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“Russia’s Arctic region is strategically important for the Kremlin …. First, it contains major population centers: With 350,000 inhabitants, Arkhangelsk is the largest Arctic town, followed by Murmansk, with 300,000 … Under … Putin, the Russian Arctic has been emphasized as a patriotic and nationalistic theme. Secondly, Russia’s economy relies heavily on its oil and gas industry, and such resources are heavily present in the Arctic, including in the Yamal region, where Russia has recently developed a massive liquified natural gas (LNG) plant and terminal. Russia … is particularly sensitive to security issues around energy infrastructure ….
Thirdly, the Northern Sea Route (NSR) … along Russia’s northern shore, between the Kara Sea and the Bering Strait  is becoming increasingly navigable. … Russia’s Northern Fleet is based in the Kola Peninsula, near Murmansk, and contains two-thirds of Russia’s nuclear submarine fleet … the Arctic … protects Russia’s strategic deterrent and … allows a sizable share of its Navy to reach the northern Atlantic. Russia’s military capabilities in the Arctic have steadily increased over the past ten years. Russia has opened new airfields and refurbished old ones; created a dedicated northern command for the region; and set up two Arctic brigades. It also is planning to substantially increase its icebreaker fleet … already … the largest in the world. Russia’s new military base on Aleksandra Land is touted as the ‘largest building in the entire circumpolar high Arctic.’ …”
“For #Russian #oil companies, the historic agreement to boost prices by cutting output in conjunction with [#OPEC] was an easy win. Extending the deal will be less straightforward. Cuts so far this year came alongside the traditional seasonal stagnation in Russian production, meaning the country made relatively few sacrifices in exchange for an increase in crude prices of more than 10 percent. For the powerful Russian oil bosses who plan to discuss the OPEC accord with Energy Minister Alexander Novak this week, a decision by the government to extend the cuts beyond June would stymie plans to boost output, creating many more headaches than the initial agreement. …”
“#IslamicState has ramped up sales of #oil and #gas to the regime of Syrian President Bashar al-#Assad, U.S. and European officials said, providing vital fuel to the government in return for desperately needed cash. … helping sustain Islamic State amid unprecedented military pressure on the militant group in both #Syria and# Iraq. It is also helping the group despite the regime’s insistence that it is dedicated to eradicating the militant group with the help of its top allies Russia and Iran. … Oil and gas sales to Mr. Assad’s regime are now Islamic State’s largest source of funds, replacing revenue the group once collected from tolls on the transit of goods and taxes on wages ….”
Russia’s economy returns to modest growth next year, but faces medium-term risks from volatility in crude oil prices, the International Monetary Fund said.
An IMF assessment found the Russian economy contracted by 3.7 percent last year because of the collapse in crude oil prices. The economy remains in recession this year before growth resumes at an estimated 1 percent next year. * * * [OPEC] said it expected Russian oil supplies would increase slightly to average almost 11 million barrels per day in 2016, a level that’s higher by 10,000 bpd from the previous estimate. More narrowly, however, second quarter output was 40,000 bpd lower than the first quarter average.
Click here for UPI: “IMF: Russia still facing risk from low oil prices; Country remains in recession for 2016, but returns to slow growth by next year”
Oil fell amid forecasts prices may slide toward $40 a barrel as consumption falters and halted supplies return.
Futures fell 0.6 percent in New York. Analysts from BNP Paribas SA to JBC Energy GmbH warned prices may sink towards $40 a barrel amid a global glut of supply and weakening demand. Prices on Friday pared earlier losses of as much as 1.4 percent after data from China showed its economy is stabilizing and the country processed a record amount of crude.
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Oil has traded between about $44 and $52 a barrel since early June after almost doubling from a 12-year low in February amid a spate of supply disruptions and falling U.S. output. Prices have been whipsawed this week, pulled down by U.S. fuel data that signaled faltering demand and rallying when global equity markets advance and a weakening dollar bolstered commodities.
Click here for Bloomberg: “Oil Falls Amid Warnings of Retreat to $40 on Rocky Rebalance”