MOSCOW, April 16. /TASS/. Pakistan steps up efforts toward a ceasefire between the United States and Iran, and Russia joins negotiations to unblock the Strait of Hormuz. Meanwhile, the Gaza destiny may await Lebanon amid continued Israeli attacks. These stories topped Thursday’s newspaper headlines across Russia.
Pakistani Prime Minister Shehbaz Sharif is looking to intensify the negotiation process between the United States and Iran as he is trying to secure support from all players in close vicinity to Iran which are interested in peace. Sharif has departed for a tour of Saudi Arabia, Qatar, and Turkey. According to a statement from the Pakistani Foreign Ministry, Saudi Arabia and Qatar will host bilateral talks involving the Pakistani PM, and in Turkey he will attend the Antalya Diplomacy Forum on the sidelines of which he will hold a meeting with Turkish President Recep Tayyip Erdogan.
In an interview with Nezavisimaya Gazeta, Alexey Portansky, Professor at the Faculty of World Economy and International Affairs at the Higher School of Economics, noted: “There is a hope that talks will yield results. Experts have to take the unpredictability of the US side into account. Many representatives of the American elite acknowledge that [US President Donald] Trump is a little crazy. And yet there is a chance of success.” Commenting on why Pakistan is playing the role of a mediator, the expert explained that the country takes an even-handed approach toward the conflicting sides and that it suits both Tehran and Washington.
Asked if China, a patron and almost an ally of Pakistan that is not directly involved in the US-Iranian talks, could influence them with Pakistan’s mediation, Alexander Lomanov, deputy head of the Russian Academy of Sciences’ Institute of World Economy and International Relations, told Nezavisimaya Gazeta: “China can help only those countries which are willing to negotiate. And there are no tools for putting military or economic pressure on any party that China could officially use. Of course, China has investments in Iran and it could help rebuild those sectors of the economy which were destroyed by the Americans if there is peace. However, Beijing cannot pressure the US into treating Iran more gently. I am afraid if Washington is tough on Iran, blocking Iranian hydrocarbon exports to China, Trump’s visit to China, scheduled for May, may as well be cancelled.”
In an interview with Nezavisimaya Gazeta, Indian reporter Vinay Shukla said: “Firstly, Pakistan is a neighbor of Iran. Secondly, Trump has a long-standing close relationship with [Chief of Army Staff of Pakistan] Asim Munir. Moreover, the Pakistani embassy represented Tehran’s interests in Washington after the Islamic revolution in Iran when Tehran and Washington severed ties. And thirdly, Indian Prime Minister Narendra Modi paid a visit to Israel a couple of days ahead of the Israeli bombing of Iran. So, it would have been hard for India to claim to act as a mediator.”
Media: Russia joins negotiations to unblock Hormuz Strait
Russia has joined the debate about the security of navigation in the Strait of Hormuz, Russian Deputy Foreign Minister Alexander Alimov told Izvestia. Also, work on a joint Russian-Chinese draft UN Security Council resolution on the Iranian issue is underway. However, the senior Russian diplomat said further steps on that document will depend on talks between Tehran and Washington that may resume in the next 24 hours.
The situation in the region has already caused major logistical disruptions, with the crews of multiple vessels refusing to enter the waterway amid threats. Against this backdrop, UN Secretary-General Antonio Guterres has set up a task force to facilitate transit, an idea that has been questioned by diplomats. “This initiative includes creating certain structures by the UN Secretariat. It is difficult for me to judge if Gulf countries and Iran support the initiative,” Alimov said. “Our joint draft resolution with China is on the negotiating table at the UN, we have officially endorsed it. We are monitoring the overall progress in negotiations between Iran and the United States which have already held one round of talks. Hopefully the negotiations are not over and will continue,” the diplomat explained.
Meanwhile, Iran has linked the prospects of talks with the US to the situation in Lebanon. Tehran views continued Israeli strikes as a factor that undermines confidence in diplomatic efforts. “Talks between Iran and the United States are key: if they are successful, this will have a positive impact on the situation in Lebanon,” Jamal Wakim, a professor at Lebanese University, noted.
Yury Lyamin, a senior researcher at the Center for Analysis of Strategies and Technologies, told Vedomosti that Iran and the United States have been cautious ahead of a new round of talks. On Wednesday afternoon, the AP reported, citing sources, that Iran and the US have agreed in principle to extend the ceasefire, even as Trump said in public that he sees no need for an extension of the truce with Iran, according to ABC journalist Jonathan Karl. “The blockade itself is an act of war, and things can be escalated very fast,” Lyamin argued.
A combination of the US blockade of Iranian oil exports and Iranian moves to let only friendly vessels pass could come next, director of the Center for Military-Economic Studies at the Institute of World Military Economy and Strategy of the Higher School of Economics Prokhor Tebin told Vedomosti. “But that situation would be bad for both Iran and the United States as it would not solve their problems in the short term. And it would be bad for the world economy, too. To achieve its objectives, the US would need to reopen the strait for everybody and block access to the sea for Iran,” Tebin said. According to him, the war could continue as, judging from the deployment of another aircraft carrier in the Arabian Sea, a group for serious operations is currently in the making.
The Israel Defense Forces (IDF) continued the ground operation in southern Lebanon, despite direct talks on a ceasefire between Israeli and Lebanese negotiators, the first in the past 33 years, the IDF said on April 15.
