TUMO shuts down centers in Paris and Beirut amid coronavirus pandemic

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 19:54,

YEREVAN, MARCH 13, ARMENPRESS. TUMO Center for Creative Technologies is shutting down its two international centers in Paris and Beirut due to the novel coronavirus pandemic, TUMO spokesperson Zaruhi Budaghyan told ARMENPRESS a day after she announced the shutdown of their educational institutions in Armenia and Artsakh.

More than 1000 students attend the TUMO center in the French capital, while around 300 are enrolled at the TUMO Beirut in Lebanon.

Edited and translated by Stepan Kocharyan

Armenia and Georgia ban movements of citizens from one country to another for 10 days

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 20:58,

YEREVAN, MARCH 13, ARMENPRESS. By the mutual consent of the sides, Armenia and Georgia have decided to ban the movement of citizens from one country to another for 10 days starting from March 14, ARMENPRESS reports Deputy PM Tigran Avinyan wrote on his Facebook page.

“At the same time the countries will ensure the entry of their citizens wishing to return to their countries. These limitations cover all types of transport means but they do not cover transportations of goods”, he wrote, a ding that everything is done for public safety.  

8 cases of the novel coronavirus (COVID-19) have been confirmed in Armenia since March 1, 2020 

Edited and translated by Tigran Sirekanyan

5 more coronavirus cases registered in Armenia, bringing total number to 13

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 23:01,

YEREVAN, MARCH 13, ARMENPRESS. 5 more people have been tested positive for novel coronavirus in Armenia, ARMENPRESS reports Prime Minister of Armenia Nikol Pashinyan said in a Facebook Live.

”28 of the 31 people isolated in Tsakhkadzor’s ”Golden Palace” since March 1 have been tested negative for coronavirus and they can go home. Coronavirus has been confirmed for 2 of the isolated people and one more person, the family member of one of them, who had an interaction during this period, will remain in isolation. This means that the two people with confirmed coronavirus will be hospitalized, while the other one will remain in isolation”, the PM said.

He also informed that 3 other citizens have been tested positive for coronavirus. 2 of them participated in an engagement ceremony in Etchmiadzin city and had been isolated days ago. ”There is also another citizen who came from France. He is also tested positive for coronavirus. The total number of coronavirus-infected citizens is 13. Most of them are participants of the engagement ceremony in Etchmiadzin”, Pashinyan said.

The health condition of all the patients is satisfactory. Only one has developed pneumonia.

Edited and translated by Tigran Sirekanyan

None of 5 hospitalized persons in Vanadzor tested positive for coronavirus

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 23:27,

YEREVAN, MARCH 13, ARMENPRESS. The 5 people who were hospitalized earlier in Vanadzor city of Armenia have been tested negative for coronavirus, ARMENPRESS reports Governor of Lori Province Andrey Ghukasyan wrote on his Facebook page.

‘’I am glad to inform that the expectations of the entire day had a positive end. As you know in that morning 5 people were hospitalized in Vanadzor infection hospital who were tested for coronavirus. A while ago we received the results. All are negative”, he wrote.

Edited and translated by Tigran Sirekanyan

100 people quarantined from Etchmiatsin as Armenia braces for coronavirus battle

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 23:53,

YEREVAN, MARCH 13, ARMENPRESS. The number of quarantined people from the town of Etchmiatsin (Vagharshapat) in Armenia has reached nearly 100, Prime Minister Nikol Pashinyan said.

“Now, the most active hotbed is Etchmiatsin. At this moment, the number of quarantined citizens from Etchmiatsin has reached approximately 100, and we must focus on Etchmiatsin,” Pashinyan said.

He said the government considers stronger countermeasures against the novel coronavirus spread.

“We should avoid visiting theaters, cinemas, concerts, and I think that from tomorrow the activities of such venues should be suspended for at least some period of time”.

One of the latest COVID19 cases in Armenia was confirmed in a woman from Etchmiatsin. Some of her direct contacts have already tested positive, others are quarantined.

The number of confirmed cases is 13. 

Edited and translated by Stepan Kocharyan

Armenian Prime Minister self-quarantines as precaution pending coronavirus test

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 23:19,

YEREVAN, MARCH 13, ARMENPRESS. Prime Minister Nikol Pashinyan and his wife Anna Hakobyan will be tested for the novel coronavirus.

