Press review: Russia to respond to US sanctions while New START dialogue still possible
Top stories from the Russian press on Friday, October 24th
MOSCOW, October 24. /TASS/. Russian President Vladimir Putin vows a overwhelming response to the latest US sanctions, while there is still a window of opportunity for Russia-US dialogue on New START. Meanwhile, the EU agrees on the 19th package of sanctions on Russia. These stories topped Friday's newspaper headlines in Russia.
Media: Russian leader vows 'overwhelming' response to latest US sanctions
Even though the new US sanctions on Russian oil majors will not affect the country’s economy, Russian President Vladimir Putin said, this is an unfriendly step that will not help normalize relations between Moscow and Washington. The country reserves the right to retaliate, Leonid Slutsky, chairman of the international committee of the Russian State Duma, or lower house of parliament, told Izvestia. However, Washington did not cross the red lines, deciding not to send Tomahawk missiles to Kiev, so the potential for continued Russia-US dialogue remains, experts say.
Those advising Trump to slap sanctions on Russian oil work against US — Putin
On Wednesday night, US President Donald Trump imposed the broadest sanctions on Russia, as the country’s largest oil companies, Rosneft and Lukoil, as well as their 34 subsidiaries, were designated. Moscow reacted quite calmly to the latest US move. While the United States is thus attempting to put pressure on Russia, not a single self-respecting country acts under pressure, the Russian leader said as he called for engaging in a serious dialogue for the longer term instead.
Slutsky criticized the additional anti-Russian sanctions as a totally counterproductive step that he said will not force Russia to change its course. "Our country keeps the right to take retaliatory measures. But, of course, this would neither contribute to successful negotiations, nor would it normalize bilateral relations," he said.
Russia could impose sanctions on US businesses, including in rare earths, among potential measures in response, Ivan Loshkarev, associate professor at the Department of Political Theory of MGIMO University of the Russian Foreign Ministry, told Izvestia. Or else cooperation in civil space exploration could be frozen, he added. And Russia could also expand restrictions on US individuals, including high-profile officials, the expert specified.
Associate professor at the Faculty of World Economy and International Affairs at the Higher School of Economics Dmitry Novikov argues that the latest US sanctions and the move to cancel the upcoming summit in Hungary cannot be called actions that could bring Russian-US relations back on the escalation track, as before. "The key red line was not crossed. <…> Washington still refrained from arms supplies, including missile systems," the expert said. To him, the latest move means a certain tactical step rather than a change in strategy.
Trump is seeking a ceasefire as soon as possible, while Europe and Ukraine categorically reject the Russian vision of resolving the conflict, Dmitry Suslov, Deputy Director of the Center for Comprehensive European and International Studies at the Higher School of Economics, told Vedomosti. Meanwhile, Russia is not ready for a ceasefire along the current front lines, as it would not mean any final settlement, but deepen the root causes of the conflict instead, the expert said. Suslov believes that a diplomatic breakthrough will come with further advancement of Russian troops.
Izvestia: Window of opportunities for Russia-US dialogue on New START remains
After ramping up sanctions on Russia, Trump supported Putin’s proposal to maintain the limits outlined in New START. Meanwhile, the issue of nuclear arms reduction faces serious disagreements between Democrats and Republicans. While the former have traditionally supported the idea to extend the treaty, Republicans advocate for the removal of any restrictions. The US is taking its time with a response, as it attempts to involve China in the dialogue on strategic stability. Russia has repeatedly emphasized the need to take the arsenals of France and Britain into account, a scenario that experts say could only be based on agreement between Russia and the United States. However, there are no plans to revive the bilateral commission on the New START Treaty, Russian Deputy Foreign Minister Sergey Ryabkov told Izvestia.
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"The Republican Party is in general more skeptical of New START, as it argues that the treaty directly increases Russia’s standing and indirectly – China’s posture. For their part, Democrats respect the agreement as they insist that there be no vacuum in this sphere," research fellow at the Center for International Security of the Institute of World Economy and International Relations Vasily Klimov told Izvestia.
The United States may have delayed a response to involve China in the dialogue on strategic stability. However, Beijing has repeatedly stressed that it has not yet reached the limits set out in the New Strategic Arms Reduction Treaty. The Chinese Ministry of Foreign Affairs dismissed demands to join US-Russian talks on nuclear disarmament as senseless and unrealistic. Moscow respects and recognizes Beijing’s position.
"Even as China may join the dialogue, it refuses to take part in unjust trilateral talks on disarmament. Amid the slow progress in the implementation of agreements under New START between the United States and Russia, the demands being put forward to China are premature and are being viewed as a circumvention of someone’s own obligations," Cui Heng of the SCO Center for International Legal Training and Cooperation at Shanghai University of Political Science and Law told Izvestia.
"If or when China decides to join the dialogue – and that will hardly happen before the 2030s, – it would be based on a bilateral Russian-American agreement that should serve as a basis for a multilateral pact, involving China as well as Britain and France, too," Klimov argues.
