MOSCOW, July 21. /TASS/. Russia and Ukraine may resume talks as early as this week; the EU’s new sanctions on Russia are expected to backfire on Europe; and Russia opposes a renewed round of sanctions on Iran. These stories have topped Monday’s newspaper headlines across Russia.
Media: Russia, Ukraine may resume talks as early as this week
Ankara is in consultations with Moscow and Kiev in order for the parties to hold the third round of talks in the near future, a high-ranking Turkish source told Izvestia. On July 19, Ukraine invited Russia to hold a meeting between the two countries’ delegations this week. The Russian leadership is working on a response and will soon announce a decision, said Grigory Karasin, head of the Federation Council (upper house of parliament) Committee on Foreign Affairs. However, experts are confident that only a meeting between the leaders of Russia, the US and China can bring peace closer.
It has been six weeks since the last round of Russia-Ukraine negotiations in Istanbul. At the meeting, Moscow and Kiev exchanged memorandums containing their visions for settling the conflict. The documents make it clear that the parties don’t see eye to eye on how to resolve the dispute.
The opposing positions of Russia and Ukraine are the key problem, Denis Denisov, an expert at the Financial University under the Government of the Russian Federation, pointed out. If the idea is to resolve talks in the form the first two rounds were held in, then a new meeting will not bring the parties closer to peace because the powers of negotiating teams are restricted, Andrey Kortunov, an expert with the Valdai International Discussion Club, explained.
A potential meeting between the leaders of Russia, China, and the United States could pave the way for discussing peace in Ukraine at a more strategic level, noted Bogdan Bezpalko, a member of the Russian Presidential Council for Interethnic Relations. At the same time, US President Donald Trump’s ultimatum to secure peace within 50 days is unlikely to significantly influence Moscow, Kortunov emphasized. "Russia, as past experience shows, does not yield to pressure," he said.
Vladimir Zelensky’s statement about talks is part of a political game that will hardly lead to any breakthroughs in the negotiation process, political scientist Alexander Nemtsev told Vedomosti. On the one hand, Moscow has no intention of reconsidering its stance. On the other, Kiev is unwilling to make concessions. "This is why Ukraine is simulating negotiations, though it is ready to discuss humanitarian issues with Moscow. A breakthrough will only be possible once Ukraine is no longer capable of continuing resistance on the battlefield," the expert added.
In the meantime, the US will keep trying to distance itself from the Ukraine crisis, gradually shifting most of the burden of assistance to Ukraine to the European Union, Nemtsev went on to say. Germany and France are clearly ready for that but other European nations are not, the political scientist noted.
Rossiyskaya Gazeta: Sanctions on Russia to boomerang back to EU
The European Union has introduced its 18th package of sanctions on Moscow. Once again, Russia’s oil and gas industry is the main target, along with the banking sector, Rossiyskaya Gazeta reports.
A move to reduce a price cap for Russian oil from $60 to $47.6 per barrel is the most notable novelty. According to energy expert Kirill Rodionov, the price of Russia’s Urals oil blend will depend on that of the Brent benchmark. The monthly average price of Urals oil will only fall below $50 per barrel if the Brent rate is below $60. The only thing the EU can do by reducing the price cap is make Russian oil discounts grow a bit. Still, the trend will not persist for long. Besides, it’s not Europe that will benefit from that but China, India, Turkey and other countries that import oil from Russia.
Furthermore, the 18th package of sanctions includes a ban on the import of petroleum products made of Russian crude from third countries. The move will deal a blow not so much to Russian oil exports, but largely to the EU itself because European nations purchase significant amounts of fuel from India and Turkey, where Russian oil is either processed or mixed with petroleum products from other countries. As a result, fuel prices may increase in the European Union.
Dmitry Skryabin, portfolio manager at the Alpha Capital asset management company, points out that if G7 members, primarily the United States, decide not to join the EU’s new package of sanctions, then it won’t affect Russian oil prices much. Rodionov believes there is no reason to expect a sustained increase in Russian oil discounts. Besides, without the US, the EU will only be able to try to monitor compliance with the price cap at its own ports and territorial waters, which will also limit the effectiveness of sanctions.
Meanwhile, the new restrictions also cut another 22 Russian banks from the SWIFT payment system. "There is no need to fear the new package of sanctions because Russia has enough opportunities to ensure its economic development. Russian banks disconnected from SWIFT are forced to look for alternatives as there are other international payment systems, including China’s CIPS. The same goes for other restrictions, which cause damage to the EU in the first place, encouraging Russian businesses to search for new partners and solutions," Pavel Seleznyov, head of the Department of International Economic Relations at the Financial University under the Russian Government, observed.
Izvestia: Russia opposes resumption of sanctions on Iran
The European trio has lost legitimacy to restore all sanctions on Iran, head of the Russian delegation to Vienna Mikhail Ulyanov told Izvestia. Earlier, France, Germany and the United Kingdom gave Iran until the end of August to strike another nuclear deal. The parties will hold the next round of talks in Geneva on July 27. However, experts warn that pressure on Iran will only exacerbate the situation, as it could lead to another conflict. Meanwhile, Russia is ready to act as a mediator between Iran and the US.