“Today we saw a headline in the press that the Brazilian president’s test results were positive, and you know that on March 7 Anna had a meeting with the Brazilian First Lady, and a photo of them embracing was published. We arrived in Sevan for self-quarantine, and the first thing we did was check ourselves for fever, we didn’t have it. We checked again, and again we didn’t have fever. But then the Brazilian President officially refuted the report, he said that his test results were negative. However, in any case we will remain isolated, tomorrow morning we will be tested to be convinced that everything is all right, despite many professional medics telling us that the possibility [of infection] is very low”, the PM said.

Edited and translated by Stepan Kocharyan

RFE/RL Armenian Report – 03/13/2020

                                        Friday, 
Opposition Calls For Armenian Referendum To Be Postponed
        • Astghik Bedevian
Leader of the opposition Bright Armenia party Edmon Marukian
An Armenian opposition leader has called on the authorities to postpone the 
constitutional referendum scheduled for April 5 because of the risks posed by 
the spread of the new coronavirus infection in the country.
“The situation tends to get worse rather than better,” Edmon Marukian, the 
leader of the parliamentary Bright Armenia party, warned on Friday. “The number 
of those infected is increasing, so it will be impossible to hold the ballot, 
and decisions in this regard must be made now.”
Marukian also said that he was in favor of introducing a state of emergency for 
at least 14 days in order to shut down all public and private institutions and 
stop all mass events. “Citizens are waiting for the government to tell them, for 
example, not to organize wedding parties so they can postpone such events. We 
should not delay these measures and wait for the number [of coronavirus cases] 
to increase and the situation to get worse.”
The oppositionist’s statement came as Armenia reported its eighth coronavirus 
case on Friday. Five more people were hospitalized in Vanadzor with 
coronavirus-like symptoms later today.
Dozens of people have either been quarantined or self-quarantined in Armenia at 
present after having suspected contacts with the infected persons, four of whom 
had come from coronavirus-hit Italy and Iran.
Naira Zohrabian, of the largest parliamentary opposition faction, Prosperous 
Armenia, also believes that if the coronavirus continues to spread, the 
referendum should be canceled. The lawmaker thinks the ongoing campaign in the 
referendum must be stopped in any case, as crowded places are the biggest risk 
of the spread of the deadly virus.
Elections authorities in Armenia have not yet spoken about any plans to postpone 
the current referendum.
The political team of Prime Minister Nikol Pashinian, who until Friday was 
actively engaged in campaigning, has suspended rallies for several days.
Deputy Parliament Speaker Alen Simonian, who is a senior member of Pashinian’s 
Civil Contract party, told RFE/RL’s Armenian Service (Azatutyun.am) on Friday 
that they have no decision yet as to when the campaign can be resumed. As for 
the possibility of postponing the referendum, he said they will follow the 
dynamics of the spread of the disease. “There will be no such thing as 
continuing the political process if there is a danger of epidemic or if the 
situation gets dramatically worse. It is not an end in itself. We will make 
decisions based on the dynamics [of the coronavirus spread] and the information 
that we have.”
At the same time, Simonian warned against “demagogic statements about extreme 
measures.” “The authorities have so far proved their openness, their ability to 
respond quickly, and the measures that have been taken to date have produced 
maximum results. If we feel the need to do so [introduce a statement of 
emergency], if professionals and not politicians make such assessments, surely 
everything will be done. But today I still can’t talk about such things. And I 
don’t want to rule out anything,” the deputy parliament speaker said.
Earlier today the Armenian government decided to close all schools, universities 
and kindergartens until at least March 23. Prime Minister Nikol Pashinian also 
called on citizens, especially those exhibiting coronavirus-like symptoms, to 
refrain from participating in mass events.
A number of government and private institutions have canceled public events. 
Thus, for example, Armenia’s soccer federation announced that all tournaments 
held under its umbrella will be suspended until March 23.
Armenian Vice-Premier Tigran Avinian, meanwhile, announced late on Friday that 
under a mutual agreement beginning on March 14 morning Armenia and Georgia will 
suspend the movements of the two countries’ citizens across the border for a 
period of 10 days.
“At the same time, the two countries will ensure the unimpeded entry of their 
citizens who wish to return home. These restrictions apply to all types of 
transportation. The restrictions will not apply to cargo traffic,” Avinian said 
in a Facebook post.
Earlier this month Armenia also re-introduced a visa regime and tightened 
controls at the border with neighboring Iran over coronavirus-related risks.
Armenian Church Calls For Coronavirus Precautions
A woman wears a medical mask during a church service in Yerevan, March 1, 2020.
The Armenian Apostolic Church on Friday called on all followers and other 
citizens of Armenia to abide by protective measures recommended by the 
authorities to contain the spread of the new coronavirus infection that has 
already affected eight people in the South Caucasus country.
In a statement disseminated by the Mother See of Holy Etchmiadzin, bishops of 
the church headed by Catholicos of All Armenians Karekin II said: “We urge all 
to exercise the utmost vigilance and responsibility, to comply with the 
requirements and instructions of the specialized agencies in a consistent and 
serious manner and to carry out all preventive measures.”
The clergy said the Church will continue to carry out its mission of providing 
