MOSCOW, June 5. /TASS/. OPEC+ drastically reduces oil production; US ceases sharing nuclear arms information with Russia under New START; and Erdogan unveils new cabinet after major reshuffle. These stories topped Monday’s newspaper headlines across Russia.
The world’s largest oil producers continue to aggressively reduce production: The OPEC+ countries agreed to lower output by an additional 1.4 mln barrels per day (bpd) starting in 2024, and to extend the deal until 2025. Russia has committed to sharply reduce its oil production; its formal quota will be reduced by 650,000 bpd to 9.8 mln bpd, with a voluntary reduction of 500,000 bpd on top of that. As a result, Russia’s actual production next year should fall to 9.3 mln bpd versus roughly 9.9 mln bpd in 2022 (without condensate), while its quota will be below that of Saudi Arabia for the first time. However, Riyadh is set to voluntarily reduce production by 1 mln bpd to 9 mln bpd as early as this July, albeit only for one month thus far.
The decision to lower quotas for 2024 is important from the viewpoint of shaping market players’ expectations, says Sergey Kondratyev of the Institute of Energy and Finance Foundation. However, Saudi Arabia’s voluntary production cut, effective July 1, will have a greater impact on oil prices. The price of global benchmark Brent crude is likely to return to a level of over $80 per barrel, which suits the majority of OPEC+ members, the expert thinks.
According to him, a critical factor here is that, starting in 2024, Russia will for the first time reject parity with Saudi Arabia in the size of its quota. Although Russia’s production volume has been below the quota since spring 2022, Moscow has formally been entitled to increase the volume. Additionally, the analyst points to the ongoing discussion, including among OPEC+ members, regarding the accuracy of data on Russian oil production volumes. "For the first time, the press release issued after [an OPEC+] meeting indicates that the production data of one of the parties to the agreement is being discussed with independent agencies and may be revised," Kondratyev points out.
Since June 1, Washington has discontinued providing information on the status and location of its nuclear weapons to Moscow under the framework of the New START nuclear arms control treaty. The US Department of State Bureau of Arms Control, Verification and Compliance said the decision was triggered by Moscow’s suspension of its participation in the treaty in February 2023.
Russia links the issue of strategic arms control directly to the overall situation in Russian-US relations, says 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). Theoretically, if certain signals are given by the US side (such as, for example, US Secretary of State Antony Blinken’s recent disavowal of any intent by Washington to seek regime change in Moscow or the destruction of Russia), then it may become possible to obtain Moscow’s consent to a discussion of the future security architecture. According to the expert, however, a space for potential cooperation may open up only if the degradation of Russian-US ties is halted on other diplomatic tracks.
While China recognizes that, sooner or later, it will become a party to such talks, at the current stage this is impossible in principle, notes Vasily Kashin, director of the Center for Comprehensive European and International Studies at the National Research University Higher School of Economics. Such talks presume a discussion of the composition of and development trends of strategic nuclear forces, whereas China is experiencing the most active growth in this area among all "big five nuclear" countries, the expert says. China’s 14th five-year plan (2021-2025) and Chinese President Xi Jinping’s speech at the 20th Congress of the Chinese Communist Party set forth the goal of building a high-level system of strategic deterrence, Kashin points out. This presumes reaching a level of development of nuclear and non-nuclear strategic forces that would allow China to both reach strategic stability in its relations with the US and ensure non-interference by Washington in China’s conflicts in the Asia-Pacific zone, the analyst explained.
Holding talks on strategic stability now would only interfere with this goal, says Kashin. In his opinion, this is precisely why China is currently dodging Washington’s proposals, saying that its forces and capabilities are much more modest in comparison and insisting that the US should first disarm itself to a comparable level.
Following his hard-fought victory in the May 28 runoff election, Turkish President Recep Tayyip Erdogan kicked off his new term in office with an overhaul of his government. Only the health and culture ministers retained their positions in the new cabinet, while fresh faces are now at the top of the other 15 ministries. According to experts, such a sweeping government reshuffle signals the president’s intention to satisfy the public demand for change, although no serious change of course in the overall policy line should be expected.
Mehmet Simsek’s appointment as the new finance minister, an office he previously held in 2009-2015, was quite expected given galloping inflation, the weakness of the Turkish lira and the growing cost of living. However, the replacement of other key figures was not quite as clearly forecasted, despite certain rumors and leaks to the media. According to Yury Mavashev, director of the Center for Modern Turkish Studies, Erdogan’s decision to reshuffle his cabinet can be viewed as an attempt to "feign a renewal," thereby satisfying the public mood.
