0825//Drones close Danish airport; Kremlin extends petrol export ban
DRONES CLOSE DANISH AIRPORT: Drones closed an airport in Denmark for the third time this week on Thursday evening. Aalborg airport in the north of the country was closed around midnight. Some Danish and NATO officials have blamed Russia for the drone flights near the airports but Russia has denied any involvement.
PETROL EXPORT BAN: The Kremlin will extend a ban on petrol exports to the end of the year because of continued shortages in the domestic market, deputy PM Alexander Novak said on Thursday. He said that stockpiles were mainly covering any deficit but the situation in "September and October is a difficult one". (COMMENT: Ukrainian drone attacks on Russian oil refineries have knocked out around 20% of Russia's oil refining capacity. On Thursday evening Ukrainian drones hit an oil refinery in the Krasnodar region. Fuel shortages have been reported across the country.)
ALTAI ACTIVIST RELEASED: A court in the Altai region of Siberia on Thursday ordered the release from police custody of high-profile local activist Aruna Arna. She had been arrested the day before for "terrorism". The judge still placed major restrictions on her movement, banning her from airports and train stations and from using her mobile phone and the internet. (COMMENT: Arna has a major following in Altai for organising protests against pro-Kremlin oligarchs. By releasing her from prison, the judge may have seen off any protests against her arrest. Also, the restrictions on her freedom of movement and freedom to communicate effectively stop her from agitating against the authorities.)
SABOTAGE: The authorities in Pskov, northwest Russia, reported an explosion on a railway line, although they also said that nobody was injured in the blast and no train had been derailed. Media said that this was a second or third sabotage attack on the Russian railway system this month. (COMMENT: Russia relies heavily on its railway system to move goods and military supplies around the country. In other words, this is an Achilles Heel that Ukraine can target.)
VAT INCREASE: Elvira Nailbullina, the head of Russia's Central Bank, said that a rise in VAT to 22% from 20% from Jan. 1 will only have a "short-term impact on inflation" and will instead be a "net positive" for the economy as it will "balance the budget". (COMMENT: The Kremlin is increasing VAT so that it can pay for its military in Ukraine. Analysts have warned that the VAT rise will push up inflation. The rouble has already lost value since the VAT increase was announced. Russia's budget deficit has grown to around 2% of GDP, four times its expected size.)
PANDA BOND: Rosatom, Russia's nuclear agency, said that it was close to issuing a so-called 'Panda Bond', a yuan-denominated debt in China. Ilya Rebrov, the Rosatom deputy head, said that the 'Panda Bond' issue was only a matter of "weeks or months" away. (COMMENT: Russian corporates haven't issued a 'Panda Bond' since 2017 but it now views China as an important and liquid finance market. China has become an increasingly important trading partner for Russia because of Western sanctions placed on its economy and companies. The question for Russia and Russian companies is whether Chinese companies will baulk at buying Russia-issued debt because of concerns of secondary US sanctions.)
CHINESE DRONES: Chinese drone specialists have visited an electronics plant in Izhevsk, central Russia, at least six times to test drones, European security officials told the Reuters news agency. Reuters quoted the officials as saying that the Chinese engineers also helped update Russian drone systems. They said that Russia may have received attack drones from China during this period, too. (COMMENT: This is, possibly, the first report that China has been supplying Russia with drones and helping it develop drones.)