Protest and Persuasion

Wagner takes Bakhmut centre, Russia is UNSC Chair, OPEC+ cuts oil output, sticky US inflation, Emmanuel Macron chaperoned by Ursula von der Leyen in China

Apr 04, 2023

UPDATE: Russian forces claim to have made a significant advance by capturing the central area of Bakhmut, a city in eastern Ukraine that has become a symbol of Kyiv’s resistance against Moscow’s invasion. But Ukrainian authorities said they still retained control of other parts of the city.

Russia is the president of the Security Council in April. Council members adopted the provisional programme of work for the month earlier today (3 April). A Chinese envoy to the United Nations emphasized on Friday that Ukraine is not an arena for fights between major countries, and no one should seek to benefit from the conflict at the cost of the Ukrainian people.

Saudi Arabia and other OPEC+ oil producers on Sunday announced further oil output cuts of around 1.16 million barrels per day, a move that analysts said would cause an immediate rise in prices and the United States called inadvisable. The pledges bring the total volume of cuts by OPEC+ to 3.66 million bpd, according to Reuters calculations, equal to 3.7 percent of global demand.

Combined with higher interest rates, the OPEC+ move puts further pressure on both the US and EU to reduce financial and material support for Ukraine and move closer to China during talks between President Xi Jinping, EU President Ursula von der Leyen and French President Emmanuel Macron in Beijing from April 5-7, 2023.

Washington has doubts about Macron’s endeavors to reach out to Xi Jinping, ahead of his trip this week. The EU and US view is that French President Emmanuel Macron is jetting off on an ambitious diplomatic mission to woo Beijing away from Moscow. Officials in Washington wish him luck with that. However, more likely is that Beijing will woo Macron and improbably von der Leyen closer to Beijing’s view for a peaceful settlement in Ukraine.

Russian forces capture Bakhmut Centre

Ukraine says it still retains control of other parts of the eastern city.

Russian forces claim to have made a significant advance by capturing the central area of Bakhmut, a city in eastern Ukraine that has become a symbol of Kyiv’s resistance against Moscow’s invasion. But Ukrainian authorities said they still retained control of other parts of the city.

Yevgeny Prigozhin, the head of Russia’s Wagner mercenary group, has claimed his forces are in “legal” control of Bakhmut after planting a flag atop the ruins of its local government building located on Peace Street.

“In the legal sense, Bakhmut has been captured. The enemy is concentrated in the western areas,” said Prigozhin, seen through the green lens of a night vision device, in a video posted to Telegram late on Sunday. It showed Prigozhin, who has a habit of prematurely claiming battlefield victories, standing in combat gear among the building and ruins of Bakhmut’s city centre.

The battle of Bakhmut, which began with air strikes in May and intensified in early December as it evolved into heavy artillery duels and close-quarters combat, is the longest and one of the fiercest contests of the conflict.

Prigozhin said the flag he planted was “in memory” of the influential pro-Kremlin war blogger Vladlen Tatarsky, who was killed in a blast on Sunday at a restaurant in St Petersburg that the Wagner leader claimed to own and lent it to a “patriotic movement” to host events.

Ukrainian officials rejected Prigozhin’s claims of being in control of Bakhmut. Deputy defence minister Hanna Maliar said the situation was “very tense” but the city was still under Kyiv’s control. Andriy Yermak, head of the Ukrainian presidential office, described Prigozhin’s claim as “not even close to reality”.

Still, the General Staff said: “The enemy does not cease its assault on Bakhmut in attempts to take it under full control.”

Russia takes UNSC Chair

"We call on Russia and Ukraine to resume negotiations without any preconditions," Dai Bing, charge d'affaires at the Chinese Permanent Mission to the UN, said at the UN Security Council Briefing on Ukraine.

Ukraine called the Russian rotating presidency a “slap in the face”.

However, Sergei Lavrov said Russia had decided how to approach Europe as it was supplying the "criminal regime" in Kyiv with weapons and instructors.

The European Union has become hostile and has "lost" Russia, and Moscow will deal with Europe in a tough fashion if need be, Foreign Minister Sergei Lavrov said in an interview published on Tuesday.

Ambassador Linda Thomas-Greenfield the U.S. Representative to the United Nations
said, “It’s like an April Fool’s joke. But the truth of the matter is it’s a rotating seat. We expect that they will behave professionally. But we also expect that they will use their seat to spread disinformation and to promote their own agenda as it relates to Ukraine, and we will stand ready to call them out at every single moment that they attempt to do that.”

Clearly the US has forgotten that it chaired the UNSC during its wars in Yugoslavia, Afghanistan, Iraq, Libya and Syria. However, that did not stop Time magazine comparing President Putin to Adolf Hitler; Saddam Hussein; or Pol Pot.

