MOSCOW, August 14. /TASS/. EU feeling defense pinch after providing 20 bln euros worth of military aid to Kiev; AUKUS expansion seen with the potential inclusion of South Korea and Japan; and export risks on the rise in the Black Sea. These stories topped Monday’s newspaper headlines across Russia.
Izvestia: Generous supplies of Western arms to Ukraine taking toll on defense capabilities
Since February 2022, the European Union has already supplied military aid to Ukraine to the tune of 20 bln euros, Peter Stano, the European Commission’s Lead Spokesperson for Foreign Affairs and Security Policy, told Izvestia. This involves both deliveries from individual countries and financing for the Kiev regime provided by the European Peace Facility, he specified. However, the incessant flooding of the Ukrainian army with Western arms has not produced the results that Brussels expected due to the successful actions of Russian forces and the ineffective use of the weapons delivered, a parliamentarian in Russia’s lower house State Duma said. Additionally, according to experts, such generous aid to Ukraine is adversely affecting the EU’s own military potential.
"A lot of weapons are being supplied; the price tag is high but there are also many issues with the quality of the arms and the [Ukrainian forces’] capacity for using them. After all, one must know how to use these weapons," Alexey Chepa, First Deputy Chairman of the State Duma International Affairs Committee, told Izvestia.
"EU leaders have encountered quite a thorny dilemma: continue supporting Ukraine but then only at the expense of their own military security. Germany’s defense potential, for example, has been weakened, and not only regarding [the Bundeswehr’s] armored troops but also the air force. Now, Chancellor Olaf Scholtz has only one squadron of strike helicopters at his disposal. In other EU countries, the situation is even worse in some cases," says Vladimir Batyuk, research fellow at the Institute for US and Canadian Studies at the Russian Academy of Sciences.
Sergey Yermakov, an expert with the Russian Institute for Strategic Studies, stresses that the defense contractors that make the weapons have benefited the most from increased military spending and aid to Ukraine. "The European military-industrial complex, as well as the American one, are the main beneficiaries. Such [German defense sector] corporations as Rheinmetall and Krauss-Maffei Wegmann are awaiting major orders. Not only is this related to aid for Ukraine but also to the need to replenish European arsenals and re-equip the armed forces of [Ukraine’s donor] countries," he told Izvestia.
Izvestia: Japan, South Korea may soon join AUKUS, Russian diplomat says
Preliminary agreements to expand AUKUS (a trilateral military alliance comprised of Australia, the UK and the US) by including Japan and South Korea may be reached as early as August 18 at a summit between the two East Asian countries and the US, Gennady Gatilov, Russian permanent representative to the United Nations Office and other international organizations in Geneva, said in an interview with Izvestia.
"The activation of Washington’s military and scientific technological cooperation with Seoul and Tokyo facilitates the connection with projects implemented within the AUKUS framework and, as a consequence, makes the prospects for South Korea and Japan joining the ‘partnership’ quite realistic. It is possible that some understanding and preliminary agreements in this regard will already be reached at the upcoming trilateral meeting between the leaders of the US, the Republic of Korea and Japan on August 18," the diplomat noted.
He stressed that the creation of AUKUS in 2021 was "one of the manifestations of bloc thinking" that "Washington and its closest allies still cannot walk away from." "Of course, one cannot draw a direct analogy between AUKUS and, for example, NATO. However, it is obvious that this 'partnership,' besides its technological dimensions, also has a clearly pronounced military-strategic aspect that the participants themselves do not particularly conceal," the diplomat added. "The presence of a substantial military and strategic component presumes a high probability of this transnational union morphing into a full-fledged military and political bloc. One cannot rule out events developing along this scenario," he explained.
Gatilov added that such an outcome will become "even more realistic" if the AUKUS "partnership" expands by including South Korea and Japan, while its technological function, as the "submarine project" concludes, will give way to a military-strategic one.
"All of the above compels us, along with other countries in the region, to treat the implementation of plans announced within the AUKUS framework quite seriously and track the efforts of its participants on achieving their declared goals," the diplomat stressed. "We cannot ignore the military-strategic component of trilateral interaction which leads to a substantial increase in the military potential of Australia, the US and the UK in the Asia-Pacific Region, resulting in a serious shift in the balance of power, which threatens to ramp up regional and global tensions," Gatilov concluded.
Nezavisimaya Gazeta: Conflict-related risks on rise for exporters using Black Sea routes
On Sunday, the Russian Navy stopped and searched a dry cargo vessel heading to a Ukrainian port on the Danube River. Following Russia’s withdrawal from the grain deal on July 18, this is hardly the first such incident in the waters of the Black Sea that raises the risks involved in exporting goods from the region to global markets. Western experts are discussing the potential start of a "tanker war" similar to the one waged by Iran and Iraq in the past century aimed at the mutual disruption of oil deliveries. Ukrainian attacks on Russian tankers and grain carriers are only possible technically with assistance from Western countries. However, the West may not be interested in reducing Russian oil or grain exports due to the risks of rising global prices.
