French call for NATO exit

Thousands of angry French protesters have gathered in the French capital to call for the country’s withdrawal from the US-led NATO military alliance. The protesters have also called for the resignation of the country’s President Emmanuel Macron.

The demonstration reflects similar rallies being held across Europe in opposition to their respective government’s support for the war in Ukraine. The constant supply of arms by mainly NATO members has prolonged the conflict in Eastern Europe, leading to the suffering of civilians caught up in the cross fire.

When Russia expressed legitimate concerns about the NATO military’s eastward expansion toward its border, it opened the door to discussion, negotiation and proposals on security guarantees. However, these were ignored which many critics said, at the time, will lead to a military confrontation that will hurt ordinary Europeans. In this case, Ukrainian civilians are suffering from the human cost and ordinary civilians are falling into poverty.

Russia’s sense of insecurity in the face of the North Atlantic Treaty Organization seemed quite genuine, but critics say the media coverage has dismissed Moscow's initial concerns.

Opposition to NATO has been strong in Europe. The military alliance’s summits are always met with anti-war demonstrations. In June this year, protesters marched during an anti-NATO rally ahead of the summit that was held in Madrid. The organizers said the American-led military alliance is not the solution to the war in Ukraine. US arms manufacturers have made lucrative profits from the war.

Last month, an estimated 70,000 people protested in Prague against the Czech government, calling on the ruling coalition to do more to control soaring energy prices and voicing opposition to the European Union and NATO.

For many years, the Kremlin has made it clear that if NATO continued to mass troops and weapons on the Russian border, the expansion would likely be met with serious resistance by the Russians, even with military action. That view was not just limited to Russian officials. Even some prominent American foreign policy experts backing the same possible scenario. The current director of the CIA, William Burns, has been warning about the provocation and consequences of NATO’s expansion on Russia for more than 20 years now.  

On the other hand, Europe’s decision to cave into American pressure and impose unprecedented sanctions on Moscow has heavily restricted the gas supplies to the continent which have instead pushed energy prices up, leaving many in poverty. Europe relied on 40% of Russian gas before the conflict erupted.

The shortage of energy on the continent and rising prices for the fuel has been met with angry voters bringing down governments at the polling stations.

A recent poll by Elabe reveals that support for anti-Russian sanctions is on the decline across France. The survey shows only 40% of the French population are in favor of the anti-Russian sanctions. The poll also reveals that 32% of French people think the anti-Russia sanctions must be restricted to diminish their effect on the livelihoods of the French people.

The opposition French Patriots party again called for the demonstrations after the initial protests that took place on September 3rd. The protesters want Macron to leave office and withdraw from both NATO and the European Union.

The French government, like others in Europe, is adopting or considering various emergency measures ahead of the winter, such as the possibility of three-hour power outages in the United Kingdom.

As inflation levels are biting, a group of French intellectuals, including Nobel literature prize winner Annie Ernaux, have urged people to join the protests being organized by the left for next week. They accuse President Macron of not doing enough to help the poor cope with high prices while the profits of some companies are spiking.

The group of 69 signatories, including writers, film directors and university teachers, said in a text published in the Journal Du Dimanche that "Emmanuel Macron is using inflation to widen the wealth gap, to boost capital income at the expense of the rest." 

"It is all a matter of political will," said the text, co-signed by Ernaux, who on Thursday became the first French woman to win the Nobel Prize for Literature.

The statement also said the government has not done enough to fight the skyrocketing energy prices and declined to raise taxes on companies making enormous profits as a result of high inflation.

The signatories have also urged the public to join the protest march planned for October 16, which is being organized by the political movement of the France Unbowed party, which this year struck an alliance with more moderate leftwing parties to form France's largest opposition bloc.

Next week’s protest is being promoted as "against the high cost of living and climate inaction". It comes as Macron faces stiff resistance from unions over a planned pensions reform and as strikes by workers demanding a pay rise from retail to refineries have disrupted parts of the economy.

There is more misery for the French government as a number of fuel service stations are grappling with supply problems amid strike action at refineries run by major oil companies TotalEnergies and ExxonMobil. The walkout by members of the national trade union center CGT mainly over pay has disrupted operations at refineries and storage facilities. The industrial action has forced the government to tap into the country’s strategic reserves.

Environment Minister Christophe Bechu earlier told French media the government will, for the time being, not be rationing petrol for drivers or restrict the use of service stations in response to supply problems. "We haven't reached this point yet," Bechu said when asked if the government would impose any national measures beyond the bans already in place in some regions on filling large flat-sided metal containers for storing or transporting petrol.

The strikes at the refineries of ExxonMobil and TotalEnergies will continue, union officials at both companies have said. “It is continuing everywhere,” a CGT representative said, adding that there had been no contact from TotalEnergies since Saturday’s call by the union for the company’s managers to begin talks on pay.

In some areas, the share of affected petrol stations is much higher than the national average. An interactive map compiled by the website mon-essence.fr, where more than 100,000 users have reported outages in recent days, shows a large majority of petrol stations in and around Paris were marked out of service.

Across France, long queues have been seen outside fuel stations. "The waiting line will take you at least one-and-a-half hours or two", motorist Jean Galibert said as he entered the last stretch of a 700-metre tailback in front of a Paris service station. Another motorist, Franck Chang, said, "This situation right behind me reflects the state of France. We're struggling."

Reports say the strikes have reduced France's total refinery output by more than 60% which will be seen as another blow to the French government. On Sunday, TotalEnergies claimed to have offered to bring forward wage talks, in response to union demands, as it strongly seeks to end the industrial action that has disrupted supplies to almost a third of French petrol stations.

Amid warnings that energy shortages and rising inflation are set to extend in coming winter, further protests and anger at governments’ economic policies across Europe are expected to expand.

 

Is US behind Nord Stream gas pipeline blasts?

Since the outbreak of the Ukraine war and many years before the conflict even erupted, the signs were clear. The United States was and continues to wage economic war against Russia and all other countries, such as China and Iran that pursue independent foreign and economic policies. 

On Russia, Congress loathed the idea of Moscow sending 40% of Europe's gas supplies mostly through the Nord Stream 1 pipeline. Over the years, the US imposed so much diplomatic pressure on Europe to abandon the implementation of another pipeline: Nord Stream 2. 

It was supposed to be a major energy project in Europe, perhaps the biggest but also of major concern in Washington, where officials tried their best at scaremongering their counterparts in Europe.

Nord Stream 2 is designed by Russian energy giant Gazprom and the aim of the new pipeline was to double the amount of gas flowing from Russia straight to Germany.

The concern in Washington was the US sitting on an excess amount of gas supply from the shale gas boom but unlike Russia, there were little buyers.

The US has been eager to export the surplus to Europe on tankers in the form of liquefied natural gas (LNG) and essentially replace Russian supplies. 

What stood in the way of the LNG companies was Nord Stream 2, which all but ended the European Union's interest in building the more expensive LNG gas terminals that are needed to import American gas. The logistics of the whole operation did not make sense when there was a much cheaper option from Russia. 

As the momentum for Nord Stream 2 was gaining speed, former US President Donald Trump, in his last year in office, signed into law sanctions from the US Congress against companies involved in the construction of the new gas pipeline between Russia and Germany. 

However, many said at that time the sanctions came too late and would do little to end the project’s completion. Too much money had already been spent on Nord Stream 2, something to the tune of US$11 billion.

