Top stories from the Russian press on Thursday, December 2nd, prepared by TASS

Kommersant: Ukraine tops global agenda

Not only has Ukraine returned to the global agenda, but it became the number one issue, with more conflict and peace there under discussion by officials from Moscow to Washington. The West is threatening Russia with unprecedented sanctions if it decides to destabilize its neighbor, yet is ready to facilitate peace talks on Donbass. The Kremlin views the issue in wider way, simultaneously raising the stakes, insisting on legal agreements covering security in the Euro-Atlantic zone. Essentially, Moscow wants to revive its own longstanding idea of signing a treaty on European security.

Moscow accuses Kiev of escalation, although indicates that it is ready for dialogue with the West. On December 1, Russian Foreign Minister Sergey Lavrov said the troop build-up in the conflict zone in eastern Ukraine was alarming. He vowed to raise this issue at a meeting with his Western colleagues in Sweden who, in their turn, at a meeting in Riga expressed concern over a possible Russian invasion of Ukraine.

At a press conference in Riga, US Secretary of State Antony Blinken urged Russia to move its troops away from the Ukrainian border and asserted that "we've made it clear to the Kremlin that we will respond resolutely, including with a range of high impact economic measures that we've refrained from using in the past."

Experts explain that Moscow’s position is conditioned by US-Russian talks that are in the works. "[The Russians] are certain that it only makes sense to talk to the US, that the government in Kiev is extremely dependent on Washington and will do what Washington says," Carnegie Moscow Center expert Alexander Gabuev told Kommersant. "The Kremlin wants to talk precisely with the US, and not with Europe, NATO or Kiev, and because of this, Washington has an opportunity to influence the situation," he explained.

Samuel Charap of the RAND corporation thinks that the threat of an escalation between Russia and Ukraine currently is quite real. However, he doesn’t think that the war is imminent. According to him, Putin is raising the stakes, demanding guarantees while politically and legally this cannot be implemented. The answer to Moscow’s demands will be obtained soon enough, during the December 2 meeting between Lavrov and Blinken.

Kommersant: Omicron may change OPEC+ plans

The oil market is awaiting the outcome of the December 2 meeting of OPEC+ countries. The participants should decide how to react to the 20% oil price drop in one month and the emergence of the new Omicron coronavirus strain. No decisions were made during a meeting before the main summit. However, the analysts of the OPEC+ Technical Committee predict a substantial oil surplus on the market in the first quarter of 2022 which may become grounds for players to postpone the scheduled increase in production in December to 400,000 barrels per day.

Analysts so far don’t have a unified opinion as to what decision will be made by OPEC+ countries on December 2. Ekaterina Rodina of VTB Capital notes that currently there are no reasons to cardinally reconsider the conditions of the OPEC+ deal, but everything will depend on the possible impact on demand by the spread of the new Omicron coronavirus strain.

According to Dmitry Marinchenko of Fitch, the possible range of OPEC+ actions lies between two endpoints: keeping production at December’s level or increasing it by 400,000 barrels per day. A more cautious approach is justified by the decision of the US and some other countries to release strategic oil reserves, as well as by the emergence of the new strain which has already triggered additional restrictions in some countries. The expert noted that in this uncertain climate, prices continue to react to the news, while freezing production can possibly help stabilize them. At the same time, an increased production by OPEC+ may lead to an even more significant drop in oil prices.

Nezavisimaya Gazeta: Lukashenko ramps up rhetoric to recognize Crimea, bring in Russian nukes and fight Ukraine

Recently, Belarusian President Alexander Lukashenko has repeatedly asserted that he considered Crimea as part of Russia for a long time and stated that he was ready to fight on Russia’s side against Ukraine. Expert opinions on what he was trying to express are divided.

Political analyst Pyotr Kuznetsov on his Telegram channel stated that Lukashenko’s latest assertions were most likely aimed at the West. In his opinion, the Belarusian president is blackmailing the West with his threats to deploy nuclear weapons in Belarus, recognize Crimea and start a war with Ukraine.