“spiritual care to its faithful children, encouraging them to remain strong in 
their faith, to face difficulties and tribulations with faith in God and 
prayers.”
Two new cases of the new coronavirus known as COVID-19 were confirmed in Armenia 
on Friday, raising the total number of infected people to eight. Dozens of 
people are either quarantined or self-quarantined in Armenia at present after 
having suspected contacts with the infected persons, four of whom had come from 
coronavirus-hit Italy and Iran.
Earlier today the Armenian government decided to close all schools, universities 
and kindergartens until at least March 23. Prime Minister Nikol Pashinian also 
called on citizens, especially those exhibiting coronavirus-like symptoms, to 
refrain from participating in mass events.
Armenia’s soccer federation announced later on Friday that all tournaments held 
under its umbrella will be suspended until March 23.
Meanwhile, to reduce the risk of the spread of the coronavirus infection through 
cash, the Central Bank of Armenia urged citizens to use more non-cash methods of 
payments and online banking services.
Armenia Slams Azerbaijan’s Aliyev Over ‘Hate Speech’
Armenian Foreign Ministry spokesperson Anna Naghdalian
Authorities in Yerevan have accused President Ilham Aliyev of using hate speech 
against Armenia and Armenians in his remarks at an inaugural session of 
Azerbaijan’s newly elected parliament earlier this week.
In her comment published on the official website of Armenia’s Ministry of 
Foreign Affairs on Friday, spokesperson Anna Naghdalian referred to Aliyev’s 
extensive speech on March 10 that she said “contained clear manifestations of 
hate speech towards Armenia and the Armenian people.”
“The authorities of Azerbaijan try to disguise the low level of legitimacy of 
recent parliamentary elections, inability to implement political and democratic 
reforms under the veil of aggressive, groundless and false allegations which 
target not only Armenia and the Armenian people, but also European countries, 
European structures and the International Election Observation Mission to the 
parliamentary elections in Azerbaijan,” Nalbandian charged.
In his speech Aliyev, in particular, again called for “offensive diplomacy” in 
the context of Nagorno-Karabakh settlement and rebuked Muslim countries for 
having good relations with Armenia and not supporting Azerbaijan in the issue.
The Armenian diplomatic representative said in this regard: “It is particularly 
concerning that the Azerbaijani leadership tries to instrumentalize religion in 
its unjustified allegations, on the one hand, accusing European countries of 
violating the rights of migrants on religious grounds, and calling for religious 
solidarity in the context of the Nagorno-Karabakh conflict on the other hand.”
Naghdalian said that “the promotion of enmity against the Armenian people, 
accompanied by new historical and geographical ‘discoveries’ by the president of 
Azerbaijan, fundamentally contradicts the commitment of Azerbaijan to build up 
an environment conducive to peace and prepare populations for peace.”
“From this perspective it should be noted that extremely low standards of human 
rights and democracy in Azerbaijan seriously hinder the advancement of the 
Nagorno-Karabakh peace process, particularly the implementation of agreements, 
reached within that framework.
Attempts of the leadership of Azerbaijan to build its own legitimacy on the 
grounds of hatred towards the neighboring nation and of mistrust towards the 
international community are irresponsible and can undermine the regional peace 
and security,” the Armenian Ministry’s spokeswoman said.
Naghdalian’s statement came amid heightened tensions between Armenia and 
Azerbaijan over recent border skirmishes in which at least one Armenian and two 
Azerbaijani soldiers were reportedly killed.
Yerevan and Baku accused each other of violating the fragile ceasefire agreed in 
1994 to stop a three-year war over Nagorno-Karabakh that killed some 30,000 
people.
The Organization for Security and Cooperation in Europe (OSCE) has led 
international efforts to negotiate a peaceful settlement of the conflict through 
its Minsk Group co-chaired by the United States, Russia and France. The 
diplomatic efforts have brought little progress in recent decades.
Armenian Defense Minister David Tonoyan (R) meeting with personal representative 
of the OSCE chairman-in-office, Ambassador Andrzej Kasprzyk, March 12, 2020
Meeting with Ambassador Andrzej Kasprzyk, Personal Representative of the OSCE’s 
Chairperson-in-Office on the conflict, in Yerevan on March 12, Armenian Defense 
Minister David Tonoyan expressed his concern over what he called recent attempts 
by Azerbaijan to intensify action at some sections of the Armenian-Azerbaijani 
border. He said that “the regional military-political developments, the 
international economic and epidemic situation, the weather conditions and a 
number of other factors increase the likelihood of destabilization.”
The press service of Armenia’s Ministry of Defense quoted Ambassador Kasprzyk as 
expressing readiness to exert “maximum efforts” in his mediation mission “to 
ease tensions.”
The same day during a press briefing in Moscow official representative of the 
Russian Foreign Ministry Maria Zakharova called on Armenia and Azerbaijan to 
“show restraint, refrain from the use of force and activate the negotiating 
process aimed at achieving a settlement through political means.”
Armenia Closes Schools Amid New Coronavirus Cases
Armenia’s government has decided to close all schools, universities and 
kindergartens until at least March 23 as the number of confirmed coronavirus 
cases reached 13 in the country on Friday.
Prime Minister Nikol Pashinian held consultations with his cabinet and other 
agencies today after interrupting his vacation and suspending campaign rallies 
ahead of next month’s constitutional referendum to discuss further measures to 
contain the spread of the highly contagious and potentially deadly disease in 
Armenia.
In a live broadcast on Facebook after the meeting Pashinian announced the 
suspension of classes in all schools, calling on all citizens to show individual 
