Russia Faces Extreme Challenges After Iran Deal

by NewsStand

While the top US officials fear that Russia might attack Ukraine in the nearest future, the whole world is wondering whether European Union is going to lift the economic sanctions that are crippling the Russian economy or, on the contrary, impose more sanctions.

However, the sanctions are not the only problem for Russia now. After world powers negotiated the framework deal with Iran, which dismantles its nuclear program in exchange for lifting economic sanctions that have worsened the state of Tehran’s economy, Russia faces new challenges for its economy.


As a result of the deal, Iran will return to the energy market, which is likely to take down the price of oil to as little as $20 per barrel. That, in turn, means Russia will lose up to 75% of its income from energy, which equals to the collapse of the Russian economy. Brent oil current price is at around $65 per barrel.

Furthermore, the fact that Iran refuses to be a nuclear country will hurt the Russia’s nuclear sector, which has been enriching Tehran’s uranium for the past 7 years.

The number of nuclear clients of Russia is decreasing by the second. Ukraine, which has been the top client of the Russia’s nuclear sector, is posed to develop a cooperation with the US companies in order to upgrade its own nuclear infrastructure.

Russia is not stupid

However, Russia is not stupid, so it takes preventative measures and voluntarily revises its gas contracts not only with Ukraine, but also a number of other European countries in an attempt to decrease the price of gas.

And it’s not just “the Western opinion,” as the supporters of Russia would say. A great number of analytical centers of Russia forecast a drop of Russia’s main economic indicators.

Meanwhile, seeing the tragic situation in the Russian economy, the Kremlin is trying to escape the hardship by adjusting its foreign policy and strategy according to the decrease of its domestic economic numbers. As an example, Russian Gazprom offers its Chinese counterparts mutually beneficial conditions for drilling in the Western Siberia, favorable treatment and other.

The funny part is that Russia is the only one who is responsible for its own collapse (demise, if you will). The Western economic sanctions were not imposed out of the blue. And there are good chances that if Russia starts to adhering to the Minsk ceasefire agreement, the sanctions will be lifted as early as this summer.

Russia increases its presence in Ukraine and prepares to attack

However, Putin doesn’t seem so eager to end the conflict in eastern Ukraine and keeps on fueling it by supporting his pesky rebels in the region.

Putin has recently ordered to increase Russia’s military presence in Donetsk and Luhansk (both in eastern Ukraine) as well as conduct military drills and deploy air defense systems near the frontline.

Furthermore, a State Department spokeswoman, Marie Harf, said last week that there is “the highest amount of Russian air defense equipment in eastern Ukraine since August.”

Meanwhile, US Air Force General Philip Breedlove, the top NATO commander, told the Senate Armed Services Committee Thursday that Russian forces have used a recent lull in fighting in Ukraine to “reset and reposition” while protecting its territory gains.

“Many of their [Russia’s] actions are consistent with preparations for another offensive,” Breedlove warned, according to The Associated Press. Breedlove acknowledged the fact that he was not able to predict the Kremlin’s next move and added that: “What we can do is learn from his [Putin’s] actions.”

Can you predict Putin’s actions?

And really, is there anybody in the world who is able to predict Putin’s actions? It has been more than a year since Russia shocked the world by ordering its troops to annex Crimea.

Later, Putin publicly said that he didn’t regret doing it, hinting that if there will be a similar opportunity, he will do the same thing. The questions is: will the world just sit and watch like it did in case with Crimea?

Despite the recent escalations in eastern Ukraine and Russia’s increased presence at the border of the two countries, the United States President Barack Obama’s administration is still uncertain about providing lethal aid to Kyiv’s government, which would help end the one-year-old conflict in Ukraine.

Although the US has recently sent its 300 troops to train and advise Ukrainian forces in Ukraine, the move is likely to escalate the fighting but not end it.

There have been numerous comments by pro-Russian rebels in Russian media that US’s decision to deploy its troops to Ukraine will only motivate them engage in more severe fighting due to their openly expressed hatred to the Americans.

It all depends on Putin now

As Obama’s softness doesn’t allow him to provide the Ukrainian government with the means of ending the conflict once and for all, it all depends on Putin. As hilarious as it sounds, but it does. It can go either way, obviously.

One of the two scenarios is Putin decides that he is done playing geopolitical games and stops viewing Ukraine as the toy of his interest, which means ending the conflict by withdrawing his troops from eastern Ukraine and ordering his rebels to come to their senses.

The second scenario is far more tragic – escalating the conflict and starting an all-out war.

And while the second scenario is more likely, the world must be prepared for any action the erratic Putin might take. It all might even resolve as early as in just a week, during the World War 2 victory celebrations on May 9.

What if Mr. Putin prepares a surprise for us and plans to end the conflict once and for all? Or will he begin the World War 3?

http://www.valuewalk.com/2015/05/russia-after-iran-deal/

 

 

 

 

 

 

Russia Faces Extreme Challenges After Iran Deal.

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