The layout of the new pipeline followed the route of the existing Nord Stream 1 pipeline under the Baltic Sea. While the Russian gas would serve most of Europe's energy needs the main countries involved, Russia and Germany, accused the US of using energy security concerns as a smokescreen for its own economic interests. 

Former German Chancellor Angela Merkel even condemned the American sanctions, with then Foreign Minister Heiko Maas saying they amounted to "interference in autonomous decisions taken in Europe. European energy policy is being decided in Europe, not in the US” he said. An EU spokesperson said the 27-nation bloc “opposes the imposition of sanctions against EU companies conducting legitimate business”.

To the huge frustration of the American Congress, Moscow and Brussels brushed aside the sanctions and it was obvious that the pipeline was almost complete. Denmark gave the final approval needed for the project. The company constructing Nord Stream 2 said it was putting the final touches with over 2,000 kilometers already laid at the bottom of the Baltic Sea. The pipeline was expected to start pumping gas earlier this year.

NATO's eastward military buildup toward Russian borders was met with the following threat by US President Joe Biden: "If Russia invades (Ukraine), then there will be longer Nord Stream 2. We will bring an end to it.” Before adding "I promise you we will be able to do it."

Moscow says the NATO military buildup on Russian borders, the abandonment of the Minsk agreement and Washington’s refusal to answer Russian security guarantees forced it to conduct what the Kremlin describes as a “special military operation” in Ukraine.

Three unexplained gas leaks, preceded by two explosions, occurred on the Baltic Sea’s Nord Stream 1 and 2 pipelines last Monday. Did the US force Russia into military action to exchange Russian gas to the EU with US gas in the aftermath of the Covid-19 pandemic that battered the American economy?

In the aftermath of the Ukraine conflict, the US offered a quick commitment to deliver its own LNG to the EU telling Brussels this is a big step towards making Europe less dependent on Russian gas.

EU Commission Head Ursula von der Leyen said, "We aim to reduce this dependency on Russian fossil fuels and get rid of it. This can only be achieved through... additional gas supplies, including LNG deliveries."

"The US commitment to provide the European Union with additional at least 15 billion cubic meters of LNG this year is a big step in this direction because this will replace the LNG supply we currently receive from Russia."

The United States has committed to providing the EU with an additional 15 billion cubic meters (bcm) of LNG this year, with both sides aiming to ramp up deliveries to 50 bcm per year over time.

"Looking ahead, the United States and Europe will ensure stable demand and supply for additional at least 50 billion cubic meters of US-LNG until 2030," Von der Leyen said, adding this would replace one-third of Russian gas supplies to the EU today.

"We need to secure our supplies not just for next winter but also for the years ahead", she added. "Our partnership aims to sustain us through this war."

The timing of the leaks and explosions has raised many eyebrows. It occurs just as Europe is getting restless with skyrocketing energy bills that are making voters topple one government after the other. While Nord Stream 1 was filled with gas when the explosions occurred, it was not pumping to Europe as a result of Western sanctions that had led to technical issues.

However, such is the severity of the European energy crisis. The sanctions could have been lifted on the pipeline, the maintenance issues resolved and the energy flows resumed. Not just Nord Stream 1 but gas could have been delivered through Nord Stream 2 as well to get to Europe by the winter.

Russia has said that the ruptures appear to be the result of state-sponsored "terrorism".

Russian President Vladimir Putin has accused the West of organizing the blasts that led to numerous gas leaks.

“Sanctions are not enough for the West. They have switched to sabotage. Unbelievable, but it is a fact!” Putin said during a televised speech.

“By organizing explosions on the Nord Stream international gas pipelines that run along the bottom of the Baltic Sea, they actually started destroying European energy infrastructure,” Putin said. “It is clear to everyone who benefits from this,” he added.

The Kremlin says the incidents on two major undersea gas pipelines from Russia to Germany look like acts of state-sponsored "terrorism".

"This looks like an act of terrorism, possibly on a state level," Kremlin spokesman Dmitry Peskov told reporters.

"It is very difficult to imagine that such an act of a terrorism could have happened without the involvement of a state of some kind, this is a very dangerous situation which requires an urgent investigation," Peskov said.

There have been many protests against energy price hikes across Europe which has put pressure on governments to return Russian energy. The German chancellor visited Persian Arab Gulf countries to try to secure energy supplies.

The Russian Foreign Ministry says US President Joe Biden is “obliged” to answer if Washington is behind the gas leaks. “On February 7, 2022, Joe Biden said that Nord Stream would be finished if Russia invaded Ukraine,” foreign ministry spokeswoman Maria Zakharova said on social media, posting a video of Biden saying “we will bring an end” to Nord Stream 2 if Russian tanks cross Ukraine’s border.

“Biden is obliged to answer the question of whether the US carried out its threat,” Zakharova added.

“A statement of intent was backed by a promise. We must be responsible for our words... Europe must know the truth,” Zakharova added.

The ministry says the ruptures to the pipelines occurred in territory that is "fully under the control" of US intelligence agencies.

 

Russia to annex four more areas of Ukraine

Russian Vladimir Putin will hold a signing ceremony on Friday formally annexing four more areas of Ukraine after a referendum. Russian-backed officials had earlier claimed the five-day exercise secured almost total popular support.

Voting was held in Luhansk and Donetsk in the east and in Zaporizhzhia and Kherson in the south. The Russian president will make a major speech at the Kremlin.

A stage has already been set up in Moscow's Red Square, with billboards proclaiming the four regions as part of Russia. There were echoes of Russia's annexation of Crimea in 2014, which also followed a discredited referendum and was heralded by a presidential victory speech from a stage.

The Western media says no independent monitoring of the process took place and there were accounts of election officials going from door to door escorted by armed soldiers.

The United States said it will impose sanctions on Russia because of the referendums and EU member states are considering an eighth round of measures.

German Foreign Minister Annalena Baerbock said on Thursday that people in occupied regions of Ukraine had been taken from their homes and workplaces by threat and sometimes at gunpoint. "This is the opposite of free and fair elections. And this is the opposite of peace, it is a dictated peace," she said.

The exercise began across 15% of Ukraine last Friday with only a few days' notice. Russian state media argued that the use of armed guards was for security purposes but it was clear that it had the added effect of intimidating residents.

"You have to answer verbally and the soldier marks the answer on the sheet and keeps it," one woman in Enerhodar told the BBC.

Russia does not fully control any of the four regions it has decided to annex. Although most of Luhansk remains in Russian hands, Moscow only controls 60% of Donetsk.

Seven months after Russian forces invaded Ukraine from the north, east and south, war is still raging on the front lines in all four areas. The capital of the southern region of Zaporizhzhia is firmly under the control of Ukraine's government, and a counter-offensive is underway in Kherson.

US mobilizing allies to reject Russian annexation effort

The United States and its allies are mobilizing the international community to reject Russian attempts to annex territory in Ukraine, in a move that Kyiv hopes will spur greater military support to deliver Moscow a decisive battlefield defeat.  

Hawkish supporters of Ukraine say now is the time for the US, Europe and NATO to increase the delivery of heavy artillery, tanks and war planes to Kyiv despite nuclear weapons threats by Russian President Vladimir Putin.  

Putin is under pressure in Russia because of the battlefield misfires and the chaotic rollout of his mobilization order for 300,000 troops. The Ukrainian military’s stunning counteroffensive in the northeast led Putin to move to mobilize more troops, which has received a negative reaction in Russia.  

William Taylor, a former US ambassador to Ukraine and vice president of the Russia and Europe program at the US Institute of Peace, said the news is helping the US effort.  