responsibility in following all basic protective measures against the new 
coronavirus known as COVID-19 that has already affected nearly 140,000 people 
around the world (with more than 5,000 deaths) and has been declared a pandemic 
by the World Health Organization.
“We will get back to the issue on March 18 or 19 and will extend the suspension 
if necessary,” he said. “We also urge citizens to avoid as much as possible 
organizing and participating in mass events, especially those citizens who have 
[coronavirus-like] symptoms.”
In another related development Armenia’s soccer federation announced on Friday 
that all tournaments held under its umbrella will be suspended until March 23.
Armenia identified its first coronavirus patient on March 1. The infected person 
was an Armenian citizen evacuated from Iran. He was immediately hospitalized and 
31 other people who might have had close contacts with him were placed under a 
two-week quarantine then.
On March 11, three people who had arrived from Italy, including two Armenian 
citizens and one Italian working in Armenia, also tested positive for COVID-19. 
Fifty-seven people were placed under quarantines. The following day two members 
of the extended family of one of the Armenian patients, a woman from Echmiadzin, 
also tested positive and were isolated. Another five patients were identified on 
Friday, including from among those quarantined after having contacts with the 
woman.
It turned out that after returning from Italy the woman participated in an 
engagement party for her son in the town situated about 20 kilometers to the 
west of capital Yerevan. The party was attended by more than three dozen people, 
according to reports.
Pashinian said that the woman, who had been properly registered upon returning 
from Italy and was under the monitoring of health officials, later concealed 
from authorities the fact that she developed coronavirus symptoms, including 
fever.
“She hid it not only form the state, but also from her family, as she deemed it 
important for her – as this is part of our tradition – to attend a family 
member’s engagement party… Before the party itself the woman was in contact with 
her hairdresser, a jeweler… And now we have a situation when her cousin and 
husband have already tested positive for coronavirus and other people she had 
contacts with are under quarantine,” said Pashinian, adding that by saying this 
he was far from intending to blame the citizen for what happened under the 
circumstances.
He said his government could not have possibly prevented a case like that, 
calling for individual responsibility of citizens. “State administrative bodies 
can take numerous measures, but if a person wants to bypass these measures, he 
or she will find the way to do that. But it is important that each of us show a 
responsible approach in this situation,” Pashinian said. “The conclusion that we 
arrived at following our discussions is that our main message to our citizens 
should be that they realize their individual responsibility in this period of 
epidemic.”
The prime minister reiterated that basic steps like temporarily refusing to 
shake hands and greet each other by kissing may prove effective in containing 
the spread of the deadly virus.
Earlier this week the Armenian government announced that a charter flight from 
Rome to Yerevan will be organized on March 15 to evacuate Armenian citizens from 
coronavirus-hit Italy.
Deputy Prime Minister Tigran Avinian said on Thursday that a 14-day quarantine 
regime will be instituted for all citizens to be brought to Armenia from Italy.
Earlier this month Armenia also re-introduced a visa regime and tightened 
controls at the border with neighboring Iran, another coronavirus hotspot in the 
world.
Pashinian Condemns Retaliation Against Opponents Over Insults
        • Robert Zargarian
A group calling themselves “Revolutionary Guards”
Armenian Prime Minister Nikol Pashinian has condemned the actions of a group of 
supporters considering themselves to be “revolutionary guards” as a video was 
circulated on the internet earlier this week showing them demanding an apology 
from a man for allegedly offending the premier.
During a referendum campaign rally in Vayk, Armenia’s Vayots Dzor province, on 
Thursday, Pashinian called such actions “unacceptable.”
“For two days now I have been constantly saying that we should not respond to 
swear words by swearing, to insults by insulting others, but some people who say 
they act in our defense, in my defense still do such things,” he said.
Pashinian urged his supporters not to succumb to provocations. “If they swear, 
let them do so, their curses will fall on their own heads,” he said.
Police have launched a probe into the video on which a group of men calling 
themselves “Revolutionary Guards” makes another man apologize to Pashinian for 
allegedly swearing at him.
The founders of the radical group are Hayk Stepanian and Vahe Khandilian. 
According to the group’s Facebook page, “the initiative is aimed at protecting 
the [2018] revolution and its values in Armenia.”
In a Facebook post Stepanian writes: “Nikol Pashinyan is the prime minister of 
Armenia, the face of this country. Swearing at him is tantamount to swearing at 
the people who have elected him.”
Human rights activist Artur Sakunts believes that any action degrading a 
person’s dignity and aimed at making a person change his or her opinion is 
unacceptable and reprehensible regardless of who commits it.
“The responsibility for preventing such actions, exposing those who commit such 
actions and holding them accountable lies directly with the authorities,” 
Sakunts said.
Deputy Parliament Speaker Alen Simonian also described the actions of the group 
as unacceptable. The senior member of Pashinian’s Civil Contract party said: “I 
have to say that such situations do not bring any benefit and have the opposite 
effect, and doing this in general is unacceptable.”
Reprinted on ANN/Armenian News with permission from RFE/RL
Copyright (c) 2020 Radio Free Europe / Radio Liberty, Inc.
1201 Connecticut Ave., N.W. Washington DC 20036.
 

