Putin to Confront Weak Economy at 'Russian Davos', under Threat of Ukrainian Drones

Russia's economy is in its trickiest spot since the start of the war in 2022. Ramil Sitdikov / POOL/AFP
Russia's economy is in its trickiest spot since the start of the war in 2022. Ramil Sitdikov / POOL/AFP
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Putin to Confront Weak Economy at 'Russian Davos', under Threat of Ukrainian Drones

Russia's economy is in its trickiest spot since the start of the war in 2022. Ramil Sitdikov / POOL/AFP
Russia's economy is in its trickiest spot since the start of the war in 2022. Ramil Sitdikov / POOL/AFP

Russia's Vladimir Putin will address a flagship investment forum in Saint Petersburg on Friday, as the war in Ukraine drags the economy into stagnation and days after brazen Ukrainian drone strikes rocked his home city.

Russia's offensive has led to rising prices, tax hikes, two-decade-high borrowing costs, business shutdowns and labour shortages, putting the economy in its trickiest spot since the start of the war in 2022.

Meanwhile, intensifying Ukrainian attacks on Russia's vital energy infrastructure -- oil depots, refineries, exporting hubs -- are threatening to dent Moscow's most important income stream.

In a highly symbolic strike, one attack hit a facility in Saint Petersburg as the conference opened on Wednesday, with arriving dignitaries greeted by a plume of back smoke in the background.

"The Russian economy is entering a stagnation, with high interest rates and high inflationary pressure," Alexander Kolyandr, a London-based Russian economy expert, told AFP on the eve of Putin's speech.

"I don't see the Russian economy entering the 1990s or something similar, it's just a slow degradation of everything," he added.

Russia's GDP contracted by 0.2 percent in the first three months of the year, according to official statistics -- the first quarterly slump in three years.

And the government posted an $80 billion budget deficit in the first four months of 2026 -- equivalent to 2.5 percent of annual GDP and more than was planned for the entire year.

- 'Russian Davos' -

The Saint Petersburg International Economic Forum (SPIEF) was once dubbed "Russia's Davos".

Western investors keen to make a buck in Russia's chaotic and fast-growing economy would gather to strike deals and hobnob with the Russian elite in the early years of Putin's rule.

But since the assault on Ukraine, it has become a marker of the ex-KGB spy's new place in the world.

Drones and machine guns are put on exhibition display.

Guests from China are now the top attendees. Americans and Europeans are few and far between.

Their slimmed-down ranks led by figures such as former Hollywood actor turned Putin-backer Steven Seagal, American conspiracy theorist Candace Owens, and MPs from the right-wing Alternative for Germany party.

Putin has previously used the event to insist the state can handle the billions being pumped into the military campaign, bash Western sanctions as a form of self-harm and insist that life at home will remain stable.

But in recent months, many Russians say life has become more expensive, as the economic costs of the war spread.

Asked by AFP about Russia's economic woes, the Russian leader on Thursday channeled Mark Twain.

"Rumors of my death have been greatly exaggerated," he said, rejecting the idea Russia was on the brink of a full-blown crisis.

- 'Shut down' -

Far away from where Putin will take to the stage on Friday, some small and medium businesses told AFP they were facing closure.

"Basically, we're planning to shut down," Svetlana, the owner of a maternity and kids brand in the Far East city of Khabarovsk, said.

"People are having less kids, tightening their belts, the costs are rising," the 40-year-old told AFP by phone.

Internet blackouts -- imposed by authorities as a means of thwarting Ukrainian retaliatory drone strikes -- mean her card payment terminal is often out of service.

"We are going back to life 18 years ago, when there was no internet or social media," she said.

"I'm tired of worrying about fines because of the new laws and the endless stream of new requirements that keep popping up," she said.

Vera, a 42-year-old owner of a beauty salon in the Moscow region, said her supplies have "doubled in price" this year.

But having survived "near collapse" in 2022, she is confident she can pull through.

"These difficulties are just unpleasantries," she told AFP.

- 'No good solution' -

The "slow degradation" of the economy would be irreversible unless the Kremlin made "political decisions" such as ending the war and restructuring the economy, expert Kolyandr said.

Russia has run a "two-tier" economy since the start of the war, prioritizing the state-dominated defense industry above everything else, he said.

While higher oil prices off the back of the Iran war have increased Russia's revenues, it has not been to the extent needed to refill the state budget, he added.

Labor shortages are also biting, with some 30,000 men a month being recruited for the war.

"There is no good solution," Kolyandr said.

"They will continue to kick the can for as long as possible."



