Top stories in the Russian press, on Monday, June 17, prepared by TASS
Izvestia: Russia has no plans of tightening security in Strait of Hormuz
Moscow is not planning to beef up its military presence in the Strait of Hormuz in the wake of the recent oil tanker attacks, Russian State Duma (lower house of parliament) Defense Committee Chairman Vladimir Shamanov told Izvestia. According to him, Russian vessels are not in jeopardy and therefore there are no grounds for tightening security. Meanwhile, the United States, the United Kingdom and Saudi Arabia have deployed additional forces to the Gulf of Oman, supposedly to protect their vessels from the Iranian threat.
However, other European countries have not responded to this clear provocation against Iran and the incident is unlikely to spoil their relations with the Islamic Republic, experts told the paper.
The Strait of Hormuz has strategic importance for the entire oil market: up to 40% of the world's hydrocarbon exports pass through it. However, as far as Russia is concerned, it has own channels for exporting hydrocarbons, so for Moscow, Hormuz is less important. That’s why the presence of Russia’s warships tasked with protecting navigation in the strait is not large-scale, Shamanov explained.
Russia and China are refraining from taking hasty steps following the example of Washington, which rushed to point fingers at Iran over the attack on the tankers. German Foreign Minister Heiko Maas expressed doubts over Washington's evidence on Tehran’s alleged involvement in the explosion. According to Director of the Center on the Near and Middle East at the Russian Institute for Strategic Studies Vladimir Fitin, Berlin’s behavior proves that Western Europe is not ready to give up its partnership with Iran. "US statement on Tehran’s involvement in the attacks is the same fake news as its rhetoric on the use of chemical weapons by the government of Bashar Assad," the expert said. "Western Europeans are not that blind to swallow any bait, which Washington gives them. They are well aware that this is an unfounded accusation, and that’s why they won’t rush to sever ties with Iran like in the case with the nuclear deal." The EU is unlikely to slap sanctions on Tehran until an international investigation into the tanker attacks is over. The expert noted that the attack on oil tankers in the Persian Gulf is apparently not the last. The US will continue pursuing its own game against Iran and carrying out similar provocations, Fitin said.
Kommersant: Putin-Trump meeting in limbo due to NYT 'leak' on US hacker attacks
Ahead of the G20 summit in Japan’s Osaka, which is expected to host a meeting between US President Donald Trump and Russian President Vladimir Putin, the US has been ramping up its online attacks against Russia’s power grid, The New York Times has reported. Sources say that the hacker attacks are intended as a warning to Moscow against its alleged efforts to meddle in the 2020 presidential election. Experts told Kommersant that the new leak was aimed at provoking Moscow’s confrontational stance and undermining the normalization of Russian-US ties. Trump has slammed the NYT cyber attack report as "the virtual act of treason."
The recent NYT article, which came ahead of the G20 summit, has a clear political meaning. Kommersant writes that a similar situation occurred a year ago ahead of the Helsinki summit between the two presidents, when the American media reported on Russia’s alleged hacker attacks against the US power grid. As a rule, such stories about hackers resonate widely, and it is almost impossible to either confirm or deny them. "That’s why this is the best tool for creating a background for a new confrontation," said Director of the Franklin Roosevelt US Policy Studies Center at Moscow State University Yuri Rogulev.
Director of the Center for Analysis of Strategies and Technologies Ruslan Pukhov shares this opinion. According to him, the latest leak about US hacker attacks on Russia’s power grid may have a serious destabilizing influence given the current conflict between the two countries. "Information in The New York Times publication is nothing but a direct challenge to Russia, which Moscow cannot leave unanswered," he stressed. "By seeking to preempt and set a confrontational tone for a new Putin-Trump meeting, the adversaries of the US president, who are pursuing their own political ambitions, dealt a blow to their own security services, by actually confirming their sabotage activity against Russia," the expert said.
Nezavisimaya Gazeta: Ukrainian operator warns of gas supply risks to Europe
Ukraine’s gas transport system operator Ukrtransgaz has announced that it lacks funds for purchasing gas, warning that this could spark a massive, far-reaching energy crisis in a week. Experts believe that the threats may be an attempt to scare the local authorities into providing additional funding, Nezavisimaya Gazeta writes. However, for Russia this situation is also dangerous since it may create obstacles for gas supplies to some European countries.