And while Iran and the United States announced a two-week ceasefire on April 8, Israel has so far refused to expand this truce to Lebanese territory. However, Hezbollah’s resistance has not been broken: on Wednesday, the Shiite movement fired about 40 missiles at Israeli cities from Lebanon, and the Israeli Air Force struck more than 200 military targets in response, the IDF reported.
Israel is likely to continue military operations against Hezbollah, even though the campaign will not be an easy walk for the Israeli army, Alexander Nadzharov, an analyst at the Faculty of World Economy and International Affairs of HSE University, believes. Firstly, the Shiite group has recovered from the previous war as it continues to deliver painful strikes on IDF positions, and secondly, the movement has a wide assortment of weapons in its arsenal, the expert said. “Should the Israeli military decide to transform southern Lebanon into a second Gaza, the Jewish state may face not only stronger military resistance but also sanctions from a number of Western countries,” he warned.
The Israeli army has been steadily eliminating Lebanese localities in the southern Arab republic so it can turn this territory into scorched earth later, Nikolay Sukhov, senior researcher at the Russian Academy of Sciences’ World Economy and International Relations Institute, told Vedomosti.
Nadzharov doubts any breakthrough is currently likely in the Lebanon-Israel talks. On the one hand, the two sides will not be able to reach a compromise without Hezbollah. On the other hand, the expert continued, Israel is not seeking to end the conflict peacefully. “In the short term, Israel will try to keep the United States in the Middle East war to avoid being left alone with Iran and its regional allies,” the expert explained.
It will be extremely difficult for Lebanon to find common ground in negotiations with the Israelis, Sukhov agrees, regardless of whether Hezbollah takes part in the process or not.
Even if Israel and Lebanon manage to reach an agreement, it would hardly be possible to achieve a longer-term stabilization in the region without functional instruments, Lyudmila Samarskaya, a researcher at the Center for Middle Eastern Studies at the Russian Academy of Sciences’ World Economy and International Relations Institute, told Vedomosti. “Moreover, for the time being, it is hard to imagine that Hezbollah would lay down arms voluntarily, therefore a potential ceasefire will likely be violated regularly,” the expert argues.
The Bank of America Fund Manager April survey showed that investor sentiment has deteriorated sharply. Bearish positioning regarding global growth outweighed the bullish signal for the first time this year. Market players expect that the lengthy conflict in the Middle East will keep oil prices near $80-100 per barrel for long, fuel inflation, and force central banks to adopt monetary tightening. As a result, fund managers are cutting equity exposure. The last time wealth managers were as bearish was in the spring of 2022 when the special military operation in Ukraine was launched.
Fund managers have a negative outlook on the consequences of the lengthy closure of the Hormuz Strait. The market has been the most vulnerable to falling energy supplies which has already pushed Brent spot prices above $120 per barrel. “Higher energy prices and logistics costs will put pressure on economic growth and accelerate inflation,” portfolio manager at Doveritelnaya brokerage Dmitry Terpelov told Kommersant. This may require a tighter than expected monetary policy of global regulators, the expert warned.
“Fund managers can already sense a systemic deterioration of conditions even as they do not see sufficient grounds to shift to a full-blown recession scenario. Therefore, expectations remain in the ‘soft landing’ zone, despite rising anxiety,” Yelena Nefyodova, the head of investment office at Astero Falcon, said.
The Middle East conflict has had limited impact on the Russian stock market even amid an increase in Russian crude prices. According to Argus, between April 1 and 13, the average Urals price was $106 per barrel, or 40% higher than the March average. “Despite rising oil prices that have supported exporters and the budget, the key pressure on the market comes from internal factors: the risks of a heavier tax burden, including through the excess profit tax, as well as an economic slowdown,” Ruslan Klyshko, Director of the Wealth Management Department at AF Capital Asset Management, told Kommersant. He pointed to the continued investor demand for money market instruments, the shares of banks and individual oil and gas companies, and gold.
In March, Russian coal exports increased 8% year-on-year to 16.9 million metric tons, or the highest level since November, a report by PBC Index seen by Vedomosti shows. The figure saw a 16% rise from February.
Exports rose despite a decline in demand for Russian coal from the largest importer, China. Last month, China, excluding Taiwan, reduced purchases by 20% to 6 million metric tons, data from PBC Index showed. India, the second-largest buyer of Russian coal, raised imports by 1% to 2.7 million metric tons. Certain countries also increased purchases, with Russian coal exports to South Korea rising 37% to 1.9 million metric tons and to Turkey by 17% to 1.6 million metric tons in March. Exports to Taiwan grew by 11% to 309,000 metric tons.
The March increase in Russian coal exports to Turkey, South Korea, and a number of other markets came amid a spike in gas prices due to the blockade of the Strait of Hormuz as a result of the armed conflict in the Middle East, PBC Index analyst Danil Udachin explained.
The main reason for the rise in Russian coal exports in March was the impact of the Middle East conflict on the coal market, experts argue. Disruptions in gas supplies from the region pushed not only demand for coal as an alternative energy source but also coal prices higher, Alexey Kalachev, an analyst at Finam, said. Coal exports in April will depend on how the situation in the Middle East evolves, he argues. Until the armed conflict in the region is over, exports will continue to grow, Maxim Shaposhnikov, an advisor to the manager of the Industrial Code fund, believes.
According to his estimates, the April figure will rise to 17.4 million metric tons.
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