“My bet is that the [global] reaction would be to double down on support for the Ukrainians on the battlefield,” he said. “The Russians have a big manpower problem and now’s the time for the Ukrainians, reinforced by these weapons … to allow them to break through the Russian lines and push the Russians out.” 

Ukraine’s ambassador to the United Nations, Sergiy Kyslytsya, told CBS News on Monday that the international community needs to speed up the supply of weapons.  

He specifically called for the delivery of weapons to protect Ukraine’s airspace, adding that Russia is “impotent when it comes to the offensive on the ground” but that the missile threat needs to be eliminated.   

“I have never had any doubt that Ukraine will militarily defeat Russia on Ukrainian territory,” he said.   

The US and Britain have warned that what they call “sham” votes in four Ukrainian territories are an effort to annex Ukrainian territory while justifying the war to the Russian public.  

The British Ministry of Defense tweeted on Tuesday that Putin is likely to use an address to the Russian Parliament on Friday “to formally announce the accession of the occupied regions of Ukraine to the Russian Federation.”   

“Russia’s leaders almost certainly hope that any accession announcement will be seen as a vindication of the ‘special military operation’ and will consolidate patriotic support for the conflict,” the ministry tweeted.  

There have been multiple reports of opposition to Putin’s military mobilization order, with angry protests popping up in Russia’s far-flung territories, a shooting at an enlistment center in a Siberian city and reports of long queues of military-age men looking to flee the country.   

The U.K. on Monday announced sanctions against 92 Russian officials and entities it says are involved in carrying out the referendums.  

Secretary of State Antony Blinken said Tuesday that the US is readying sanctions if Russia moves forward on annexation.

“We are prepared and we will impose additional severe and swift costs on Russia for proceeding with the annexations,” he said during a press conference on Tuesday.  

“Ukraine has the absolute right to defend itself throughout its territory, including to take back the territory that has been illegally seized, one way or another, by Russia,” he added. “The weapons that we and many other countries are providing have been used very effectively to do just that.” 

Israel, which has maintained strategic ties with Moscow despite its invasion of Ukraine, released a statement Tuesday rejecting any results from the referendums.  

Taylor said the international community needs to follow up statements of anger with stronger military support.  

“All these expressions of outrage, of rejection, sanctions — that’s important to do, and it does send a message, but what’s really going to send a message, what really needs to happen, is the Ukrainians need to be able to push [the Russians] out of those places where they’re doing these referendum, pushing them out of these four provinces,” he said.  

The US has so far provided Ukraine with US$15 billion in security assistance, and lawmakers on Tuesday earmarked an additional $12.3 billion for Ukraine, included in draft text funding the government through December.   

But Ukrainian officials are frustrated that European powers with significant military reserves — Germany, France and Italy, specifically — have not matched commitments by the US, Britain and even the Baltic states, which are proportional to their size and military budgets.  

An analysis by the Kiel Institute for World Economy put the US as the number one donor for arms and equipment to Ukraine — citing about US$24 billion in commitments between January and August 03 — compared to pledges from Germany that equal about US$1.2 billion.  

France has committed less than $800 million in military assistance, and Italy around US$200 million, according to the tracker though it has counted US$2.4 billion in military commitments from European Union institutions.

Frustrations appear to be roiling in Berlin, where opposition lawmakers are demanding German Chancellor Olaf Scholz immediately send German tanks and armored vehicles to Ukraine. 

Politico Europe reported heated and inflammatory debate within Germany’s Bundestag last week over the need to increase, and quickly, military supplies to Ukraine.   

“If, in the light of mass graves in Bucha and Izyum, we are serious in saying: ‘Never again! Germany must ensure that something never happens again’ — then we have to go a decisive step further here,” parliamentarian Johann Wadephul, Deputy Chairman of the CDU/CSU parliamentary group, reportedly said. 

Zelenskiy sounds perfect moth peace of CIA

Ukraine President Volodymyr Zelenskiy has demanded a special United Nations tribunal to impose ‘just punishment’ on Russia for its invasion of Ukraine. These include imposing financial penalties and stripping Moscow of its veto power in the Security Council.

Zelenskiy's recorded address to world leaders at the UN General Assembly on Wednesday came after Russian President Vladimir Putin ordered Moscow's first wartime mobilization since World War II and threatened to use nuclear weapons to defend Russia in what he has cast as a defining East-West clash.

Moscow plans to conscript some 300,000 troops in an apparent escalation of its Ukraine invasion that began in February and has left thousands dead, displaced millions and reduced towns to rubble.

"A crime has been committed against Ukraine, and we demand just punishment," Zelenskiy told the UN body.

"A special tribunal should be created to punish Russia for the crime of aggression against our state... Russia should pay for this war with its assets," the Ukrainian president said, urging the UN to "remove the right of veto" from Russia as a Security Council member.

Zelenskiy laid out what he said were five non-negotiable conditions for peace. These included: punishment for Russian aggression, restoration of Ukraine's security and territorial integrity, and security guarantees.

Many delegates at the UN gave Zelenskiy a standing ovation at the end of his speech.

Earlier on Wednesday, Putin had ordered the military draft in a televised address in which he also announced moves to annex four Ukrainian provinces and threatened to use nuclear weapons to defend Russia, declaring: "It's not a bluff".

The reservists' main task will be to reinforce the front line in Ukraine, which is currently over 1,000 km (621 miles) long, Russian Defence Minister Sergei Shoigu said.

The reservists will need training and Western military analysts said it will be several months before they see action.

Flights out of Russia quickly sold out, and jailed opposition leader Alexei Navalny called for mass demonstrations against the mobilization.

Independent protest monitoring group OVD-Info said more than 1,300 people had been detained in protests by Wednesday evening.

Offering no evidence, Putin accused officials in NATO states of threatening to use nuclear weapons against Russia. They should know that "the weathervane can turn towards them", he said, adding that Russia "also has various means of destruction".

"When the territorial integrity of our country is threatened, we will certainly use all the means at our disposal to protect Russia and our people. It's not a bluff."

US President Joe Biden, in a speech to the UN General Assembly, responded: "Again, just today, President Putin has made overt nuclear threats against Europe, in a reckless disregard for the responsibilities of the non-proliferation regime."

Canadian Prime Minister Justin Trudeau condemed Putin's "irresponsible escalation of the war", saying "Putin's behavior only goes to show that his invasion is failing."

Foreign Ministers from the Group of Seven (G7) advanced economies confirmed in a meeting in New York on Wednesday their cooperation in extending support for Ukraine and responding to food and energy security, the Japanese Foreign Ministry said.

"It's clear Russia wants to destroy Ukraine," EU Foreign Policy Chief Josep Borrell said. "We will not be intimidated." 

Russia and Ukraine carried out an unexpected prisoner swap on Wednesday, the largest since the war began and involving almost 300 people, including 10 foreigners and the commanders who led a prolonged Ukrainian defence of Mariupol earlier this year. 

The foreigners released included two Britons and a Moroccan who had been sentenced to death in June after being captured fighting for Ukraine. Also freed in the deal brokered by Saudi Arabia, according to a Saudi ministry, were three other Britons, two Americans, a Croatian, and a Swedish national.

The released Ukrainians had been captured after a long battle for the port city of Mariupol earlier this year and included top military commanders, said Andriy Yermak, the head of President Volodymyr Zelenskiy's office.

The moves come at a time when Russia has been facing a string of battlefield failures, with its invasion force routed in northeastern Ukraine.