The European trio issued similar threats against Iran during the Biden administration in 2022-2023, noted Farkhad Ibragimov, a Middle East expert and lecturer in the Economic Department at the Peoples' Friendship University of Russia.
"The European nations are in a hurry because they seek to fully implement the mechanism before Russia takes over the presidency of the UN Security Council in October 2025," Middle East expert Leonid Tsukanov emphasized.
Ulyanov emphasized that pressure-based policies are doomed to fail. "The Europeans and Americans have a habit of imposing deadlines, which proves highly counterproductive," he said. "This approach has backfired before, most notably during the 2021-2022 negotiations to revive the Joint Comprehensive Plan of Action. Despite reaching the final stages, those talks ultimately collapsed without concrete results," the Russian diplomat added.
The European trio’s ultimatum and further threats from Washington could eventually make Iran withdraw from the Nuclear Non-Proliferation Treaty and actively work on its nuclear program, Ibragimov believes. According to the expert, the June 2025 conflict between Iran and Israel, which also involved the United States, was a watershed event for Tehran. "The Iranians have now come to think that after all, nuclear weapons would more likely benefit Iran than cause it harm," he elaborated.
Vedomosti: European nations fund arms buildup as direct aid to Kiev declines
US President Donald Trump has announced a new scheme for providing US weapons to Ukraine. Kiev will be receiving weapons via Europe, which will pay for everything. The initiative did not spark enthusiasm among European nations. If military products have to be paid for, they should be made in Europe, French President Emmanuel Macron stated, Vedomosti reports.
NATO countries agreed to increase defense spending to 5% of GDP by 2035 at their summit on June 25. In order to justify such expenses, Europe is taking over the baton of the so-called "Russian threat narrative" from the US.
The Russian threat is the European Union’s new key idea, said Prokhor Tebin, director of the Military and Economic Research Center at the Higher School of Economics’ Institute of World Military Economy and Strategy. The welfare state used to be the idee fixe in the 1990s and 2000s, which was later replaced by the green agenda and a transition to clean energy. Now, rearmament is on the agenda.
Loud statements about the Russian threat are part of domestic propaganda aimed at explaining a rise in military spending, which is what European authorities need to encourage economic growth, Fyodor Voitolovsky, director of the Russian Academy of Sciences’ Institute of World Economy and International Relations, elaborated. A large part of the European defense industry has until recently remained under-funded as there were serious doubts about long-term demand for its products, Dmitry Stefanovich, researcher with the Center for International Security at the Russian Academy of Sciences’ Institute of World Economy and International Relations and member of the Russian Council for Foreign and Defense Policy, observed. Now, expectations are growing that the Europeans will have to significantly boost their own defense investments.
A change in the US administration's priorities has spurred growth in the European defense industry's revenues. Corporations’ proceeds rose by 13% to $123 billion in 2024, according to their reports. Western defense companies have much improved their skills in lobbying for their interests in Ukraine and are now promoting them in European governments, looking forward to a further increase in revenues, Voitolovsky noted.
Meanwhile, in Tebin’s view, the current range of European military products cannot meet the region’s needs as the industry still depends on the US in certain technological areas. This is why US corporations expect to have their share of the EU’s military contracts, the analyst stressed.
Rossiyskaya Gazeta: Analysts expect Russia’s Central Bank to reduce key interest rate
The Russian Central Bank’s board of directors may bring the key rate lower than previously projected, said experts interviewed by Rossiyskaya Gazeta.
Data from the Federal Service for State Statistics is what has unexpectedly increased the market’s optimism in the past several days. In June, annual inflation dropped to 9.4%. Still, fresh opinion polls show that the Russian people’s inflation expectations did not change in July, and remained at 13%. The level is high, and the Bank of Russia's board of directors will certainly take it into account when discussing a decision on the key rate at its July 25 meeting.
"The population’s inflation expectations were not an additional positive factor, but they were not discouraging either. Actually, we did not expect them to improve amid reports of rising utility tariffs. However, other data on inflation trends and business sentiment is below expectations, paving the way for another round of reduction in the key rate," T-Bank Chief Economist Sofya Donets said.
There are indeed many reasons to consider an interest rate cut, Igor Alutin, chief managing director for retail businesses and the Financial Services Marketplace at the Moscow Exchange, believes. "According to our estimates, the Bank of Russia’s board of directors will consider the possibility of reducing the rate by 1% to 3%. We expect the directors to agree on 2% and cut the rate to 18%," Alexander Isakov, senior managing director and head of the Center for Macroeconomic Research at Sber, predicts.
The view is shared by Donets and Renaissance Capital analysts Oleg Kuzmin and Andrey Melashchenko. Sovcombank Chief Analyst Mikhail Vasilyev also agrees with the forecast. "An about 2% decline in the current rate of inflation is what makes it possible for the Central Bank to cut the key rate by 2%," he explained.
"We expect a gradual reduction in the key rate, which will eventually reach the 12% mark in the middle of next year, while the ruble’s exchange rate will gradually weaken to just under 90 rubles per dollar by the end of the year," Kuzmin and Melashchenko concluded.
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