CIVILNET.Petrostrategies: Oil Wars

CIVILNET.AM

21:33

By Pierre Terzian

The breaking of oil-sector cooperation between Saudi Arabia and Russia, which occurred in Vienna on March 6, was the result of political calculation on the Russian side, and of resentment and psychological clumsiness in the case of the Saudis. The two countries were unable to reach an agreement in the days before the Vienna meeting. Saudi Arabia was demanding a substantial further production cut, while Russia just wanted to prolong the production cuts – decided in December 2019 and applicable until March 31, 2020 – for another three months. The Saudis believe that the impact of the coronavirus crisis on the oil market is very serious and requires all appropriate measures to be taken, while the Russians argue that the uncertainties surrounding the epidemic do not yet justify any drastic decisions and that one should wait and see before going any further. So much for the oil aspect.

The Russian decision not to make further production cuts at this time was made during a meeting chaired by Vladimir Putin in Moscow on March 1. Russian Minister of Energy Alexander Novak passed it to his Saudi counterpart, Prince Abdulaziz bin Salman, in Vienna on March 4. Their meeting ended without an agreement being reached. Under these circumstances, when OPEC ministers issued a statement on the following day (March 5), giving very precise quantified recommendations for the meeting of OPEC+ ministers scheduled for the following day, it became clear that failure was almost certain.

An OPEC conference press release that “recommends” quantified production targets to an OPEC+ conference, which is itself supposed to decide, is unprecedented. So far, even when a preliminary agreement has been reached with the Russians, OPEC press releases prior to OPEC+ meetings have never included any numbers, and have simply analyzed the market situation. Quantification decisions were left to the OPEC+ conference of ministers, and thus appeared to be made jointly. It was therefore more than likely that the publication of quantified recommendations, on March 5, would be perceived by the Russians as impolite, at the very least. Why?

First of all, let’s look at the facts. On March 5, OPEC ministers recommended that the current OPEC+ production cuts (1.7 million b/d) be extended until the end of 2020 (instead of March 31), with an additional reduction of 1.5 million b/d (the figure circulating previously was 1 million b/d) until June 30, 2020. This proposal seems to have been rejected, within only a few hours, by the Crown Prince of the Wahhabi kingdom, Mohammad bin Salman (MBS). He is said to have requested that the additional production reduction of 1.5 million b/d should also be applicable until the end of 2020. OPEC ministers therefore had to meet again – this time at a hastily-convened informal conference – to adopt MBS’ formula via a short statement. The Russians were faced with a “take it or leave it” proposal; the word “ultimatum” then began to circulate. By acting in this way, the Saudis made a psychological mistake.