Rossiyskaya Gazeta: Experts weigh in on US sanctions on Russian oil majors
The US Department of the Treasury’s Office of Foreign Assets Control (OFAC) added Russia’s two largest oil companies, Lukoil and Rosneft, as well as their 34 subsidiaries, to its SDN list. The two companies account for more than half of Russian oil production and crude exports. Besides, Lukoil has a well-developed international business, with its subsidiaries operating in numerous countries, and it runs projects in the oil production and refining sector and even holds a stake in an LNG project. Rosneft is currently implementing several international projects that were hit.
Experts shared their criticism of the latest sanctions. Konstantin Simonov, general director of the National Energy Security Fund, described them as more of a political signal rather than a serious hit to the Russian economy. The companies will certainly face higher costs, and they will have to create new trading subsidiaries without the presence of Lukoil or Rosneft or with their share below 50%. There may also be challenges with oil supplies under long-term contracts — for example, Rosneft has signed such deals with Indian companies, the expert told Rossiyskaya Gazeta.
While the expert does not expect a decline in Russia’s oil production volumes or exports, he warns that costs will rise and that buyers will bargain for an additional discount on Russian oil.
Valery Andrianov, associate professor at the Financial University under the Government of the Russian Federation, agrees. He believes that Trump attempted to ban what has already been restricted and that he is actually ‘going small’ as regards the scope of the sanctions. The US leader demanded that India and China stop purchasing Russian oil, and he even imposed higher import tariffs on New Delhi for its energy cooperation with Russia. However, as long as India does not cut Russian oil imports amid higher tariffs, why should it do so now that two Russian oil companies have been targeted, Andrianov asked rhetorically.
Izvestia: Reparations loan for Kiev may damage EU economy
The European Union is negotiating a `reparations loan’ for Ukraine to be financed with Russia’s frozen assets, something that Moscow would view as a theft. The very idea of discussing such a loan may weaken the EU’s reputation as a safe haven for investment, Vladislav Maslennikov, Director of the Russian Foreign Ministry’s Department of European Issues, told Izvestia.
Belgium, which hosts Euroclear holding Russian assets, may be hit most. Belgian businesses have already expressed concern that they may lose access to assets and revenues in Russia because of any retaliatory measures from the country. The bloc’s 19th sanctions package includes a ban on LNG imports, and restrictions on lenders, oil tankers and Russian diplomats. While coordinating additional restrictions has been increasingly difficult, their effect has failed to change the course of the special military operation.
"The European Union is facing major reputational risks that may affect institutional investors who closely watch the situation and worry about their large portfolios and international reserves in Europe," Alexey Rodin, financial adviser and founder of Rodin.Capital, told Izvestia. "Belgium, which physically hosts Euroclear with Russian assets, understands these risks only too well, hence it opposes the plan," he added.
The 19th package of anti-Russian sanctions agreed by the EU on October 23 mostly targets LNG imports, Russia’s largest oil companies, vessels, banks, the tourism sector and the travel regime for Russian diplomats. The EU also agreed to prohibit Russian LNG imports from January 1, 2027.
"This looks impressive at first glance, but, in fact, the Russian economy has already developed mechanisms for adjusting to similar situations. Workarounds will certainly be found, as was the case with previous packages," Igor Rastorguyev, a leading analyst at AMarkets, explained.
Vedomosti: Indian PM Modi not ready to meet Trump
Indian Prime Minister Narendra Modi told his Malaysian counterpart Anwar Ibrahim on October 23 that he will address the upcoming ASEAN summit in Kuala Lumpur online, without explaining why. Therefore, Modi will skip a personal meeting with Trump to discuss a trade deal around import tariffs imposed by the United States in August as sanctions for Russian oil purchases.
The summit will receive 10 ASEAN leaders and regional partners, including the United States, China, and India. Russia, too, has been invited to attend but it has yet to confirm whether and how it will participate.
India is the second-largest buyer of Russian oil after China. In January-August, oil imports stood at 1.8 mln barrels per day on average, in September its oil purchases shrank to 1.6 mln bpd, or a 5% decline from August, according to data from Kpler.
The Indian PM is not ready for one-on-ones with Trump amid the uncertainty, noted Boris Volkhonsky, associate professor at the Institute of Asian and African Studies at Moscow State University. New Delhi is trying to come up with a line of behavior with Moscow and Washington and it is reluctant to give any clear promises to the United States regarding its ties with Russia, the expert explained to Vedomosti. "The Indians are facing the dilemma of whether they should stop buying Russian energy at a discount or continue to import [Russian crude] under the threat of secondary sanctions. While several Indian companies have already ceased buying Russian oil, the country’s leadership has not yet formulated decisions," he said. However, Volkhonsky continued, India realizes that a complete rejection of Russian oil is fraught with economic risks. He doubts a new trade agreement between the US and India will now be reached soon.
India is still interested in Russian oil purchases, Gleb Makarevich, researcher at the Center for Indo-Pacific Studies under the Russian Academy of Sciences’ Institute of World Economy and International Relations, believes. According to Indian political analyst Nandan Unnikrisnan, Modi may have cancelled his trip to Malaysia ahead of elections in Bihar, and India will gradually reduce the volume of Russian oil purchases, he argues.
