MOSCOW, May 17. /TASS/. Russia calls halt to data sharing on its strategic nuclear forces; Washington’s money spigot for Ukraine arms supplies may be running dry; and Central Asian nations may join anti-Russian sanctions. These stories topped Wednesday’s newspaper headlines across Russia.

 

Vedomosti: Russia stops sharing data on its strategic nuclear forces

Moscow will not disclose data about its strategic nuclear forces even after Washington has done so, Russian Deputy Foreign Minister Sergey Ryabkov said on Tuesday. According to the US Department of State, as of March 1 the United States had 662 deployed carriers with 1,419 warheads, as well as 138 non-deployed carriers. According to the latest data, published by the Russian Foreign Ministry, as of March 1, 2021, Russia had 800 carriers and 1,456 deployed warheads.

In his state of the nation speech in February, Russian President Vladimir Putin announced that Moscow would halt its participation in the New START nuclear weapons treaty, a move intended to preclude any harm to Russia’s national interests that might potentially arise from US inspections of Russian defense enterprises and other facilities during the course of the special military operation.

Moscow’s refusal to exchange key data is directly linked to its suspended participation in New START, said Dmitry Stefanovich, a researcher at the Center for International Security at the Russian Academy of Sciences’ Primakov Institute of World Economy and International Relations (IMEMO RAS). Formally, Russia is legally prohibited from carrying out any START-related activities, which is clearly demonstrated by its refusal to share information. The United States has also stopped providing daily notifications about its strategic offensive weapons. While the general US data as a whole are not surprising, the number of Russian weapons, especially deployed warheads, has increased recently (since March 2020): last fall, they were below the treaty-mandated ceiling by just a single unit, Stefanovich explained. At the same time, the Russian side has voluntarily committed itself to adhering to the quantitative restrictions under New START as long as it remains in force, despite Moscow’s suspension of the treaty, the expert clarified further. It is likely that the US has obtained a general idea of how many strategic offensive weapons, or at least carriers, Russia has by means of technical reconnaissance and signals intelligence, but the situation with warheads once again demonstrates the utility of inspections. Moreover, it would be beneficial for Russia to have access to prospective US launchers that could, in theory, become closer to deployment by 2026. However, there are no indications of any potential reversal in the current situation with the Strategic Arms Reduction Treaty, especially while both sides continue to exchange mutual recriminations, Stefanovich concluded.

 

Vedomosti: Washington’s money spigot for Ukraine arms supplies may be running dry

The $48 billion military aid package that the US approved for Ukraine in December may be fully allocated by mid-summer, according to Politico. According to the US publication, only $6 billion of the original aid package now remains, and the process of getting Congress to approve more assistance will take time and could disrupt the pipeline of weapons and military hardware to Kiev. Meanwhile, however, such deliveries are needed now more than ever as Ukraine gears up to launch its much-ballyhooed counteroffensive, yet the jury is still out on whether the Biden administration’s latest aid measures will be enough and will arrive in time, Politico writes.

Meanwhile, senior US leaders are already discussing yet another aid package for Kiev. An official told Politico that, although it is unclear how Ukraine’s needs may change during or after the expected counteroffensive, the White House fully intends to keep the spigot of aid for Kiev open.

This time around, however, any new Ukraine aid package may fall victim to the rancorous partisan tug-of-war over the US debt ceiling, Politico added. What the publication termed a small but vocal group of Republicans is seeking to cut spending on Ukraine. As an alternative option, though, the White House may propose smaller packages for Ukraine to get through the rest of the year.

For the Biden administration, which is in charge of decision-making on this issue, providing aid to Ukraine remains a "sacred cow," Vladimir Vasilyev, senior research fellow at the Institute for US and Canadian Studies, told Vedomosti. Even should the US go into technical default if the debt ceiling is not raised, the White House may well go to the wall defending more appropriations for Ukraine, the more so since the financing of national security needs is Washington’s No. 2 priority after debt payments. This is why the United States will definitely not leave Kiev in the lurch without support until the end of this fiscal year, the expert argues. According to him, more heated debates may arise during congressional voting on the budget, as Republicans, who control the House of Representatives, are set to bring defense expenditures down to the 2022 level, which may negatively affect the volume of aid for Kiev. At the same time, Republicans may curb aid for Ukraine through audits, an argument the party will use if any abuses and misappropriation are detected in Ukrainian aid flows. However, Vasilyev says, the GOP will clearly be reluctant to play this card this year, but would instead save it as an argument to trot out in next year's budget debates, thus ensuring that Ukraine will not be left without weapons in the next four to five months.

