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Russia’s arms sales to Middle East spike to record-high levels

Fighter jets, tanks, and air defense systems are some of the weapons Mid East clients are looking to acquire from Moscow

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(Strategic Culture Foundation) – Dubai Airshow 2017, one of the largest and most successful air shows in the world, ended on Nov.16, having drawn over 79,000 trade visitors, up around 20% over the last version of the event in 2015. The total order tally is $113.8 billion in orders. It nearly tripled from the $37.2 billion signed two years ago.

Russia’s exposition at the Dubai Airshow 2017 included the combat helicopter Ka-52, multi-mission fighter MiG-29M, Su-35 supermaneuverable air defense fighter, Be-200 multipurpose amphibious aircraft, combat-transport helicopter Mi-35M, long-range air defense system S-400 Triumph, and short-range air defense missile system Pantsir–S1. The ‘Russian Knights’ aerobatic demonstration team performed extraordinary stunts riding through the skies to greatly impress spectators.

The United Arab Emirates (UAE) is interested in procuring the Sukhoi Su-35 multi-role fighter. The country is considering the purchase of 10 or more of such aircraft. The UAE and Russia signed a letter of intent on the purchase of Su-35 fighter jets in Feb. 2017. The talks are in progress. The Emirates will be the second country after China to buy the plane.

The UAE has already purchased Russian ground weapons, such as BMP-3 infantry combat vehicles and Pantsir S1 air-defense systems. In February, the Emirates entered into military contracts with Russia worth $1.9 billion. The deal includes 5,000 anti-armor missiles in addition to training and logistic support. The UAE started talks with Rostec company on the development of light fighter based on the MiG-29 twin-engine aircraft with development set to kick off in 2018.

The military cooperation with the UAE is a good example to illustrate the increasingly growing demand for Russian weapons in the Middle East. Orders from Arab countries account for roughly 20 percent of Russian weapons’ exports. Last year, Russia delivered more than $1.5 billion in arms to Algeria, $37 million to Egypt, $374 million to Iran and $300 million to Iraq. Today, the Russia’s portfolio of weaponry orders from the countries of the region is $8 billion. In 2017, the Russian defence industry has been making major inroads in the Middle East and North Africa. Bahrain, Egypt, Morocco, Saudi Arabia, the United Arab Emirates and Tunisia are interested in purchasing Russian weapon systems.

This year, Moscow started delivery of 50 MiG-29 fighter aircraft to Egypt. Cairo is to start receiving 46 Ka-50 combat helicopters. It was reported in September that Algeria is going to buy over 300 Russian-made BMPT-72 Terminator-2 tank support combat vehicles (TSCV) in order to support T-90SA main battle tanks bought from Russia earlier. Now, the Algerian military uses technical vehicles equipped with Kornet ATGM launchers and ZSU Shilka self-propelled, radar guided anti-aircraft weapon systems.

In early October, Russia had signed a number of landmark arms contracts with Riyadh, following President Vladimir Putin’s talks with Saudi King Salman bin Abdulaziz Al Saud. The deal includes the S-400 anti-aircraft missile system, as well as Kornet-EM anti-tank missile systems, TOS-1A “Buratino” heavy flame systems, AGS-30 grenade launchers and Kalashnikov AK-103 assault rifles. The parties agreed to organize the licensed production of Kalashnikov AK-103 assault rifles and ammunition in Saudi Arabia.

On September 12, Moscow and Ankara reached an agreement on the delivery of S-400 systems to Turkey, a NATO member. Czech Gen. Petr Pavel, the chairman of NATO’s Military Committee, recently said that Turkey’s purchase of the S-400 may bar it from any integrated air-defense system with NATO allies but Ankara stands tall, refusing to succumb to pressure.

The already agreed on sales of S-400 air defense system to Saudi Arabia and Turkey are groundbreaking deals. The system appears to be in great demand internationally, including India, not a Middle East country but a very important customer. No way would Russia miss out on its slice of air defense systems’ market share.

Bahrain and Russia are also in talks on the purchase of S-400. Further arms deals will be discussed during the talks with Bahraini Prince Nasser bin Hamad Al Khalifa, commander of the country’s Royal Guard, who is expected to visit Russia soon.