Ukrainian forces say they are now poised to push deeper into territory Moscow had captured over months of heavy fighting.

"No amount of threats and propaganda can hide the fact that Ukraine is winning this war, the international community is united and Russia is becoming a global pariah," said British Defence Secretary Ben Wallace.

Russia's mobilization may be the riskiest domestic political move of Putin's two decades in power, and followed months of Kremlin promises it would do no such thing.

The war has so far appeared to enjoy popular support in a country where independent media have all been shut down and public criticism of the "special military operation" is banned.

But for many ordinary Russians, especially in the urban middle classes, the prospect of being sent to fight would be the first hint of the war affecting them personally.

Several Western military experts said drafting hundreds of thousands of new troops would take months, do little to slow Russia's losses, and could even make matters worse by drawing resources away from the battlefield to train and equip recruits.

 

China reaps energy windfall as West shuns Russian supplies

China is buying more of less expensive energy supplies from Russia, reaping the benefits of a plunge in European purchases. Beijing emerges the ready buyer when Moscow is searching alternative markets.

The growing cooperation is likely to deepen further after Chinese President Xi Jinping's meeting with Russia's Vladimir Putin in Uzbekistan, a boon for both the countries. 

China has gained access to cheaper energy while Russia is able to offset losses from the European Union and other allies scaling back on purchases of Russian exports due to the recent imposition of the sanctions.

Closer Chinese-Russian ties have also promoted the use of their yuan and rouble currencies in commodities trade, lessening reliance on the US dollar.

China, the world's largest energy consumer and top buyer of crude oil, liquefied natural gas and coal, has imported 17% more Russian crude between April and July as compared to the same period a year ago.

It has also bought over 50% more LNG and 6% more coal from Russia during the same period while electricity imports from Russia, mainly via a cross-broader transmission line connecting northeast China and Russia's Far East, soared by 39%.

China's oil, gas, coal and electricity purchases from Russia amount to US$43.68 billion so far this year.

Russian crude oil gains market share in China despite decline in overall imports

Cheaper Russian energy supplies are helping to control inflation in China, where the economy narrowly avoided contracting in the second quarter amid COVID-19 lockdowns.

The recent meeting between Xi and Putin is likely to fortify China's ties with Russia in energy trade for mutual benefit, particularly at a time when Russia is grappling with intensified western sanctions, while China is in need of low-cost energy to shore up its sagging economy.

Russia became China's top crude supplier from May to July, accounting for 19% of China's imports, versus 15% in the same period of 2021. Russia's share could grow to more than 20% this year.

China saved about US$3 billion in buying Russian oil. At an average, China paid about US$708 per ton for Russian crude while the value of imports from the rest of countries was US$816 per ton.

For LNG, China's imports from Russia rose 26% in the first seven months as compared to the same period a year ago, while exports jumped to 66,798 tons in July, the highest since 2019, on re-exports to Europe and Japan.

"China is taking advantage of the disrupted trade flows, including by buying discounted Russian oil and LNG cargoes, while swapping out alternative volumes back into Europe at higher prices, delivering a profitable trade," said Saul Kavonic, head of Integrated Energy and Resources Research at Credit Suisse.

China also has long-term incentives for Russian supply as it strives to meet new carbon emissions targets and boosts gas consumption. That prompted a February deal for a new pipeline from Russia to start in the next two to three years.

China's coal imports from Russia jumped to their highest in at least five years in July, as it bought discounted coal while Europe shunned Russian cargoes ahead of a ban that came into force on August 11, 2022

Russian thermal coal with a heating value of 5,500 kilocalories (kcal) traded around US$150 a ton on a cost-and-freight basis in late July, while coal of the same quality at Australia's Newcastle port was assessed at more than US$210 a ton on a free-on-board (FOB) basis.

China has increased coal imports from Russia although it cut back overall imports of the fuel

Though Russian supplies meet only about 1% of Chinese needs, some traders expect more Russian coal to arrive in the fourth quarter when utilities build stocks for the winter heating season.

Analysts said that while the gains for China are clear, Russia remains more reliant on the trade than China.

It is apparent that Russia can no longer rely on its major energy export markets in Europe for the foreseeable future, and the redirection of its energy and commodity exports towards the East will gather pace.

 

Beware it is United States and allies fighting war against Russia

According to the western media, the United States has played a quiet but crucial role as Ukrainian troops have made stunning gains this week in a counteroffensive that dealt an embarrassing blow to Russian forces. 

Kyiv’s military strategy, which has allowed it to take back thousands of kilometers worth of Russian-occupied territory within days, is the culmination of months’ worth of planning helped by US war modeling and expertise.  

In addition, artillery and heavy weapons provided by the US have provided immediate firepower and long-term confidence that Ukraine’s troops will remain equipped for the longer fight. 

“What you’re seeing now is real unity in action,” a senior defense official told The Hill, adding that Ukraine’s current successes are the result of “incredible resolve from our allies, partners, and from the Ukrainian people, really, at every level.” 

As of Thursday, Ukrainian troops had taken back nearly the entire Kharkiv province in the northeast and continued to liberate several villages in the southern Kherson region, according to officials in the country. 

The gains are part of a two-front counteroffensive that began at the start of September and made major headway in the past week — particularly in Kharkiv, where Ukrainian troops’ lightning-fast advance seemed to catch Russians forces on the back foot and forced them to rapidly retreat. 

President Volodymyr Zelensky said earlier this week that Ukrainian forces had retaken 6,000 square kilometers (2317 square miles) of Russian-held territory since the beginning of the month — about 3,400 kilometers (2113 miles) of that in the north just in the last week.   

The rapid territory gains — more than the Russians have made in the past five months — even took Ukrainian and Western officials by surprise. 

But the counteroffensive was the result of months of discussions, war strategizing and intelligence sharing between senior US and Ukrainian officials, as well as a steady buildup of Ukrainian firepower with the help of US weapons shipments, according to defense officials and experts.  

Zelensky in midsummer relayed to his top military brass that he wanted to make a major push to show that Ukraine could kick back at the Russian incursion, and had his generals create a plan for a broad offensive across the south and east, CNN first reported. 

The strategy, which was then shared with US defense officials, was assessed to likely fail, and the Ukrainians went back to the drawing board, according to The New York Times. 

The senior defense official confirmed that “over the summer,” the Pentagon “provided advice during the war games, and then the Ukrainians internalized that and made their own decisions.” 

Through “regular dialogue” with their Ukrainian counterparts, US officials were able to “understand evolving requirements” and “synchronize with allies, partners, and Ukraine around the clock” to provide needed weapons and intelligence to help the Ukrainian forces, the official said.    

And top Pentagon spokesperson Brig. Gen. Pat Ryder on Tuesday acknowledged that Washington has been sharing “time sensitive information” with Kyiv, but declined to provide specifics.  

The strategy ultimately deployed by Kyiv proved to amplify existing problems on the Russian side, including supply line and logistics issues, as well as a battered command and control that has hampered Russian troops in the six months since the war began.  

In droves, Russian forces fled from their positions, leaving behind ammunition stockpiles and equipment and, in some cases, falling back into their country across the northeastern border with Ukraine.  

“The biggest explanation you can give for why Ukraine is so successful is that they took the time, they were patient and they shaped the battlespace,” said Steven Horrell, a senior fellow at the Center for European Policy Analysis and a former US naval intelligence officer. “They were very well prepared for this.” 

