MOSCOW, August 23. /TASS/. Turkish President Erdogan is set to visit Russia for talks with Vladimir Putin on reviving the Black Sea grain deal; Kiev is seeking to make up for its failed counteroffensive by disrupting civilian air traffic within Russia; and Putin instructs the Cabinet and Bank of Russia to take measures to ease financial market volatility. These stories topped Wednesday’s newspaper headlines across Russia.

 

Izvestia: Turkey’s global prestige riding on Erdogan’s grain deal revival ambitions

On Tuesday, several Turkish media outlets announced that Turkey’s president, Recep Tayyip Erdogan, is set to visit Russia for a meeting with his Russian counterpart, Vladimir Putin. His key goal will be to discuss a resumption of the grain deal that Russia exited from in July. In addition, top Erdogan adviser Akif Cagatay Kilic is expected to visit Ukraine, while Foreign Minister Hakan Fidan, Ankara’s former intel chief, will visit both Kiev and Moscow. According to the media, Turkey’s top diplomat will arrive in Ukraine as early as Friday.

Meanwhile, experts doubt that Turkey will actually succeed in achieving a revival of the Black Sea Initiative grain deal, at least in the format that existed before July 18. There are scant grounds to expect that the Russian Agricultural Bank (Rosselkhozbank) will be reconnected to SWIFT or that the West will lift its sanctions restrictions now hampering Russian agricultural imports, which are both key Russian demands, Turkish political scientist Kerim Has told Izvestia. "However, Erdogan may find some wording that could help persuade Putin to supply Russian grain and fertilizers via Turkey," Has maintained. The Turkish president may attempt to conclude a separate deal with Moscow, with Ankara acting as a mediator for Russian exports. And Turkey may put forward specific proposals to Russia in the hope of securing Moscow’s go-ahead for Ukrainian grain supplies, he surmised.

For Erdogan, Turkey’s ability to secure a functioning grain deal has become a question of the country’s prestige and weight on the world stage. "Today, Turkey is seeking to become a geopolitical force in the polycentric world. Now, Turkey wants to come up with a solution to this global problem and could state at the next UN General Assembly meeting to be held in September that it can play a role in global issues," Amur Gadzhiev, a researcher at the Russian Academy of Sciences’ Institute of Asian Studies, explained to Izvestia.

But the Turkish leader has his own, exclusively economic and political, reasons to seek a restart of the grain deal: Turkey will hold local elections in March 2024, and it is of paramount importance for Erdogan that his supporters gain a victory in Istanbul, where the opposition is now largely in charge and holds key municipal posts. To this end, Has said, it will be essential for Erdogan to keep prices stable for bread and other staple foods. While Russia is actually considered to be Ankara’s partner No. 1 for wheat imports, Ukraine is also a major partner of Turkey in this regard, and "therefore, restoring both the Russian and the Ukrainian parts of the grain deal would very much benefit Erdogan economically," the expert said. Moreover, Turkey has security concerns, and unless the grain deal is revived, geopolitical and military risks in the Black Sea will rise significantly amid continued Ukrainian attempts to implement it unilaterally.

 

Nezavisimaya Gazeta: Kiev seeks to disrupt air links in Russia amid lack of combat success

Although Ukrainian drone attacks against Moscow, now in their fifth day, have not brought any military success, they are causing disruption at the Russian capital’s busy airports. All Moscow airports were closed on Monday night amid the threat of four Ukrainian drones targeting the metropolis, with 94 flights being delayed. Kiev is seeking not only to attack targets deep within Russia, but also to sow panic amid Russian and foreign civilian air travelers.

As practice shows, stopping Ukrainian combat drone attacks on areas around the Russian capital is extremely difficult. Given Kiev’s plans to strengthen drone units as part of its armed forces, the risk is rising that unmanned aerial vehicles (UAVs) will be used against civilian targets on Russian soil. "It will be possible to put an end to this phenomenon only when the Ukrainian army is defeated. But the reality is that Ukrainian troops have been advancing in the south, while achieving small tactical successes near the Sea of Azov," retired Colonel Nikolay Shulgin, a military expert, told Nezavisimaya Gazeta. He cited the US-based Institute for the Study of War (ISW), which had registered advances of Ukrainian troops in two sectors of the line of engagement, specifically in the Melitopol and Berdyansk directions, based on geolocation data. "Particularly fierce battles are taking place near Rabotino in the Zaporozhye Region. The Russian Defense Ministry reported in the afternoon on August 22 that all attacks by [Ukraine’s] 65th Mechanized Brigade and the 82nd Air Assault Brigade had been repelled," Shulgin said.

Another military expert, retired Lieutenant General Yury Netkachev, believes that the Ukrainians have so far failed to show strategic successes in any sector of the line of engagement, which is almost 1,000 km long. "Russian forces are securely holding the defense, and the enemy has broken through it several kilometers deep in isolated sectors near Zaporozhye only," he said. "And groups of the Russian Armed Forces have been steadfastly advancing in the Kharkov Region and in northern Donbass. Meanwhile, preparations are underway to use strategic reserves that should turn the tide in hostilities in the special operation zone," he added.

