Russia announced that it may partially repeal an embargo leveled against European food imports. Specifically, Moscow may begin to allow for imports from approximately 20 firms from Hungary, Cyprus and Greece back into the Russian market after an embargo worth $9 billion was imposed in August of 2014. Incidentally, in order to make up for the loss in European goods, Russia has ramped up imports from South America – namely Uruguay and Chile – and from North African countries Morocco and Tunisia.

The embargo on EU food products has frequently been criticized for being potentially more damaging to the Russian economy than successive rounds of US and EU sanctions., although its impact on Western food exporters has also reportedly been significant. However, the reversing of posture with regards to Hungary is likely born from geopolitical rather than economic considerations. The Russian government has a strong relationship with Hungarian Prime Minister Viktor Orbán, and recently signed a controversial nuclear deal with his government.  The Hungarian and Greek governments also recently endorsed plans to build Russia’s “Turkish stream” pipeline as a potential alternate to proposed pipelines such as the Trans-Caspian or TANAP.

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News Briefs:

• The Ukrainian parliament passed a bill that will give the government the ability to cease payments to its creditors while it finalizes the terms of an ongoing $23 billion debt restructuring. The negotiations over Ukraine’s debt soured last week after international creditors balked at the notion of cutting the total amount Ukraine currently owes, while Kiev responded by criticizing them for a “lack of good faith.” Ukrainian Prime Minister Arseny Yatseniuk appeared uncompromising in a recent statement affirming that Ukraine will only pay back its debts under “terms proposed by the Ukrainian government.”

• Mining conglomerate Rio Tinto and the Mongolian government have at last come to terms on a deal expected to pave the way for the resumption of work on the Oyu Tolgoi project, the most significant investment yet made in Mongolia. The two sides had long been at loggerheads over the terms of the deal, namely tax structures, and the lack of progress has had repercussions on the Mongolian economy.

• European Union Council President Donald Tusk suggested that Russia should allow for the former Soviet Union countries of Ukraine, Georgia and Moldova the right to aspire to the “European dream.” The statement was seemingly released in order to respond to these three countries’ contentions that the EU has not been clear enough regarding their potential inclusion in the EU.

• Iran intends to significant expand its oil exploration operations in the Caspian Sea. The country currently holds the rights to one major offshore oil field, Sardar-e Jangal field, although it wishes to build on limited progress in the Caspian Sea and begin operations in a potentially auspicious area known as Block 8-1. The new exploratory well will be drilled to a depth of 5,000 meters and will be completed by Iranian companies.

• Russian energy major Gazprom has slashed its expected 2015 natural gas production. A statement released yesterday indicates a decrease to 450 bcm due to unexpected warm weather in late April and May. Gazprom recently announced that a pipeline deal with Turkey will proceed according to plan, although production is not expected until the end of 2016.

• Pakistani Prime Minister Nawaz Sharif is in Central Asia today on a brief two-day visit to Turkmenistan and Kyrgyzstan. The purpose of the visit is to sign a memorandum of understanding negotiated between the Turkmen and Kyrgyz trade authorities. The completion of a Pakistan-China economic corridor will facilitate the transport of goods from Pakistan to both Kyrgyzstan and Kazakhstan, and appears to be one of the tenants of the deal. The reason behind Sharif’s visit to Turkmenistan is similarly focused on trade and will include the signing of bilateral trade agreements.