The carefully planned operations were then bolstered by US weapons, including precision armaments such as the High Mobility Artillery Rocket System, which allows the Ukrainians to precisely strike and take out high-value Kremlin targets, Horrell said.  

As of this week, the US has committed nearly US$15 billion in lethal aid to Ukraine since the start of the Feb. 24 invasion, including a new $675 million package of weapons and equipment for Kyiv announced last week.  

Since April, the US government has also led a 50-country effort known as the Ukraine Contact Group to coordinate the flow of military assistance to Kyiv.  

“Definitely the Western assistance of equipment, training on that equipment, but also intelligence sharing, contributed to the current Ukrainian successes,” Horrell said. 

Despite Ukraine’s recent successes — with country officials calling it one of the major turning points of the war — others have warned the fight is still far from over.  

United Nations Secretary-General António Guterres said Wednesday he thinks a peace deal to end the conflict isn’t likely anytime soon. 

“We are far away from the end of the war,” he told reporters following a call Wednesday with Russian President Vladimir Putin, as reported by CNN. 

“A cease-fire is not in sight,” he added, “I would be lying if I said it would happen.” 

And Biden administration officials have been hesitant to label the quick Ukrainian territorial gains as a turning point in the war. 

US defense officials point out that the Russians still have large amounts of manpower and weapons in Ukraine and still hold important territory, including key cities and towns in the easternmost Luhansk region. 

Still unknown is whether Ukraine can keep the momentum and make headway into Luhansk, where Russian forces will try to hold the line.  

But Western governments say they are prepared for the long haul. 

“Russia’s efforts have not succeeded and will not succeed; and as we have made clear, we are committed to sustained assistance and support as Ukraine defends its sovereignty and territorial integrity,” the defense official said.

 

US and EU making the world a big fool

The United States and European Union have ramped up buying key industrial metals from Russia, despite logistical problems spurred by the war in Ukraine and tough talk about foreign exchange starved Moscow.

The metal shipments highlight the West's difficulty in pressuring Russia's economy, which has performed better than expected and seen its currency (rouble) surge as buoyant oil revenue has helped offset the impact of sanctions. 

The US and EU import of Russia's main base metal products, aluminium and nickel, during March-June period increased by as much as 70% shows official trade data.

The total value of US and EU imports of the two metals from March to June were reported at US$1.98 billion.

The West has imposed repeated waves of sanctions on a wide range of Russian products, people and institutions, but has largely spared the industrial metals sector.

A US State Department spokesperson said in response to a query from Reuters, "Although we don't preview our sanctions actions, nothing is off the table to increase the price on Putin's unjustified war against Ukraine."

Analysts said the United States and Europe have learned lessons after huge disruption on construction, auto and power sectors caused by sanctions imposed by former US President Donald Trump on Russian aluminium 2018. Those sanctions were lifted the following year.

Prices of both metals surged to record peaks shortly after Russia launched its invasion of Ukraine on February 24 on fears that sanctions or difficult logistics would block shipments.

But those fears were unfounded, since the data show Russian exports during March to June were relatively strong.

"Market mechanisms are working," said Julius Baer analyst Carsten Menke, referring to Russian metals shipments.

"We know from commodity traders it's mainly a question of the price. It's not so much about some politician not wanting you to buy, but is there a deal here."

Russia's Rusal is the world's largest aluminium producer outside China and accounts for about 6% of estimated world production.

During the four months following Russia's invasion of Ukraine, the EU was the biggest importer of unwrought aluminium from Russia, pulling in an average of 78,207 tons a month in March-June, 13% more than the same period last year.

Rotterdam, Europe's largest port, said in a report total volumes rose 0.8% in the first half of 2022, but "break bulk" - cargo that does not fit in containers -- rose sharply by 17.7%, driven by higher imports of metals.

A port spokesperson told Reuters that shipments of aluminium and nickel were still arriving in the port since they are not sanctioned, but declined to give any figures.

US monthly imports of Russian aluminium averaged 23,049 tons in March-June, up 21% from the same period last year.

"For the Americans, it's very important that they get as many different aluminium sources as possible," said Tom Price, Head of Commodities Strategy at Liberum.

"They're very reluctant to get any metal from China, where exports are shrinking, so Russian Rusal aluminium is very important, that is the reason they haven't shut that trade down."

Russian aluminium imports to last year's top seven destinations in March to June averaged 221,693 tons a month, 9% less than the same period last year, but 4% higher than the monthly average for all of 2021.

In nickel, Russia accounts for about 10% of global output and the country's Nornickel makes about 15%-20% of the world's battery-grade nickel. Nickel imports from Russia by the top three destinations in March-June rose 17% year-on-year. The United States saw the biggest gains, surging 70% compared to last year, while EU shipments gained 22%.

Benchmark nickel on the London Metal Exchange doubled to a record above US$100,000/ton on March 08, prompting the LME to suspend trading and cancel deals.

 

Can Liz Truss be another 'Iron Lady" of Britain?

According to Reuters, New British Prime Minister, Liz Truss faces a financial markets test. If she was planning big energy subsidies only, investors might not worry too much. But she plans tax cuts – and may pick a fight with the Bank of England (BoE) and trigger a trade war with the European Union (EU).

In many ways, Britain faces similar challenges to other European countries i.e. high inflation, rising interest rates, soaring energy prices and an imminent recession. Insofar as it stays in the pack, markets won’t single it out for special attention.

Britain faces extra risks. Inflation is particularly high, Brexit has damaged the economy and the country has a chronic current account deficit meaning it relies on foreign investors to pay its bills. Truss does not want to be part of any pack. She believes that bold supply-side reforms will launch the country onto a new higher-growth trajectory.

While that is not a bad ambition, she hasn’t presented a convincing strategy to deliver it. Rather, she looks like a populist prime minister who relishes confrontation.

According to media reports she is set to declare China a threat and has questioned Britain’s special relationship with the United States. She is also taking a hard line with the EU. She also wants to change the BoE’s mandate, which is to deliver price stability.

Up to now, Britain has been in the middle of the European herd on fiscal policy. Government debt was 100% of GDP at the end of the first quarter, not vastly above the EU’s 88%. Since last September Britain had allocated 1.6% of annual economic output to cushion consumers and businesses from the energy crisis, about the same as Germany and France, according to Bruegel, the Brussels-based think tank.

It’s still unclear what extra help Truss will give to support people with spiralling energy bills this winter. But it will be expensive. Just supporting households could top 50 billion pounds over the next year, or about 2% of GDP.

Helping businesses would require another mega-package. If gas prices stay high now that Russia has suspended some gas deliveries to Europe indefinitely, the government could face similar costs the following winter and beyond.

This bailout may end up being roughly in line with the rest of Europe. Germany announced a 65 billion euro energy package over the weekend.

The difference is that Truss will at the same time cut taxes on employment and reverse a planned rise in corporation tax, costing at least 30 billion pounds a year. And she does not seem to want to cut spending to compensate.

Truss is also dead set against funding her support package via windfall taxes on energy companies. This is a missed opportunity since the sector is set for excess profits of up to 170 billion pounds over the next two years, according to the Finance Ministry calculation.

High inflation might help the government by lowering the debt-to-GDP ratio. But this is not as much of a get-out-of-jail-free card as it is for some other countries, because a quarter of British government debt is linked to rising prices and just over a third has been bought by the BoE.

One area where Britain is already an outlier is that prices are rising faster than in other Group of Seven countries. Inflation jumped to 10.1% in July, and Citigroup analysts recently predicted it could reach 18.6% early next year.

