0715GMT//Russia claims military victory as Witkoff flies to Moscow; Iraq to sell Lukoil assets to the US; Porsche cars stop working in Russia

PUTIN TO MEET WITKOFF: Vladimir Putin is due to meet with Steve Witkoff in the Kremlin on Tuesday to discuss plans to impose a peace deal on Ukraine. This is Witkoff's sixth meeting with Putin in the Kremlin. (COMMENT>> It is surely no coincidence that on the eve of Witkoff's mission to meet with Putin, the Kremlin announces that it has captured the Ukrainian fortress city of Pokrovsk. This capture is unconfirmed, but that probably doesn't matter. What matters for the Kremlin is the illusion that it is moving forward on the battlefield, a grinding military juggernaut that the US can only stop by forcing Ukraine to make concessions. Putin has said that he won't budge on his key demands that Ukraine retreats from all areas of the Donbas and that Volodymyr Zelensky is replaced as Ukrainian leader.)

IRAQ TO SELL LUKOIL ASSETS TO THE US: Iraq has said that it wants to sell Lukoil's stake in the giant West Qurna-2 field to US companies. West Qurna-2 is Lukoil's most important overseas asset. It owns a 75% stake in the field, which produces 500,000 barrels of oil per day. Lukoil declared a force majeure at the field in November shortly after the US imposed sanctions on Lukoil. (COMMENT>> Losing control of West Qurna-2, its most prized asset, is a major blow to Lukoil and the Kremlin. As expected, the US is a direct beneficiary.)

SUDAN OFFERS RED SEA NAVAL BASE: Sudan has offered the Kremlin a 25-year lease on a naval base on the Red Sea coast in exchange for weapons, the WSJ has reported. Russia will be able to deploy 300 soldiers and four warships at its base at Port Sudan. (COMMENT>> The Kremlin has been angling for a base on Sudan's Red Sea coast for years. Analysts have warned that it may be able to disrupt shipping routes from the base. The base will also become an important hub for the Kremlin to project influence across Africa -- a key Kremlin strategy.)

GUVNOR CEO QUITS: Torbjörn Törnqvist quit as CEO of Switzerland-based Gunvor Group on Monday, less than a month after his failed attempt to buy Russian oil and gas company Lukoil. Gunvor also said that the Swedish national would sell his controlling interest in the company to management. (COMMENT>> This just shows how toxic it is to even try to do business with the Kremlin. Impending US sanctions on Lukoil pushed it into attempting a fire sale, but this was scuppered by the White House when it accused Guvnor of being a "Kremlin agent".)

TOURIST TAXES INTRODUCED: More Russian cities have introduced a tourist tax to offset declining tax revenues. Voronezh, Nizhny Novgorod, Izhevsk, Kursk and Zhigulevsk will charge a tax of 2% on hotel stays. Samara and Tolyatti will charge 1% over the summer and 0.5% over winter. (COMMENT>> Domestic tourism in Russia has increased since the Kremlin's invasion of Ukraine, and slipping in a "tourist tax" is seen by cash-strapped cities as a way of plugging budget deficits created by the worsening economy. St. Petersburg, Sochi, and neighbouring Suzdal and Vladimir introduced a tourist tax earlier this year.)

PORSCHE CARS TURNED INTO 'BRICKS': Hundreds of Porsche cars in Russia failed to start on Monday, a Russian dealership has said. It said that a security demobiliser targeting Porsche cars in Russia had been turned on via a satellite system. (COMMENT>> The Kremlin has been mocking Western sanctions, suggesting that they are so leaky that they barely count. This news item suggests otherwise.)