Russia sidelined at the G7 Summit

The G7 Summit ended today in the Bavarian Alps, and the heads of state of Britain, Canada, France, Germany, Italy, Japan, and the US issued a proclamation of solidarity on sanctions again the Russian Federation and committed to keep them in place and have their duration be “clearly linked to Russia’s complete implementation of the Minsk agreements and respect for Ukraine’s sovereignty.” The G7 group was previously known as the G8 and included Russia in its deliberations, but it was banned after the annexation of Crimea in March 2014.

The comment prompted replies from the top levels of the Russian government, with President Putin calling on the G7 to pressure the Ukrainian government to comply with the Minsk II ceasefire and announcing its official support behind keeping the rebel-held regions of Donetsk and Luhansk as part of Ukraine. Putin and Foreign Minister Lavrov placed the blame on noncompliance of the agreement squarely on Ukrainian President Petro Poroshenko.

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News Briefs:

  • Iran has pledged it will boost oil output regardless of price after meeting with OPEC members, announcing it will continue pumping above the group’s overall production target, likely driving the worldwide benchmark pricing index Brent crude further down. The fulcrum of this likely outcome will be the schedule of sanctions removal, which according to most European officials privy to the negotiations, have issued a negative outlook. The moment restrictions are lifted is the moment that new supply floods an already over-saturated global crude market.
  • A Russian oil for goods deal is set to move forward this week, after more than a year of negotiations. The Kremlin said it would export some 500,000 barrels per day of crude to Russia in exchange for goods of equivalent value (in this case it looks like cash or cash equivalents like steel, wheat, and refined oil products). This comes at an interesting time – when another price slump in Brent crude could prolong the recession Russia is experiencing. As a result, they are likely trying to reduce the impact of Iran’s seemingly inevitable entry into the global crude marketplace.
  • RFE/RL has an interesting piece on the Chinese expansion into Central Asia and assembled a panel to discuss the most recently developments and noting the expanding trade between the region and the world’s second largest economy. The panel noted that the changes are not completely welcome, however, citing extreme suspicion on the part of Kazakhstan in particular for Chinese private sector activities and local business owners complain that prices are often subsidized by the Chinese government forcing them out of business.
  • The OSCE has asserted a worrying increase in violence in Ukraine, particularly in the transportation of heavy weaponry around the conflict zones, a move prohibited by the Minsk II accords of this past February. The battle is centered this time around a separatist assault on the government held town of Maryinka, with some 28 total casualties.
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