As EU Leaders mull the passage or extension of its sanctions against Russian leaders and upper class, an economic aide in the Kremlin said that the Russian government is considering additional measures that can be taken in response, in addition to the already-in-place ban on Western food imports and travel bans on European officials. Either way, however, Russian officials are waiting for the EU to make the first move.
The imposition of sanctions against Russia by a cabal of Western nations have exacerbated severe economic distress for the Russian Federation, whose economy was hit hard by the precipitous decline in oil prices and the simultaneous fall in the value of the ruble against the strong US dollar.
Economy Minister Alexei Ulyukayev said on Thursday that Russia would almost certainly be extending the food embargo, but remained ambivalent about any new measures that would be taken against the EU in the form of sanctions, saying that he will likely “keep the status quo.”
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- Iranian oil minister Bijan Zanganeh has reportedly decided to offer longer-term and more profitable contracts to foreign oil and gas majors if a nuclear deal is reached and sanctions are lifted, incentivizing lobbying on the part of the energy industry to see the deal passed. The catch is that companies would also be expected and required under the terms of the contract to share technology and management expertise with NIOC (National Iranian Oil Company). Conservative estimates put the value of the next six years of energy development in Iran at $185 billion.
- Investigative reporting and open source geointelligence website Bellingcat has an interesting article on Azerbaijan’s shipbuilding capacity, and assistance from the US and Israel to develop its navy to offset overwhelming Russian naval forces in the Caspian Sea. The imagery from the article indicates that several new Shaldak patrol boats are being built in an Azeri facility with technology provided by Israel. The buildup would indicate that the battle for influence in the Caspian is not only being played out in diplomatic conferences and offshore oil and gas rigs.
- Chinese officials in Xinjiang have banned Ramadan fasting for government officials, teachers, and students, issuing an outcry from the local Muslim Uighur groups. Starting on Tuesday, the month of Ramadan stipulates fasting every day until the sun goes down, and while most years have seen Chinese officials issue similar decrees surrounding religious holidays, this year Chinese officials specifically named the policy as part of a government pledge to crack down on “religious extremists,” whom they blame for major violent attacks across the country, including bombings and riots in the regional capital of Urumqi, and a knife attack as far east as Kunming last year.
- According to a new report from research firm GlobalData, Kazakhstan will surpass Azerbaijan as the leading Central Asian supplier of oil and noted trends that portend Azerbaijan’s waning influence as a regional supplier and its new role as more of a transit country towards markets in Turkey and the EU. The report cites the unfulfilled potential of Kashagan in comparison to the Azeri-Chirag-Guneshli (ACG) project that has moved past its peak production phase already. Azerbaijan’s future exports are in offshore gas, with the Shah Deniz II field forecasted to come online in 2018.
- The EU and Turkmenistan held another Human Rights Dialogue in Ashgabat yesterday. The meetings allowed for a wide range of issues that are viewed as impediments to increased support and mutual project support by the EU in Turkmenistan, like constitutional reforms, freedom of expression and movement being cited as the EU’s top concern. The European delegation acknowledged that positive steps had been taken, and with the Turkmen government engaged in overtures to supply eastern Europe with natural gas to offset Russia, much more progress remains if the EU wishes to avoid criticism dealing with authoritarian Turkmenistan.
- Mongolia’s Finance Ministry and the World Bank have signed three credit agreements totaling $63 million for major development projects focusing on Education Quality reform, E-health (whatever that means), and the SMART Government project. The second two appear to be focusing on introducing an IT infrastructure to key government services for Mongolian citizens. These new project approvals come just on the heels of a major breakthrough between Rio Tinto Group and the Mongolian government on the development of the Oyu Tolgoi copper mine as well as a major new bond offering announced in April – essentially the threshold agreements for foreign investment to continue.