According to the expert, the essence of Lukashenko’s message to Western politicians is: "we are ready to deploy nuclear weapons on the border, we are ready to recognize Crimea, we are ready to fight Ukraine - because we cannot get away from Russia, and you don’t want to talk to us, yet if you don’t want war or nuclear missiles, then talk." The expert thinks that Lukashenko needs the West in order not to conduct a referendum and a transit of power that, in his opinion, Moscow insists on.

Political analyst Andrei Yeliseev thinks that Lukashenko needs Russia’s financial support and an approval of a referendum which would allow him to remain in power indefinitely. In exchange, Lukashenko should consent to a deep integration and the recognition of Crimea.

Regardless of the goals of Lukashenko’s statements on recognizing Crimea, they were his last trump card, political scientist Valery Karbalevich says. He concurs that this is related to the upcoming referendum and Lukashenko’s prospects for remaining in power. The key matter, which ties with Ukraine can be sacrificed for, is "Putin’s support of the transit alternative that Lukashenko has in mind," the expert thinks. According to him, the Belarusian president is trying to gain Putin’s favor although it is very likely that he won’t make any of his promises official.

Rossiyskaya Gazeta: Record high gas prices in Europe may diminish exports from Russia

The increase in the export of Russian gas may turn out to be lower than expected due to the energy crisis in Europe. As a consequence, there may be a rise in long-term LNG supply contracts from the Middle East and the US, as well as a continued hike in the share of wind and solar generation despite the poor results of this sector in 2021. These factors will impact the demand of European countries for pipeline gas from Russia.

The gas crisis was linked exclusively with the allegedly insufficient export from Russia. However, the panic on the European market was caused by record high market gas prices that have been over $1,000 per 1,000 cubic meters since October. There is no real threat of a gas deficit in Europe, which is confirmed by Gazprom’s numerous statements on fully complying with its contractual obligations and the statistics. European countries may either boost long-term contracts with Russia or get interested in LNG.

However, according to Deputy Director General of National Energy Security Fund Alexei Grivach, a major share of the new volumes of LNG will be designated for the Asia-Pacific region. A group of countries led by Germany, Austria and the Netherlands continues to bank on increasing the share of renewable energy sources (RES) and on the mechanisms of short-term gas trading, Associate Professor at the Russian Government’s Financial University Valery Andrianov notes, pointing out that it is precisely these countries that due to their location have no problems accessing Russian gas, while any transit risks will vanish once Nord Stream 2 is launched.

Senior analyst at Alfa Capital Maxim Biryukov believes that considering Russian reserves and the delivery infrastructure, Europe will inevitably remain a consumer of Russian gas, however, the contracts will move towards longer terms and more predictable prices. At the same time, Europe will try to diversify supplies, mainly through LNG, while investments into renewable energy will remain a priority among European infrastructure projects, the expert thinks.

Nezavisimaya Gazeta: Moscow, Beijing hash over $120 bln in investments

Russia’s First Deputy Prime Minister Andrei Belousov and China’s Senior Vice Premier of the State Council Han Zheng have agreed on a new list of significant projects for Russian-Chinese investment cooperation with the stated investment volume surpassing $120 bln at the 8th session of the Intergovernmental Russian-Chinese Commission on Investment Cooperation. These include a project on joint vaccine production for $50 mln, a gas-chemical complex for $21.7 bln and production of household appliances for $198 mln.

President of the Russian-Asian Union of Industrialists and Entrepreneurs Vitaly Mankevich told the newspaper that in 2021 a certain revival of investment demand is seen coming from China for Russian projects. "First of all, this is impacted by the gradual opening of borders (if in 2020, it was almost impossible to enter Russia, now Chinese delegations can visit, though with serious restrictions). Secondly, we see the effect of a low base. Thirdly, we see the effect of delayed investment demand. A number of projects planned in the past are now moving ahead," the expert said.

Director of Moscow State University’s Institute of Asian and African Studies Alexey Maslov told the newspaper that this is rather not the renewal but an expansion of investment cooperation of both countries which was insignificant over the past decades, since the countries were focusing on mutual trade. "The Chinese usually actually invest no more than 10-15% of the stated plans but even these amounts are rather significant. The Chinese more readily invest in three directions: new petroleum and coal production fields in Siberia and the Far East, and in the auto industry and agriculture," the expert said.