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Russia Steps Up Economic Pressure on Kiev

KIEV, Ukraine — Russia and Russian state companies have increased the economic pressure on the new pro-Western government in Kiev over the past week, closing the border to most trucks, shutting a Ukrainian factory in Russia and yet again raising the price of natural gas . The actions revive an array of Russian economic foreign policy tools used for years and made possible by Russia’s robust domestic consumer market and the country’s energy exports. About a quarter of all Ukraine ’s exports go to Russia, and factories here have benefited from a growing demand in the defense sector and rising consumer purchasing power. Russia’s manipulation of gas prices under various pretexts has for a decade proved to be a particular headache for pro-Western Ukrainian governments. Russia is now asking close to $500 for 1,000 cubic meters of gas, the standard unit for gas trade in Europe, which is a […]

Posted On : Published By : Tom Whipple
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Foreign Monitors Enter Ukraine to Observe Political Situation

The first foreign observers permitted by governments in Moscow and Kiev to monitor the political situation and human rights are assembling in the Ukrainian capital and will start fanning out across the troubled region on Tuesday, a spokeswoman said Sunday. Deployment of the first 100 observers — a number that may rise to 500 during the six-month mission — was viewed by some diplomats as the first break in the crisis over Crimea since Russia sent thousands of troops into the peninsula and then annexed it last week. The annexation, considered illegal by the West, followed a public referendum in favor in Crimea on March 16. Moscow expressly barred the monitors from Crimea, and even suggested that the mission constituted foreign recognition that the peninsula was now Russia’s — a notion swiftly dismissed in the West. The monitors are working for the 57-nation Organization for Security […]

Posted On : Published By : Tom Whipple
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As Sanctions Start, Russia Feels a Sting

American and European sanctions rattled Russia’s economy on Friday, with Moscow’s stock indexes opening sharply lower, rating agencies threatening to reduce the country’s creditworthiness, and hints of trepidation coming from Russia’s tycoons as they concluded an annual conference here. But if the aim of the sanctions is to put economic pressure on the wealthy allies crucial to President Vladimir V. Putin’s continued grip on power, there were few signs they would succeed, largely because those targeted were among the new generations of oligarchs who owe their fortunes and loyalties to Mr. Putin. And even though Russia has become more integrated in the global economy, those who were not targeted — other billionaires and millionaires who have prospered in the Russia that emerged under Mr. Putin’s rule — have not shown signs of breaking ranks , either, since the prospects of sanctions first arose. One of those […]

Posted On : Published By : Tom Whipple
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Petrodollar Alert: Putin Prepares To Announce “Holy Grail” Gas Deal With China

If it was the intent of the West to bring Russia and China together – one a natural resource (if “somewhat” corrupt) superpower and the other a fixed capital / labor output (if “somewhat” capital misallocating and credit bubbleicious) powerhouse – in the process marginalizing the dollar and encouraging Ruble and Renminbi bilateral trade, then things are surely “going according to plan.” For now there have been no major developments as a result of the shift in the geopolitical axis that has seen global US influence, away from the Group of 7 (most insolvent nations) of course, decline precipitously in the aftermath of the bungled Syrian intervention attempt and the bloodless Russian annexation of Crimea, but that will soon change. Because while the west is focused on day to day developments in […]

Posted On : Published By : Tom Whipple
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Ukraine crisis: EU signs association deal

The agreement moves Ukraine and its interim PM Arseniy Yatsenyuk closer to the EU EU leaders have signed an agreement on closer relations with Ukraine, in a show of support following Russia’s annexation of Crimea. Ukraine’s interim PM Arseniy Yatsenyuk and the EU signed the deal in Brussels. Pro-Moscow President Viktor Yanukovych’s abandonment of the deal had led to deadly protests, his removal and Russia taking over Crimea. On Friday, Russia’s upper house unanimously approved the treaty on Crimea joining the Russian Federation. The EU Association Agreement is designed to give Ukraine’s interim leadership economic and political support. EU President Herman Van Rompuy said in a tweeted message: "Signing political part EU-Ukraine Association Agreement symbolises importance of relations [and] will to take it further." The move comes hours after the EU broadened its sanctions over Russia’s annexation of Crimea. It added 12 individuals to an earlier list of 21 […]

Posted On : Published By : Tom Whipple
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“The Oil and Gas Weapon Won’t Work”: Davis & Leggett on Ukraine

