MOSCOW, January 31. /TASS/. US Secretary of State Antony Blinken embarks on a Middle East tour as tensions between Israelis and Palestinians explode, NATO and Washington seek to rally Asian allies in the face of threats from China and North Korea, and the EU is searching for ways to seize Russian assets. These stories topped Tuesday’s newspaper headlines across Russia.
Izvestia: Can America’s top diplomat reconcile Israelis and Palestinians?
Tensions between Israel and Palestine may spill over into a full-scale missile war, said experts interviewed by Izvestia. The new round of escalation coincided with US Secretary of State Antony Blinken’s tour of the Middle East. However, experts say that Washington does not have enough leverage to influence the situation.
This latest escalation was sparked by the January 26 Israeli military operation in the Palestinian city of Jenin, which left nine people dead, according to Palestine's Health Ministry. On January 27, a terrorist attack in East Jerusalem claimed seven lives. A shooting attack that broke out later at the City of David archeological site left two injured. Missiles were fired from the Gaza Strip, which were intercepted by Israel’s air defenses.
Sergey Melkonyan, a researcher at the Russian Academy of Sciences’ Institute of Oriental Studies, believes that if Israel "decides to carry out a larger-scale operation than what took place in Jenin and in Gaza, the situation may escalate to a level where Hamas and Islamic Jihad would use missiles." According to Melkonyan, the US top diplomat’s planned meeting with the Palestinian leadership makes it clear that de-escalation is important for Washington. "It’s hard to say how successful these efforts will be. Much depends on the balance of power within the Palestinian authorities," the expert explained.
Meanwhile, the Israeli-Palestinian conflict is not the only issue on Blinken’s agenda. He also plans to discuss Washington’s support for Israel in light of threats coming from Tehran. This is a daunting aspect, given the recent attack on a military facility in Iran. The emergence of another front will not play into US hands, orientalist scholar Roland Bidzhamov noted. "They [the Americans] seem to be more interested in strengthening pressure on Iran and raising tensions on this track but they don’t want to bring matters to a military standoff," the expert pointed out. In his view, the focus will be on continued pressure on Tehran but it is hardly a question of military activities between Iran and Israel at this point.
Media: NATO, US seek to rally Asian allies in face of threats from China, North Korea
The United States and NATO have ramped up their activities in East Asia. On January 30, US Secretary of Defense Lloyd Austin embarked on a trip to South Korea and the Philippines, while NATO Secretary General Jens Stoltenberg arrived in Seoul on January 28. The Pentagon is concerned about China’s policies and North Korea’s nuclear arsenal as well as ballistic missile tests. Stoltenberg, in turn, called on Seoul to increase ammunition supplies to Ukraine, Vedomosti writes.
Austin’s visit to South Korea indicates that the US was asleep at the wheel while North Korea was stepping up its game, Senior Research Fellow at the Russian Academy of Sciences’ Institute for US and Canadian Studies Vladimir Vasilyev pointed out. While Washington was focused on Ukraine, Pyongyang conducted missile launches and started talking about resuming nuclear tests. Still, in the expert’s words, Austin’s trip may also be linked to the Ukrainian crisis. The United States is facing difficulties sending weapons to Kiev so chances are that he will seek to ensure South Korean weapons supplies to Ukraine. However, it is too early to talk about US plans to create a NATO-like organization in the region.
An "Asian NATO" won’t be established as a unified organization, said Vladimir Nelidov, a research fellow at Moscow State Institute of International Relations. The level of solidarity between the countries of the region isn’t as high as in Europe and historical contradictions remain between Japan and South Korea.
In the meantime, the NATO chief’s tour was also aimed at boosting weapons supplies to the Ukrainian army. "Last year, South Korea had already stepped up military exports many times over. First and foremost, to Poland," Associate Professor with the Department of Oriental Studies at Moscow State Institute of International Relations Ilya Dyachkov noted. The South Koreans clearly realize that their ammunition is being sent to Ukraine from Poland and their tanks and howitzers are replacing the weapons that were provided to the Ukrainian army earlier. According to Dyachkov, despite a lack of enthusiasm to directly support Ukraine through weapons supplies, no one can guarantee that the South Koreans will resist doing so. "The US is South Korea’s closest military ally. This fact inevitably impacts its foreign policy activities and its freedom to maneuver in terms of decision making," the analyst emphasized.
Rossiyskaya Gazeta: EU lawyers racking brains for ways to seize Russian assets
The European Union’s legal service has announced that the EU has grounds to temporarily use € 33.8 bln out of the Russian Central Bank’s frozen assets for Ukraine’s restoration. The funds in question make up about one-tenth of the Russian Central Bank’s assets frozen in the West, Rossiyskaya Gazeta writes.