As a result, the BoE will need to jack up interest rates sharply to re-establish price stability. It’s also minded to start selling government bonds later this month. These moves are unlikely to please Truss. Not only will they deepen the recession and hit her core voters; these will make it harder to fund a fiscal bonanza.

This could lead to further confrontation between Truss and the BoE. Although many investors agree that the central bank has been slow to nip inflation in the bud, the priority now is to bring prices under control. Financial markets will not appreciate anything that looks like tampering with the BoE’s independence.

Until recently investors viewed Britain part of the European pack. Both pound and the euro have fallen sharply against the US dollar this year – and government bond yields have been rising across the world. But there are now the first signs of jitters focused specifically on Britain. The yield spread between UK and German 10-year government bonds has widened by 0.3 percentage points in the past month. In the past 10 days, pond has fallen about 2% against the euro.

Israel using gas exports to boost its diplomatic influence

A visit to the Leviathan gas rig off the coast of Haifa illustrates Israel’s opportunity to up its gas game and wield its diplomatic power across the globe. The gas rig is actually quite big.

With three main levels and pipes that seem to go on forever – leaving one wonder how someone figured out how to connect them all.

Leviathan is the largest gas rig in Israeli waters that receives gas from the country’s largest gas reservoir located well over 100 km away. The gas flows through the rig where it is cleaned and then propelled directly to Israel where it immediately powers the country.

Russian invasion of Ukraine has opened what some in the industry call “historic opportunities” for the Jewish state to up its energy game and, in return, increase its diplomatic value and standing in the Middle East and beyond.

The illustrations are bountiful, but two are important: In March, President Isaac Herzog flew to Turkey and met with President Recep Tayyip Erdogan. Last month, Turkish Foreign Minister Mevlut Cavusoglu visited Jerusalem for talks with Foreign Minister Yair Lapid.

Ankara is heavily reliant on Russia for energy – including 45% of its natural gas and 17% of its oil. Reconciliation with Israel and improving relations is the key for Turkey to be able to potentially diversify its suppliers and cut back its dependence on Russia.

The second example was the flip-flop that Israeli Energy Minister Karin Elharrar did on May 30 when she announced that her ministry would be issuing licenses for new exploration of natural gas in Israeli waters. It was a sharp turn from what the Yesh Atid had announced just six months earlier in December 2021.

Elharrar said, “In the coming year we will focus on the future, on green energy, on energy optimization and on renewable energy, and while we do so we will put aside the development of natural gas, which, as is known, is a short-term solution.”

By May 30, Elharrar was singing a different mantra, “The global energy crisis provides an opportunity for Israel to export natural gas, along with the honest and real concern for what is going on in Europe.”

A global energy crisis and the recognition that Israel can play a role in resolving it and at the same time improving its international standing, makes the big difference.

“The world changed and we cannot ignore it,” said Energy Ministry Director General Lior Schillat. “There is a rise in the demand for gas especially in Europe since the Russia situation and they need a steady supply and the minister did a reassessment in the middle of the year instead of at the end of the year since we think it is possible to increase the supply.”

Oded Eran, Israel’s former Ambassador to the European Union, said that the developments in Europe are a historic opportunity for Israel and the energy minister’s policy reversal needs to be looked at through that prism. On the one hand, Eran explained, was the populist-driven decision last December to stop exploration which had wanted to put Israel on track with the climate change camp while ignoring the economic and diplomatic opportunities that gas provides the country.

Until now, Eran added, Israel was not viewed as an international energy player but just as a regional one. “But now with the war in Ukraine, you can see that Israel is not unimportant,” he said.

As an example, Eran referred to US President Joe Biden’s promise in March to transfer 15 billion cubic meters (BCM) of liquefied natural gas to Europe by the end of 2022 to help with the shortfall caused by the war in Ukraine. Israel, he said, already exports about 10 BCM of natural gas to Jordan and Egypt.

“This is not far from the amount that Biden promised Europe,” he said.

European leaders visit Ukraine

I am a bit surprised but a lot disturbed to read this news. German, Italian and Romanian leaders visited a small town Irpin to show support for Ukraine. However, little effort is being made to negotiate ceasefire. 

I also fail to understand why people of Ukraine have been made scapegoat to push Russia out of the energy market. United States has done this to Iran, Iraq, Libya and Venezuela in the past.

French President Emmanuel Macron said Thursday that there are signs of war crimes in a Kyiv suburb following “massacres” by Russian forces. He spoke in the town of Irpin while on a visit with the German, Italian and Romanian leaders to show support for Ukraine.

He denounced the “barbarism” of the attacks that devastated the town, and praised the courage of residents of Irpin and other Kyiv region towns who held back Russians forces from attacking the capital.

The four European leaders arrived earlier in Kyiv to the sound of air raid sirens as they made a high-profile show of collective European support for the Ukrainian people as they resist Russia’s invasion.

The visit, which includes a planned meeting with President Volodymyr Zelenskyy, carries heavy symbolic weight given that the three Western European powers have faced criticism for not providing Ukraine with the scale of weaponry that Zelenskyy has been asking for.

They have also been criticized for not visiting Kyiv sooner. In past weeks and months a number of other European leaders had already made the long trip overland to show solidarity with a nation under attack, even in times when the fighting raged closer to the capital than it does now.

The French president’s office said that Macron, German Chancellor Olaf Scholz and Italian Premier Mario Draghi, representing the three largest economies in Europe, traveled to Kyiv together on a special overnight train provided by the Ukrainian authorities.

President Klaus Iohannis of Romania — which borders Ukraine and has been a key destination for Ukrainian refugees — arrived on a separate train, tweeting on arrival, “This illegal Russian aggression must stop!”

“It’s a message of European unity for the Ukrainian people, support now and in the future, because the weeks to come will be very difficult,” Macron said.

The Russian forces are pressing their offensive in the eastern Donbas region, slowly but steadily gaining ground on the badly outmanned and outgunned Ukrainian forces, who are pleading for more arms from Western allies.

Several air raid sirens rang out while the European leaders were in their hotel preparing for the rest of their visit, and Kyiv authorities urged people to seek shelter. Such alerts are a frequent occurrence.

As he left the hotel, Macron, putting his hand on his heart, said in English, “I want to show my admiration for the Ukrainian people.”

German news agency dpa quoted Scholz as saying that the leaders are seeking to show not only solidarity but also their intent to keep up financial and humanitarian help for Ukraine, and a supply of weapons.

Scholz added that this support would continue “for as long as is necessary for Ukraine’s fight for independence.”

Scholz said that the sanctions against Russia were also significant and could lead to Moscow withdrawing its troops, according to dpa.

Scholz, Macron and Draghi have been criticized not only for helping too little but for speaking to Russian President Vladimir Putin.

Many leaders and regular people in the Baltic and Central European nations, which were controlled by Moscow during the Cold War, believe that Putin only understands force, and have viewed the efforts by Macron and others to keep speaking to Putin following his invasion as unacceptable.

Hopes were high among Ukrainians that the visit could mark a turning point by opening the way to significant new arms supplies.

Tamara Malko, a resident of Pokrovsk, in the Donestsk region of eastern Ukraine, said Macron and Olaf had been “very cold” toward Ukrainians so far, and hoped for a change.

“We want peace very much, very much and have high hopes for Macron and Scholz,” she said. “We want them to see and understand our pain.”

Luhansk regional governor Serhiy Haidai said the visit will not bring anything if the leaders ask Ukraine to conclude a peace treaty with Russia that involves giving up territory. He said that is something Ukrainians would never accept.