Oil Falls as Trump Comments on Iran Talks Ease Supply Concerns

FILE PHOTO: A drone view shows the Portuguese flagged oil and chemical tanker ship CB Pacific docked at the Moran Shipping Agencies’ Citgo Petroleum Quincy/Braintree Terminal, March 18, 2026. REUTERS/Brian Snyder/File Photo
FILE PHOTO: A drone view shows the Portuguese flagged oil and chemical tanker ship CB Pacific docked at the Moran Shipping Agencies’ Citgo Petroleum Quincy/Braintree Terminal, March 18, 2026. REUTERS/Brian Snyder/File Photo
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Oil Falls as Trump Comments on Iran Talks Ease Supply Concerns

FILE PHOTO: A drone view shows the Portuguese flagged oil and chemical tanker ship CB Pacific docked at the Moran Shipping Agencies’ Citgo Petroleum Quincy/Braintree Terminal, March 18, 2026. REUTERS/Brian Snyder/File Photo
FILE PHOTO: A drone view shows the Portuguese flagged oil and chemical tanker ship CB Pacific docked at the Moran Shipping Agencies’ Citgo Petroleum Quincy/Braintree Terminal, March 18, 2026. REUTERS/Brian Snyder/File Photo

Oil prices fell on Friday as Middle East supply concerns eased after US President Donald Trump said the country would not attack Iran before US elections next month, amid productive talks to end their war that has disrupted global energy markets.

Brent crude futures dropped $1.68, or 1.61%, to $102.6 a barrel by 0819 GMT. US West Texas Intermediate (WTI) crude futures fell $1.31, or 1.43%, to $90.18, Reuters reported.

On a weekly basis, Brent prices are set to rise after settling 4% higher on Thursday, while WTI is set for a slight decline.

The US President’s pledge not to renew military attacks on Iran before the midterm elections along with China’s resumption of product exports were moving prices lower, PVM Oil Associates analyst Tamas Varga said.

Yet, the escalation of atrocities in ⁠the Arabian Gulf ⁠and around the Red Sea “has dashed hopes that swelling oil exports from the region will be sustainable and, as such, a protracted fall in oil prices in the foreseeable future seems implausible."

On Thursday, Trump said Washington was having "productive discussions" with Iran and said no attack was planned before the November 3 midterm congressional elections after media reports that he was considering an attack before then.

Iran's Tasnim news agency reported the same day ⁠that Foreign Minister Abbas Araqchi said Tehran is reviewing the US response to its proposal that would reopen the Strait of Hormuz within seven days.

"The prospect of easing tensions still needs to be reinforced by concrete progress in negotiations and improvements in shipping safety through the Strait of Hormuz," said XS.com analyst Linh Tran.

The US is still pressuring Iran economically to try to end the war, now in its eighth month, imposing sanctions on Thursday targeting individuals, networks and 17 vessels for transporting Iranian crude, oil products and petrochemicals.

Prices have been volatile this week as threats to shipping in the Gulf and the Strait of Hormuz, which carried shipments equal to about 20% of global ⁠oil and fuel ⁠before the war, have increased in October.

The Middle East war and the conflict between Russia and Ukraine have disrupted supplies of refined fuels such as gasoline, jet fuel and especially diesel fuel.

The oil market is also contending with Hurricane Isaias in the Gulf of Mexico. Because of the storm, producers there have shut in about 1.3 million barrels per day, or 62.9%, of current oil production as of Thursday, according to the US Marine Minerals Administration.

"This disruption provides additional support for oil prices, but the duration of its impact will depend on post-storm facility inspections and the pace of operational recovery," Tran said.


London Copper Rises on Supply Risks, China Buying

Stacks of copper cathodes sit inside Glencore's Canadian Copper Refinery in Montreal, Quebec, Canada on October 3, 2026. (Photo by ANDREJ IVANOV / AFP)
Stacks of copper cathodes sit inside Glencore's Canadian Copper Refinery in Montreal, Quebec, Canada on October 3, 2026. (Photo by ANDREJ IVANOV / AFP)
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London Copper Rises on Supply Risks, China Buying

Stacks of copper cathodes sit inside Glencore's Canadian Copper Refinery in Montreal, Quebec, Canada on October 3, 2026. (Photo by ANDREJ IVANOV / AFP)
Stacks of copper cathodes sit inside Glencore's Canadian Copper Refinery in Montreal, Quebec, Canada on October 3, 2026. (Photo by ANDREJ IVANOV / AFP)

London copper rose on Friday, recovering from the previous session's loss, as mine disruptions and buying in top consumer China supported prices.