 

Nezavisimaya Gazeta: Central Asian nations may join anti-Russian sanctions

Addressing the third Central Asian Conference of the Valdai Discussion Club on Tuesday, Russian Deputy Foreign Minister Mikhail Galuzin said that some Central Asian nations are showing little appetite for risk and, thus, may join sanctions against Russia. However, he warned that any artificial severance of ties with Russia may cause more damage than the costs of any secondary sanctions. The senior Russian diplomat emphasized that Russia is seeking to consistently intensify its strategic partnership with the nations of the region.

Meanwhile, Brussels is working on an 11th package of anti-Russian sanctions, threatening to use secondary restrictions on China, the UAE, Syria, Iran, Uzbekistan and Kazakhstan. As part of these measures, Kazakh oil tankers would be banned from unloading in the open sea or calling at ports with disabled GPS trackers. The new measures are meant to prevent trading oil in ways that enable skirting sanctions. On Tuesday, Kazakh Foreign Minister Murat Nurtleu discussed ways to offset the potential adverse effects of European sanctions on the Kazakh economy with EU foreign policy chief Josep Borrell, according to Kazakhstan’s foreign ministry.

Alexander Knyazev, leading researcher at the Institute for International Research at Moscow State Institute of International Relations (MGIMO University), told Nezavisimaya Gazeta that Russia and China will hardly deprive the Central Asian region of their support. The expert said that smaller economies, like Kyrgyzstan, will suffer less, and Bishkek has seemingly opted for cooperation with Russia. "Of course, the Kyrgyz authorities expect that Russia will compensate for the damage, if secondary sanctions are imposed, and they rely no less on China," he said. However, secondary restrictions may cause serious damage to the two larger economies, Kazakhstan and Uzbekistan, he warned, with the bulk of Kazakhstan’s exports flowing to Europe.

"Summing up the results of last year and the first quarter of 2023, we see that all Central Asian nations benefited from the new situation and have strengthened cooperation with Russia," Knyazev said. In addition, on May 17-19, Beijing will host a China-Central Asia summit, where the regional players will be offered new investment packages, he concluded.

 

Kommersant: US preparing to replenish strategic oil reserve

The United States, which holds the world's largest strategic petroleum reserve (SPR), will replenish it in the summer after its volume fell to the lowest level seen since 1983, following interventions in 2022. The US Department of Energy announced that it will purchase up to 3 million barrels for the SPR in August, and volumes may increase further down the road. Some experts believe that, in the context of relatively low prices, the US decision was expected, although a local shortage of oil in the market cannot be ruled out, they warn.

As of May 5, the US had 362 million barrels in its SPR, or the lowest volume seen in the past 40 years, said Andrey Storozhev, a senior expert at the Institute for Energy and Finance Foundation. To him, the purchase of more crude to replenish the strategic reserve was quite expected amid falling prices in recent months. At the same time, a modest volume of 3 million barrels will not seriously affect either prices or the behavior of other players, the expert argues. He believes that a gradual replenishment of volumes being released will make it possible to avoid spikes in prices for oil or petroleum products, while the ongoing uncertainty about a potential recession or falling demand will continue to put pressure on prices.

Currently, there is a fragile balance between supply and demand in the market, which could easily be broken, says Oleg Zhirnov, a partner at Kept. This manifested itself in the highly volatile oil prices seen in early 2023. The expert does not rule out that the replenishment of the SPR may trigger a local market shortage that would be highly likely to propel prices higher.

 

Kommersant: Buyers of exiting foreign firms may face share float mandate

A Russian government commission is exploring the idea of mandating that the new owners of assets purchased from companies exiting the Russian market float a portion of their shares in the stock market. Central Bank of Russia Governor Elvira Nabiullina announced the initiative at a conference on Tuesday.

The obligation to offer a certain portion of the shares of a company bought from foreign market players for sale in the equity markets should be adopted shortly, Nabiullina’s first deputy, Vladimir Chistyukhin, told TASS. Meanwhile, the Finance Ministry informed Kommersant that the issue is now being worked out.

Between March and November 2022, about 120 companies based in the EU or G7, or about 8.5% of the total, left the Russian market, according to a survey by economists from Switzerland’s IMD Institute and St. Gallen University.

Commenting on the advantages of the idea, Yevgeny Shatov, a partner at Capital Lab, said that it could unleash more liquidity and make these companies more transparent. Consumer retailers, agricultural firms, food producers and leasing companies would be of particular interest, according to another expert, Anna Avakimyan.

However, she sees quite a number of obstacles that may hamper the plan, including strict listing requirements and pressure on share prices for existing securities, as well as the disapproval of strategic investors.

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