"How The World Sees Russia"

Issue #43: 02/09/2019

From the Publisher:

The Arctic is making rumblings again.

Although mostly for show, we start of this issue by looking at Moscow’s latest decision to begin fighter jet patrols near the Arctic circle. This is an area of increasing geopolitical interest for several nations with northern territories. New potential shipping routes and undiscovered oil are just some of the reasons why Russia, and other players want to make sure their presence is felt.

Russia and the U.S are no longer abiding by the INF treaty. This reality is likely to heat up the arms race in regards to mid-range missiles. However, there has already been an arms going on between both Russia and the U.S as far as the development of defense technology. Both are the main players in this highly lucrative industry, and this coupled with their geopolitical aims has added fire to the competition.

The EU is inching towards the development of a proper united defense policy, which could include a standing army. This idea is still far from reality, but it appears to be making headway. We look at what this means for Russia from a geopolitical perspective with the latest happenings for context.

Finally, OPEC is trying to make their alliance with Russia permanent. We look at why this is unlikely, but also why this ad-hoc agreement is likely to be extended further in the short-term.

-Rossiya Scan

Russia To Resume Arctic Patrols….

Today’s ongoing New Cold War seems to have hit another symbolic milestone.  Moscow announced that it would resume air patrols in the Arctic, much like it did during the Cold War

"The Defense Ministry has decided to deploy two of the Northern Fleet's MiG-31 squadrons at the Monchegorsk air base before the year is out,” said a Russian Defense Ministry source, according to the arctic.ru website. “The possible establishment of a new air force regiment on their basis will later be discussed."

As previously mentioned in a prior issue,​ the Arctic is another global flashpoint where Russia and the West are at odds. The polar ice caps are melting, new shipping routes are developing and the potential for finding undiscovered oil has made this a place the setting for potential conflict. So much so, that both Russia and NATO have carried out military drills in this frozen landscape. 

Russia is unsurprisingly one of the biggest players in the Arctic. All of its northern regions border it, and with the high possibility of oil being discovered in the area, the Arctic is an obvious place of interest for its important energy industry.

The MiG-31 fighters are to begin patrolling the Arctic air space over the next few weeks. These jets are expected carry Kinzhal (Dagger) hypersonic air-to-air missiles. The latter are said to be highly accurate, but yet another form of saber rattling by Russia. Why? The area is so vast that Russia would require a lot more squadrons to properly defend it from the U.S should a hot war ever break out. Russia currently does not have the required number of fighter jets to carry out this defensive feet.

One squadron, in the region or Murmansk will be in charge of the patrols in European Russia. While others stationed in Kamchatka will do so from Russia’s Asian side. Both squadrons will be controlled by the Russian Navy, and not the Air Force. They are expected to take place regularly until the the end of 2019. Bombers will also occasionally make patrols in the area and be escorted by these fighter jets. 

These patrols are a way of showcasing Russian sovereignty, and keeping foreign powers at bay. They are also a way for Russia to let the U.S know that it is dusting up old plans from their Cold War defense playbook, and updating it accordingly with their current capabilities.

Read more:

"Russia Resumes Fighter Patrols Over the North Pole," by Kyle Mikozami for Popular Mechanics. 

"Media: Moscow To Deploy Fighter Regiment in Russian Arctic," by the Arctic staff. 

"Russia Resumes North Pole Patrol with Fighter Jets," by Thomas Nilsen for the Barents Observer. 

"Claiming the Arctic: Russia To Begin Sending intercept Fighters On North Pole Patrols," by Alex Hollings for NewsRep. 

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Let The Arms Race 3.0 Begin...

“I know not with what weapons World War III will be fought, but world War IV will be fought with sticks and stones” - Albert Einstein, Theoretical Physicist 

Since the beginning of times we have been in conflict with one another, developing technologies which have changed the course of history, always looking for an edge on our rivals intentionally wanting to subdue them; gunpowder, steam engine, rockets to nuclear fusion. The latter having the capability to annihilate mankind, acted more as a deterrent than a WMD (Weapon of Mass Destruction).

We have previously discussed Russian weapon development and the Geo-Strategic implications it could have, such as the S400 SAM ​(Surface to Air Missile) and the potential it has to tilt the scale of power from one axis to the other.

