Press review: Putin’s Iturup visit sends message to Japan as EU falls short of gas targets

Press review: Putin’s Iturup visit sends message to Japan as EU falls short of gas targets Top stories from the Russian press on Friday, August 14th© Gavriil Grigorov/Russian Presidential Press and Information Office/TASSMOSCOW, August 14. /TASS/. Russian President Vladimir Putin’s trip to the Kuril Islands sends a clear message to the Japanese authorities; Moscow’s promise to retaliate the seizure of its vessels alarms Europe; and the EU is falling behind on its winter gas storage targets by refusing Russia's help. These stories topped Friday’s newspaper headlines across Russia. Media: Putin's visit to Iturup sends clear message to Japan President Vladimir Putin’s trip to the Kuril Islands is more than just a working visit to Russia’s Sakhalin Region. It is a strategically calculated move. Moscow has no intention of discussing who is in charge here. Meanwhile, the Japanese are alarmed. The country’s Foreign Ministry immediately lodged a protest, refusing to recognize Russia’s sovereignty. However, the question of ownership isn’t even being raised on the islands themselves: the president was welcomed very warmly. At the same time, Moscow isn’t ruling out the resumption of constructive dialogue with Tokyo. Read alsoFACTBOX: Putin personally visits Kuril Islands for first time Japan remains Russia’s neighbor, so diplomatic efforts with Tokyo will always continue, but with his visit, Putin is showing that the discussion on the Kuril Islands is settled, Viktor Kuzminkov, a leading researcher in the Japan Economics and Politics Group at the Center for Strategic Planning Studies under the Russian Academy of Sciences’ World Economy and International Relations Institute, told Vedomosti. According to the expert, annual Japanese reports mention Tokyo’s concerns about Russia. Moreover, the Japanese have imposed sanctions against Russia, so the president’s visit to the islands is a logical next move, he added. It would be incorrect to reduce Putin’s visit to a message to bilateral relations with Tokyo, as the Russian leader pays great attention to the well-being of the Kuril Islands’ residents and the development of infrastructure there, Vladimir Nelidov, associate professor in the Oriental Studies Department at the Moscow State Institute of International Relations (MGIMO), noted. "Japan is currently an unfriendly country toward Russia, and the Japanese government’s move over the Kuril Islands will not significantly harm relations, which are already devoid of political dialogue," he said. Putin’s current trip took place at perhaps the worst possible time for Russian-Japanese relations: political ties are virtually frozen, and economic cooperation is declining, Oleg Kazakov, a senior researcher at the Japanese Studies Center under the Russian Academy of Sciences’ China and Modern Asia Institute, told Izvestia. According to him, Putin sent a clear signal to Tokyo: Russia does not pose a threat to Japan and has no claims against it. Today, Tokyo lacks autonomy on the world stage, obediently following in Washington’s wake, Dmitry Streltsov, head of the MGIMO’s Oriental Studies Department, stressed. Therefore, Putin’s visit should be viewed as a warning that new unfriendly moves will only deepen the crisis, the expert pointed out. Izvestia: Russia's promise to retaliate seizure of its vessels alarms Europe Vessel inspections conducted under the EU Naval Force Mediterranean Operation Irini sharply increase the risk of a direct confrontation between Russia and EU countries at sea. Russian President Vladimir Putin has already warned that Moscow may respond to the seizure of Russian merchant ships and cargo, and it is by no means clear that such a response would take place in the same waters. Some European politicians fear further escalation and are taking the situation seriously. The parties must do everything in their power to avoid actions that could be perceived as provocations. At the same time, experts believe that potential retaliatory measures by Russia could affect the European merchant fleet, especially in countries with large shipping sectors. Read alsoEU puts its decisions above international law out of pride, self-importance — Lavrov Europe is already concerned about a potential escalation at sea. German lawmaker Matthias Moosdorf told Izvestia that both sides must avoid confrontation. "Of course, both sides must do everything possible to prevent this from happening. It is not in our interest to take actions that could be perceived as provocations. Our party’s position is absolutely clear: we do not want to be part of any escalation against Russia," he said. The lawmaker noted that serious consequences for relations between Russia and Europe should be avoided. According to him, if tensions do escalate, Germany must restrain the most hardline positions of certain European partners, primarily the UK and France. The EU’s move toward the actual detention of a vessel or the seizure of cargo could set a dangerous precedent, especially in international waters, Pavel Anisimov, deputy director of the International Relations and Political Science Institute at Russian State University for the Humanities, emphasized. The main risk is the emergence of mutual selective detentions. Retaliatory measures by Russia would pose additional risks to the European merchant fleet. According to the expert, Moscow could respond in other key areas, such as the Baltic Sea, the Black Sea, or routes connected to Russian ports. This would be particularly problematic for the EU due to its dependence on maritime trade. First and foremost, Russia’s measures could affect countries with large shipping and port sectors, such as Greece, Cyprus, Portugal, Ireland, the Netherlands, Italy, and Spain. Anisimov added that commercial costs will most likely increase. Even a few high-profile ship detentions could drive up the cost of maritime transport: insurance and shipping costs would rise, and companies would incur additional expenses due to delays and the need to reroute shipments. As a result, EU foreign trade could become more expensive, and these costs would ultimately be passed on to European consumers. Rossiyskaya Gazeta: Europe falling short of its winter gas storage targets by refusing Russia's help Gas injection into the EU’s underground storage facilities this year is falling significantly behind previous years’ figures. At the current pace, the facilities will be less than 80% full by October. Until 2022, EU countries could only maintain such low levels of gas reserves for the winter because they could import almost any additional volumes of natural gas from Russia without any problems. However, the EU is now cutting back on gas from Russia, and supply volumes are expected to fall