MOSCOW, December 7. /TASS/. Russia is considering three options in response to the price cap imposed on its oil by the G7 and the EU, Washington is reluctant to help Ukraine retake Crimea, and experts see the Kiev regime’s combat capabilities deteriorating amid losses in manpower. These stories topped Wednesday’s newspaper headlines across Russia.
Vedomosti: Russia mulling three options in response to oil price cap
Russia’s presidential administration and government are discussing three options in response to the price ceiling imposed by the G7 and the EU on Russian oil imports on Monday. The first envisages a complete embargo on oil supplies to those economies who supported the price cap, even if they buy Russian crude via third countries, two officials close to the Cabinet told Vedomosti.
According to the officials, the second option would include a ban on any exports under contracts whose terms include the price cap, regardless of which country acts as the buyer, and in the third scenario Russia could introduce a so-called indicative price, meaning Moscow would only sell its Urals blend at a certain minimal discount to Brent that has yet to be determined.
So far, none of the above options have been approved, and other alternatives may exist, one of the officials said. The issue was to be raised at a meeting between the president and oil majors on Tuesday, he added. Another official said the country is least likely to opt for the fixed discount initiative.
Yevgeny Mironyuk, an expert at BCS World of Investments, told Vedomosti that choosing either of the first two options would formalize earlier official statements that Russia would not sell its crude to those who signed off on the oil ceiling. Commenting on the potential indicative price on Russian oil, he warned that any non-market price setting mechanisms could hurt friendly importers, while disagreements could arise and oil exports may drop if there is a formula for calculating such a discount. According to Mironyuk, in the short term, the $60 per barrel cap could mean that Russian oil supplies would either stay intact or increase, and this may put further downward pressure on oil prices.
Mikhail Vasiliev, an analyst at Sovcombank, believes the second option is the most likely, as it is the most flexible and would allow Russian oil to keep its presence on the global market, which would benefit everyone.
Vedomosti: US reluctant to help Ukraine win back Crimea
Washington has assisted Kiev in retaking the territories occupied by Russia since February 24, US State Secretary Antony Blinken told The Wall Street Journal CEO Council Summit. His remark echoes the proposals US officials made to Ukrainian leader Vladimir Zelensky behind the scenes to drop his hard-line stance to retake Crimea and be "more realistic." The WSJ reported on this, citing diplomats, in mid-November, in the wake of White House National Security Adviser Jake Sullivan’s visit to Kiev earlier that month.
A top priority for the United States is to prevent Russia from somehow claiming some degree of victory or finding itself under better circumstances than they were in before February 24, Director General of the Russian International Affairs Council Andrey Kortunov told Vedomosti. Actually, what Sullivan allegedly told Zelensky, and this was later articulated by Blinken, was that restoring the pre-February status quo is the least that Washington and the West could hope to achieve, he said. The bracketing of Crimea and the Donbass republics to the pre-February status quo here speaks more to the Americans' desire to prevent uncontrolled escalation, the expert says.
While Russia signaled back in March that it was ready to consider such parameters, it would be harder to revisit the decisions which have already been made and formalized after the referendums and the accession of the four new regions to Russia, Kortunov explains. The position voiced by Russia in Istanbul allowed for some flexibility, but now the expert doubts Moscow could accept such a scheme.
Director of the Institute of World Economy and International Relations Fyodor Voitolovsky finds the US stance pragmatic and intermediate, but, judging from those statements, Washington no longer disputes Russia’s ownership of Crimea, he says. Though Washington has been encouraging Kiev to continue hostilities by sending over its financial assistance and weapons, it has made it clear that there is room for compromise, and the fundamental terms for such a compromise have been confirmed by Blinken in public, Voitolovsky says. The trouble is that Russia does not view US attempts to usher in such a compromise as alluring, the more so since the combat situation may turn against Ukraine next spring or summer, the expert concluded.
Izvestia: Ukraine’s combat capabilities deteriorate amid losses in manpower, experts say
In November, Ukrainian forces lost more than 8,300 servicemen, five aircraft, 10 helicopters, 149 tanks and more than 300 armored vehicles, Russia’s Defense Minister Sergey Shoigu announced on Tuesday. He also said the Russian Army had recently liberated six localities in Donbass. And experts see Ukraine’s combat capabilities deteriorating amid heavy losses both in manpower and equipment.
