0715GMT//Kremlin recognises Islamic State of Afghanistan; oil and gas revenues drop to lowest in 2-1/2 years; deputy head of navy killed
RECOGNISING THE TALIBAN: Russia on Thursday became the first country in the world to recognise the Islamic State of Afghanistan. (COMMENT: Economics is driving this decision. The Kremlin needs Afghanistan as part of a transit route south to South Asia. The Taliban and the Kremlin also share enemies – the West.)
NAVY DAY PARADE CANCELLED: The Kremlin is on the brink of cancelling its annual naval parade on July 27 in St Petersburg for "security reasons", the St Petersburg-based Fontanka news website reported on Thursday. This would be the first time since 2015 that Putin won't inspect a flotilla of warships. Instead, he will lay a wreath in a public square. (COMMENT: This has not yet been officially confirmed. If it is, Putin will be disappointed as he clearly enjoys presiding over Russia's Navy, a legacy of one of his heroes – Tsar Peter the Great. No details of the "security threat" have been released but Ukrainian drones have increased their range and accuracy.)
OIL AND GAS INCOME DROPS, AGAIN: Russia's export revenues from oil and gas sales in June were 495 billion roubles ($6.25 billion), according to Ministry of Economy data. This is 24% lower than June 2024 and the lowest monthly income from oil and gas sales since January 2023. (COMMENT: Soft oil and gas prices are piling pressure onto the Russian economy. This generates around a third of the Kremlin's income.)
ASSET SEIZURE: Russian Prosecutors on Thursday filed a lawsuit to seize Yuzhuralzoloto, Russia's fourth largest gold miner, from Russian businessman Konstantin Strukov who serves as a deputy in the Chelyabinsk regional parliament. The lawsuit states that it is illegal for politicians to own businesses. (COMMENT: This is yet another asset grab by the Kremlin from Russian oligarchs. It seized the Domededovo airport outside Moscow last month. The Kremlin has increased the pace of these asset grabs since it launched its war in Ukraine, often targeting Russian businessmen who live abroad. Strukov lives in Russia and has been sanctioned by the West but the Kommersant newspaper said that the Yuzhuralzoloto gold mine was owned by his daughter, a Swiss citizen.)
INTEREST RATES: Russia's Central Bank will discuss cutting its core interest rate at its meeting on July 25, Elvira Nabiullina, head of the Russian Central Bank, said on Thursday. (COMMENT: She is under pressure from business and increasingly from Kremlin insiders, to cut rates. Last month, the Central Bank cut rates to 20% from 21%. For Nabiullina, slowing inflation may be key to cutting rates.)
CAR SALES DROP: There was a drop of around 28% in new car sales in the first six months of the year compared to the same period last year, Russia's Ministry of Trade said on Thursday. (COMMENT: More negative economic data.)
ROW WITH AZERBAIJAN: Police in Moscow arrested another high-profile Azerbaijan businessman, Vagif Suleymanov (called a 'thief-in-law for his underworld connections), for visa violations. Media reported that he will be held in a Moscow detention centre and then deported. (COMMENT: This arrest is part of a row between Azerbaijan and Russia. In the Russian media, commentators are already talking up the prospect of sanctions. This is a classic Kremlin tactic against former vassal states that it feels are out of line. In Baku, Russians living in the Azerbaijani capital have reported "violent" night-time raids by security forces. The Kremlin has warned Russian holidaymakers travelling to Azerbaijan to be wary.)
ROW WITH ARMENIA: Armenia's parliament on Thursday approved legislation to seize the country's power grid from the control of pro-Kremlin oligarch Samvel Karapetyan. Police later raided Karapetyan's Tashir Group HQ in Yerevan, arresting two managers for money laundering and tax evasion. (COMMENT: Police arrested Karapetyran last month for plotting a coup. This legislation was passed quickly. Expect Kremlin push-back.)
DEPUTY HEAD OF NAVY KILLED: The deputy commander of the Russian Navy was killed on Wednesday when US-made HIMARS artillery hit his HQ in the Krusk region of southern Russia, Russian media reported on Friday. (COMMENT: This is a major scalp for Ukraine. Gudkov, 42, was considered a rising star of Russia's military and had already been made a Hero of Russia, the Kremlin's top medal. Gudkov was also a high profile target for Ukraine as his marines are accused of taking part in the rape and pillage of Bucha, north of Kiyv, in March and April 2022.)
SLOWING MOBILE INTERNET: Rostov region in southern Russia will permanently slow and restrict mobile internet access to hinder Ukrainian drone attacks, its governor said on Thursday. (COMMENT: Mobile internet access across Russia has become increasingly patchy as local officials turn it on and off to counter drone attacks. Rostov is the first region to admit that it will now permanently downgrade coverage. This will impact business and economic efficiency.)
PUTIN-TRUMP TELEPHONE CALL: Putin and Donald Trump held their second telephone call in less than a month on Thursday afternoon. The Kremlin said that the two men spoke for an hour. The Kremlin said that Putin had once again told Trump that he had no intention of relaxing his war aims in Ukraine. Trump later told the US media that he had "made no progress" trying to persuade Putin into a ceasefire deal. (COMMENT: Perhaps the timing of this phone call, rather than the predictable stalemate outcome, is the most interesting aspect. It came only two days after French Pres. Emmanuel Macron had spoken to Putin. It's clear that Putin has no real interest in pushing for a peace deal in Ukraine at the moment.)
NEWS MATRIX:
Four important stories in today's New Matrix. Russia's recognition of the Taliban as the rightful rulers of Afghanistan is not a surprise, nor is another drop in oil and gas revenues. The drop in oil and gas revenues, though, is very important. More surprising are comments from Russia's Central Bank chief that she is considering cutting interest rates and also unconfirmed reports that the Kremlin could cancel its annual naval parade.