Morocco is standing in line to acquire the S-400. Rabat and Moscow are in talks on the Sukhoi Su-34 tactical bomber and Amur-1650 diesel-electric submarine deal.

Last month, Russia and Qatar signed a memorandum-of-understanding (MoU) calling for increased military and technical cooperation. Doha has recently expressed interest in purchasing the S-400 missile defence system.

It’s not S-400 only. Russian weapons, especially aircraft and air defense systems, have proven to be a cost effective alternative to much more expensive Western systems. They are reliable and have better characteristics. The military campaign in Syria demonstrated they could be used to alter the course of a high-stakes conflict. With Syria having become a department store window displaying the latest in Russian weapons systems offered for sale to other countries, Moscow is significantly expanding its arms sales to the Persian Gulf states with their leaders going with greater regularity to Moscow.

All in all, the spike in Middle East arms sales is a success story for Russia’s defense industry. A big exporter of natural resources, Russia also exports high-tech products with many countries in line to purchase them.

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Russia’s Lukoil Halts Oil Swaps In Venezuela After U.S. Sanctions

Under the new wide-ranging U.S. sanctions, Venezuela will not be able to import U.S. naphtha which it has typically used to dilute its heavy crude grades.

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Via Oilprice.com


Litasco, the international trading arm of Russia’s second-biggest oil producer Lukoil, stopped its oil swaps deals with Venezuela immediately after the U.S. imposed sanctions on Venezuela’s oil industry and state oil firm PDVSA, Lukoil’s chief executive Vagit Alekperov said at an investment forum in Russia.

Russia, which stands by Nicolas Maduro in the ongoing Venezuelan political crisis, has vowed to defend its interests in Venezuela—including oil interests—within the international law using “all mechanisms available to us.”

Because of Moscow’s support for Maduro, the international community and market analysts are closely watching the relationship of Russian oil companies with Venezuela.

“Litasco does not work with Venezuela. Before the restrictions were imposed, Litasco had operations to deliver oil products and to sell oil. There were swap operations. Today there are none, since the sanctions were imposed,” Lukoil’s Alekperov said at the Russian Investment Forum in the Black Sea resort of Sochi.

Another Russian oil producer, Gazprom Neft, however, does not see major risks for its oil business in Venezuela, the company’s chief executive officer Alexander Dyukov said at the same event.

Gazprom Neft has not supplied and does not supply oil products to Venezuela needed to dilute the thick heavy Venezuelan oil, Dyukov said, noting that the Latin American country hadn’t approached Gazprom Neft for possible supply of oil products for diluents.

Under the new wide-ranging U.S. sanctions, Venezuela will not be able to import U.S. naphtha which it has typically used to dilute its heavy crude grades. Analysts expect that a shortage of diluents could accelerate beginning this month the already steadily declining Venezuelan oil production and exports.

Venezuela’s crude oil production plunged by another 59,000 bpd from December 2018 to stand at just 1.106 million bpd in January 2019, OPEC’s secondary sources figures showed in the cartel’s closely watched Monthly Oil Market Report (MOMR) this week.

By Tsvetana Paraskova for Oilprice.com

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Germany Pulls Rank on Macron and American Energy Blackmail

Why France’s Macron, at the last minute, attempted to undermine the project by placing stiffer regulations is a curious question.

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Authored by Finian Cunningham via The Strategic Culture Foundation:


It was billed politely as a Franco-German “compromise” when the EU balked at adopting a Gas Directive which would have undermined the Nord Stream 2 project with Russia.

Nevertheless, diplomatic rhetoric aside, Berlin’s blocking last week of a bid by French President Emmanuel Macron to impose tougher regulations on the Nord Stream 2 gas project was without doubt a firm rebuff to Paris.

Macron wanted to give the EU administration in Brussels greater control over the new pipeline running from Russia to Germany. But in the end the so-called “compromise” was a rejection of Macron’s proposal, reaffirming Germany in the lead role of implementing the Nord Stream 2 route, along with Russia.

The $11-billion, 1,200 kilometer pipeline is due to become operational at the end of this year. Stretching from Russian mainland under the Baltic Sea, it will double the natural gas supply from Russia to Germany. The Berlin government and German industry view the project as a vital boost to the country’s ever-robust economy. Gas supplies will also be distributed from Germany to other European states. Consumers stand to gain from lower prices for heating homes and businesses.