Ukraine has been throwing cannon fodder and, where possible, weapons at Russian positions, according to military expert Alexey Leonkov. The Kiev regime has sustained heavy losses, but Ukraine is determined to keep throwing manpower at this conflict and will do so as long as it can, he said. While officials in Kiev have insisted that some 10,000 Ukrainian troops have been killed since the onset of the conflict, the figure mentioned by EC President Ursula von der Leyen, who said 100,000 had been killed could be nearer the truth, the expert explained.
According to Leonkov, heavy troop losses have had an impact on the morale and mobilization capabilities of the Ukrainian military. Lots of Ukrainians have been paying or fleeing abroad to dodge the call-up, and recruiting live forces has been a major challenge for Ukraine. And large numbers of foreign soldiers on the frontline who give themselves away as mercenaries or members of private military companies prove that, he said.
The expert also pointed to heavy technical losses inflicted on the Ukrainian Army in November. Ukraine’s defense industry is dead, and the West is not ready for such a scenario, Leonkov said. Though military equipment is being delivered, the supplies have not covered the losses, he said. And the combat capabilities of the Ukrainian military have been failing because of that, too. However, the Ukrainians are still capable of going on an offensive on a section of the front, he warned.
Vedomosti: China not willing to wage new cold war against US, but preparing for one
The Primakov Readings, an international forum that opened in Moscow on Tuesday, started to discuss prospects for the development of China’s relations with the United States and Russia. While other countries were not mentioned whatsoever at the October congress of the Chinese Communist Party (CPC), the West has been talking a lot about China, Head of the Center for Asia Pacific Studies at the Russian Academy of Sciences' Institute of World Economy and International Relations Alexander Lomanov told Vedomosti. According to him, China is now entering its third war: a trade war was waged between Beijing and Washington under President Donald Trump, a technology war is in full swing under Joe Biden, and an ideological war is flaring up now. And China is ready to show to the world that it is capable of more in this domain than people expect, Lomanov maintains.
Meanwhile, there will be increasingly more Western opposition to China and its leader Xi Jinping himself, while it will be harder for the West to maintain dialogue, the expert forecasts. This is why the 20th CPC Congress urged measures in anticipation of any `black swans’ or ‘gray rhinos’ in various spheres. Russia, the expert insists, should discuss everything with China, and the two sides should not quarrel over potentially different visions of the future.
Chinese experts told the Primakov Readings that intensifying confrontation between China and the West was not something Beijing has chosen. A prominent Chinese expert who graduated from the same university as Xi said China had been seeking peaceful co-existence and stability overall in its relations with the United States. And if preventing any China-US competition is impossible, the two countries could still thwart a conflict, he assured.
The CPC Congress focused a great deal on China’s national security in its various aspects, and that can be considered a recent trend, according to Director of the Center for Comprehensive European and International Studies at the Higher School of Economics Vasily Kashin. The expert told Vedomosti that the US had been making proactive attempts to undermine production chains between China and the developed world in recent years and put the brakes on the Asian country’s innovative development. However, they will not be able to immediately cut China off from the global economy because of heavy interdependence and the size of the Chinese economy.
The expert does not expect that any Russian-Chinese union will be formalized, but the two countries may hold more joint maneuvers, patrols and other events in response to NATO’s actions.
Izvestia: Germany could face recession amid Russian oil price cap
In his interview with Izvestia, Klaus Ernst, a Bundestag member for the Left, said the price cap on Russian oil could possibly push crude prices higher in the global market. This measure, as well as Berlin’s strategy aimed at weaning the country off Russian energy in general, will have a negative impact on the German economy and could lead to a recession further down the road, he warned.
Commenting on the sabotage against the Nord Stream natural gas pipelines, the German lawmaker, who is chairman of the Committee for Economics and Energy, said, "The results of the investigation by Germany’s Federal Police and probes in other countries remain a kept secret. To me, the idea that it was Russia who blew up the projects is absurd."
As for the $60 a barrel price cap, Ernst doubted the limit could prove effective, for if that causes a reduction in supply, oil prices will surge, he warned. Russia has already taken precautionary measures by buying oil tankers to circumvent the price ceiling, he said. Nor does Ernst see any sense in either those sanctions or a general boycott against Russian oil and gas, because all this will lead to is soaring energy prices the globe over without any signs of the [military conflict] ending.
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