The US and Iran are seeking ways to strike back at each other while still keeping a lid on the potential for a "knife’s edge" escalation; China is taking active steps to get closer to Taiwan; and global gold demand hit a record level in 2023, with central banks among the key buyers. These stories topped Thursday’s newspaper headlines across Russia, according to TASS News Agency.
Media: US, Iran seek ways to strike back while keeping lid on 'knife’s edge' escalation
Iraq-based Shiite militia Kata'ib Hezbollah (KH), which forms the core of the Islamic Resistance in Iraq group, has close ties to Iran and is in the forefront of the fight against the US presence in the Middle East, has announced a suspension of military operations against US forces. The move came after Iraqi Prime Minister Mohammed Al Sudani promised that his team would persuade the US to leave the country. Meanwhile, Washington has made it clear that it has no plans to abandon a military scenario in how it responds to the killing of its troops in Jordan, Nezavisimaya Gazeta writes.
Ruslan Mamedov, senior researcher with the Center of Arab and Islamic Studies at the Russian Academy of Sciences’ Institute of Oriental Studies, points out that KH is changing its strategy but not its ultimate goal. "Its announcement was aimed at preventing a strike on Iraq," the expert noted. "This is because the Americans started considering options for attacks on targets in Iraq, Syria and Yemen," he explained.
KH is taking a cautious approach, Andrey Kortunov, academic director of the Russian International Affairs Council (RIAC), told Vedomosti. Hence the decision to refrain from striking US facilities. As for a reaction from the US, it will definitely follow. According to Kortunov, US President Joe Biden needs to prove that Shiite groups active in the region cannot operate with impunity. However, a US response will probably come in measured doses and be more phased than it might have been under different circumstances.
Further developments depend on what the US does, said Yury Lyamin, an expert at the Center for Analysis of Strategies and Technologies. A direct US strike on targets inside Iran will almost certainly require an appropriate response from Tehran against US bases in the region, which is fraught with the potential to spark a major war. However, the Biden administration may find another limited strike on some facilities belonging to pro-Iranian forces in Iraq or Syria to be too weak a reaction, given the foreign and domestic policy situations, which require a show of force, especially with an increasingly unpopular Biden up for re-election. "Basically, the parties don’t want a major war. Still, contradictions between them are too deep and the situation is on a knife’s edge," Lyamin concluded.
Izvestia: China takes active steps to get closer to Taiwan without playing military card
China has formally started moving towards the so-called border with Taiwan. On February 1, China’s Civil Aviation Administration is unilaterally changing a route designated for civilian flights, moving it closer to the median line. For its part, Taipei has claimed that Beijing seeks to use civil aviation for military purposes in a bid to change the status quo in the Taiwan Strait, Izvestia notes.
"The median line is in fact a virtual boundary because, formally, there can be no border between China and Taiwan. However, until recently, China has always respected it in terms of transport movements," Alexey Maslov, director of Moscow State University’s Institute of Asian and African Studies, pointed out.
"The Chinese authorities’ decision stems directly from rising tensions in the Taiwan Strait. More pilgrimages by Western politicians and lawmakers are expected after the Taiwanese elections, which will clearly trigger a harsh reaction from Beijing. All of this will certainly affect navigation and air services in the strait. Let’s recall then-US House Speaker Nancy Pelosi’s controversial trip to the island in August 2022. China is taking measures to make sure that civil transportation does not suffer any damage," Kirill Babayev, director of the Russian Academy of Sciences’ Institute of China and Contemporary Asia, noted.
"Beijing is dialing up the pressure, albeit very carefully. The reason is that China is not interested in military operations, and Beijing understands perfectly well that Taiwan likewise has no desire for a military confrontation. By shifting the path of the flight route, China is testing Taiwan’s readiness to respond to see how far this can go. This is because all of the junkets by US officials and European Parliament members, not to mention US proclamations [in support of Taipei], have already reached the peak of unfriendliness [toward China]," Maslov stressed.
Nezavisimaya Gazeta: Saudi Arabia abandons oil market competition with US
The Saudi authorities will not increase oil production to the US level of 13 mln barrels per day (bpd). Riyadh’s decision will ensure that global oil prices remain at a level that is comfortable for Russia. Saudi Arabia’s previous attempt at preserving its share of the oil market made prices nosedive to $40 per barrel, which would have been a heavy blow to the Russian budget in the current situation, Nezavisimaya Gazeta writes.
