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Press review: NATO begins Nordic drills and Houthis set to show teeth in Strait of Hormuz

Top stories from the Russian press on Tuesday, March 5th

MOSCOW, March 5. /TASS/. NATO kicks off major drills in northern Europe; Yemen’s Houthi rebels are ready to escalate tensions in the Strait of Hormuz; and the US is seeking to forge alliances against China in Southeast Asia. These stories topped Tuesday’s newspaper headlines across Russia.


Media: NATO kicks off major drills in northern Europe not far from Russia’s borders

On March 4-15, 12 NATO countries are holding joint drills in Norway, Sweden and Finland dubbed Nordic Response. According to the website of NATO’s Allied Air Command, 20,000 troops are taking part in the exercise, Vedomosti writes.

Nordic Response is part of a larger series of military drills called Steadfast Defender 2024, which are taking place from January 22 to May 31 and involve some 90,000 troops from all member states. The Nordic Response exercise is a rebranded version of the earlier Cold Response drills that were focused on Norway, Alexander Yermakov, a researcher with the Department of Military and Economic Security Research at the Russian Academy of Sciences’ Institute of World Economy and International Relations (IMEMO RAS), said. Although Nordic Response is a routine drill rather than a snap exercise, it still poses a threat to Russia. According to the expert, the drills used to take place around Norway but now encompass three countries, two of which share a border with Russia.

The drills reflect the trend toward strengthening NATO’s position in northern Europe, Andrey Kortunov, research director at the Russian International Affairs Council (RIAC), pointed out. The alliance will step up its activities in the region following Finland’s accession, while its capabilities will expand. However, it is premature to talk about a direct military threat to Russia from NATO in the north. Still, Russia needs to keep an eye on the situation and respond to regional developments. The creation of new military districts and efforts to reinforce Russia’s positions in the Baltic Sea, the Arctic and around the country’s westernmost Kaliningrad Region, a Baltic exclave surrounded by NATO member states, are examples of a proper reaction, the expert concluded.

"In the past, there used to be an exercise script that simulated attacks on some made-up placeholder countries but, now, everything is straight to the point with the stated goal being to practice an operation against Russia, which is overtly offensive," Admiral (Ret.) Sergey Avakyants, ex-commander of Russia’s Pacific Fleet, told Izvestia. In his view, if the situation starts to escalate, Russia will have to respond by additionally strengthening the border and deploying more air defenses and border troops to the area.


Izvestia: Houthis ready to ratchet up tensions in strategic Strait of Hormuz oil artery

The Yemen-based Ansar Allah movement (known as the Houthis) is ruling out a full shutdown of the strategic Strait of Hormuz, the group’s deputy spokesman Nasr al-Din Amer told Izvestia, refuting several earlier media reports. However, the Houthis are ready for a further escalation. Meanwhile, any rise in tensions may deal a strong blow to the energy market as about 20% of global oil and gas supplies pass through the Strait of Hormuz, a critical marine transport artery and chokehold that connects the oil-rich Persian Gulf to the Gulf of Oman and the Arabian Sea, and beyond to the Indian Ocean and other world oceans.

Ansar Allah political bureau member Mohammed al-Bukhaiti, in turn, told the paper that the Houthis were indeed ready to expand their operations but they also highlighted that there is a window for avoiding such a scenario "if the West puts pressure on Israel to make the mass genocide in the Gaza Strip finally stop."

Even a minor escalation around the critical marine transport corridor could trigger an economic shock in global energy markets with oil prices potentially skyrocketing to $200 per barrel and gas prices reaching $5,000 per one cubic meter, Alexander Frolov, an expert at the Infotek think tank, said.

There are not many options for a way out of the worst-case scenario. Arabian Peninsula countries do have pipelines but, according to various estimates, they are only capable of offsetting small amounts of supplies, Igor Yushkov, an expert at the Financial University under the Government of the Russian Federation and the National Energy Security Fund, noted. In addition, major energy importers, including China, India, South Korea and Japan, would also be affected as they receive 85% of their oil supplies through this critical transport route. In addition, European Union countries would definitely take a hit, given their sanctions on Russian energy.

Meanwhile, Washington is not particularly interested in any escalation in the Persian Gulf ahead of the US presidential election in November. "Any quick turnaround on the global oil market will have an immediate impact on the US oil products market," Frolov explained.


Izvestia: US seeking to forge alliances against China in Southeast Asia

The US and its allies are seeking to build alliances against China in Southeast Asia. The ASEAN (Association of Southeast Asian Nations)-Australia Summit is taking place on March 4-6. Canberra is boosting defense ties with its neighbors, citing an external security threat from China. However, it is the Americans who are largely interested in the process as they are unable to control the entire region alone, Izvestia notes.