Furthermore, we have always focused on the defensive military capabilities developed by the Russians, rather than on the offensive which is more resource intensive and complicated to develop.

Given the recent political panorama with the mutual removal by the U.S and Russia from the INF treaty, and development of cutting edge technologies; Russia has developed some game changing offensive weaponry bolstering the reality of a new arms race.

Recently the weapon imaginativeness of Russians has caught our attention. This may sound like straight out from a Sci-Fi novel, but its not. Russians have developed a non-lethal weapon, which fires a beam similar to a blinking light to hinder its enemies causing blindness and nausea, reducing enemy troops capabilities. This weapon has been deployed and tested effectively in cruise ships. Thus it will initially be used by the Russian Navy compensating for their weaknesses if ever confronted with the U.S, or maybe China? Who knows…

However, the aforementioned is a taste of what’s to come. From underwater missiles which can strike undetected from the abysm of the ocean, to a mobile laser from the likes of a James Bond movie. The more recent, is well equipped for conventional warfare. This artifact has the capability to neutralize large drone attacks as Russia suffered recently in Syria, highlighting one of its many military capabilities. Another, allows this laser to recharge drones in motion with the beam being a great addition for air defense and electronic warfare systems. We know, sometimes reality surpasses fiction.

Going back to our initial statement by the genius Albert Einstein, we are currently in the midst of point of no return. Tensions are escalating between global powers, however actions and political strategies are giving mixed signals as to who is really aligned and who is not. Notwithstanding, actions have a bad habit of going crescendo when a nation wants to stand its ground.

We already highlighted the outcome of the previous arms races, the first led to World War 1 and the most recent almost destroyed us during the Cold War period. The feeling is that major powers are gearing for what could or may already be a “fait accompli”.

Read more: 

“Top 20 Greatest Inventions of All Time,” by Paul Ratner for Big Think.

“Russian Warships Reportedly Fitted With Device to ‘Blind’ and Induce Nausea in Enemies,” by Nick Whigham for News. 

“A Renewed Nuclear Arms Race Between Russia and U.S. Begins to Gather Pace,” by Pavel Felgenhauer for Real Clear Defense.

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Are We One Step Closer To An EU Army?

“When two brothers are busy fighting, an evil man can easily attack and rob their poor mother. Mankind should always stay united, standing shoulder to shoulder so evil can never cheat and divide them,” - Suzy Kassem, American Writer. 

Russia’s greatest threat, or perceived fear is growing stronger by the day, or perhaps slowly crumbling; depending which angle you eye it from.

In prior issues, we have discussed NATO flirting with what’s perceived to be greater Russia (or its buffer zone).  In the eyes of Russia, this task force was created to contain Soviet power in Europe and globally.

Notwithstanding, rapprochement on one side means nothing if the core of NATO is not in tune with the rest of its members. U.S President Donald Trump has been voicing threats of the U.S leaving NATO, which would have major geopolitical consequences.

First and foremost, Russian President Vladimir Putin is probably staying put and watching these announcements with a grin in his face. However, a new threat is emerging and becoming more of a reality as the days go by, that’s the possibility of a European army led by Germany and France.

On the other hand, all buffer nations toying with NATO could fall once again into the paws of Russia if the U.S leaves NATO, which would result in withdrawal of most of the forces and resources allocated to this military alliance, weakening it considerably.

We believe that the possibility of a European army, co-led by Germany would create a new threat to Russia. It would also likely bring up ghosts from the past, as we have discussed in previous issues. Germany has been attempting to implement this initiative for quite some time​, and has already began integrating army units from different nations within their command such as Romania and Czech Republic. Now it seems that France is fully on-board with this initiative, yet it remains to be seen if this is not simply a political stunt.

Currently the U.S and Europe are in quarrel, in many issues besides the minimum budget required to be spent by NATO members. Nonetheless, European and American brotherhood is busier arguing than uniting (without factoring the divisions in Europe).