Benchmark three-month copper on the London Metal Exchange was up 1.16% at $14,475 a metric ton by 0700 GMT, after dropping 1.15% in the previous session. It has climbed 1.52% so far this week, Reuters reported.

The most-traded copper contract on the Shanghai Futures Exchange fell 0.57% to 110,110 yuan a ‌ton, tracking overnight ‌losses in London.

"Copper is near record ‌levels, ⁠supported by supply-side issues," ⁠Daniel Hynes, senior commodity strategist at ANZ, said in a note.

The Yangshan copper premium <SMM-CUYP-CN> - a gauge of China's appetite for imported copper - ose to $125 a ton, its highest since November 2022, on Thursday, when China returned from a week-long holiday.

Copper in SHFE-monitored warehouses <CU-STX-SGH> increased by ⁠20,000 tons (51.6%) during the shortened week, but ‌stocks at 58,744 tons nonetheless ‌remain thin.

A workers' union at Antofagasta's Centinela copper mine in ‌Chile said their ongoing strike would begin to ‌weigh on outputin November. Antofagasta earlier downplayed the impact of the strike.

Disruptions at other mines added to already heightened supply risk, while stocks outside the US have fallen as copper has ‌been pulled into the country ahead of potential tariffs on refined copper imports.

The dollar ⁠index, ⁠which measures the greenback against a basket of other currencies, nudged lower. Oil prices also edged down on Friday.

Both had earlier in the week weighed on industrial metals.

A stronger dollar makes commodities more expensive for buyers using other currencies, while elevated energy prices threaten to stoke inflationary concerns and weigh on economic activity.

Among LME metals, aluminium gained 0.79%, zinc gained 1.25%, lead gained 0.7%, nickel gained 0.66% and tin gained 0.96%.

On the SHFE, aluminium lost 0.49%, zinc lost 1.12%, lead lost 1.45%, nickel lost 0.38% and tin dropped 4.23%.


China and EU Trade Envoys Seek Ways to Ease Tensions over Growing Imbalances

EU and Chinese flags are seen in this illustration taken, March 20, 2025. REUTERS/Dado Ruvic/Illustration
EU and Chinese flags are seen in this illustration taken, March 20, 2025. REUTERS/Dado Ruvic/Illustration
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China and EU Trade Envoys Seek Ways to Ease Tensions over Growing Imbalances

EU and Chinese flags are seen in this illustration taken, March 20, 2025. REUTERS/Dado Ruvic/Illustration
EU and Chinese flags are seen in this illustration taken, March 20, 2025. REUTERS/Dado Ruvic/Illustration

The top trade envoys for China and the European Union were wrapping up two days of talks Friday aimed at calming escalating tensions over growing imbalances between the two giant economies.

EU trade chief Maros Sefcovic traveled to Beijing saying it was crucial that the negotiations deliver “tangible outcomes” in rebalancing trade between China and the 27-nation bloc.

It was unclear, however, if the two sides would find the will to resolve key factors behind China’s growing trade surplus, which hit 360 billion euros ($410 billion) last year.

China is pushing for the EU to stop blocking its imports of advanced computer chipmaking machines, restrictions imposed on national security grounds at Washington's behest.

Sefcovic said the talks this week were the culmination of three months of intensive work. He had set an October deadline for meaningful results on trade rebalancing.

Earlier in the week, the Chinese Commerce Ministry issued a statement urging the EU to avoid protectionist measures, warning that such moves could backfire.

Trade tensions have grown in recent months, with both sides imposing or considering curbs on each other’s imports.

The EU has moved to limit imports of Chinese-made electric vehicles and EV batteries and enacted measures to protect the European steel industry. It also is limiting duty-free imports of e-commerce small parcels, essentially targeting Chinese fast fashion firms.

Last week, China launched an anti-dumping investigation into imports from the EU of p-nitrotoluene, a chemical compound used in dyes and pharmaceuticals.

Chinese officials and businesses have raised concerns over reports some EU members are pushing for new measures to protect local industries.

Worries over surging Chinese exports to Europe and other parts of the world in what some are calling a China shock 2.0 have deepened as the US, especially since President Donald Trump returned to the White House, has raised tariffs and enacted other measures to try to reduce its own huge trade deficit with Beijing.

Despite the backlash from some of its trading partners, China's global trade surplus hit $1.2 trillion in 2025 and is forecast to surpass $1 trillion again this year.

The EU's trade deficit with China widened to 103.34 billion euros (about $116 billion) in the April-July quarter, as imports rose to 153.63 billion euros ($172.3 billion) ,while European exports to China climbed to 50.3 billion euros ($56.4 billion), according to EU statistics.