Experts agree that, today, it is critical for the hydrocarbon-rich desert kingdom to keep oil prices stable. "As an OPEC+ leader, Saudi Arabia is engaged in the fight for oil prices. For OPEC+ countries to make money, the prices should remain at a level that is comfortable both for buyers and sellers," Iva Partners department head Artyom Tuzov emphasized.
The kingdom’s move reflects a change in Saudi Arabia’s view of the future of global oil consumption, Finam analyst Alexander Potavin pointed out. "In recent months, OPEC and the International Energy Agency have already lowered their expectations for an increase in global oil consumption this year and next. Second, as a key player in the OPEC cartel, Saudi Arabia has to make sure that global oil prices are acceptable for producers. As independent oil producers increased output in the past year, it was OPEC nations that maintained a balance on the market by reducing oil production. This was first and foremost about Saudi Arabia," he explained.
The expert sees a distinct possibility that, if oil consumption continues to decline and production keeps growing, the Saudis will have to once again reduce output instead of increasing it. According to the analyst, the only way to outplay the US is to bring oil prices down in the long term. "The Saudis attempted to take such a move in 2014, when they sharply increased production and collapsed prices from $115 to $50 per barrel. However, nothing good came out of it back then because Saudi Arabia punished itself by reducing its own revenues," Potavin said.
Media: Global gold demand hits record level in 2023, with central banks among key buyers
Overall global demand for gold, including in the over-the-counter (OTC) market, climbed by about three percent to 4,899 tons in 2023 compared to the previous year, Vedomosti writes, citing a report by the World Gold Council (WGC). Gold prices rose by 13% year on year, reaching the highest level in December amid political and economic uncertainty, the report says.
Dmitry Kazakov, senior analyst at BCS World of Investments, points out that gold is a tool for protecting against inflation. "Gold prices rise when investors consider the US Federal Reserve’s anti-inflation policy to be insufficiently aggressive in times of crisis," he explained.
Boris Krasnozhenov, head of research at Alfa-Bank, notes that demand for physical gold from consumers and central banks is growing in the world in general, and in Russia in particular. Central banks purchased record amounts of gold in 2022-2023, at levels unseen since the late 1960s. Regulators across the globe have been net buyers of gold for 13 consecutive years, Krasnozhenov stressed.
The ongoing processes of deglobalization and dedollarization will keep central banks’ interest in gold investment high, Anna Pilgunova, senior commodity market analyst at SberCIB Investment, told Kommersant. Meanwhile, demand for gold will primarily come from the central banks of developing countries. "Particularly those who are suffering from a weakening national currency or are in a difficult relationship with the US, which is prompting them to reduce their dollar[-denominated] investments. Specifically, these countries include China, India, Turkey and Middle Eastern nations," Sovcombank Chief Analyst Mikhail Vasilyev said.
RBC: Washington wades into Venezuelan presidential election with renewed sanctions
Washington has re-imposed economic sanctions on Venezuela, citing pressure on the opposition by President Nicolas Maduro’s government. The move raises the question as to whether Venezuela is about to plummet into another political crisis during a presidential election year, RBC writes.
The US withdrew its decision to suspend sanctions on Venezuela’s oil and gas sector due to a lack of progress in implementing an agreement between the Maduro government and the opposition. The renewed restrictions will take effect on April 18. In addition, the US Treasury Department’s sanctions arm, the Office of Foreign Assets Control (OFAC), also announced the suspension of a general license that had allowed transactions involving Venezuelan state-owned gold mining company Minerven.
The US measures came after the Venezuelan Supreme Court’s January 26 ruling, which banned Maria Corina Machado, leader of the Vente Venezuela movement (part of the Unitary Platform opposition coalition), from holding public office until 2038. Thus, the country’s main opposition candidate was stripped of the right to run in the presidential election that Venezuela is expected to hold later this year. Meanwhile, the date of the vote has not been announced yet.
Ronal Rodriguez, a Venezuela expert at Colombia’s National University of Rosario, believes that Maduro is trying to ensure that an election date is agreed on as late as possible because he is acutely aware of his own low popularity rating. In fact, Maduro may even try to postpone the vote and create a tool that would effectively preclude electing any other candidate, the analyst told RBC.
Support for the Unitary Platform opposition group in the country is stronger than ever at this point because, for the first time, the opposition is being led by a more right-leaning politician than before. In addition, in Rodriguez’s words, the so-called referendum on the accession of the disputed Essequibo region in neighboring Guyana became another indication of Maduro’s poor polling performance. Even though, according to Caracas, 95% of plebiscite participants supported Essequibo becoming part of Venezuela, the referendum ultimately failed to have a strong mobilization effect within Venezuelan society, the expert points out.
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