This could potentially end in two ways. The first will simply mean a bump in the road and all sides will co-exist in harmony, possibly emerging stronger if the European army is created along side NATO. Second, the U.S leaves NATO and re-enters a period of military isolationism as North America did after World War 1. Whilst Europe decides itself on how to unite to confront a potential threat like Russia in the future.

All in all, we believe that Russia is content with all this chaos and dispersion as it facilitates its ability to fulfill its political agenda slowly advancing to reach its goals.

Read more: 

“New German CDU Leader Calls For Creation of European Army,” by Jim Brunsden for the Financial Times. 

“Trump 'might actually leave Nato', former US ambassador says,” by Tom Embury-Dennis for the Independent. 

“A True European Army is Coming,” by Louis Cox-Brusseau for Global Risks Insights.

“Trump Discussed Pulling U.S. From NATO, Aides Say Amid New Concerns Over Russia,” by Julian E. Barnes and Helene Cooper for the New York Times

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OPEC Wants To 'Marry' Russia...

The ad-hoc alliance between Russia and the Organization of Petroleum Exporting Countries​ (OPEC) has garnered support from key players in the industry. Saudi Arabia and the United Arab Emirates (UAE) want Russia to commit to another 3 years of ongoing controlled oil-supply.

As we have discussed in several prior issues, Saudi Arabia (on behalf of OPEC) and Russia (on behalf of non-OPEC nations) have carved out an informal alliance that has successfully managed oil prices.

This partnership, which has been commonly referred to as the  OPEC+ coalition first reached a deal in 2016. The group of oil producing countries agreed to reduce their oil output in an effort to quell the oil price downturn. This group of oil producers briefly lifted their self-imposed oil production caps in 2018, but also agreed to production cuts last December, as a response to the collapse of oil prices of last year.

It has long been mentioned by the press and analysts, that current OPEC Secretary General Mohammed Barkindo, along with other major OPEC players, have made attempts to formalize the alliance with Russia. However, Russia has not expressed an interest in formalizing it.

"It is an effort to put a formal framework around an ad hoc relationship," said Helima Croft, global head of commodities strategy at RBC Capital Markets, according to CNBC. 

Fears of another price crash are fueling a push by some in OPEC towards the creation of a more long term agreement. This agreement would reassure oil traders that a crash is less likely. Brent crude has rebounded to about $62 a barrel after a crash of almost 50 percent. That being said, the price is struggling to break above $65 a barrel. Moscow is well positioned to balance its budget at the current price. Saudi Arabia and other OPEC members are not.

How likely is it that this to happen?

In our opinion, a continuance of this deal is likely to be made or further explored. As stated in several prior issues, Moscow is fine with the current price, as they have planned their budget for lower prices.  However, Russia is clearly aware of the choppy waters that still surround the price of oil, and with its precarious economic situation due to sanctions, it rather have assurances that it can at least maintain the price at a desired point. However, a permanent alliance  or agreement of sorts is likely to be ignored by Moscow. The current ad-hoc system works, and both Russia and Saudi Arabia have proven that they can achieve this without the need of a formal entity. Russia is also heavily involved with Iran in various geopolitical pursuits. Tehran (an OPEC member) is not a fan of handing so much control to Saudi Arabia, which they perceive as their regional rival.

Last December, Russian Energy Minister Alexander Novak tossed the idea of a permanent alliance with OPEC.

"There is a consensus that there will be no such organization, " said Novak last December, according to CNBC.  

Novak also cited concerns about the No Oil Producing and Exporting Cartels Act (NOPEC). The latter is a bill currently being considered by the U.S congress which  would authorize the U.S Justice Department to sue groups like OPEC. Such a law would strip countries engaged in alleged price fixing from the sovereign immunity protections that currently exist within the U.S. legal system.

Read more:

“OPEC Pursues Formal Pact with Russia,” by Benoit Faucon and Summer Said for the Wall Street Journal.

“Some OPEC Nations Are Reportedly Trying to Extend Oil Cooperation with Russia for Another Several Years,” by Tom DiChristopher by CNBC.

“OPEC Seeks Formal Marriage with Russia,” by Irina Slav for Oilprice.com.

“Crude Oil Prices Rise on Supply Data While OPEC, Russia Debate Marriage,” by Gillian Rich for Investor’s Business Daily.

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