As their entire history has shown, the Russians will not yield to an ultimatum. They will fight, even if they sometimes have to pay a very heavy price. It was therefore hardly surprising that they refused to comply, on March 6, with what they probably viewed as a command, despite the efforts of Saudi Minister of Energy, Prince Abdulaziz bin Salman (MBS’ halfbrother), who spent five hours that day talking to his Russian counterpart, Alexandre Novak. The Russian Minister had very strict instructions from Vladimir Putin and couldn’t go beyond the limits decided by his boss. Could things have been different if MBS had spoken to Putin? Why didn’t he do so? The answer to these questions may never be known. MBS’ inflexibility may be an _expression_ of Saudi anger against the Russians, who have so far failed to really cut their production despite the commitments made during OPEC+ meetings. Their output rose by 1% in 2019, with most of the increase attributable to Rosneft, whose CEO, Igor Sechin – a very close Putin ally – is notoriously opposed to output reduction agreements with OPEC.

Russia’s position

For Russia, the political situation has changed between the last two OPEC+ meetings. Two weeks after the one held on December 6, 2019 (i.e., on December 21), Donald Trump introduced sanctions against the Nord Stream 2 gasline project, when only 160 kilometers of pipeline had yet to be laid at sea for the structure to be finalized. Vladimir Putin had hoped to complete Nord Stream 2 before negotiating a new transit agreement with Ukraine on Russian gas destined for Europe. Then came the US sanctions against Rosneft Trading, which had been helping Venezuela (under US embargo) to export its crude oil and stop its production from declining further. The situation in the Middle East has also seen changes in recent weeks, marked by the consolidation of Russian positions in Syria, especially after the recent Russian-Syrian breakthrough at Idlib, in the northwest of the country.

Thus, having largely succeeded in expanding and consolidating his country’s influence in the Middle East, Vladimir Putin doesn’t need Riyadh’s friendship as much as he did three years ago, when Russian-Saudi oil cooperation began. This collaboration was sealed just after the Russian offensive in Syria was launched on September 30, 2015. Moscow considers that Saudi Arabia has lost much of its regional influence over the last few years (Qatar, Yemen, Turkey, Trump’s “peace plan”, etc.). In addition, due to the new US sanctions, Putin has become more receptive to those in Moscow who argue that defending oil prices in cooperation with OPEC limits the growth of Russian oil production and serves the interests of US shale producers. Igor Sechin is constantly saying that the market share lost by Russian oil is gained by the US shales. This argument echoes that of Gazprom, which has been complaining about competition from American LNG on its main market, Europe. Last year, the volume of LNG exported to Europe by the United States was exactly equal to the increase in US LNG exports worldwide (+21 bcm). The Russians aren’t alone in believing that Washington wants to block Nord Stream 2 in order to promote US LNG exports to Europe; others, such as the Germans, also share this view. The Russians also fear that they will pay the price for the so-called “phase 1” trade agreement signed by China and the United States on January 15, 2020, according to which Beijing pledged to increase its purchases of US energy goods by $52.4 billion over a two-year period (2020-2021).

Are the Russians pursuing specific goals vis-a-vis the United States? Probably, but not through downward pressure on prices: it was the Saudis who triggered the price war, not them. On the other hand, the Russians will certainly not be displeased to see the Americans suffer the consequences of this price war. The fact that the Russian ambassador to Washington was invited to meet US Secretary of the Treasury Steven Mnuchin on March 9 must have pleased them. According to the official US version, Mnuchin discussed with Ambassador Anatoly Antonov “compliance with sanctions programs, Venezuelan economic conditions and the potential for trade and investment”. Furthermore, he “emphasized the importance of orderly energy markets”. This is sweet music to the ears of the Russians. They have long called on the Americans to discuss energy issues and possible cooperation. And now the Americans are asking the Russians to help “order” energy markets, despite the fact that the US is officially opposed to the very existence of OPEC, let alone that of OPEC+. So the current crisis will have been useful to Moscow if it helps to start a real Russian-US energy dialogue. Perhaps it will also curb US enthusiasm for further sanctions against Nord Stream 2? That is by no means certain: on March 12, another Rosneft subsidiary, TNK Trading, was placed under US embargo due to its ties to Venezuela.

