Russia Cheated by Grain Deal, Gas Price Cap Stupid: Putin

 

Russian President Vladimir Putin has warned of a looming global food crisis and said he would discuss amending a landmark grain deal with Ukraine to limit the countries that can receive shipments.

Putin claimed that and the developing world had been “cheated” by the grain deal and that he would discuss “limiting the destinations for grain and other food exports” with Turkey’s President Tayyip Erdogan, who helped broker the deal to free up exports from Ukraine’s southern ports in July.

Putin, who spoke at the Eastern Economic Forum in Vladivostok, also said some restrictions on Russia’s fertiliser exports had been eased, but problems remained. He pledged to revise the deal to ensure it reaches its original goals.

Russia earlier questioned the UN-brokered deal at the United Nations, accusing Western states of failing to honour pledges to help facilitate Russia’s shipments.

However, a Ukrainian presidential adviser said Putin’s remarks were extraordinary because the Istanbul agreements only concerned the transfer of cargo ships through the Black Sea.

 

ALSO SEE: India Likely Selling Refined Russian Oil to West, Study Says

 

 

Czechs Cool on Gas Price Cap

Putin was a figure of defiance. He described Europe and the US’s idea for a price cap on Russian gas as “stupid” and said Russia would walk away from its supply contracts if the West imposed price caps on Russia’s exports.

The US Treasury is seeking to design a simple compliance regime for enforcing a price cap on Russian oil exports and hopes that China and India will join the coalition or at least take advantage of it, Deputy Treasury Secretary Wally Adeyemo said.

But Putin said: “This is another non-market solution that has no prospects. All administrative restrictions in global trade only lead to imbalances and higher prices,” he said, adding that global demand for Russian energy was high.

EU energy ministers are due to meet on Friday to discuss how to respond to reduced gas supplies from Russia and a surge in prices that threaten to overwhelm businesses and consumers as demand rises in the colder months.

However, the plan to cap prices for Russian gas – one of the main measures being weighed by the EU – was thrown into doubt when a Czech minister said it should be taken off the agenda. The Czechs are helping to guide discussions as holders of the EU’s rotating presidency.

“It is not a constructive proposal, according to me. It is more another way to sanction Russia than an actual solution to the energy crisis in Europe,” Czech news agency CTK quoted Industry Minister Jozef Sikela as saying.

The energy crisis that Europe faces has grown more acute after Russia’s Gazprom fully suspended gas supplied through the Nord Stream 1 pipeline to Germany after it said it found an engine oil leak during maintenance work last week.

Gazprom has said it will sell gas to China using a 50-50 split between the Russian rouble and Chinese yuan, Putin said, to avoid the US dollar.

How the gas cap idea will play out is hard to determine, but it’s worth noting that efforts to contain exports of Russian oil and other major commodities such as coal have only had partial success.

Russia has boosted exports of cut-priced oil to India by a considerable amount since the war in Ukraine began in late February, and some Indian refiners are believed to mixing that crude and selling it to the US and other countries with sanctions imposed on Russia, such as South Korea, Australia and the Netherlands.

Moscow also became India’s third largest supplier of coal in July, via deals that have so far avoided sanctions by use of major Asian currencies, such as the yuan, the Emirati Dirham, and the Hong Kong dollar.

Meanwhile, Myanmar, another global pariah, has started buying Russian oil products and is ready to pay for deliveries in roubles, the RIA news agency cited junta leader Senior General Min Aung Hlaing as saying.

 

West is ‘in Decline’

Putin used his speech to hit back at his many detractors. The West, he said, was in decline, and Asia was the future of economic power.

“The role of dynamic, promising countries and regions of the world, primarily the Asia-Pacific region, has significantly increased,” Putin said.

Among guests at the forum was China’s top legislator Li Zhanshu, currently ranked No-3 in the Chinese Communist Party.

Putin also discussed Russia’s expanding trade with Asia’s top economies, while downplaying the ability of Western sanctions to hurt his country’s economy.

The Russian economy was coping with what Putin called the financial and technological aggression of the West, although he acknowledged difficulties in some industries and regions. Firms that depended on supplies from Europe were among those struggling, he conceded.

The West had undermined the global economy with sanctions, in what the Russian leader said was a “futile” and aggressive attempt to impose its hegemony.

“I am speaking of the West’s sanctions fever, with its brazen, aggressive attempt to impose models of behaviour on other countries, to deprive them of their sovereignty and subordinate them to their will.”

The United States and its allies imposed the most severe sanctions in modern history on Russia for what Putin casts as a ‘special military operation’ in Ukraine, a response the Kremlin says is akin to a declaration of war.

But Putin said it would be “impossible” to isolate Russia and that Moscow would defy the West’s attempts to push Russia off the global stage.

He said Russia saw more opportunities in entering markets in the Middle East and Iran, following the imposition of Western sanctions.

“Irreversible and even tectonic changes have taken place throughout international relations,” he said, pointing to Asia as the future.

In related news, the White House said Russia could be about to buy “literally millions” of artillery shells and rockets from old Cold War ally North Korea.

 

• Reuters, with additional editing from Alfie Habershon and Jim Pollard

NOTE: Further details were added to this report on Sept 7, 2022.

 

 

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