In recent months, Australia has been actively working to expand ties in the field of maritime security. In particular, Canberra is strengthening cooperation with ASEAN member states.

Although the initial ASEAN members (along with Brunei and Vietnam) are pro-American and skeptical towards Beijing, they do not hold a common position on China. Moreover, three ASEAN countries that joined the group later - Cambodia, Laos and Myanmar - are sympathetic to China, given their economic dependence on and geographical proximity to the country, Teuku Rezasyah, an associate professor with the Department of International Relations at Indonesia’s Padjadjaran University, told Izvestia.

However, some countries may build trilateral and quadrilateral naval cooperation in the South China Sea with limited participation from Australia in order to better monitor China’s activities, the expert added.

The US is actively trying to boost its influence through its so-called proxy allies, including Australia and the Philippines, Dmitry Mosyakov, head of the Center for the Study of Southeast Asia, Australia and Oceania at the Russian Academy of Sciences’ Institute of Oriental Studies, emphasized. These countries are actually doing the job for the Americans in the region, in particular by applying a certain degree of pressure on China. All of this is taking place with Washington’s full consent and blessing.


Nezavisimaya Gazeta: Haley’s DC primary win against Trump may be her last hurrah

Former South Carolina Governor and US Ambassador to the UN Nikki Haley, who is the only rival to ex-US President Donald Trump for the Republican Party presidential nomination left standing, secured her first win at the polls by beating Trump in the Washington, DC, primary election, which may prove to be her last hurrah, or, conversely, could mark a decisive turning point in the election, Nezavisimaya Gazeta writes.

Trump took his first primary loss philosophically. The victory awarded Haley just 19 delegates to the Republican National Convention, which will convene in Milwaukee, Wisconsin, on July 15-18 to nominate the GOP’s presidential standard bearer. Meanwhile, Trump, who has already won primaries and caucuses in seven states, currently has 247 pledged delegates. The 43 delegates that Haley has now are a drop in the bucket. Moreover, so-called "Super Tuesday" on March 5, when 15 states and one US territory, American Samoa, hold their party primaries, will be far more critical than the District of Columbia’s relatively insignificant primary. Trump is determined to sweep all 16 contests to leave his sole rival far behind in the convention delegate count.

"Haley has almost no chance of beating Trump. However, she has bright prospects for the future. There is an assumption that her refusal to withdraw from the race is part of preparations for the 2028 presidential election," said Pavel Sharikov, researcher at the Russian Academy of Sciences’ Institute of Europe.

Meanwhile, public opinion polls are giving Trump grounds for optimism, with them showing incumbent President Joe Biden lagging behind his White House predecessor in a likely November rematch. However, swing voters still have to have their say. If a court finds Trump guilty of any of the multiple charges now pending against him in various states, it would give undecided voters a solid argument not to vote for him. Haley is openly preparing for such a development or for a situation where her rival may be removed from the presidential race one way or another. In her first statement after winning the District of Columbia primary, she reiterated that she had absolutely no plans to withdraw and would fight until the end.


Nezavisimaya Gazeta: Energy prices, ruble exchange rate to support Russian budget

Russia will voluntarily reduce oil production and exports by another 471,000 barrels per day (bpd) in the second quarter of the year. In addition, OPEC+ has also announced the extension of additional voluntary output reductions. However, oil prices did not change much on Monday, making it clear that the move was quite anticipated. Experts interviewed by Nezavisimaya Gazeta explained that stable prices were already an achievement.

There is currently nothing extraordinary on the news agenda that would somehow shock the market following all the events that took place earlier. Finam analyst Alexander Potavin pointed to two main facts: demand "remains at a rather low level, particularly in China," while production is growing outside the oil cartel, making it take steps "to at least keep the Brent crude price above $80 per barrel."

Daniil Bolotskikh, leading analyst at Tsifra Broker, points out that ongoing output cuts are a positive factor for Russia because comfortable oil prices mean a potential reduction of this year’s budget deficit. According to the expert, stable global prices are more important than export volumes at this point as stable prices allow Russian oil suppliers to predict foreign currency earnings more or less accurately.

However, where oil prices do not support the budget, the ruble exchange rate seems to come to the rescue, Iva Partners department head Artyom Tuzov noted. The expert believes that if oil prices stand at the $83 per barrel mark and the dollar remains at the 90-ruble level in 2024, "Russia will have a budget surplus."

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