The Saudi position

Unless they were really looking for trouble, the Saudis mishandled the situation psychologically in the days leading up to the March 6 failure. They then worsened their position by starting a price war, coupled with a volume war, on the day after their divorce from the Russians. Their Minister of Energy visited Aramco headquarters in Dhahran on March 7, and the company thereafter sharply reduced (by $6 to $8/b) price differentials for its crude oil exports in April. What’s more, they did this while the marker crudes used to calculate Saudi prices were already falling sharply. A few days later, the CEO of the Saudi national company, Amin Nasser, stated that he had received a directive from the Ministry of Energy ordering him to increase production to 12.3 million b/d in April, instead of the current 9.7 million b/d. Nasser added that the ministry had also ordered Aramco to increase its maximum production capacity from 12 million b/d to 13 million b/d as soon as possible. The price war was thus coupled with a volume war. What’s more, Aramco’s sales teams have started to reach out aggressively to buyers of Russian Ural crude in Europe, Moscow’s main oil market, while at the same time they are reportedly rejecting calls by Asian clients for additional sales nominations. It’s said that MBS wants to “punish” Russia!

The Saudi reaction, described by some American newspapers as “going nuclear”, surprised everyone because it appeared so excessive. Why didn’t they opt for a more moderate position which would have involved, for example, a temporary disagreement, awaiting further developments regarding the coronavirus epidemic before talking to the Russians again? Admittedly, prices would have fallen without a sharp production cut, but won’t they now fall even lower, with a price war coupled with a volume war, while world demand is collapsing due to the coronavirus epidemic? Have the Saudis forgotten that every time they have launched a price war – in 1985-1986 against North Sea oil, in 2014-2016 against US shales – they have never attained their goals, but have instead lost hundreds of billions of dollars in missing oil revenues (along with the other exporting countries)?

The only possible explanation for this surprising display of amnesia about such recent history lies in the extreme youth of the decision-maker in Riyadh, MBS (34), his impulsiveness, and in the growing eclipse of King Salman, his very sick father. The Crown Prince has enormous ambitions, and he holds and exercises absolute power. This power has been strengthened, if that is at all possible, by the arrest – which he ordered the morning of March 6 – of four Princes of the royal family, including a brother of King Salman and of the former Crown Prince of the Wahhabi kingdom, all known for their critical attitude towards MBS.

Strengths and weaknesses of the various parties

1 – The United States

The US administration is worried. On March 9, a spokesperson for the US Department of Energy (DoE) denounced “these attempts by state actors to manipulate and shock oil markets”. Donald Trump called MBS on March 10 and, according to the White House, the two men “discussed global energy markets and other critical regional and bilateral issues”. The next day, the DoE suspended the sale of 12 MMb of strategic reserves “given current oil markets”. On March 12, a meeting with US oil lobbies was held at the White House. As it drew to a close, the head of the American Petroleum Institute, Mike Sommers, said that his group is trying to “make sure policymakers are responding in the right way” to the oil crisis and that, according to him, what is needed mainly is “to work in a diplomatic way to make sure oil markets are wellbalanced”. In other words, US oil companies are asking the Trump administration to speak with the main players in the crisis.

The Americans are worried because, paradoxically, while the increase in hydrocarbon output has undeniably enhanced the energy independence of the United States in physical terms (and reduced its trade deficit), it has also made its economy as a whole more sensitive to large variations in oil and gas prices. Hydrocarbons now account for 7% of US GDP and employ more than 10.3 million people. They provide a large proportion of the revenues of some large states that voted for Donald Trump in November 2016. US hydrocarbon companies are deeply in debt: $936 billion in bonds alone. Moody’s warned on March 10 that “companies with refinancing needs over the next 6 to 12 months” are at risk. The high-cost shale oil sector, which has experienced a revival in US oil production since 2008 or 2009, was already suffering from a lack of liquidity. The EIA predicts that US oil output will decline in 2021 for the first time since 2016. And due to the falling cost of feedstocks, the competitive advantage of the US petrochemicals industry – which has experienced rapid growth in recent years – over those of Europe and Asia has disappeared.

2 – Saudi Arabia

Despite its very large foreign exchange reserves, Saudi Arabia appears very vulnerable to a prolonged oil crisis. The state budget requires a price of around $82/b to attain a balance. This is very far from being the case, of course. Government agencies have already been instructed to reduce their expenditures and postpone projects. Some economists are predicting a budget deficit of $100 billion in 2020. This would exceed the record figure ($98 billion) set in 2015, during the war against US shale oil. Orders relating to prices, output and production capacity, issued by the Kingdom’s leaders, confirm that Aramco – now listed on Saudi Arabia’s Tadawul stock exchange – is not at all free to make its own decisions. Millions of Saudi citizens bought Aramco shares at a price of RS33.45 during the company’s partial IPO on December 11, 2019. Today, despite massive market price support, the stock is worth RS29, down 13%. The problem is that, once again, it isn’t at all clear what compelled MBS to resort to such drastic measures to deal with the Russians’ refusal to comply.