The European Commission’s attorneys made a disclaimer that the plan could be carried out legally only if the assets weren’t expropriated, the date for the relevant mechanism’s expiration was set and both principal and interest were returned to Russia at some point.
It won’t be easy to quickly seize Russian assets, experts point out. Any asset handover should be based on well-prepared regulations but no one has so far created a legal framework on the matter, Director of the Center for Business Tendency Studies at Higher School of Economics Georgy Ostapkovich noted.
The illegal process of seizing funds belonging to a sovereign country may affect the entire global financial system. "As soon as the EU seizes Russia’s frozen assets for its own purposes, everyone in the world will know it means that any sovereign government’s funds are now fair game for the countries where those reserves are stored. Some nations have already begun to reduce their dollar and euro reserves for fear of them being illegally seized," Dean of Law at the Russian Government’s Financial University Gulnara Ruchkina stressed.
This is why the EU suggested that its member states and their partners establish a fund to manage the liquid assets of Russia’s Central Bank. However, such a scheme involves risks because if transactions with Russian assets prove to be unprofitable, Moscow’s losses will have to be offset from the European Union’s budget. "In addition, there are ways to give a tit-for-tat response to the EU’s illegal actions because unfriendly countries’ assets of nearly the same value remain frozen in Russia," the expert added.
Vedomosti: Gazprom’s gas transit through Ukraine drops to all-time lows
The transit of Russian gas through Ukraine dropped to all-time lows in January 2023, Vedomosti writes, citing data from Gazprom, Russia’s gas giant.
Russia’s gas transit to the European Union through Ukraine’s Gas Transmission System plummeted to 41-42 mln cubic meters per day in May 2022, after Kiev had refused to accept requests for transit via the Sokhranovka gas pumping station in Russia’s Rostov Region, from where gas goes to the Lugansk People’s Republic. Since then, gas has been transported only through the Sudzha pumping station in Russia’s Kursk Region, from where gas enters Ukraine’s Sumy Region. In January 2023, daily gas transit began to fall once again, nosediving by more than 40% by the end of the month.
Leading Analyst at the National Energy Security Fund Igor Yushkov points out that the January reduction was primarily due to a decline in Europe’s demand for Russian gas.
BCS World of Investment Senior Analyst Ronald Smith explained that unusually warm and windy winter in Europe was the main reason why gas supplies had dropped in January. Finam analyst Sergey Kaufman agreed that unusually warm weather and the "quite good" performance of wind power generation had resulted in a temporary decline in gas demand in the EU.
Kaufman emphasizes that if there are no more force majeure situations, Gazprom’s gas transit can be expected to return to the level recorded in late 2022. If gas prices stop falling, Russian gas transit may start to recover as early as February, he said. Yushkov, however, disagreed, saying that "the EU’s demand for Russian gas will rebound to December’s level only in the second half of the year, when Gazpriom’s prices become more attractive to customers than spot rates." Still, the expert does not rule out that the contract for gas transit via Ukraine may be terminated in 2023 over the fulfillment of its terms.
Rossiyskaya Gazeta: OPEC+ to discuss global oil situation
The OPEC+ monitoring committee will meet on February 1 to discuss the situation on the oil market. The committee’s members will gather for the first time after December 5, when the European Union’s embargo on Russian oil imports and the much-talked-about price cap on Russian oil came into force, Rossiyskaya Gazeta writes.
Neither too optimistic nor too pessimistic forecasts came true following the introduction of these restrictions. Global oil prices did not skyrocket above $100 per barrel, nor did they plunge to the cap level.
OPEC+ has three options in the current situation. The first one is to maintain oil output at the current level and see what happens after the EU’s embargo on the import of Russian oil products and the price cap on them take effect on February 5. The second option is to try to raise prices by announcing an additional cut in oil production. The third option will be to take advantage of Russia’s logistic difficulties and increase output in order to seize the country’s share of the market. This option seems to be the least likely one, primarily because it would destroy the deal.
Increasing output would require raising OPEC+ quotas but the deal’s participants are very unlikely to take such a step, Institute for the Development of Technologies expert Kirill Rodionov said. Oil prices have only recently managed to rise to the $86 per barrel mark after falling to $76 in early January.
Head of the Energy Development Center Kirill Melnikov points out that the OPEC+ leader, Saudi Arabia, is interested in stable and reasonably high oil prices, and the country is content with the current situation.
As for Russia, the first and second options are acceptable. The second one may be slightly better because, in Melnikov’s opinion, a move to reduce output in order to push prices higher will benefit the budget more. However, the reduction option is less likely because there are high hopes for a rise in China’s oil demand that is expected to boost oil prices.
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