Russian media coverage focused on several major events this week: the OPEC summit in Vienna, the resignation of U.S. Secretary of Defense Chuck Hagel and France’s decision to postpone indefinitely the delivery of two Mistral amphibious assault ships to Russia.
Secretary General of OPEC Abdalla Salem El-Badri of Libya speaks during a news conference after a meeting of the Organization of the Petroleum Exporting Countries, OPEC, at their headquarters in Vienna, Austria, November 27, 2014. Photo: AP
The OPEC summit and oil prices
The Nov. 27 meeting of the Organization for Petroleum Exporting Countries (OPEC) was undoubtedly the central event of the week. Even before it kicked off in Vienna, Russian media were peppered with articles speculating on the likelihood or improbability of imminent changes to world oil markets. The business papers (Vedomosti, Kommersant) and opposition media (Slon) were busy counting up Russia’s accumulated losses from the drop in oil prices, and were generally pessimistic about the prospects of an agreement between OPEC and Russia. Pro-government media (Izvestia) posited that the situation regarding formal agreements with OPEC was not as simple as it may seem.
An editorial in Vedomosti cited Finance Minister Anton Siluanov as estimating Russian losses from the 30 percent dip in oil prices at around $90-$100 billion per year — a more painful blow than sanctions, which have cost Russia $40 billion. The article concluded that, “for Russia, the task of working out how to cut budget expenditure is more urgent than trying to build a united front with OPEC.”
Yuri Barsukov and Kirill Melnikov of Kommersant emphasized Russia’s lost revenues would force it to reduce production unilaterally, because other major oil exporting countries, in particular Saudi Arabia, are more capable of withstanding lower prices. The journalists suggested that “for Russia, an oil price of $80 per barrel may not be critical, but companies’ plans, in particular those of Rosneft, will be affected.”
Meanwhile, Sergei Khestanov, an analyst for the liberal online newspaper Slon, focused on the economic losses and potential social disruptions faced by all oil-exporting countries.
“The snag is that there is really no way out for these countries,” he wrote. “Whatever decision is taken in Vienna, it will lead to a loss of revenue — either from reduced export volumes or lower oil prices. Many oil exporters are threatened by social upheavals, making the decision-making process very hard for governments.”
Arseny Pogosyan of the pro-Kremlin newspaper Izvestia wrote that Saudi Arabia aims to maintain current production rates and lower oil prices as a means of deterring future production from U.S. oil companies, which have become major players as a result of the “shale revolution.” In that sense, OPEC’s decision represents a small act of defiance on the part of Saudi Arabia, one of America’s key allies in the Middle East.
“The decision primarily benefits Saudi Arabia,” writes Pogosyan. “Although Saudi Arabia enjoys very strong positions in OPEC, it would not risk openly opposing the United States.... As the strongest member of OPEC, Saudi Arabia is reducing prices by retaining quotas in an effort to slow down the shale oil boom in the US, making shale drilling less profitable.”
Hagel’s resignation: will U.S. rhetoric soften or stiffen?
Russian media actively discussed the resignation of U.S. Secretary of Defense Chuck Hagel. Pro-government media (online portal Actualniye Kommentarii [Actual Comments]) insisted that the White House will be unlikely to change its policy, while the independent and business press (Kommersant, Vedomosti) tried to understand Obama’s logic. Curiously, the most significant liberal media outlets (radio station Echo of Moscow, newspaper — Slon, Nezavisimaya Gazeta, Novaya Gazeta) didn’t cover the news in detail, limiting themselves to formal reports and links to the New York Times.
Actualniye Kommentarii cited military expert Viktor Zavarzin, who noted that “one should not expect anything good — a softening of the rhetoric or compromise solutions — from the United States.”
“Washington has made it clear that it will act tough on Russia,” he remarked. “This resignation helps preserve Obama’s image. Chuck Hagel is a Republican, and Obama has opted to surround himself with Democrats and spend his remaining time in office on this critical area of foreign policy, above all Ukraine and the Middle East.”
Kommersant reporter Olga Kuznetsova, citing expert commentators, drew attention to the internal contradictions in the U.S. political system.
“Kommersant canvassed expert opinion and found that most believe the real reasons for Chuck Hagel’s resignation to be rooted in the face-off between the key political forces in the United States and the fact that throughout its tenure the Obama administration has been unable to find common ground with its opponents,” the article said. “The rout of the Democrats in the mid-term elections played a decisive role in Mr. Hagel’s exit.”
President Barack Obama, left, listens as Defense Secretary Chuck Hagel, right, talks about his resignation during an event in the State Dining Room of the White House in Washington, Monday, November 24, 2014. Photo: AP
Marie Mesropyan of Vedomosti disagreed with the experts interviewed by Kommersant, citing the failure of U.S. Middle East policy as the reason for Hagel’s resignation, as well as the failure to frame a strategy to deal with Islamic State. In addition, she noted that the antagonisms surrounding Syria and Ukraine took a toll.
“According to anonymous U.S. officials, Hagel’s departure came after criticism of Washington’s foreign policy in the fight against Islamic State militants in Iraq and Afghanistan, as well as his conflicts with White House officials over Ukraine and Syria,” she wrote.
The Mistral carriers: No sale, for now
News that France postponed indefinitely the delivery of naval vessels to Russia received a mixed reaction from the Russian media. The pro-government press (Rossiyskaya Gazeta, Actualniye Kommentarii) displayed an understanding of France’s position and the pressure it faces from the the U.S., while opposition media (Echo of Moscow) seemingly could not decide which angle to take.
The online portal of opposition radio station Echo of Moscow hosted an entire debate between the project’s two resident authors, Matvei Ganapolsky and Andrei Belkevich.
Ganapolsky argued that France was in the right for declining to bow to Kremlin blackmail and asserting its right to advocate European values (including transatlantic unity).
“Mr. Hollande seems ready to accept financial losses, but not to sacrifice his European country’s image,” he said. “He believes that French voters would not want to see Mistral vessels being used to protect the annexed Crimea, which is the reason for the sanctions in the first place, or maybe even as a platform from which to launch fire and aerial assaults on Ukraine.”
Belkevich, on the other hand, said that Ganapolsky’s portrayal of President Hollande as a “fearless knight unflinching in the face of Kremlin blackmail, nobly refusing to deliver the helicopter carriers” reveals an unfamiliarity with French realities. “The French people consider their president to be politically impotent and wholly incapable of taking decisions, while those that he does take are always out of place.”
Moreover, he stressed that France’s image is suffering most, and not only abroad, but also domestically, since, according to polls cited by Belkevich, 78-83 percent of the French public believe that the Mistrals should be delivered.
Rossiyskaya Gazeta gave the floor to the head of the State Duma Committee on Foreign Affairs, Alexei Pushkov, who spoke directly about America’s role in the Mistral saga. “Three billion euros is the price of France’s potential refusal to deliver the Mistrals,” he remarked. “That way, the United States is making Europe pay for its sanctions against Russia. And Europe is acquiescent.”
Actualniye Kommentarii quoted Vasily Dandykin, who said that “the French are not against delivering the ships sooner or later, but presently find themselves under extreme pressure from NATO and the U.S.”
“The West is frantically looking for buyers for these vessels so as not to deliver them to Russia,” he said. “The U.S. has no regard for French shipbuilders or the French budget. The problem lies in the autonomy and independence of French politics and politicians. If the country was led not by Francois Hollande, but by a politician of the stature of Charles de Gaulle, whose words carried weight, France would leave NATO.”