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Press review: Kiev hits border to allay Donbass defeat and EU Russian oil price cap slips

Top stories from the Russian press on Tuesday, May 23rd

MOSCOW, May 23. /TASS/. Ukrainian saboteurs attempted to penetrate Russia’s borderline Belgorod Region; the EU is finding it increasingly harder to hold Russian oil prices down; and the US has little leverage for hampering friendly ties between Russia, Vietnam. These stories topped Tuesday’s newspaper headlines across Russia.


Izvestia: Kiev aims to divert eyes from Artyomovsk loss with attack on Russian border zone

A counterterrorism operation was launched in Russia’s borderline Belgorod Region on Monday following a breakthrough attempt by a Ukrainian sabotage group. The Russian Armed Forces, the Border Service, the National Guard and the Federal Security Service (FSB) are engaged in the operation to eliminate the fighters. The Kremlin stated that the attack was aimed at softening the political fallout for Kiev of the fall of Artyomovsk (known as Bakhmut in Ukraine). Experts interviewed by Izvestia say that Ukrainian forces are going to do their best to divert attention away from their ignominious defeat.

"It’s certainly nothing but a hysterical reaction to the fall of Artyomovsk," military expert Vladislav Shurygin told the newspaper. "In this way they are attempting to capture the information agenda, gloss it over and paint it with blood, creating as many excuses as possible not to revisit their devastating defeat. It should be clear that their objective now is to capture the information space, no matter what the cost," the expert noted.

Meanwhile, in the early hours of May 22, the Russian Armed Forces carried out a massive strike on the Dnepr airfield’s facilities, which involved high-precision, long-range, air-launched weapons. Sources familiar with the situation told Izvestia that the attack had destroyed a stockpile of long-range munitions provided to Ukraine by NATO. In addition, several aircraft re-equipped to carry such weaponry suffered damage.

"This has to do with the Kiev regime’s expected counteroffensive," military expert Vasily Dandykin pointed out. "This is why such an intensive attack was conducted for the first time on the airfield in Dnepropetrovsk. Instead of hitting targets inside Ukraine, strikes were carried out on areas close to the line of contact, including the Dnepropetrovsk Region and the occupied part of the Zaporozhye Region. Missile forces used Iskander missile systems, and military pilots carried out airstrikes. I think the same thing is now going to happen almost every day and every night," the expert emphasized.


Rossiyskaya Gazeta: EU finding it increasingly harder to keep lid on Russian oil prices

The European Union’s expenditures for procuring Russian energy commodities have shrunk by nearly four-fold since November 2022, but still exceed one bln euros per month. Moreover, according to Finland’s Center for Research on Energy and Clean Air (CREA), the EU’s imports of Russian gas, oil and oil products began to show growth in cash terms in May. Despite the price cap on Russian oil introduced by the EU and the G7, China’s spending on imports of Russian hydrocarbons has remained constant at last year’s levels, while those of Turkey and India have grown. These countries also increased their fuel exports to Europe, which are actually ensured by Russian commodity supplies, for which the EU ends up paying at the end of the day, Rossiyskaya Gazeta writes.

The EU and the G7 are currently discussing sanctions to prevent third-country companies from bypassing the price cap, but, in fact, Europe is trying to change the market situation in its favor rather than reduce Russia’s fiscal revenues. Today, Moscow’s revenues depend not so much on the price of the Russian benchmark Urals blend delivered to European ports (since maritime exports of Russian crude to the EU have been suspended) but on the price of the global Brent benchmark, at a fixed maximum discount. The EU is betting on competition: If Russian oil prices go down, other suppliers will also have to reduce their rates. However, most forecasts say that demand will grow in the second half of the year and oil prices will rise. In this case, Russian oil prices will also go up, no matter what measures those who imposed the sanctions take.

Finam analyst Alexander Potavin points out that, apart from the Russian oil price cap, increasing freight costs also affected the discount rate in late 2022 and early 2023. In addition, supplying commodities to new markets required Russian companies to offer attractive low prices to customers. However, as export channels are being established, discount rates for new customers are declining.

Western countries still have leverage to put pressure on the market, said Dmitry Alexandrov, head of analytical research at the IVA Partners investment company. The question concerns their determination to take tough measures. There is increasing pressure on India and, if the country reduces oil imports, logistics disruptions will push discount rates up, given New Delhi’s activities on the market in recent months. However, a reduction in Russian oil supply in the market is not what the EU wants because it could once again result in a rise in global prices. This is why the masterminds of sanctions will have to maintain a delicate balance between tough restrictions and the risk of going too far, simply leaving Europe without fuel should India or Turkey significantly reduce their Russian oil imports.


Izvestia: Washington has little chance of driving wedge between Hanoi, Moscow

Russia is ready to resume wheat supplies and boost exports of meat products to Vietnam. This news came in the wake of a visit to Hanoi by Russian Security Council Deputy Chairman Dmitry Medvedev, who also serves as chairman of the ruling United Russia party. The atmosphere of his meetings with Vietnamese political leaders and public figures has confirmed: It is not for nothing that, since Soviet times, Vietnam has been considered to be one of Russia’s best friends, Izvestia writes.

The high-level talks in Hanoi touched upon the use of national currencies in bilateral trade and the potential roll out of Russia’s Mir payment system in Vietnam. The parties paid particular attention to energy cooperation, including the operations of Russian energy sector companies, such as Gazprom, Zarubezhneft and Novatek, in Vietnam.

According to Valeria Vershinina, an expert with the ASEAN Center at the Moscow State Institute of International Relations (MGIMO University), cooperation in the oil and gas sector has always been the foundation of ties between Moscow and Hanoi. For instance, projects like the Vietsovpetro joint venture have no analogues in the world.