3 – Russia

While the Russian economy isn’t in very good health, it is now in a better position to withstand a drop in oil revenues than it was a few years ago. Since 2017, the state budget has only needed a crude price of $40/b (adjusted for inflation: therefore $42.4/b for 2020) to achieve a balance. When the price exceeds this figure, excess income is paid into sovereign wealth funds. The day after the failure of the March 4 meeting between the Energy Ministers of Saudi Arabia and Russia, the Russian Minister of Finance, Anton Silouanov, declared that his country was prepared to face a drop in prices. On March 9, his staff clarified that the $139 billion in the NWF Fund would be enough to cover a possible budget deficit for six to ten years, if the price of crude oil fell to $25-30/b. Russian oil companies are protected by the ruble’s fall against the dollar and the euro. Their expenditure is overwhelmingly denominated in Russian currency, while they are paid for their exports in foreign currency. In addition, the level of taxation on exported oil falls according to the price, protecting corporate margins. On March 11, Putin said: “I’m sure that Russia will go through this turbulent period with dignity, calmness”. He said there was a good chance that “key sectors” of the Russian economy would emerge from the current crisis stronger than ever. According to Novak, Russian oil output could increase by 300,000 to 500,000 b/d over the next few months.

What about tomorrow?

Unless much more important secret reasons are revealed at some time in the future, the decisions that triggered the current crisis appear so impulsive that it’s difficult to believe that the price and volume war will last for very long. The Russians and the Saudis will meet again in Vienna very soon, as the OPEC+ mechanisms continue to work (expert meetings). Statements of goodwill have come from some Russian officials. The Saudi press, for its part, is starting to calm down. But MBS is unpredictable, and the Russians are divided into pro- and anti-OPEC+ factions. The solution could come from … the Americans. MBS can’t remain deaf to their calls, and the Russians have a lot to negotiate with them. One thing is certain: due to its financial repercussions on companies, stock markets and banks, this oil crisis is deepening the worldwide economic shock caused by the coronavirus pandemic.

Dr. Pierre (Bedros) Terzian is the founder of Petrostrategies, a French think-tank specializing in global energy research.

This article was published by the World Energy Weekly, a publication of Petrostrategies.



CIVILNET.Cases of Coronavirus in Armenia Reach 15, Georgian Border Closed

CIVILNET.AM

13:19

By Emilio Luciano Cricchio

The number of confirmed cases of COVID-19 in Armenia has risen to 15.

The number of cases has risen suddenly in the last few days, five cases were confirmed on Thursday, seven new cases were confirmed on Friday and two more have been confirmed on Saturday.

 All patients have been hospitalized and are in good condition, except one who has been diagnosed with pneumonia. 

The number of cases had hovered at just one for some time after a man who had traveled to the Iranian capital tested positive with the virus on March 1. 

During a live stream on Facebook, Prime Minister Nikol Pashinyan said that a woman who returned from Italy attended an engagement party in Echmiadzin and that she had infected her husband and cousin.

Pashinyan also said that health authorities had been trying to contact the woman and get her to come for check-up, but she insisted she was completely well, when in fact she had already developed symptoms including a fever. 

Pashinyan said that considering the circumstances, it was difficult for Armenian health authorities to act to contain the spread of the virus. 

Deputy Prime Minister Tigran Avinyan also announced that the Armenian-Georgian border will be closed from Saturday for ten days, after an agreement between Armenian and Georgian authorities. However, this new restriction will not apply to Armenian citizens seeking to return home.  

Moreover, after an emergency meeting of ministers, Pashinyan announced that all educational institutions in Armenia will also be closed next week.

 Pashinyan and his wife Anna Hakobyan have self-isolated in Sevan, due to Hakobyan’s recent meeting with the President of Brazil during her journey to Latin America. This comes after reports that the President of Brazil Jair Bolsonaro had tested positive with COVID-19, although Bolsonaro has stated he tested negative. Pashinyan and his wife will also be tested for coronavirus on Saturday. 

Furthermore, 28 of the 31 people who had been isolated at the Golden Palace Hotel in Tsaghkadzor will be allowed to return home, with two of the remaining three patients testing positive. 

With flights also suspended to Italy until early April, Armenia’s Deputy Prime Minister Tigran Avinyan announced that a charter flight from Rome to Yerevan will be organized for March 15 to evacuate Armenian citizens from Italy.

It also remains unclear whether the April 5 constitutional referendum and the general elections in Nagorno-Karabakh on March 31 will be suspended.