🟥 Putin picks Trump over Iran
Hello and welcome to the first edition of our new English-language newsletter—your essential guide to Russian politics and economics. Written by Farida Rustamova and Margarita Liutova, it will arrive in your inbox every two weeks.
This time, our main stories are:
Why the Kremlin has decided that relations with the United States are more important than helping Iran in its time of need
The state seizure of Moscow’s Domodedovo airport after a stand-off lasting more than two decades—and what it means for Russian business
We also look briefly at one of the largest street demonstrations in Russia since the full-scale invasion of Ukraine, the Kremlin’s decision to create a Russian version of China’s WeChat, and the Finance Ministry’s desperate efforts to adapt the budget to fluctuating oil prices.
⏳This newsletter contains 2,072 words – it will take about 10 minutes to read.
Putin-Trump bromance set to survive Middle East crisis
Despite the Kremlin’s dislike of regime change instigated by the West, and Russia’s close ties with Iran, Russia decided not to do anything in the Middle East that could jeopardize its friendly relations with the White House.
The attacks by Israel and the U.S. on Iran put Russian President Vladimir Putin in a difficult spot. Iran is a major Russian ally and, amid the war in Ukraine, Russia doesn't have many allies. At the same time, Putin was extremely reluctant to jeopardize his relations with U.S. President Donald Trump by being seen to provide significant backing for Iran.
Putin behaved cautiously from the beginning of the conflict in the Middle East. He did not rush to make any public comments following the initial Israeli air strikes on Iran on June 13. And this was characteristic: Putin is known for disappearing from the public arena when something terrible happens so as to avoid being associated with negative news.
Officially, Russian criticism of Israel was expressed by the Foreign Ministry and Russia’s Permanent Representative to the UN. But Putin is firmly in charge of Russian foreign policy, and these statements were merely a holding-pattern. Putin only spoke publicly about the war a week after Israel’s attack (during a meeting with foreign journalists at the St. Petersburg International Economic Forum). His comments were as neutral as possible. When asked how Russia would react if Israel or the U.S. assassinated Iran’s supreme leader, Ayatollah Khamenei, he was reluctant to answer—perhaps because his feelings about the West using violence to effect regime change are so strong that he feared losing his composure. “I don't even want to discuss it,” he told the gathered reporters.
On the day the U.S. bombed Iran’s nuclear facilities, Putin was shown discussing Russia’s school history curriculum. But when Iranian Foreign Minister Abbas Araqchi flew to Moscow the next day, he was obliged to comment. Yet, the Russian leader did not directly condemn the U.S. for striking Iran. And he did not offer Iran anything more than moral support.
Formally, Putin is under no obligation to provide military assistance to Iran—Russia and Iran’s strategic agreement signed in January has not yet come into force. But this is decidedly not in the spirit of the agreement.
Russia is only a party to a few such bilateral treaties. Only one of them—with North Korea—involves collective defense: in other words, in the event of an attack, the two parties are obliged to provide each other with military assistance. The agreement with Iran states that, if one party is attacked, the other should not provide military assistance to its enemy.
Putin’s explanation for Russia's refusal to offer more support was simple. “We already have ongoing combat operations,” he told journalists in St. Petersburg, referring to the fighting in Ukraine. And he called anyone who considers Russia an unreliable ally a “provocateur.”
At the same time, Putin is obviously interested in being a mediator between Tehran, Washington, and Tel Aviv. Indeed, the Kremlin has been keen to talk to the U.S. about Iran's nuclear program ever since the beginning of Trump's second term. During their first official phone call, it was one of the issues discussed by the two leaders. Likely, the Kremlin believes that offering this service might bring Putin closer to Trump, and weaken U.S. support for Ukraine. But Trump has so far shown little interest in taking Putin up on his offer.
“They will turn over this page and move on,” a source with knowledge of Kremlin thinking told Faridaily.
Putin values the relationship with Trump too highly to “take offense” over the U.S. actions in Iran, the source said. “Putin is acting pragmatically.”
Putin likes nothing more than talking about how he wants to create a multipolar world. And he often argues this was why the war in Ukraine was necessary. But for Trump, he is willing to make an exception. The best way to stop U.S. aid and political support for Kyiv, and thus inflict a defeat on Ukraine, is through the ego of the U.S. president. And Putin has not abandoned his hopes of accomplishing this.
Curtain falls on 20-year Domodedovo airport ownership saga
The state seizure of Domodedovo is a watershed moment for Russian business, revealing how even high-level connections are no longer sufficient protection.
It emerged in January that the Prosecutor General was seeking to seize one of Russia's largest airports, Domodedovo, from its owners. The airport's shares were quickly frozen, and its owners, billionaires Dmitry Kamenshchik and Valery Kogan, were banned from leaving the country. Less than six months later, at the case’s first hearing on June 19, a court granted all the Prosecutor General’s wishes. Domodedovo shares were immediately seized, and the entry about Domodedovo in the official Russian register of companies was updated (the only shareholder of the airport is now listed as Rosimushchestvo, a department subordinate to the Finance Ministry, which manages all state property).
This was the culmination of a two-decade battle between Kogan and Kamenshchik, and the state—and it stands out even amid the unprecedented campaign to nationalize businesses—both Russian and foreign—that has been ongoing since the full-scale invasion of Ukraine. Apart from anything else, Domodedovo is one of the most valuable single assets that has been nationalized: it’s estimated to be worth up to $4.2 billion, and is the fourth largest airport in Russia in terms of passenger traffic.