Beyond the hysterical propaganda Russia will be seeking to hold two signature events during its presidency. One will be an open debate on “Risks stemming from violations of the agreements regulating the export of weapons and military equipment”. High Representative for Disarmament Affairs Izumi Nakamitsu will brief.

The other will be a ministerial-level open debate, chaired by Russian Foreign Minister Sergey Lavrov, on “Effective multilateralism through the defense of the principles of the UN Charter”. Secretary-General António Guterres is expected to brief.

As in past months, there are likely to be one or more meetings on Ukraine in April.

UNSC other matters

Several African issues are on the programme this month.

There will be a briefing, followed by consultations, on the UN Multidimensional Integrated Stabilization Mission in Mali (MINUSMA) and developments in Mali.

A briefing, followed by consultations, is also planned on the UN Support Mission in Libya (UNSMIL) and developments in Libya, as well as on the work of the 1970 Libya Sanctions Committee.

Special Envoy Huang Xia and Ambassador Ivan Šimonović (Croatia), the chair of the Peacebuilding Commission (PBC), are scheduled to brief on the Great Lakes Region. Consultations are scheduled to follow.

Consultations on the UN Mission for the Referendum in Western Sahara (MINURSO) and the situation in Western Sahara are planned for April. The anticipated briefers are Personal Envoy Staffan de Mistura and Special Representative Alexander Ivanko.

Several Middle Eastern issues will be discussed in April.

The quarterly open debate on “The situation in the Middle East, including the Palestinian question” will be held at ministerial level. Lavrov is expected to chair the meeting.

The monthly briefing and consultations on Yemen are expected to feature briefings by Special Envoy Hans Grundberg and Assistant Secretary-General for Humanitarian Affairs Joyce Msuya.

The monthly briefing on the political and humanitarian situations in Syria will include briefings by Special Envoy Geir O. Pedersen and Under-Secretary-General for Humanitarian Affairs Martin Griffiths, respectively.

Regarding issues in the Americas, Colombia and Haiti are both on the programme of work in April.

With regard to European issues, there will be a briefing on the UN Mission in Kosovo(UNMIK) and recent developments in Kosovo. Special Representative Caroline Ziadeh is the anticipated briefer.

OPEC+ announces voluntary oil output cuts, U.S. calls move inadvisable

Top OPEC producer Saudi Arabia said it would cut output by 500,000 bpd. The ministry clarified that the decision is a precautionary measure aimed at supporting the stability of the global oil market.

The United Arab Emirates (UAE), Kuwait, Iraq, Oman and Algeria said they would voluntarily cut output over the same time period.

The UAE said it would cut production by 144,000 bpd, Kuwait announced a cut of 128,000 bpd while Iraq said it would cut output by 211,000 bpd. Oman announced a cut of 40,000 bpd, with Algeria saying it would cut its output by 48,000 bpd.

Russian Deputy Prime Minister Alexander Novak said Moscow would extend a voluntary cut of 500,000 bpd until the end of 2023.

"OPEC is taking pre-emptive steps in case of any possible demand reduction," Amrita Sen, founder and director of Energy Aspects, said.

Sunday's development comes a day before a virtual meeting of an OPEC+ ministerial panel, which had been expected to stick to 2 million bpd of cuts already in place until the end of 2023.

Oil prices last month fell towards $70 a barrel, the lowest in 15 months, on concern that a global banking crisis would hit demand. Still, further action by OPEC+ to support the market was not expected after sources downplayed this prospect and crude recovered towards $80.

The latest reductions could lift oil prices by $10 per barrel, the head of investment firm Pickering Energy Partners said on Sunday, while oil broker PVM said it expected an immediate jump once trading starts after the weekend.

The Biden administration said it sees the move announced by the producers on Sunday as unwise.

"We don't think cuts are advisable at this moment given market uncertainty – and we've made that clear," a spokesperson for the National Security Council said.

Read full article here.

Sticky US Inflation

The expected increase in oil prices following the OPEC+ output reduction is certain to increase upward pressure on US inflation and negative impact on worker standards of living. The EU will also experience higher energy industrial input costs and spillovers for worker wages and spending. Combined with higher interest rates, the OPEC+ move puts further pressure on both the US and EU to reduce financial and material support for Ukraine and move closer to China during talks between President Xi Jinping, EU President Ursula von der Leyen and French President Emmanuel Macron in Beijing from April 5-7, 2023.

In February 2023, prices had increased by six percent compared to February 2022 according to the 12-month percentage of change in the consumer price index - the monthly inflation rate for goods and services in the United States. The data represents U.S. city averages. In economics, the inflation rate is a measure of inflation, the rate of increase of a price index (in the below case: consumer price index). It is the percentage rate of change in price level over time. The rate of decrease in the purchasing power of money is approximately equal.

A projection of the annual U.S. inflation rate can be accessed here and the actual annual inflation rate since 1990 can be accessed here.

