Russian Press on the Ukrainian crisis

Russia has recognized the independence of the Lugansk and Donetsk People’s Republics (LPR, DPR). President Vladimir Putin signed the relevant decrees on February 21 and Russia’s parliament is expected to ratify the move on February 22.

“It is a historic decision. Today, Vladimir Putin responded to all, including Ukraine and the collective West. It will prevent a major war and a massive loss of civilian lives,” deputy chief of the United Russia party’s parliamentary faction Adalbi Shkhagoshev told the newspaper.

Implementing the Minsk Agreements was the only way to resolve the situation peacefully but Kiev had been refusing to do it for many years, First Deputy Chairman of the State Duma’s (the lower house of parliament) Foreign Affairs Committee Alexey Chepa pointed out. “I am sure that troops will be deployed to the now recognized republics following this decision. Agreements will be signed and attacks on these territories will be viewed as attacks on the Russian Armed Forces. It is the only way to protect the republics’ citizens,” the politician stated.

According to Ukrainian politician, former Verkhovna Rada (parliament) member Yevgeny Balitsky, the current developments stem from the fact that Ukraine’s “post-Maidan authorities” were reluctant to fulfill the Minsk accords.

Political scientist Nikolay Petrov told Vedomosti that the recognition of the DPR and LPR “is a game of nerves.” “The White House is playing one game, setting dates for the start of a war, while the Kremlin and Putin are playing another one. His goal is to make the West put pressure on [Ukrainian President] Vladimir Zelensky to make him comply with the Minsk Agreements,” Petrov said.

Social scientist Denis Volkov emphasized that most Russians would support the move to recognize the DPR and LPR out of the belief that it is being done to protect the Russian-speaking population. “For an average Russian citizen, there is no direct link between Russia’s actions and economic consequences, most people are inclined to view it as America’s hostile schemes as they are convinced that ‘no matter what Russia does, there will still be sanctions’,” Volkov explained.

Media: Technology sanctions may sting Russia

Neither the Russian authorities, nor the business community, nor experts interviewed by Kommersant have any doubt that Vladimir Putin’s decision on Donbass will make the West respond with sanctions on Russia. The question is how serious the consequences will be.

According to Director of Programs at the Russian International Affairs Council Ivan Timofeev, the situation will inevitably lead to new sanctions but much will depend on the military aspect. “If the recognition is accompanied by a military operation openly involving Russian troops, the US Congress will be more likely to pass a bill on tough sanctions.” Without a military operation, it will be about blacklisting officials, the expert predicted.

Analysts don’t rule out sanctions against the Nord Stream 2 gas pipeline project and Russian banks, as well as restrictions on the purchase of Russian debt. Possible restrictions on the supply of electronic goods and software to Russia are a new option.

Market participants, experts, and government sources expect this kind of sanctions would have “a devastating” impact. A technology blockade may deal a blow both to the consumer market and companies producing equipment for commercial and state needs.

A scenario involving a package of measures against the financial sector would shock the currency market, making the ruble hit the 85-90 per dollar mark in a few weeks and possibly reaching 100 in the worst-case scenario, Director of BCS World of Investment’s regional network for high-end clients Grigory Sosnovsky told Vedomosti. However, the Russian authorities have tools to keep the national currency’s exchange rate at bay, so its plunge will be a short one and not devastating, the expert added.

Since Kiev in fact has no control over Donbass, sanctions won’t be as tough as they would have been, had Russian troops invaded Ukraine’s territory, AriCapital Investment Strategist Sergey Suverov emphasized. In his view, the ruble may reach the 85 per dollar level. However, the Russian currency is highly undervalued so if Russia doesn’t go further than recognizing the DPR and LPR, the spring may see the ruble strengthen after a dive.

Nezavisimaya Gazeta: Reverberations of Ukrainian crisis return felt in Syria

Russian troops active in Syria have been accused of increasingly violating protocols aimed at preventing confrontations with US troops, according to a report issued by the office of the Pentagon’s inspector general. Although incidents between the two countries’ armed forces have become a frequent occurrence in Syria in the past several years, the possible development of the crisis around Ukraine increases the probability that a deconfliction channel between the two countries will be affected, Nezavisimaya Gazeta writes.

Over the past few years, Russian and US troops have repeatedly gotten involved in traffic incidents in Syria. Numerous videos show the two countries’ military motor patrols trying to drive each other off major highways and block the road for each other. However, there have been no serious clashes that would compromise the deconfliction channel.

Russian International Affairs Council expert Kirill Semenov does not expect tensions to rise in Syria due to the developments in Ukraine. “On the contrary, the crisis between Russia and the West has somewhat ‘cooled down’ the situation in Syria and none of the parties have been seen making preparations or attempts to raise tensions,” the analyst noted. “The atmosphere there is more that of a lull as the focus is on Europe,” he added.

According to military expert Yury Lyamin, whether the Syrian deconfliction channels between Russia and the US are jeopardized will depend on developments around Ukraine and the security guarantees that Russia demands from the West. “If tensions keep mounting, eventually it will inevitably affect everything,” the expert stressed. “In particular, options for ensuring deconfliction between Russian and US troops in Syria will shrink. Moreover, it is also possible that one of the parties will at some point use the Syrian track to put pressure on the other party or divert some of its attention,” Lyamin noted.

Kommersant: World headed towards LNG shortages

The multinational oil and gas titan, Shell, expects a liquified natural gas (LNG) supply deficit to reach 180-340 mln tonnes by 2040. By that time, LNG demand will exceed 700 mln tonnes, a 90% rise from the 2021 level. At the same time, prices will remain highly volatile, Kommersant writes.

Europe will continue to see gas price volatility until 2030, Shell said in an annual review, citing market fundamentals. LNG’s share in the energy mix will grow, while the import of pipeline gas and domestic gas production will keep declining year on year, with the demand for LNG boosted first and foremost by the Asian market.

Vygon Consulting’s Maria Belova points out that the European Commission’s current legislative initiative concerns a ban on gas contracts that would expire after the end of 2049. Still, it does not prevent companies from signing traditional long-term contracts for about 25 years. The longest agreement that Russia’s gas giant, Gazprom, has with a European company will expire in 2040 (it is a contract with Austria’s OMV). Given that only 30% of the LNG that is planned to be supplied to Europe will definitely be delivered to the continent based on contracts in 2030, it creates significant risks for consumers.

“At least, it is about price risks because in order to ensure the supply of scarce LNG amounts to the region, prices need to be the same or higher than in Asia,” Belova explained. Clearly, as Asia-Pacific countries anticipate a doubling of LNG prices in the next 20 years, they are making long-term contracts in a bid to ensure stable imports and predictable prices. European countries also intend to raise LNG imports so they “should act in a similar manner, and not only in terms of LNG,” the analyst noted.

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