On February 17th, 2023, in Ryazan, Russia, Kasimovskoye’s underground natural gas storage measures were marked with “keep open”. Image source: vision china
May 18th is the expiration date of the Black Sea Grain Transportation Agreement. The Black Sea Grain Transportation Agreement concluded by Russia, Ukraine, Turkey and the United Nations in July last year has been rescheduled twice. Due to the aggravation of the differences between Russia and Ukraine and the fact that the Group of Seven (G7) gave birth to a new decision on Russia, the uncertainty about whether the agreement can be rescheduled has increased.
On the day before the expiration of the grain transportation agreement, Turkish leader Erdogan announced that Russia was willing to extend the Black Sea grain transportation agreement for another two months. The news was subsequently confirmed by Russia, Ukraine and the United Nations.
After the news was released, the futures prices of wheat, corn and soybean in Chicago Futures Business Office rose across the board. UN Secretary-General Guterres called the rescheduling of the agreement “good news around the world”.
Although Turkey and the United Nations do not reveal what promises they have made to Russia to extend the agreement, the G7 summit to be convened in Japan this Friday is the “match point” of the game between Russia and the West. Earlier, it was reported that G7 was ready to fully allow imports to Russia, and Russia immediately told that once the West fully allowed imports to Russia, the Black Sea Grain Transportation Agreement would be closed.
As the G7 summit approaches, the latest news shows that G7 no longer considers fully allowing imports to Russia, but it is gestating that it has no feet for Russian natural gas for the first time. G7 hopes that the EU will allow member countries to import Russian natural gas from the stopped pipeline in the future.
Extension of the Black Sea Grain Transport Agreement
Erdogan was the first to announce the news of the extension of the Black Sea grain transport agreement in a televised speech on Wednesday. He promised that Turkey would continue its efforts to ensure that all the items in the agreement were not implemented, so that the agreement could participate in the next stage.
UN Secretary-General Guterres then confirmed the news at a regular meeting. He pointed out that the Black Sea Grain Transport Agreement is crucial to global food security. It is precisely because of the conclusion of the agreement that global food prices rose by 20% last year from a record high in March.
Guterres expressed his gratitude to all the participants in the talks, saying that the Black Sea Grain Transportation Agreement confirmed that even in the darkest time, there was still hope to find a handling plan that would make everyone lose.
When confirming the extension agreement, the Russian Foreign Ministry pointed out that Russia’s overall evaluation of the agreement will not change, and the “distortion” that did not exist when the agreement was implemented should be corrected immediately. Ukrainian Deputy Prime Minister Kubla Kosuke also expressed farewell to the extension of the agreement, but exaggerated that the agreement must be “effectively operated”.
Due to the aggravation of the differences between Russia and Ukraine, since May 6, no grain boats have been sent from Turkey to participate in the Black Sea port of Ukraine. At present, nearly 70 grain boats are lined up in Turkey’s coastal areas.
According to the agreement, the representatives of the United Nations, Turkey, Russia and Ukraine are required to review whether the boats are running and boarding in Istanbul to ensure that the boats are not carrying weapons and soldiers. Russia accused Ukraine of abusing the boarding review to ask for bribes from boat owners, while Ukraine accused Russia of trying to safeguard the grain transport agreement and running to board the review first.
Since its inception in July last year, the Black Sea Grain Transport Corridor has transported 30.28 million tons of grain, of which 50% is corn and 28% is wheat. The Black Sea grain transportation channel is also the main channel for Ukraine’s grain imports, accounting for more than half of Ukraine’s corn and wheat imports in 2022/23.
Photo source: United Nations
The Black Sea Grain Transport Agreement was originally valid for 120 days, extended for 120 days in November last year, and then extended for 60 days in March this year. After this week’s extension, the next expiration date of the agreement is July 18.
At the end of the grain transportation agreement, the United Nations promised to help Russia regulate the import of agricultural products and fertilizers. Although the western ruling does not specifically target Russian agricultural products and fertilizers, the reality of ruling in other fields such as freight guarantee and payment limits the import of related products. After the implementation of the grain transportation agreement, Russia has repeatedly complained that the import inheritance of agricultural products in this country is limited.
Russian Foreign Minister La Luofu had previously warned that Russia would not extend the Black Sea Grain Transport Agreement if the import restrictions of Russian agricultural products could not be handled. Neither the United Nations nor Turkey has revealed what promises the parties have made in order to subdue the Russian extension agreement.
The requests that the Russian Foreign Ministry failed to make in April included the western countries’ returning the Agricultural Bank of Russia to the SWIFT payment system, re-regulating the request for agricultural machinery and parts from Russia, banning the restrictions on the bank account and financial movement of the Russian Fertilizer Company, and regulating the operation of the Russian togliatti-Ukrainian Odessa ammonia pipeline.