"There is a certain degree of imitation in all of this," the expert explained to Kommersant, pointing out that the new ministers could only nominally be considered as newcomers given that all of them have, in one way or another, been involved in Turkish politics of the Erdogan era for quite a while.
One of the most noteworthy replacements was the appointment of Hakan Fidan, who led Turkish intelligence, as foreign minister in place of Mevlut Cavusoglu. According to Mavashev, the dismissal of Cavusoglu may be related to the fact that he is "a very charismatic figure who is strongly associated with Turkey’s foreign policy." "He was increasingly perceived as the face of Turkey, with Mr. Erdogan looking less favorable in comparison as a flamboyant, radical and unpredictable figure," the expert thinks.
That said, observers note that Fidan is well-known in Moscow, Tehran and Damascus, largely thanks to years of interaction on Syria. "Fidan was with Erdogan during the toughest times in relations between Russia and Turkey. Both when Moscow and Ankara had a falling out in 2015 and when they made up later in 2015. Most likely, one should expect from him a less diplomatic approach in resolving foreign policy issues. With his arrival, Turkey’s foreign policy definitely won’t get softer, including with regard to Russia," the expert asserts.
Meanwhile, Defense Minister Hulusi Akar, one of the main players in the Black Sea grain initiative, which became Ankara’s key success in the context of the Russian-Ukrainian conflict, has also lost his position. He has been replaced by Yasar Guler, Turkey’s Chief of General Staff. Given that prior to his tenure as defense minister, Akar also led the General Staff, this switch may be viewed as an ordinary staff rotation. In any case, both Fidan and Guler will soon be seen in action at the talks on extending the grain deal, which expires in mid-July. As previously, Russia is threatening not to renew the agreement if its demands on unblocking Russian exports are not met.
US pressure on India continues in order to tear the country away from Russia, but maintaining friendly relations with Moscow is important to India and it will not sacrifice its national interests, Russian Ambassador to India Denis Alipov said in an interview with Izvestia.
"The West’s pressure on India continues and the US is openly stating its policy in this regard - to tear it away from Russia. Maintaining friendly relations with our country corresponds to India’s national interests and, I think, it won’t sacrifice them at somebody else’s whim," the envoy asserted.
The diplomat noted that "under the conditions <...> of Russia’s standoff with the West, India is conducting a balanced policy, displaying independence in decision-making and a strategy of political pressure does not work in [India’s] case."
"Russia has become India’s biggest partner in the [oil] sphere, getting ahead of traditional leaders, such as Iraq, Saudi Arabia and the UAE. Our supplies make up over one-third of India’s imports: in 2022, they increased 12-fold and reached 24 mln tons. It is important that the sides are interested in long-term contracts and not just for oil. We have high hopes for LNG and other types of energy resources," Alipov said.
"For positions opening up on the Russian market, we are finding the suppliers of machinery products, electronics, car components, medical products and pharmaceutical substances, textiles and food products. Among key priorities are projects in the mining and chemical industries, metallurgy and rail engineering," the diplomat noted.
Talks that may resolve the Kosovo crisis will be held in Belgrade on Monday and Tuesday. Serbian President Aleksandar Vucic will meet there with representatives from the EU and the US. The West is ready to agree to the annulment of contentious election results in Serbian municipalities in unrecognized Kosovo and the dismissal of governing bodies formed there by Kosovar Albanians.
However, the West has now made it clear that it will not allow the Kosovar authorities to use their current issues with Vucic for their purposes. "Kosovar Prime Minister Albin Kurti unilaterally decided that Albanian mayors, unrecognized by the Serbian majority, may take office, disregarding warnings and advice not to do so from the entire international community. […] Let’s not pretend that this situation is normal," KFOR Commander General Angelo Michele Ristuccia told Italian daily Corriere della Sera. He essentially pinned the blame on Kurti for clashes in which dozens of NATO servicemen were injured. Under these conditions, the possibility is great that Kosovo will have to backtrack on the election issue and dismiss the mayors that are unrecognized by the local Serbian population.
Alexander Tevdoy-Burmuli, associate professor in the Department of Integration Processes at MGIMO University, told Nezavisimaya Gazeta that even after the creation of the Community of Serb Municipalities, technically a Serbian autonomy, the recognition by Belgrade of Kosovo’s independence, which is a precondition for launching Serbia’s EU accession process, would hardly be automatic. "A situation has developed where all parties to the conflict made numerous mistakes, making the knot of problems even more convoluted and any compromise rather painful," he explained.
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