The company’s debt to gas suppliers in March-April reached 4.1 bln hryvnia (nearly $152 mln). Ukrtransgaz stressed that the gas producers are refusing to supply gas under the contract and the remaining volume will suffice only until June 24. The operator blames its financial problems on unfounded temporary tariffs introduced in late 2018.
The news broke ahead of the upcoming gas transit talks between Russia and Ukraine. Uncertainty still hangs over whether a new transit deal will be signed, with experts saying that in a best-case scenario, this would be a temporary agreement. The next round of consultations between Russia, Ukraine and the European Commission may be held in the second half of September, Russian Energy Minister Alexander Novak said.
According to Director of the Law and Mediation Fund for the Fuel and Energy Complex Alexander Pakhomov, the company’s financial hurdles are unlikely to affect gas transit through Ukraine to European consumers. In order to avoid a crisis, the new government will find money to support the company’s operations, he said. "Now the fate of the gas transport system’s operator is one of central issues in the energy sphere, but there is no sense now in supporting it by large-scale and long-term investments, since no one knows what scenario to prepare for by 2020," the economist said.
The latest news once again confirms that there are risks for gas transit via Ukraine, said senior analyst at the Moscow-based investment bank BCS Premier Sergey Suverov in an interview with the paper. "Meanwhile, the statements by Ukrtransgaz may be viewed in the context of Ukraine’s domestic political struggle and as an attempt to get additional funding from the authorities," he said, voicing doubt that this situation could affect talks on transit.
Nezavisimaya Gazeta: Economy will be US president’s trump card in 2020 race
This week, US President Donald Trump will kick off his election campaign for the 2020 race with a rally in Orlando, Florida. This time, the White House occupant is expected to have stronger positions in his struggle against the Democrats, after no evidence was found in the alleged ‘Russia collusion’ commotion. Another advantage for Trump may be the successful implementation of his economic initiatives, Nezavisimaya Gazeta writes.
Trump is setting a new tone, the paper says. The incumbent president’s campaign agenda is more advantageous than that of the Democrats. For example, Trump has something to boast of in the economy, and his spin masters want him to focus on rising stock markets and the lowest unemployment rate in the country over the past 50 years.
The Republicans will deal their major blows to the economic agenda of the Democrats, who seem to lean towards ‘socialist’ slogans. Besides, Trump and his allies may form a good donor basis. The US president has managed to collect more than $100 mln.
Meanwhile, political scientists of the Democratic Party believe that Trump is unlikely to repeat his success in 2016, when he lost the popular vote but won the election because the Electoral College voted in his favor.
However, Russian experts believe Trump has huge chances of being re-elected in 2020. According to Valdai Club Program Director and Director of the Institute of International Studies at MGIMO University Andrei Sushentsov, the Democratic Party lacks candidates who could defeat Trump. The latest opinion poll carried out by Fox News shows that Trump’s possible rival at the election might be Vice President Joe Biden, with 32% support.
Vedomosti: Russia’s central bank cuts key rate for first time since March 2018
The Bank of Russia Board of Directors lowered its key rate by 25 bp to 7.5% per annum on Friday for the first time since March 2018 and admitted the possibility of a further key rate reduction at one of its upcoming meetings. This year, the key rate may be lowered twice unless there are negative surprises, the central bank’s chief, Elvira Nabiullina, said.
The central bank may cut the key rate in July, if the inflation rate slows down due to a good harvest and the US Federal Reserve System starts lowering rates, Gazprombank’s analysts told Vedomosti. Chief economist of the Russian Direct Investment Fund (RDIF) Dmitry Polevoy also predicts that by late 2019 the key rate may reach 7%.
The Bank of Russia also lowered its GDP growth forecast for this year from 1.2-1.7% to 1.0-1.5%. Nabiullina explained the decision by weak economic growth in the first quarter (by 0.5%). The forecast for 2020-2021 remains unchanged. However, the central bank has improved its forecast on oil prices, saying that in 2019, the price will average $65 per barrel, up from $60 in its previous forecast. There is still uncertainty over the talks between OPEC and non-OPEC countries on the fate of the oil output cut deal, Nabiullina noted. The central bank’s further rhetoric on GDP dynamics will substantially depend on the effective implementation of the National Projects initiative, she said. Meanwhile, experts doubt whether the National Projects could make a real contribution to Russia’s economic growth.