to 38 billion by 2025. Moreover, the EU plans to stop imports of Russian liquefied natural gas (LNG) under long-term contracts starting in early 2027. The gas market is currently experiencing a shortage, Alexey Grivach, deputy head of the National Energy Security Fund, told Rossiyskaya Gazeta. The heat wave in Europe has worsened the situation, including by reducing power generation from wind and solar plants and causing nuclear power plant shutdowns for safety reasons. The expert noted that meeting the EU’s plan to inject gas into underground storage facilities now seems extremely unlikely. Even if LNG supplies from Qatar were fully restored tomorrow - which is impossible - there is no quick way to saturate the market with pipeline gas from Russia. So far, the EU is not ready to use this option, Grivach emphasized. Russian gas could be a panacea for the EU, but politics are prevailing over common sense. According to Ivan Timonin, a senior manager at the Implementa consulting firm, Russian gas supplies to the EU have already risen. From January through May, pipeline gas imports rose by about 7% year-over-year, while LNG imports increased by 11%. This higher level of supply may continue through the end of the year, he added. In turn, Grivach noted that Europe’s refusal to import LNG from Russia does not change the overall supply volume but complicates transportation and drives up costs. With high prices, this is not a critical issue for suppliers, but it is more significant for consumers. Therefore, the EU could invoke the provision allowing for a delay in the ban on imports from Russia, as EU rules provide for this possibility in the event of force majeure. Alternatively, the EU could pretend that the LNG is not from Russia, but from Alpha Centauri, the expert quipped. Izvestia: US tightening diplomatic noose around Cuba The US is expanding the Shield of the Americas military and political alliance to increase pressure on Cuba. Meanwhile, the Pentagon has issued another stern warning about the possibility of a military operation. Colombia has become the bloc’s 19th member, and its new President Abelardo de la Espriella has already embarked on a course to fully sever ties with Havana. However, his motives are unclear. Washington will allocate $1 billion to Colombia for joint efforts against drug cartels. The money could be used to rebuild the country following a devastating earthquake. Colombia’s accession to the Shield of the Americas is a psychological ploy by the US to demonstrate Cuba’s isolation in the region, American studies expert Vladimir Pavlov told Izvestia. According to him, Washington officially considers South America its "backyard," where the presence of external players is undesirable. Currently, the White House lacks the resources and capacity for a new war following the conflict in Iran, so it is mobilizing third-party resources and applying diplomatic pressure. The expert added that the US has effectively equated drug traffickers with terrorists, creating a new pretext for intervention to replace the previous "red flag" of weapons of mass destruction, under the guise of which Iraq was bombed. It was precisely under the pretext of fighting narco-terrorism that the Americans previously kidnapped Venezuelan President Nicolas Maduro, so the fight against the cartels is secondary in this case and entirely subordinate to political goals, Pavlov noted. This US hardline stance is fully in line with the policy of the new administration in Bogota. Colombia’s accession to the Shield of the Americas is a consequence of a domestic shift in power, not a turning point for Cuba, Viktor Heifets, a professor at St. Petersburg State University, stressed. The new Colombian president considers Havana an "accomplice to terrorism" for harboring militants. Immediately after his inauguration, he initiated a reform to completely sever diplomatic relations with Cuba and Nicaragua. Meanwhile, expanding the alliance benefits US President Donald Trump ahead of the November congressional elections. According to Heifets, the size of the bloc is important to the American leader so he can demonstrate to voters that he has his own military alliance, which is something that was lacking under the Joe Biden administration. Kommersant: Major global currencies’ exchange rates hit five-month highs on Russian market The exchange rates of the world’s leading currencies on the Russian market reached five-month highs. The over-the-counter dollar exchange rate exceeded 84 rubles, and the exchange-traded yuan rate approached 12.5 rubles. The summer decline in global oil prices and the widening discount on Russian Urals crude oil led to a significant reduction in the currency supply, exacerbated by the Finance Ministry's increased currency purchases. While rising tensions in the Middle East periodically lead to higher oil prices, in the long term, the persistent discount will only provide limited support for the ruble. The main reason for the ruble’s weakening over the past few weeks remains the limited supply of foreign currency, primarily from exporters, while demand from importers is increasing, BCS World of Investments analyst Dmitry Babin told Kommersant. According to the Bank of Russia’s latest Financial Market Risk Review, net foreign currency sales by major exporters totaled just $2.2 billion in July, the lowest level since the beginning of 2023. In contrast, the average volume of sales over the previous three months was $8.6 billion. "The effect of reduced sales by exporters manifests with a lag of one to one and a half months. The impact of last month’s sales is still being felt in August," Finam analyst Nikolay Dudchenko noted. Meanwhile, factors that will reduce the pressure on the Russian currency are set to take effect at the end of the month. The conflict between Iran and the US has pushed Brent crude oil prices above $90 per barrel and near the $100-per-barrel mark. The regulator’s continued tight monetary policy also supports the ruble, Nikita Bredikhin, lead investment analyst at Go Invest, pointed out. "Maintaining a high key rate, as well as hawkish statements from the regulator, makes ruble-denominated investments attractive to investors because the high rate guarantees higher returns," the expert said. Nevertheless, market participants expect the ruble to weaken in the longer term. Amid ongoing geopolitical tensions, Russian oil is trading at a significant discount to global prices, Babin stressed. In June and July, the discount stood at $20-30, and if the geopolitical situation continues to deteriorate, "the price gap could widen," the expert emphasized. This situation will affect the volume of foreign currency revenue and consequently exert pressure on the ruble exchange rate, he said. 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