Until now, Kamenshchik and Kogan had been able to use their connections to fend off criminal cases and other attacks from law enforcement officials, as well as other tycoons who wanted to snap up the asset. A former official told Faridaily that, in 2011, companies affiliated with then-President Dmitry Medvedev were interested in acquiring Domodedovo—but they were rebuffed. “Kamenshchik had a $3.8 billion offer on the table, but he said the airport was worth $10 billion,” the former official said.
While Kamenshchik and Kogan clearly have high-level supporters, the identity of their backers has never been clear. Since the 1990s, it has been Kogan, a notoriously publicity-shy individual (who has never given an interview) who has been responsible for relations with Russian officials. When asked about who protects Domodedovo, people in the transportation industry usually just smile and shrug.
Over the years, the successful resistance of Domodedovo's owners to state pressure has annoyed many in government, and law enforcement agencies. Even after the Kremlin demanded in 2014 that big business stop owning assets via foreign entities, Domodedovo remained owned by a company registered on the Isle of Man. Only in 2023 did Kamenshchik and Kogan finally re-register it in Russia. But this was too little, too late.
In the official lawsuit, prosecutors accused Kamenshchik and Kogan of creating a “false appearance” of returning assets to Russia because their business remained “under foreign control.” This claim arose from the fact that Kogan allegedly has an Israeli passport, while Kamenshchik has passports or residence permits in Turkey and the UAE (both businessmen said in court that they had long ago renounced their foreign residencies).
"You can no longer do things the way you used to—hide your business abroad, transfer money there, and treat everyone as idiots,” a top manager at a state-owned company, who knows Kamenshchik and is close to Putin, told Faridaily.
Significantly, the court ruling about Domodedovo took place hours before the opening of the St. Petersburg International Economic Forum (SPIEF). In previous years, the authorities have tried to ensure there were no news stories that reflected badly on Russia’s investment climate in the run-up to the event. But not this time. While the court date may have been set by chance, it was remarkable that it took only one short, closed-door session for it to reach its verdict. Similar trials to nationalize assets have lasted for months, or even years.
In response to a question during the SPIEF plenary session, Putin refused to use the term “nationalization” about Domodedovo, and contemptuously called what was going on a “fuss” and a “dispute.” He appeared to want to portray it as a conflict between businessmen; not a lawsuit brought by the Prosecutor General against a private company.
In a letter about Domodedovo written 20 years ago, Putin wrote: “Government actions must not lead to the destruction of a successful business.” Now, the Kremlin no longer stands up for “successful businesses.” Unless, of course, the president's inner circle stands to gain. In the absence of an independent judiciary, connections among high-ranking officials with access to the president have become the last hope of Russian businesses. The Domodedovo case shows that even this defense is no longer reliable.
Analysis in brief
One of the largest opposition protests since the full-scale invasion of Ukraine
As many as 4,000 people gathered in the southern Siberian city of Gorno-Altaisk on Saturday to protest proposed local government reforms. Not only did they demand the cancellation of the reforms (which merged municipal districts, and raised the possibility of abolishing elections of municipality heads), but they also sought the resignation of Altai Region Governor Andrei Turchak, the son of one of Putin's judo sparring partners.
While Altai Region is a deprived area of Russia a long way from Moscow, it has a special significance for the Kremlin because its natural beauty means many top officials travel regularly there for vacations. Putin himself has a residence in the area.
Officials said the protest (which obtained permission to go ahead from the authorities) was attended by about 1,000 people. Local activists claimed there were more like 4,000 present. Even if the official estimate is more accurate, it is an extraordinarily big gathering for a city of just 63,000 people. Nevertheless, it was ignored by the authorities, and, three days later, the reforms were approved by the local parliament. There is no sign the unrest will continue.
Russia to create a messenger modeled on China's WeChat
Putin signed a law Tuesday to allow messenger users to create a digital ID, and perform legally significant actions (like signing contracts and paying for goods). This is a provision for a messenger known as MAX that was launched in test mode in March. The company responsible for its development is VK, which is controlled by Putin's close friend Yuri Kovalchuk. With the help of MAX, the authorities want to reduce usage of WhatsApp and Telegram in Russia (together, these two apps are used by about 80% of the population). The history of Russia’s attempts to develop local alternatives suggests that MAX will not meet with much success—unless, of course, it is given a helping hand by the state (for example, via a ban on WhatsApp or Telegram).
Finance Ministry in a bind
Amid declining oil-and-gas-revenues, Finance Minister Anton Siluanov has once again floated a reduction in the $60 a barrel oil cut-off price as part of Russia’s budget rule (currently, if oil costs more than $60 a barrel then oil-and-gas revenue is squirreled away in the National Welfare Fund and not used for spending).
Siluanov had previously gone back and forth on such a change, initially arguing for it, before going on to rule it out. Siluanov’s twists and turns show how the Finance Ministry is trying to combine two incompatible things: fiscal stability, and increased state spending. Tightening the budget rule actually means cutting spending—a measure that, in wartime, would look like an admission of vulnerability. So, the Ministry has to be cautious.
Thank you for extraordinary informative (and superbly well written) news!
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A very useful and concise account! Thank you. Please resist the temptation to make it any longer in future, this is perfect!