“I am sure that our president, Volodymyr Zelenskyy, is not going to make concessions and trade our territories. If someone wants to stop Russia by giving them the territories, Germany has Bavaria, Italy has Tuscany, the French can concede Provence, for instance,” he said.

“Listen, this is Russia. These are wild people. Today it will be one territory, tomorrow another one, the day after tomorrow another. And another thing: Many heroes of Ukraine died protecting the country as a whole. Nobody will forgive us if people die but we make concessions to the aggressor.”

The visit comes as EU leaders prepare to make a decision June 23-24 on Ukraine’s request to become a candidate for EU membership, and ahead of an important NATO summit June 29-30 in Madrid.

Also Thursday, NATO defense ministers are meeting in Brussels to weigh more military aid for Ukraine. On Wednesday, the US and Germany announced more aid, as America and its allies provide longer-range weapons they say can make a difference in a fight where Ukrainian forces are outnumbered and outgunned by their Russian invaders.

On Tuesday, during a trip to Ukraine’s neighbors Romania and Moldova, Macron said a “message of support” must be sent to Ukraine before EU heads of state and government “have to make important decisions” at their Brussels meeting.

“We are in a moment where we need to send clear political signals — we, Europeans, we the European Union — toward Ukraine and the Ukrainian people,” he said.

Macron is deeply involved in diplomatic efforts to push for a cease-fire in Ukraine that would allow future peace negotiations. He has frequent discussions with Zelenskyy and has spoken on the phone several times with Russian President Vladimir Putin since Putin launched the invasion in late February.

Scholz had long resisted traveling to Kyiv, saying he didn’t want to “join the queue of people who do a quick in-out for a photo opportunity.” Instead, Scholz said a trip should focus on doing “concrete things.”

Germany on Wednesday announced that it will provide Ukraine with three multiple launch rocket systems of the kind that Kyiv has said it urgently needs to defend itself against Russia’s invasion.

 

Israel-Egypt-European Union sign initial gas export agreement

The energy ministers of Israel, Egypt and the European Union signed a memorandum of understanding to export Israeli gas to Europe, at a ceremony in Cairo on Wednesday. The agreement comes as Europe looks for alternative sources of energy to Russia in light of its invasion of Ukraine.

The gas will be transferred from Israel to Egypt via an existing pipeline. Egypt will use its facilities to liquefy the gas for export to ensure a steady stream of natural gas to Europe, while ensuring the energy security of all sides.

“The MOU will allow Israel to export natural gas to Europe for the first time, and that is even more impressive when considering that significant agreements we have signed in the past year, making Israel and its energy and water market a key player in the world.”

The arrangement is meant to continue until at least 2030, and will be gradually reduced until 2050. The sides agreed to work together on carbon capture and the reduction of carbon emissions, as well as to cooperate with the private sector on green energy and energy efficiency initiatives.

In addition, the sides agreed to work on a plan to make gas exports to Europe more efficient. The EU will encourage European companies to take part in searching for and producing natural gas in Israeli and Egyptian economic waters.

Energy Minister Karin Elharrar characterized the signing as a great moment in which little Israel becomes a significant player in the global energy market.

“The MOU will allow Israel to export natural gas to Europe for the first time, and that is even more impressive when considering that significant agreements we have signed in the past year, making Israel and its energy and water market a key player in the world,” Elharrar stated.

European Commission President Ursula von der Leyen, who was present at the signing, tweeted, “With this... agreement we will work on the stable delivery of natural gas to the EU from the East Med region. This will contribute to our EU energy security. And we are building infrastructure fit for renewables – the energy of the future.”

Von der Leyen addressed the important role of EU-Israel energy cooperation in her remarks to Prime Minister Naftali Bennett in Jerusalem on Tuesday.

“The EU was the biggest, most important client of the Russian supplier – for oil, gas and coal,” she said, “But with the beginning of this war and the attempt of Russia to blackmail us through energy, by deliberately cutting off the energy supplies, we decided to cut off and to get rid of the dependency on Russian fossil fuels and to move away from Russia and diversify to trustworthy suppliers.”

Russia provided Europe with about 40% of its natural gas consumption per year – more than 150 billion cubic meters (bcm). Israel cannot take Russia’s place altogether, but Eastern Mediterranean states can provide about 20 bcm annually, most of which would come from Israel. The US promised Europe 15-20 bcm of liquefied natural gas following the Russia sanctions, and Qatar is expected to export 20-30 bcm to the continent.

Talks between the EU and Israel toward a framework agreement for transferring gas officially began in late April.

Energy Ministry Director-General Lior Schillat said last month, “The Europeans and Americans expect that the energy crisis will influence the continent not only in the next couple of years but for the next decade as they try to reduce dependence on Russian gas. Israel, as part of this effort, will have to build infrastructure to send more gas to Egypt and then to Europe. It is a long-term effort.”

Gas exploration and production company Energean brought the Karish reservoir in Israel’s northern waters online earlier this month, which works toward the Energy Ministry’s aim of doubling Israel’s gas export capacity in the coming years.

“Today, the local market uses 12 billion cubic meters and we export another 4 to Egypt and 3 to Jordan,” Schillat said. “We will start with low numbers of additional exports and increase as Israel’s capacity grows.”

Understanding significance of TRACECA

Established in May 1993 in Brussels, Transport Corridor Europe Caucasus Asia (TRACECA) is an international transport program involving the European Union and 12 member states of the Eastern European, Caucasus, and Central Asian region. 

The program aims at strengthen economic relations, trade, and transport in the regions of the Black Sea basin, South Caucasus and Central Asia.

At the conference, it was agreed to implement a program of a European Union funded technical assistance to develop a transport corridor on a west-east axis from Europe, across the Black Sea, through the Caucasus and the Caspian Sea to Central Asia.

TRACECA members include Armenia, Azerbaijan, Bulgaria, Georgia, Kazakhstan, Kyrgyz Republic, Moldova, Romania, Tajikistan, Turkey, Turkmenistan, Ukraine, and Uzbekistan. All are signatories to the multilateral agreement, and only Turkmenistan has yet to ratify the agreement.

According to the portal of Iran’s Transport and Urban Development Ministry, the country is eying expansion of TRACECA. The issue was brought up during a meeting between Head of Iran Road Maintenance and Transportation Organization (RMTO) Dariush Amani and TRACECA Secretary General Asset Assavbayev.

According to Amani, the meeting focused on the development of international road transport cooperation with TRACECA member countries and increasing the volume of transit through this corridor.

Amani noted that following the policies of the government, RMTO is implementing new strategies to actively and effectively participate in international forums, regional treaties and join international conventions on transportation.

Various steps have been taken in this regard, including joining the transport of perishable goods (ATP) and the International Carriage of Dangerous Goods by Road (ADR) treaties, participating in the electronic version of the International Carriage of Goods by Road (e-CMR) convention, as well as the successful implementation of the project (E-TIR), the official said.

Amani stated that there are great areas for cooperation between the member states of the TRACECA agreement with the Islamic Republic of Iran, and added, “We are therefore interested in making the best use of the various projects and courses offered or held each year under the framework of the said agreement at the secretariat or in other member states.”

The RMTO head has also called on the Assavbayev to take the necessary measures to eliminate or reduce significant tariff barriers and unconventional tolls imposed by some TRACECA member countries on the international road fleet crossing those countries in order to realize the goals envisioned for the corridor.