Lt. Col. Daniel Davis & Jeremy Leggett in  The National Interest : “After many weeks of political chaos and bloodshed in Kiev, Moscow sent soldiers across the frontier into the Crimea on February 27, claiming it aimed to protect the Russian-speaking population.” “Writing in the  Washington Post  on March 7, former US Secretary of State Condoleezza Rice captured the essence of many in the US who advocate using oil as a weapon against Russia. She wrote that “soon, North America’s bounty of oil and gas will swamp Moscow’s capacity. Authorizing the Keystone XL pipeline and championing natural gas exports would signal that we intend to do precisely that.” Secretary Rice’s assumptions regarding the state of US tight oil and gas as “bountiful” are common among many opinion leaders in the West. They also happen to be wrong. Before contemplating the use of US oil and gas as a strategic weapon, […]

Posted On : Published By : Tom Whipple
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“The Oil and Gas Weapon Won’t Work”: Davis & Leggett on Ukraine

Lt. Col. Daniel Davis & Jeremy Leggett in  The National Interest : “After many weeks of political chaos and bloodshed in Kiev, Moscow sent soldiers across the frontier into the Crimea on February 27, claiming it aimed to protect the Russian-speaking population.” “Writing in the  Washington Post  on March 7, former US Secretary of State Condoleezza Rice captured the essence of many in the US who advocate using oil as a weapon against Russia. She wrote that “soon, North America’s bounty of oil and gas will swamp Moscow’s capacity. Authorizing the Keystone XL pipeline and championing natural gas exports would signal that we intend to do precisely that.” Secretary Rice’s assumptions regarding the state of US tight oil and gas as “bountiful” are common among many opinion leaders in the West. They also happen to be wrong. Before contemplating the use of US oil and gas as a strategic weapon, […]

Posted On : Published By : Tom Whipple
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Ukraine crisis: Russia faces fresh sanctions over Crimea

Crimean pro-Russian forces seized two naval bases on Wednesday European Union leaders are due to meet in Brussels to discuss further targeted sanctions in response to Russia’s annexation of Crimea from Ukraine. It comes as UN chief Ban Ki-moon visits Russian leaders in Moscow to urge a diplomatic solution to the crisis. Tensions remain high in Crimea – pro-Russia forces seized two bases on Wednesday, including Ukraine’s navy HQ in Sevastopol. Ukraine’s navy commander was detained, but has now been released. Crimean leaders signed a treaty with Moscow on Tuesday to absorb the peninsula – an autonomous republic in southern Ukraine – into Russia, following a disputed referendum on Sunday. Russia’s Foreign Minister Sergei Lavrov said the political process was expected to be completed this week, Russia’s Interfax news agency reports. The lower house will vote on ratifying the Crimea treaty on Thursday, and the upper house on Friday. […]

Posted On : Published By : Tom Whipple
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Shell Pulls Out of Ukraine Deal Near Crimea

Royal Dutch Shell PLC said Wednesday that it withdrew from negotiations over an offshore exploration deal in the Black Sea, west of Crimea. Shell made the decision to pull out in January, a spokesman said. The Anglo-Dutch energy major was part of a group of companies including Exxon Mobil Corp. that struck a deal with the Ukraine government to develop the offshore Skifska oil-and-gas field. "In the Ukraine, we maintain our interest in the Skifska license, but it is on hold due to current circumstances," Exxon Senior Vice President Andrew Swiger told analysts at a meeting earlier this month. The Ukrainian government announced the deal in 2012, but a Shell spokesman said Wednesday that Shell still hadn’t signed the agreement at the time it pulled out in January. The spokesman said Shell is still pursuing other Ukraine projects, including exploration for "tight" natural gas in […]

Posted On : Published By : Tom Whipple
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After annexing Crimea, Russians move to carve up the spoils

While the people of Simferopol celebrated Russia’s annexation of Crimea , 10 minutes’ drive from the city centre on Balaklava Street another Russian invasion was under way – this time of a private business. A group of heavily-armed suspected Russian soldiers in ski masks on Tuesday stormed the Bogdan Avto-Salon, a Hyundai and Subaru dealership in a quiet suburb of the city, taking control of its offices and salesrooms. The men, who later stood guard along the salon’s perimeter fence, refused to identify themselves to reporters and waved them away with guns. Critics of Moscow have been warning for weeks now that Russia’s attacks on Ukrainian military facilities in Crimea were just the start, and that commercial business on the peninsula would be the next target. Events on Balaklava Street suggests they might be right. “It’s clear there’s going to be a new carve-up of property here now that […]

Posted On : Published By : Tom Whipple