Thus Macron’s belated bizarre meddling was rebuffed by Berlin. A rebuff was given too to the stepped-up pressure from Washington for the Nord Stream 2 project to be cancelled. Last week, US ambassador to Germany Richard Grenell and two other American envoys wrote an op-ed for Deutsche Welle in which they accused Russia of trying to use “energy blackmail” over Europe’s geopolitics.

Why France’s Macron, at the last minute, attempted to undermine the project by placing stiffer regulations is a curious question. Those extra regulations if they had been imposed would have potentially made the Russian gas supply more expensive. As it turns out, the project will now go-ahead without onerous restrictions.

In short, Macron and the spoiling tactics of Washington, along with EU states hostile to Russia, Poland and the Baltic countries, have been put in their place by Germany and its assertion of national interests of securing economical and abundant gas supply from Russia. Other EU member states that backed Berlin over Nord Stream 2 were Austria, Belgium, Cyprus, Greece and the Netherlands.

Washington’s claims that Nord Stream 2 would give Russia leverage of Europe’s security have been echoed by Poland and the Baltic states. Poland, and non-EU Ukraine, stand to lose out billions of dollars-worth of transit fees. Such a move, however, is the prerogative of Germany and Russia to find a more economical mode of supply. Besides, what right has Ukraine to make demands on a bilateral matter that is none of its business? Kiev’s previous bad faith over not paying gas bills to Russia disbars it from reasonable opinion.

Another factor is the inherent Russophobia of Polish and Baltic politicians who view everything concerning Russia through a prism of paranoia.

For the Americans, it is obviously a blatant case of seeking to sell their own much more expensive natural gas to Europe’s giant energy market – in place of Russia’s product. Based on objective market figures, Russia is the most competitive supplier to Europe. The Americans are therefore trying to snatch a strategic business through foul means of propaganda and political pressure. Ironically, the US German ambassador Richard Grenell and the other American envoys wrote in their recent oped: “Europe must retain control of its energy security.”

Last month, Grenell threatened German and European firms involved in the construction of Nord Stream 2 that they could face punitive American sanctions in the future. Evidently, it is the US side that is using “blackmail” to coerce others into submission, not Russia.

Back to Macron. What was he up to in his belated spoiling tactics over Nord Stream 2 and in particular the attempted problems being leveled for Germany if the extra regulations had been imposed?

It seems implausible that Macron was suddenly finding a concern for Poland and the Baltic states in their paranoia over alleged Russian invasion.

Was Macron trying to garner favors from the Trump administration? His initial obsequious rapport with Trump has since faded from the early days of Macron’s presidency in 2017. By doing Washington’s bidding to undermine the Nord Stream 2 project was Macron trying to ingratiate himself again?

The contradictions regarding Macron are replete. He is supposed to be a champion of “ecological causes”. A major factor in Germany’s desire for the Nord Stream 2 project is that the increased gas supply will reduce the European powerhouse’s dependence on dirty fuels of coal, oil and nuclear power. By throwing up regulatory barriers, Macron is making it harder for Germany and Europe to move to cleaner sources of energy that the Russian natural gas represents.

Also, if Macron had succeeded in imposing tougher regulations on the Nord Stream 2 project it would have inevitably increased the costs to consumers for gas bills. This is at a time when his government is being assailed by nationwide Yellow Vest protests over soaring living costs, in particular fuel-price hikes.

A possible factor in Macron’s sabotage bid in Germany’s Nord Stream 2 plans was his chagrin over Berlin’s rejection of his much-vaunted reform agenda for the Eurozone bloc within the EU. Despite Macron’s very public amity with Chancellor Angela Merkel, Berlin has continually knocked back the French leader’s ambitions for reform.

It’s hard to discern what are the real objectives of Macron’s reforms. But they seem to constitute a “banker’s charter”. Many eminent German economists have lambasted his plans, which they say will give more taxpayer-funded bailouts to insolvent banks. They say Macron is trying to move the EU further away from the social-market economy than the bloc already has moved.

