories. "In order to cause major destruction to military logistics, this work needs to be continued for about a week and a half to two weeks," Shurygin added.

 

Izvestia: US sanctions goading China into escalation with Taiwan

Chinese semiconductor producers have lost $8.5 bln following the decision by US officials to limit the export of technologies and high-tech equipment, including microchips, to the country. According to Beijing, the United States blatantly violated market principles, Izvestia notes.

China has the ability to respond to these economic sanctions by ratcheting up domestic production, Banking Institute of Development Deputy Director Yulia Makarenko said. Companies will rework processes, and the market will soon recover from a decline so the stagnation will be temporary, she explained.

The export ban on hi-tech goods and technologies first and foremost has political goals, Executive Director of the Capital Markets Department at Iva Partners Artem Tuzov emphasized. "By imposing such sanctions, the US is driving China to escalate the conflict with Taiwan, the world’s leading microchip producer," he noted. "Taiwan has access to US technologies, so it will now have a competitive technological advantage over China. A military standoff will not make sense because Taiwan’s microchip manufacturers will immediately lose access to American technologies. The catch is that the US is no longer a technology leader in many aspects. China is actively working to catch up with it and at times it even overtakes it. As a result, such sanctions only encourage China to build up its capabilities in the microchip industry, too. Taiwan will only lose from it in the long term," the analyst forecasted.

Washington’s activities on the international stage are focused on containing China in the field of technology, the expert emphasized. "Tensions are rising in relation to Taiwan who in fact no longer can exist in isolation from China. Taiwan’s microchip industry is well developed because of the import of resources from China and the export of microchips to China. US attempts to disrupt this balance cannot lead to anything good," the expert concluded.

 

Nezavisimaya Gazeta: Removal of sanctions against Iran facing roadblocks

The situation around efforts to restore the Joint Comprehensive Plan of Action on Iran’s nuclear program has dramatically changed since August, when Tehran and the West were one step away from striking a new deal. The International Atomic Energy Agency reports that Iran is continuing to enrich uranium. Besides, Tehran is being accused of providing military supplies to Russia. All this, along with the White House’s unwillingness to meet Iran halfway ahead of the midterm congressional elections, will probably delay an agreement on Iran’s nuclear program until next year, Nezavisimaya Gazeta writes.

The current situation is paradoxical because the US, Western Europe and Iran need to restore the nuclear deal for economic reasons. If Iran’s oil made it to the global market, then it would bring down energy prices sharply, by replacing Western-shunned Russian oil. However, political reasons prevent an agreement from being reached.

"Europe is not very friendly towards Iran’s authorities at the moment because of the protests in the country that have already claimed the lives of 100 to 180 people. Meanwhile, after OPEC+ countries had decided to reduce oil output, the demand for Iranian oil started to grow, particularly in European countries. Another thing to note is that the EU’s sanctions on Russian oil supplies will take effect in December," Senior Researcher at the Russian Academy of Sciences’ Institute of Oriental Studies Vladimir Sazhin noted.

"At the same time, the Iranian elite is also divided on the deal. Forces close to the Islamic Revolutionary Guard Corps oppose it," the expert said. Sazhin believes that the Iranian authorities will have the capability to suppress the protests but discontent in the West will persist in the coming months, so significant steps to reach a nuclear deal are unlikely to be taken this year.

 

Kommersant: Warm weather pushes Europe’s gas prices down

The current mild weather in Europe has made gas prices drop to the levels seen in early July, when the Nord Stream gas pipeline was still operating. Analysts say that apart from the warm weather, large amounts of gas in underground storage facilities, weak LNG demand in Asia and declining industrial consumption in Europe are also keeping prices from rising. However, the price trend may change once the winter cold sets in, Kommersant writes.

Europe is receiving most of its pipeline gas from Norway, while major EU consumers are in talks on boosting supplies from Algeria and Azerbaijan. After launching its special military operation, Russia started to reduce supplies via the Nord Stream gas pipeline and other routes because the West introduced numerous sanctions against Moscow over its activities in Ukraine. Nord Stream supplies were halted in September and all chances for them to be restored this winter disappeared after acts of sabotage against the Nord Stream 1 and 2 pipelines.

Independent expert Alexander Sobko points out that Europe’s gas prices always depend on spot prices in Asia, which are currently 20% lower than in Europe because of the mild weather. "As a result, increasing amounts of LNG are being sent to Europe, which affects prices that in theory should be closer to those in Asia, particularly because for many LNG producers the shipping distance to Europe is far shorter than to Asia," he noted.

Sergey Kondratyev from the Institute for Energy and Finance Foundation shares the view that a drop in LNG prices in East Asia is the main factor, as well as high levels of stocks in Europe’s underground storage sites and declining consumption in its industrial sector. However, the expert emphasizes that the weather will be crucial in the coming months and prices may reach new highs if the winter is cold.

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