 

Izvestia: Putin instructs Cabinet, central bank to ease financial market volatility

Addressing a meeting of the Council for Strategic Development and National Projects on Tuesday, Russian President Vladimir Putin called on the government and the Bank of Russia to make more active use of the tools in their arsenals to lower volatility in the financial market. "Obviously, such turbulence [in the financial market] hampers investment decisions by businesses, companies and citizens," the Russian president lamented. Also, inflation risks are rising in Russia, hence efforts to curb price growth are becoming a priority task, he noted. Putin described the situation in the economy in general as "stable and functioning" though, despite domestic and external challenges.

Amid increased volatility, additional restrictions on foreign currency purchases and sales may be imposed, Ivan Abramov, first deputy chair of the Economic Policy Committee in the Federation Council (upper house of parliament, or senate), told Izvestia. Also, foreign currency transaction fees may be increased. "Certainly, interventions are the easiest instrument the central bank, which can buy or sell foreign currency, could use to stabilize the ruble exchange rate," the senator said. Among other things, he said, requirements for the sale of export revenues may be introduced to curb volatility.

Drivers of ruble depreciation, which include both export and import trends and outflows of capital received on foreign accounts from shipments abroad, are now raising concerns, Vladimir Prokhorov, a member of the Delovaya Rossiya (Business Russia) trade association’s general council, told Izvestia. "Among other monetary policy instruments, the Central Bank of Russia can set limits on maximum loan and deposit rates. And the central bank could introduce them for the entire banking sector or for individual local lenders," Prokhorov explained. "To keep the ruble exchange rate stable, the regulator adjusts its key rate, conducts open market operations (with sovereign securities), or refinances lenders. Despite the trend toward using local currencies in settlements in the international arena, FX interventions are there to use. And the CBR continues to both replenish and sell its foreign currency reserves," the expert concluded.

 

Vedomosti: India striving for import substitution in naval shipbuilding program

India is seeking to develop its own naval shipbuilding sector and production of naval weapons, Rear Admiral Kunal Sigh Rajkumar told the press at a news briefing at the headquarters of the Indian Navy’s Western Command in Mumbai. However, the Indian navy’s fleet of warships and aircraft and arsenal of weapons currently in service are largely foreign, mostly made in Russia.

India still has a long way to go in terms of actual import substitution in the construction of large warships and submarines, or in building full-fledged naval weapon systems independently from scratch, Ilya Kramnik, research fellow with the Russian Academy of Sciences’ Primakov Institute of World Economy and International Relations (IMEMO Institute), told Vedomosti. Although foreign technology costs are partially lower, in the medium term, India can only build vessels using foreign systems and components based on adjusted foreign projects or in close cooperation with its overseas partners, the expert said. It is noteworthy that a number of projects were developed both with Russian and Western assistance in parallel, he argued.

Amid Western sanctions and with Russian proposals being somewhat limited, Russia’s share in Indian shipbuilding will gradually decline, but it will remain significant, Kramnik continued. For India, under license as well, frigates are being built based on Russian designs, and Russian companies will be involved in the construction of ships based on Indian designs at Indian shipyards, too, he believes. India is particularly focused on modernizing its fleet against the backdrop of tensions in its relations with China, which has been actively strengthening its naval forces, Kramnik said. But in the event of a potential military confrontation in the Indian Ocean, the geographic location will benefit the Indian navy, despite the nominally larger Chinese fleet, the expert assumed.

 

Kommersant: Russian seaborne oil exports drop in August according to plan

Kommersant has learned that Russia has reduced its seaborne oil exports in August, under a previously announced plan, to an estimated 2.94 mln barrels per day (bpd). The reduction has led to higher crude prices globally and pushed the price of Russian oil above the Western imposed price ceiling. Experts argue that oil production was not affected thanks to high refining volumes and growing oil stockpiles.

In August, Russian oil exports have dropped to the lowest level since last December, when the EU and the G7 imposed their oil price ceiling on Russian oil, Viktor Katona at Kpler said. So far this month, Russia has kept its oil and condensate production volumes stable at 10.7 mln bpd and has sustained oil refining at more than 5.6 mln bpd by replenishing its oil stockpiles which, according to Katona’s estimate, rose by 2 mln barrels, or 286,000 metric tons, in the past month. He expects that now that they have reached the goal of reducing oil exports and limiting oil price growth, Russian oil producers will start increasing oil supplies abroad starting in late August, which will bring oil prices lower against August’s relatively high levels as early as next month.

The decline in oil exports, the Institute of Energy and Finance’s Sergey Kondratyev told Kommersant, has propped up Russian oil prices, given lower discounts on the Urals and ESPO blends. Market players in India have been discussing a $6 per barrel discount (on a CIF basis) on the Urals price, the expert concluded: In July-August, Russian oil prices not only followed the global Brent benchmark, but also narrowed the discount to the benchmark at a faster pace.

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