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N05/834 от 02.05.2016 e-mail: info@gorizont.com Simply the best
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‘The Russians are going to have a cow’: The US’s latest message to Putin ‘is a really
big deal’
Natasha Bertrand
The US will devote a substantial
portion of its defense spending
to building up its military presence
in Eastern Europe in an effort
to deter Russian aggression
in the region, Obama administration
officials told The New
York Times.
Countries belonging to the
NATO alliance in Central and
Eastern Europe will apparently
receive heavy weaponry, tanks,
and other equipment from the
US, which quadrupled its budget
from $789 million to more than
$3.4 billion for military spending
in Europe through 2017.
«This is a really big deal, and
the Russians are going to have
a cow,» Evelyn N. Farkas, the
Pentagon’s top policy official on
Russia and Ukraine until October,
told The Times on Tuesday.
«It’s a huge sign of commitment
to deterring Russia, and
to strengthening our alliance
and our partnership with countries
like Ukraine, Moldova and
Georgia.»
The move comes four months
after Russia launched an air campaign
in Syria to prop up embattled
Syrian President Bashar al-
Assad in a move widely seen as
an attempt by Russian President
Vladimir Putin to secure and
expand Russia’s influence in the
Middle East.
Russia’s presence in Syria, however,
has «undermined» virtually
everything the West is trying to
accomplish there and beyond,
British Foreign Secretary Philip
Hammond said in an interview
with Reuters from a refugee camp
in Jordan on Monday.
That includes the US’s attempts
to bolster «moderate»
Syrian rebel groups, which have
been targeted by Russian airstrikes,
and the US-led anti-ISIS
coalition’s attempts to wipe out
the Islamic State in Syria, which
has largely been spared the brunt
of Russia’s punishing air campaign.
As such, the new funding being
allocated to fortify Eastern
Europe against Russian aggression
«is not a response to something
that happened last Tuesday,»
a senior administration
official told The Times.
«This is a longer-term response
to a changed security
environment in Europe. This
reflects a new situation, where
Russia has become a more difficult
actor,» the official added.
Russia is unlikely to react
kindly to an expanded NATO
military presence along its western
flank. In an interview with
the German daily newspaper
Bild in January, Putin asserted
that Russia’s tensions with the
West largely resulted from NA-
TO’s eastward expansion after
the collapse of the Soviet Union.
Putin said:
Of course every state has the
right to organize its security the
way it deems appropriate. But
the states that were already in
NATO, the member states, could
also have followed their own interests–
and abstained from an
expansion to the east.
He added: «NATO and the
USA wanted a complete victory
over the Soviet Union. They
wanted to sit on the throne in
Europe alone.»
Incidentally, Russia is now
trying to dethrone NATO and
position itself as an alternative to
US influence in the Middle East,
as evidenced by its alliance with
Iran, Syria, and Iraq under the
guise of fighting ISIS.
«Russia is of course trying to
leverage the entire intervention
[in Syria] as a way to lap up as
much real estate in the Middle
East as possible,» Tony Badran,
a research fellow at the Foundation
for the Defense of Democracies,
told Business Insider in
September. «It’s classic Putin.»
In pushing himself to the
forefront of an «anti-ISIS coalition»
and creating a distraction
from Ukraine, Putin has tried
to coerce the US into accepting–
and potentially embracing– Russia’s
role in the conflict.
But Obama’s new funding
plan to bolster NATO’s presence
in Eastern Europe shows that his
administration is trying to put a
damper on Putin’s plans to dislodge
the West from the Middle
East entirely by reasserting the
US’s role in the region.
From The Times:
Administration officials said
the new investments were not
just about deterring Russia. The
weapons and equipment could
also be deployed along NATO’s
southern flank, where they could
help in the fight against the Islamic
State or in dealing with the
influx of migrants from Syria.
Another anonymous administration
official speaking to
The Times put it bluntly: «This
is a message that we see what
they’re capable of, and what
their political leadership is willing
to do.»
Russia is now China’s biggest oil partner– and it’s a huge problem for Saudi Arabia
Elena Holodny
Saudi Arabia has long
trumped Russia in the Chinese
oil market.
The Saudi share of Chinese
crude imports at the beginning
of the decade was about 20 %,
while Russia’s was below 7 %,
according to data cited by RBC
Capital Markets.
But now the Russians are
creeping in– and the Saudis are
getting nervous.
«Russia is the biggest rival to
the Saudis in the single-largest
oil demand growth country in
the world,» RBC Capital Markets’
commodity strategist Michael
Tran wrote.
«The rising tide of Chinese
growth has meant that notional
volumes for both countries have
increased in the years since, but
Russia’s gains have been outsized,»
he continued.
«The Kingdom now finds itself
neck and neck with Moscow
for the lead in Chinese market
share, with both jostling in the
13–14 % range, yet the momentum
resides with the latter.»
Notably, the Saudis managed
to increase exports to China by
only about 120 kilobarrels a day
over the past five years– a growth
rate that was beaten by seven
other countries including South
Sudan and Colombia, according
to figures cited by Tran.
Meanwhile, Russia increased
exports by 550 kilobarrels a day
in the same period.
Moreover, Tran continued,
Russia even managed to overtake
the Saudis as the biggest crude
exporter to China in December
and three other months in 2015.
While this detail may not sound
particularly impressive, it’s worth
pointing out that the Saudis have
lost the top spot only six times in
the past five years.
Interestingly, part of Russia’s
success in China has been attributed
to its willingness to accept
Chinese yuan denominated
currency for its oil. (And not, as
others have suggested, because
of any sort of allegiance to the
Sino-Russo friendship.)
RBC Capital Markets
On the flip side, «Saudi Arabia
is losing its crown as its selling
prices in Asia haven’t been
attractive enough,» Gao Jian,
an analyst at SCI International,
a Shandong-based energy consultant,
told Bloomberg back in
June.
«If Saudi Arabia wants to recapture
its number one ranking,
it needs to accept the renminbi
for oil payments instead of just
the dollar,» Gordon Kwan, the
Hong Kong-based head of regional
oil and gas research at
Nomura Holdings Inc., told
Bloomberg back in June.
There are certainly other
things the Saudis could theoretically
do to capture market
share.
«Owning refineries in key demand
regions guarantees market
captivity,» Tran wrote. «This
has historically been part of the
Saudi playbook and the recent
reported interest in acquiring
stakes in Chinese refineries is a
strategic move that would guarantee
the Kingdom a seat at the
table in the preeminent region
for demand growth.»
Basically, if the Saudis own
the refineries, then their oil will
be sold there.
In any case, the upshot for
the overall oil market is that we
probably won’t see Russian-Saudi
coordination in the oil sector
anytime soon, Tran argued.
«The recent meeting between
the Russian government and its
domestic oil company execs introduces
a glimmer of promise
for potential coordination with
the Saudis and other OPEC
countries, but the probability of
a production cut remains low,»
he wrote.
In sum, Russia has moved into
China– and the Saudis aren’t
loving it.
«Is there a sense of urgency
from the Saudis?» Tran said.
«You bet.»