Nuclear energy is another important area. There is a distinct possibility that Hanoi may resume work on the Ninh Thuan 1 Nuclear Power Plant project. Russia and Vietnam signed an agreement for construction of the facility’s two energy units in 2011, but five years later Vietnam abandoned the project in favor of coal and gas generation due to low demand forecasts and Hanoi’s high level of external public debt. However, after nuclear energy once again became cheaper than fossil fuel last year, as well as based on environmental considerations, Vietnam decided to reconsider the prospects for developing nuclear power generation capacities.

The United States has always been persistent in courting this Russia-friendly country, seeking to drive a wedge between Moscow and Hanoi. Vietnam is facing significantly increased pressure due to the situation in Ukraine, especially because Hanoi abstained from condemning Russia on the issue at the UN Security Council. "It should be understood that trade between Vietnam and the US is actively growing (reaching $124 bln in 2022), and the US market is one of the most attractive ones for Vietnamese exporters, while US companies are likewise showing considerable interest in Vietnam. As well, a lot of Vietnamese students attend US universities," Vershinina noted. However, in her words, Vietnam’s main foreign policy principle is to balance and preserve room for maneuver for as long as possible. In this regard, Hanoi’s position has been rather restrained as it takes both Moscow’s interests and Washington’s mood into consideration.


Kommersant: Armenian prime minister ready to recognize Karabakh as part of Azerbaijan

Armenian Prime Minister Nikol Pashinyan has expressed his willingness to recognize Nagorno-Karabakh as part of Azerbaijan in exchange for safeguards for the rights and safety of the region’s Armenian population and Baku’s recognition of Armenia’s territorial integrity. However, the prime minister noted that ensuring lasting peace would require guarantees by third parties. Judging by Pashinyan’s statements, one cannot be certain that Yerevan sees only Moscow and the Collective Security Treaty Organization (CSTO) as such guarantors because he even threatened to leave the organization, Kommersant notes.

Efforts to resolve the Armenian-Azerbaijani conflict were stepped up in early May, with the two country’s foreign ministers holding meetings in Washington and Moscow, followed by a meeting between the country’s leaders in Brussels. They are now expected to hold talks in Moscow on May 25.

According to Tatul Akopyan, head of Armenia’s Ani think tank, Pashinyan’s statement about recognizing Baku’s sovereignty over Nagorno-Karabakh should be seen as an effort to avoid another war with Azerbaijan and ensure the security of Armenia’s internationally recognized borders. "That said, the goal is to preserve what the international community does not call into question," the expert explained.

Azerbaijani President Ilham Aliyev on May 22 described the signing of a peace treaty with Armenia as inevitable. In the meantime, Pashinyan is confident that any agreements reached with Baku should be accompanied by international security guarantees. In any case, Yerevan has accumulated plenty of bones to pick with the CSTO, with Pashinyan even saying that Armenia was not ruling out making "a legal decision to end or suspend its CSTO membership."

Armenian experts insist that, "the CSTO’s passive response to the Armenian authorities’ requests to intervene in the conflict with Azerbaijan" have led to a situation where Yerevan keeps reminding the organization of its grievances, while looking around for other potential guarantors of peace.

"The United States and the European Union are being considered as such a party but they haven’t gone beyond making statements so far," Akopyan noted. However, in the expert’s view, Pashinyan’s remark may have been driven by a desire "to wake the CSTO up to respond to Azerbaijan’s actions," as well as by an attempt to justify potential weapons purchases from third countries and the deployment of an EU civilian observer mission on Armenia's border.


Vedomosti: Outcome of Turkey’s May 28 presidential runoff election far from preordained

Turkey’s third-place presidential candidate, nationalist Sinan Ogan, has endorsed incumbent head of state Recep Tayyip Erdogan for the upcoming runoff vote on May 28, Vedomosti writes; Erdogan garnered 49.4% of the vote in the May 14 presidential balloting, falling just short of a first-round victory.

Erdogan will face challenger Kemal Kilicdaroglu, leader of the center-left Republican People's Party and the opposition Nation Alliance, who garnered 44.8% of the first-round vote. The opposition alliance managed to win only 35% in the concurrent parliamentary election on May 14, while Erdogan’s ruling alliance secured a 49.5% share of the parliamentary vote. Thus, should Kilicdaroglu pull off a win in the second round of the presidential election, he would have to deal with an opposition-led legislative branch, crippling his ability to effectively run the country.

Ogan’s endorsement will not have a decisive impact on the outcome of the presidential runoff, said Ikbal Durre, associate professor at Moscow State Linguistic University’s Department of Regional Studies. "First, the politician does not fully control the nationalist vote. The ballots that were cast in his favor more likely reflect protest sentiment among nationalist-minded voters who may be dissatisfied with both Erdogan’s policies and Kilicdaroglu’s nomination," the expert noted. "Second, the majority of nationalists made up their minds in the first round. Ultra-nationalists voted for the incumbent president and moderate ones cast their ballots for the opposition," the analyst added.

The Ogan factor could turn out to be toxic for Kilicdaroglu, however, Durre went on to say. "Kilicdaroglu has been actively using nationalist rhetoric after the first round in a bid to attract nationalist voters. He did not say such things before. However, the opposition candidate is thus discouraging Kurdish voters and may spoil his election chances because the Kurds significantly outnumber Turkish ultra-nationalists in the country," Durre said.

According to him, it is the undecided voters that will determine the outcome of the election. "About 8-10% of voters did not take part in the first round. In addition, some 1.5 million ballots were destroyed. I believe that most of these people don’t support the current government. In theory, Kilicdaroglu could mobilize this reserve," the expert concluded.

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