Emmanuel Macron chaperoned by hawkish von der Leyen

Macron’s hope to dissuade China's leader Xi Jinping from getting any closer with Russian President Vladimir Putin must be balanced with the Chinese playing the central mediation role in Ukraine.

However, it is unclear what leverage Macron has — and the backdrop to his three-day trip starting Tuesday isn't easy. Europe continues to reel from the impact of cutting off trade ties with Russia, new OPEC+ production cuts, which increase industrial input costs for the EU, and geopolitical tensions between China and the US.

The French president wants to play a more personal card with his Chinese counterpart, and will spend several hours in discussions with Xi. Moreover, the trip includes a visit to a city that holds personal value for the Chinese president.

"You can count with one hand the number of world leaders who could have an in-depth discussion with Xi,” said an Elysée adviser who asked to remain anonymous because they were not authorized to speak publicly.

Analysts say China's deteriorating relationship with the U.S. gives Europe a bit more leverage, with the EU's vast single market becoming more crucial for China. That can provide an opportunity for Macron, who has pushed Europe to bolster its "strategic autonomy", but is also hoping France and the rest of the EU can benefit from a reopening Chinese economy after years of pandemic.

French diplomats are playing down the impact the protests at home could have on Macron's credibility abroad. "The Chinese will play a fine balancing act. They need a good relationship with Europe so will not want to play on Macron's internal problems," another French diplomat said.

But while expectations in France of a breakthrough are moderate, the view among other Western officials is even bleaker. The White House has little expectation that Macron will achieve a breakthrough, according to three administration officials not authorized to speak publicly about private conversations. There is also some concern in the Biden administration about France’s potential coziness with China at a time when tensions between Washington and Beijing are at their highest in decades.

The French leader, whose decision to ram much-disputed pension legislation through parliament earlier this month sparked clashes and violence in French cities, is trying to keep his busy diplomatic schedule on track. But the chaotic scenes of burning piles of rubbish in Paris, which were broadcast around the world, have already forced Macron to cancel a state visit by Britain's King Charles, an embarrassment which did not go unnoticed in diplomatic circles.

The protests, which will see unions stage an 11th nationwide strike during Macron's time in Beijing, come as the French president is trying to regain the initiative on the war in Ukraine and play a leadership role in Europe. That hasn't escaped Chinese observers.

"The protests bring a large amount of risk and France needs a diplomatic highlight, especially since it wants to play the role of Europe's leader," said Wang Yiwei, director of the Centre for European Studies at Renmin University in China.

But what might further complicate Macron's endeavours is an emerging feud between the European Commission President Ursula von der Leyen, who is traveling with the president. Her hard-hitting speech last Thursday on the bloc’s relations with China .was immediately criticised by Wang Lutong, director general of European affairs at China’s Foreign Ministry, who said Ms von der Leyen ran the risk of “linking trade with ideology and national security, and creating bloc confrontation”.

China’s ambassador to the EU, Fu Cong, criticised the speech as a misrepresentation of Chinese policy, and said he hoped Ms von der Leyen’s visit to Beijing would help her “understand China better”. Mr Fu has called for a restart of talks on a stalled EU-China investment treaty, which Washington has been determined to thwart.

That pact was signed in December 2020, much to the incoming Biden administration’s dismay. But a round of tit-for-tat sanctions in its aftermath, which were related to some European politicians’ vocal criticisms of human rights abuses in Xinjiang, put the deal in the deep freeze. Even in the aftermath of that fracas, many Europeans remained reluctant to jeopardise the Continent’s substantial trade and investment ties with China.

Macron is the second European leader in less than a week to meet Chinese President Xi Jinping in Beijing, as Europe makes overtures to China despite a drumbeat of hawkish Brussels rhetoric. Mr Macron, like Spanish Prime Minister Pedro Sanchez last week, is ostensibly focused on lobbying Mr Xi to play a more even-handed role in pursuing a peaceful settlement between Russia and Ukraine.

But, also like Mr Sanchez, the French leader will look to promote two-way trade and investment, even as the European Commission in Brussels begins to cleave to Washington’s more hawkish tone.

Mr Sanchez struck a deal to ship almost half Spain’s almonds to China, and will open a cultural institute in Shanghai. Mr Macron’s delegation reportedly includes executives from Airbus and Alstom.

As it stands, Mr Xi’s peace proposal implicitly backs the idea that Russian security is under threat, rather than starting with the Western premise that Russia is the aggressor.

He has also refused to meet or talk to President Volodymyr Zelensky, despite the Ukrainian overtly encouraging him to do so.

Mr Sanchez said he had encouraged Mr Xi to talk to Mr Zelensky, and Mr Macron will probably do the same. The hope is that China might be able to cut through the political impasse, if France, Spain and other EU members back Beijing as the peace mediator.

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