What Macron, an ex-Rothschild banker, appears to be striving for is a replication of his pro-rich, anti-worker policies that he is imposing on France, and for these policies to be extended across the Eurozone. Berlin is not buying it, realizing such policies will further erode the social fabric. This could be the main reason why Macron tried to use the Nord Stream 2 project as leverage over Berlin.

In the end, Macron and Washington – albeit working for different objectives – were defeated in their attempts to sabotage the emerging energy trade between Germany, Europe and Russia. Nord Stream 2, as with Russia’s Turk Stream to the south of Europe, seems inevitable by sheer force of natural partnership.

On this note, the Hungarian government’s comments this week were apt. Budapest accused some European leaders and the US of “huge hypocrisy” in decrying association with Russia over energy trade. Macron has previously attended an economics forum in St Petersburg, and yet lately has sought to “blackmail” and disrupt Germany over its trade plans with Russia.

As for the Americans, their arrant hypocrisy is beyond words. As well as trying to dictate to Europe about “market principles” and “energy security”, it was reported this week that Washington is similarly demanding Iraq to end its import of natural gas from neighboring Iran.

Iraq is crippled by electricity and power shortages because of the criminal war that the US waged on that country from 2003-2011 which destroyed much of the country’s infrastructure. Iraq critically needs Iranian gas supplies to keep the lights and fans running. Yet, here we have the US now dictating to Iraq to end its lifeline import of Iranian fuel in order to comply with the Trump administration’s sanctions against Tehran. Iraq is furious at the latest bullying interference by Washington in its sovereign affairs.

The hypocrisy of Washington and elitist politicians like Emmanuel Macron has become too much to stomach. Maybe Germany and others are finally realizing who the charlatans are.

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Russia Readies Own Web To Survive Global Internet Shutdown

Russia is simultaneously building a mass censorship system similar to that seen in China.

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Via Zerohedge


Russian authorities and major telecom operators are preparing to disconnect the country from the world wide web as part of an exercise to prepare for future cyber attacks, Russian news agency RosBiznesKonsalting (RBK) reported last week.

The purpose of the exercise is to develop a threat analysis and provide feedback to a proposed law introduced in the Russian Parliament last December.

The draft law, called the Digital Economy National Program, requires Russian internet service providers (ISP) to guarantee the independence of the Russian Internet (Runet) in the event of a foreign attack to sever the country’s internet from the world wide web.

Telecom operators (MegaFon, VimpelCom (Beeline brand), MTS, Rostelecom and others) will have to introduce the “technical means” to re-route all Russian internet traffic to exchange points approved by the Federal Service for Supervision of Communications, Information Technology and Mass Media (Roskomnadzor), Russia’s federal executive body responsible for censorship in media and telecommunications.

Roskomnazor will observe all internet traffic and make sure data between Russian users stays within the country’s borders, and is not re-routed abroad.

The exercise is expected to occur before April 1, as Russian authorities have not given exact dates.

The measures described in the law include Russia constructing its internet system, known as Domain Name System (DNS), so it can operate independently from the rest of the world.

Across the world, 12 companies oversee the root servers for DNS and none are located in Russia. However, there are copies of Russia’s core internet address book inside the country suggesting its internet could keep operating if the US cut it off.

Ultimately, the Russian government will require all domestic traffic to pass through government-controlled routing points. These hubs will filter traffic so that data sent between Russians internet users work seamlessly, but any data to foreign computers would be rejected.

Besides protecting its internet, Russia is simultaneously building a mass censorship system similar to that seen in China.

“What Russia wants to do is to bring those router points that handle data entering or exiting the country within its borders and under its control- so that it can then pull up the drawbridge, as it were, to external traffic if it’s under threat – or if it decides to censor what outside information people can access.

China’s firewall is probably the world’s best known censorship tool and it has become a sophisticated operation. It also polices its router points, using filters and blocks on keywords and certain websites and redirecting web traffic so that computers cannot connect to sites the state does not wish Chinese citizens to see,” said BBC.

The Russian government started preparations for creating its internet several years ago. Russian officials expect 95% of all internet traffic locally by next year.

As for Russia unplugging its internet from the rest of the world for an upcoming training exercise, well, this could potentially anger Washington because it is one less sanction that can keep Moscow contained.

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