"There are only two countries capable of conducting independent trade and defense policy in the Black Sea and these are Russia and Turkey," Nikolay Dunayev, vice president of the Opora Russia non-governmental organization (NGO), told Nezavisimaya Gazeta. "Not only has Turkey chosen to be neutral with regard to the conflict in Ukraine but it has also blocked passage through the Turkish Straits, the Bosporus and the Dardanelles, from the Mediterranean to the Black Sea for non-regional vessels in accordance with the Montreux Convention," he added. The expert added that the situation in the two countries’ Black Sea ports is rather sensitive from the point of view of deliveries of certain products to global markets. "This is the point of origin of up to 30% of global wheat exports, 50% of sunflower oil, and almost 10% of oil and oil products. Restricting trade there carries major risks for global exports," Dunayev explained.
"Deliveries of Ukrainian grain from Odessa were cut. Ukraine is also supplying [grain] from ports on the Danube but they are much less substantial. And Novorossiysk is the source of exports of Russian grain and oil and oil products," Stanislav Mitrakhovich, expert at the Financial University and the National Energy Security Fund, told Nezavisimaya Gazeta. "The Ukrainians may try to restrict such exports by military means but it is impossible for them to do so without the West. And the West is not thrilled by plans to reduce our exports. The thing is that even earlier Western countries were not aspiring to limit the export of Russian grain, although in reality it was happening due to problems with insurance, payments, and so on. As for oil, then aiding Ukraine in blocking Novorossiysk would also lead to reduced supplies and therefore growing global prices. Yet this would not benefit the US on the eve of its presidential election. For this reason, prices on oil products may go up in Europe, which could trigger changes of government in a number of countries. In all, this is a potentially dangerous scenario for the West," Mitrakhovich said.
Vedomosti: Turkmenistan sees threat in 'gas union' among Russia, Kazakhstan, Uzbekistan
On August 12, Turkmenistan’s Foreign Ministry published a statement by Myrad Archayev, deputy chairman of the Turkmengaz state company, that Russia’s plans for creating a "gas union" with Kazakhstan and Uzbekistan will affect Ashgabat’s interests. He listed a number of issues that emerged in Turkmenistan following the interview of Dmitry Birichevsky, director of the Economic Cooperation Department at the Russian Foreign Ministry, in which the Russian diplomat did not rule out "the possibility of expanding trilateral cooperation in the gas sector."
Turkmengaz’s statement looks rather strange given that, most likely, Russian and Turkmen delegations earlier had opportunities to discuss the pertinent issues in the context of creating a "trilateral gas union," said Alexey Grivach, deputy head of the National Energy Security Fund. Ashgabat did not participate in the construction of the Kazakh and Uzbek parts of the Central Asia-China gas pipeline and, therefore, it is hardly possible to say that Turkmenistan has any serious say on the issue of Russian gas deliveries via these countries, the expert added. Possible talks about such deliveries of Russian gas to China seem quite logical amid Kazakhstan and Uzbekistan’s current difficulties in ensuring gas exports, he thinks.
The reaction by the Turkmen side is the expression of its high concern over Russia turning to the south and expanding its gas supplies to Central Asia and China, said Stanislav Pritchin, senior researcher at the Center for Post-Soviet Studies at the Russian Academy of Sciences’ Institute of World Economy and International Relations. Through a reverse flow via the Central Asia-Center gas pipeline, Russia becomes an important gas supplier to Kazakhstan and Uzbekistan as well as to Kyrgyzstan, where the gas-distribution system is already being developed by Gazprom. The deliveries may potentially go on to Tajikistan, and, most importantly, to China via a new route, which directly affects Turkmenistan’s interests, given its status as China’s main gas partner in Central Asia.
"The direct risk of Ashgabat’s practical monopoly being eliminated is evident, which, above all, is the reason for the tone taken by the Turkmen side in their statement," Pritchin said.
Vedomosti: What drove price of Russia’s benchmark Urals blend above $70 per barrel
The price of a barrel of Russian Urals blend on a Free on Board (FOB) basis in the Baltic and Black seas surpassed $70 in early August 2023, according to a report by the International Energy Agency (IEA), citing data by Argus. According to the Russian Finance Ministry, which also uses Argus data, such a Urals price was last recorded in October 2022.
According to Yekaterina Krylova, managing expert at the PSB Analytics and Expertise Center, Russia is actively increasing its export of "mazut," or fuel oil, to global markets amid decreased supplies of Urals. According to her, oil refineries designed for processing heavy oil, including Urals, in the event such grades are lacking may resort to purchasing light oil and mixing it with mazut to obtain raw materials with the necessary characteristics.
In Krylova’s opinion, mazut prices will continue to climb while the supply of high-sulfur oil is decreasing and the demand for oil products is growing due to the summer vacation season. "In some European regions, mazut is already being traded at a premium to Brent," she added.
TASS is not responsible for the material quoted in these press reviews