With the extension of the Black Sea Grain Transportation Agreement, the local time opened on Wednesday, and the futures prices of wheat, corn and soybeans in Chicago Futures Business Office rose across the board. The wheat contract in July was issued at $6.255 per bushel, a decrease of 3.4%; The July corn contract was issued at $5.615 per bushel, a decrease of 3.4%; The July soybean contract was issued at $13.37 per bushel, a decrease of 1.98%.
G7 breeds new creation.
From Friday to Sunday, the G7 Summit will be held in Hiroshima, Japan. The Asian situation and the conflict between Russia and Ukraine will be the focus of this summit. G7 members include the United States, Britain, France, Germany, Italy, Canada and Japan. Russia used to be a member, but it has been eliminated since its inception in 2014. The EU acts as a “non-enumerated member” to participate in the G7 behavior.
At this summit, G7 will issue a new round of arbitration against Russia. Earlier, the Japanese media broke the news that G7 was ready to fully allow imports to Russia, and Russia immediately reported that it had not attacked and threatened to close the Black Sea grain transportation agreement.
According to the latest reports of Reuters and Financial Times, news sources leaked that the new ruling of G7 against Russia will be aimed at the third-party countries that assist Russia’s encirclement and ruling, limit Russia’s future power, and crack down on whether it will be used to support Russian military business.
The United States also hopes that G7 members will integrate the cutting forms and allow all kinds of goods to be imported from Russia unless the relevant goods are exempted.
The G7 is gestating for the first time that it has no feet on Russian pipeline natural gas. After the beginning of Russia-Ukraine conflict, Russia acted against the western ruling, and Russia increased its demand for gas from the main EU gas pipeline “Beixi No.1”, and another pipeline, Yamal Pipeline, which passed through Poland, also ran for gas.
In September last year, two pipelines in Beixi were hit by explosions, and “Beixi No.1” was completely shut down. At present, Russia’s pipeline to seek gas from the EU through Ukraine and the “Turkey Creek” to seek gas from the EU through Turkey are still in operation. Before the conflict between Russia and Ukraine, more than 40% of the natural gas imported by the EU came from Russia, and now the proportion of Russian natural gas has risen below 10%.
According to G7′ s new initiative, even if Russia re-regulates the gas demand for the stopped pipeline in the future, G7 and EU member states are not allowed to re-import natural gas from Russia through relevant pipelines, unless Russia and Ukraine have already made plans to deal with it.
Since Russia increased its demand for gas, the European Union began to import more liquefied natural gas from the United States, and the United States became the main source of liquefied natural gas in the European Union. Although the new initiative will not dispel the practical effect on the EU’s natural gas imports, it will mark the further decoupling between the EU and Russia.
Some European officials believe that this new initiative is aimed at strengthening investors’ confidence, letting investors see that the EU will not immediately re-purchase cheap Russian natural gas in the future, and allowing investors to invest in liquefied natural gas in Europe and North America.
However, according to the report of the European Political News Network, EU officials leaked out that it is unlikely that the EU can revise the new ruling on Russia and allow the import of Russian pipeline natural gas to participate in this round of ruling. The EU is preparing to push off the 11th round of arbitration against Russia.
The official who leaked the news said that the natural gas cutting initiated by the G7 in the EU did not resonate. Even Germany and Italy, members of the G7, have doubts. Both countries have natural gas pipelines connecting Russia. The “Nord Stream 2” pipeline is a name that Germany once guaranteed, and Germany was also ruled by the United States.
While other EU member states increased their imports of Russian natural gas, Hungary signed a new natural gas import treaty with Russia. 80% to 85% of Hungary’s natural gas demand comes from Russia.
Last month, Hungarian Foreign Minister Jos Jardot visited Russia and reiterated that Russian natural gas is vital to Hungary’s power security. Earlier, Hungary was telling that once the EU imposed sanctions on Russian natural gas, Hungary would oppose the sanctions plan.
EU officials said that there are many voices of support within the EU, and the 11th round of EU arbitration has been basically made, so it is difficult to temporarily participate in “such a major new step”.
In the 11th round of arbitration against Russia, the EU also considered that it had no feet for the third party and punished the third-party enterprises and countries that helped Russia avoid the EU arbitration. It is reported that seven China companies and companies from Iran, Armenia, Uzbekistan and Kazakstan will be included in the EU’s arbitration list.
At the beginning of this month, when Qin Gang, State Councilor and Foreign Minister of China, visited Germany, you Zi asked whether the European Union could lay off Russian enterprises because of its mutual assistance to China.
Qin Gang responded that China did not sell weapons to Ukraine’s critical parties, and prudently handled and punished the import of dual-use items in accordance with the law. Sino-Russian enterprises should not be affected by their normal exchanges and mutual assistance. China firmly supports the long-arm command and unilateral arbitration of other countries according to its own law enforcement, and will take necessary steps to resolutely