According to Amani, during the meeting Assavbayev stated that the Islamic Republic of Iran is an active member of TRACECA and the main link between Central Asia and Europe.

“The main purpose of these talks is to develop cooperation and implement TRACECA programs through the Islamic Republic of Iran; In this regard, the main concern is to reduce transportation costs and increase cross-border traffic in order to optimize trade activities,” he said.

EU members to buy gas from Egypt and Israel

The European Commission has proposed a deal to European Union (EU) member states with Egypt and Israel to boost imports of natural gas from the eastern Mediterranean. The draft memorandum of understanding, which is still subject to changes and needs approval from the governments involved.

It is part of the European Union's efforts to reduce fossil fuel imports from Russia following the war in Ukraine.

"The natural gas to be shipped to the European Union will originate either from Egypt, Israel or any other source in the East Mediterranean region, including EU member states in the region.

The EU has said publicly it intends to conclude a trilateral agreement with Egypt and Israel before the summer.

The draft deal establishes the principles for enhanced cooperation between the three partners but does not say how much gas the EU would import nor set any timelines for deliveries.

The document said shipments would include the use of liquefied natural gas (LNG) infrastructure in Egypt, noting the North African country's plan to become a regional hub for natural gas.

The memorandum of understanding would run for nine years from its signature, the document says, although that part is still in brackets, a sign that there is a higher chance it could be changed than other paragraphs.

Egypt already exports relatively small amounts of gas to the EU, and both countries are expecting to ramp up production and exports in the coming years.

Egypt exported 8.9 billion cubic meters (bcm) of LNG last year and 4.7 bcm in the first five months of 2022, according to Refinitiv Eikon data, though the majority goes to Asia.

Israel is on track in the next few years to double gas output to about 40 bcm a year as it expands projects and brings new fields online, industry officials say. Israel has said it hopes to reach a deal to supply gas to Europe and is also considering building a pipeline to export more gas to Egypt.

The EU imported 155 bcm of gas from Russia last year, accounting for about 40% of the bloc's overall consumption.

Under the draft agreement, Egypt would be able to purchase some of the gas being transported to the EU or other countries via Egyptian infrastructure, the document said, adding that Egypt could use it for its own consumption or for export.

The parties "will work collaboratively to set forth the appropriate ways and means for implementing the purpose of this memorandum of understanding in order to expedite the export of natural gas to the EU," the document said.

The deal does not introduce any binding legal or financial obligation on the signatories, the document said.

Under the plan, the EU could fund new infrastructure if it is in line with its commitment to discourage all further investments into fossil fuel infrastructure projects in third countries, unless they are fully consistent with an ambitious, clearly defined pathway towards climate neutrality.

European Union needs €210 billion to free itself from Russian energy

According to the European Commission, the Union will have to invest an additional €210 billion (US$220 billion) to free itself from Russian energy imports by 2027. 

The extra investment comprises of €29 billion to adapt the power grid, €10 billion to ensure sufficient LNG and alternative pipeline gas imports, €2 billion for security of alternative oil supplies, €56 billion on energy efficiency and heat pumps, and an extra €113 billion on developing renewable energy sources, almost a quarter of which would be earmarked for key hydrogen infrastructure.

The commission suggests tackling existing bottlenecks at oil supply infrastructure in the region such as the Transalpine, Adria or SPSE pipelines. It also proposes targeted investment on upgrading refineries that are configured to run on Russian Urals crude. The commission made no direct reference to Hungary, which has said it cannot switch to solely using non-Russian crude without up to €750 million of investment in refinery upgrades and pipeline capacity expansion.

The investment recommendations presented on Wednesday complement previous proposals from the Commission aimed at cutting EU imports of Russian gas by two-thirds, or over 100 billion cubic meters per year, by the end of 2022. The EU is also trying to hammer out an agreement among member states to phase out Russian oil imports this year, although it faces pushback from Hungary among others.

The €210 billion of additional spending would be on top of investment required to implement the EU's climate and energy policies by 2030. The Commission’s latest recommendations together with the 2030 policies will allow the EU to save some €80 billion on gas imports, €12 billion on oil imports and €1.7 billion on coal imports.

EU officials confirmed that the proposed target for the share of renewables in the bloc's energy mix will increase to 45% by 2030, up from 40% previously. This would bring total renewable energy generation in the EU to 1,236GW by 2030, as compared to 511GW at present. The Commission points to solar panels as key to accelerating out of fossil fuel imports. It is eyeing 300GW of installed solar photovoltaics by 2028, double the present installations.

EU officials also confirmed a proposal for an EU-wide gas price cap. The cap would be a measure of "last resort" in the case of full disruption of Russian gas supplies, a senior official said, adding that it would be combined with curtailment of supply to industry and would require additional legislation.

"A price cap is an emergency measure," European Commission Executive Vice President Frans Timmermans told Argus. "It will be taken when there's massive disruption. But with one measure you can't make cheap out of expensive energy."

 

US Defense Secretary succeeds in establishing contact with Russian Defense Minister, finally

It is beyond comprehension that United States sponsoring tons of lethal arms wants a ceasefire between Russia and Ukraine. Has the superpower realized it can’t defeat Russia or it is an attempt to recoup energy before making the final attempt to cause ‘substantial damage’ to Russia?

Another point of view is that Joe Biden has exhausted all the limits available to him regarding sale of arms to Ukraine. It may be recalled that Sen. Rand Paul hit the brakes Thursday on bipartisan hopes that the Senate could quickly pass nearly US$40 billion in Ukraine aid before leaving town for the week. 

Yet another point hardly being discussed is that the United States has lost the edge, because some European countries have started making gas payment in Russian ruble, having realized that no other source of supply is available, at least in the short term.

According to the latest reports, US Defense Secretary Lloyd Austin spoke with Russian Defense Minister Sergey Shoygu on Friday, marking the first time the two have spoken since before Moscow’s invasion of Ukraine began.

Austin “urged an immediate ceasefire in Ukraine and emphasized the importance of maintaining lines of communication,” Pentagon spokesman John Kirby said in a readout of the call.

Last time Austin had spoken with Shoygu on February 18, 2022, less than a week before Russia’s invasion began.

A month into the invasion, Kirby acknowledged that Austin and Joint Chiefs of Staff Mark Milley had unsuccessfully tried to engage with his counterparts. The Washington Post was the first to report the dilemma.  

“There are vehicles, we still have military-to-military communications with the Russians,” Kirby told Fox News. “But at the senior levels, where we think it’s really important particularly right now, that’s not happening. It is not happening because the Russians don’t seem to be interested.” 

A senior US defense official told reporters that the call was initiated by Austin and lasted about an hour, with the tone characterized as “professional.” 

It was unclear what changed on the Russian side to engage in the call, but Austin hopes it “will serve as a springboard for future conversations,” according to the official.

However, Austin “continues to have concerns about what’s going on in Ukraine,” and the call itself “didn’t specifically solve any acute issues or lead to a direct change in what the Russians are doing and what they’re saying,” the official said.

Whereas Austin and Milley have had a hard time speaking with their Russian counterparts, the two have remained close with their Ukrainian counterparts.

Austin has held multiple conversations with Ukrainian Defense Minister Oleksii Reznikov throughout the invasion, and the two most recently spoke on Thursday.

Also on Thursday, Milley spoke with Gen. Valery Zaluzhny, the commander-in-chief of the Ukrainian Armed Forces. According to a readout of the call, the two “continued to exchange perspectives and assessments of the ongoing Russian invasion of Ukraine.”