Is the oil price crash over? In mid-February, Brent crude traded at $63 a barrel, up from a $45 low a month earlier. Does that sharp rise mean oil will now climb steadily back above $100? Triple-digit oil prices, after all, have become the normal in recent years. The black stuff spiralled to almost $150 in late 2008, ahead of the global financial crisis – before falling back, as the world economy endured it worst peacetime shock for 80 years and asset markets collapsed.
As global growth returned, though, and traders remembered that the populous emerging markets were still becoming more populous, their energy demands ever rising, oil quickly recovered. During the three and a half years from early 2011 to mid-2014, oil was above $100 pretty consistently. Prices then started falling last June, by some 60% to their mid-January low. But Brent crude is now up 36% during the four weeks to the time of writing. So has the oil market now turned?
Russia’s recent “pivot East” has become a geopolitical cliché. It’s now widely understood that one of the most significant consequences of sanctions imposed by America and (less enthusiastically) the European Union has been significantly to strengthen relations between Moscow and Beijing.
Enemies for much of the Cold War, Russia and China have been building serious commercial and diplomatic ties across their 2,700-mile border for well over a decade. Since 2002, their bilateral trade has grown 7-fold, to almost $100bn annually, as both sides recognize the economic synergies between the world’s largest energy exporter and the biggest and most populous manufacturer on the planet.
I’m struggling to identify any agreement of real political or commercial significance that was struck during the 2-day Brisbane G20 summit in mid-November. Yes – a chunky 800-page communiqué was released as the various Heads of Government flew from Australia’s east coast. It consisted, though, of little apart from grand words and vague aspirations, with almost no costings, let alone information on sources of actual finance.
The leaders of the G20 nations – accounting for around four-fifths of the world economy – want an additional 2pc of growth by 2018, we were told. Beyond the simple mention of “investment, trade and competition”, there were few details on how this extra growth would be achieved.
It’s 25 years since the fall of the Berlin Wall. Billed as the most important political event of the second half of the twentieth century, the collapse of Communism has been much commented upon but rather less widely understood.
Far from marking the “end of history”, the demise of state-planning in Russia and Eastern Europe, and the subsequent dissolution of the Warsaw pact, ushered in an era when history significantly sped-up. Developments that took decades or even centuries in other parts of the world, have been compressed into just a few tumultuous years.
The partial ceasefire in Donbas and Lugansk has done little to ease the East-West information and diplomatic argy-bargy relating to Russia and Ukraine. If anything, the rhetorical exchanges have become more testy during September, after the EU and US expanded their sanctions program. This happened after the ceasefire – patchy, but thankfully still holding – was agreed between Kiev and rebel-fighters in East Ukraine.
The new measures are designed to target top state-owned energy, defence and financial services companies – including Gazprom, Lukoil, Rostec and Sberbank. The list of Russian officials subject to asset freezes and travel bans has also been extended. “Given Russia’s direct military intervention and blatant efforts to destabilize Ukraine, we’ve deepened our sanctions, in concert with our European allies,” said US Treasury Secretary Jacob Lew.
After three rounds of US-inspired sanctions against Russia, Moscow has finally retaliated. We’re now on the brink of a fully-blown East-West trade war. Since March, the West has imposed successive travel bans and asset freezes on various lawmakers and other prominent individuals – the most wide-ranging restrictions on Russian commerce since the Soviet era. In late July, the screw was turned even tighter, as America and then the EU limited Russian state-owned banks’ access to international capital markets.
President Putin then snapped. A 12-month ban on food imports from America, the EU, Australia, Canada and Norway was imposed and there’s talk of stronger measures to come. Diplomacy having failed – having barely been attempted – the economic gloves are now off. Will tit-for-tat sanctions between Russia and the West escalate, worsening the commercial and political damage? Or will they be contained?
Turkey’s economic potential is obvious. Sitting at the crossroads of Europe and Asia, this secular, predominantly Muslim democracy could hardly be more strategically located. With its blend of Western and Eastern cultures and fast-growing 74m-strong population, many of them young and well-educated, Turkey should be among the world’s most attractive emerging markets.
And so it has seemed. The Turkish economy has tripled in size since the early 2000s, riding an almighty wave of consumption and construction. Foreign direct investment has poured in. This ancient country, with its ubiquitous monuments and minarets, now has a multitude of skyscrapers, shopping malls and infrastructure mega-projects. These include the $11bn Istanbul-Izmir motorway, a high-speed Ankara-Istanbul rail-link and a plausible bid to build the world’s largest airport, handling 150m passengers a year.
Kateryna Kruk was born in Rivne, Western Ukraine in 1991. After studying for a Master’s Degree in Poland, she returned to Kiev last autumn, as the Euromaidan protests began. Determined to shift Ukraine towards Western Europe, Kruk became heavily involved in the protest movement. Tweeting extensively in English, she emerged as the “unofficial voice” of Euromaidan, providing a running commentary both on the protesters’ strategic positioning and dramatic events on the streets, as she tells LIAM HALLIGAN
LH: Is Ukraine part of Europe?
Ukraine isn’t only part of Europe but is also its Eastern border. This border isn’t really defined in geographical or physical terms. Cultural differences define the true border of Europe. As such, this border is rather wide and vague but obviously lies somewhere in Eastern Ukraine. Being part of Europe, belonging to it, is also a process. By observing cultural changes in Ukraine, you can see how the country is becoming more and more European.
Vera Graziadei (nee Filatova) is a familiar face to British audiences, given her role in the cult Channel 4 series Peep Show, numerous TV dramas and widely-praised theatre and film work. Born in Donetsk, to a Ukrainian mother and Russian father, she came to the UK as a teenager and was educated at the London School of Economics. But Graziadei’s passions go beyond acting. Recent events in Ukraine have left her shocked and disturbed, as she tells LIAM HALLIGAN in London.
LH: ARE YOU UKRAINIAN OR RUSSIAN?
Actually, first and foremost I’m a Brit. I swore my allegiance, took citizenship and spent my formative years here, having arrived at the age of 13. Back then, I’d tell people I was Russian but born in Ukraine. That was a kid talking. As an adult, I say I’m Ukrainian. But if I meet two people from Vladivostok and Western Ukraine, I feel culturally closer to the person from Vladivostok, even though its thousands of miles away. I’m not saying I don’t like people from Western Ukraine. I’m talking about how close I feel culturally, not personally nor in terms of friendship. So – a rather complicated answer to a simple question.
The St Petersburg International Economic Forum, now in its eighteenth year, was less well attended than usual. The absence of various American and West European CEOs, responding to pressure from their governments following sanctions on Russia, was heavily commented upon in the West.
Less widely noticed was one of the most important pieces of news to emerge from Russia since the Soviet collapse of the early-1990s – namely the $400bn deal struck between Moscow and Beijing, under which Russia supplies 38bn cubic metres (bcm) of gas to China over 30 years from 2018.