Shifting Ties in Russia’s Backyard

Vladimir Putin holds summit talks in Tehran with the Iranian and Turkish presidents today about the Syrian conflict — yet the Russian presid [View in browser]( [Bloomberg]( Follow Us [Get the newsletter]( Vladimir Putin holds summit talks in Tehran with the Iranian and Turkish presidents today about the Syrian conflict — yet the Russian president’s war in Ukraine will be the main focus. The struggle to unblock grain exports from Ukraine’s Black Sea ports that were upended by Putin’s invasion will dominate planned discussions with his Turkish counterpart Recep Tayyip Erdogan, who’s pushing to broker an agreement. With prices spiking amid a deepening global food crisis, the European Union is hopeful for a deal between Russia and Ukraine this week. Key reading: - [Putin To Meet Iranian and Turkish Leaders With War Center Stage]( - [Russia Visited Iran to View Drone Capabilities: US Official]( - [Europe Must Slash Gas Demand Now Before ‘Hard’ Winter, IEA Warns]( - [EU Agrees to Double Azeri Gas Imports in Shift From Russia]( - [Russia, Ukraine See Initial Step Forward in Grain-Export Talks]( - Read our rolling coverage of the Russian invasion of Ukraine [here](. Meanwhile, the US is warning that Iran may supply Russia with hundreds of drones as five months of war take their toll on Putin’s military. With the EU bracing for a winter gas crisis if Russia turns off supplies, Erdogan is positioning himself as a key figure in the West’s efforts to prevent Putin wielding food and energy as weapons to weaken support for Ukraine. The Caucasus region squeezed between Russia and Iran is gaining in strategic significance, as visits to Armenia in the past week by the top US and Russian spy chiefs underlined. European Commission President Ursula von der Leyen was in neighboring Azerbaijan yesterday to sign a deal to double EU gas imports from the energy-abundant state that’s closely allied to Turkey. Armenia and Turkey, historically enemies, are working to open their common border for the first time in decades, while Azerbaijan and Armenia are also in talks on normalizing relations after fighting a 2020 war. Successful outcomes of these negotiations may transform the region as a bridge linking Europe to oil- and gas-rich central Asia via Turkey and bypassing Russia. The Caucasus was Russia’s undisputed backyard in the Soviet era and immediate post-Communist decades. Just as in Ukraine, Putin’s war may prompt a recasting of relations there too. Erdogan and Putin attend a news conference in Moscow on Aug. 27, 2019. Photographer: Andrey Rudakov/Bloomberg Click [here]( to follow Bloomberg Politics on Facebook and share this newsletter with others. They can sign up [here](. Global Headlines Loan boycott | Tens of thousands of people across China are withholding mortgage payments for homes builders have yet to finish, threatening to deepen a real-estate slump by shifting focus from property companies to banks. The [boycott]( is intensifying a crisis that Beijing appeared to have under control, in spite of the wave of defaults by developers in recent months. - As many as 10,000 high-net-worth Chinese residents are seeking to pull $48 billion from China this year, the second-largest predicted wealth and people [outflow]( for a country after Russia. - Top EU leaders haven’t responded to an invitation from President Xi Jinping to meet him in Beijing later this year, according to the South China Morning Post, as [tensions]( intensify with the bloc. Evergrande residential buildings under construction in Guangzhou, China. Photographer: Jade Gao/Getty Images Italian turmoil | Some Italian lawmakers are working on a last-ditch plan to [convince]( Prime Minister Mario Draghi to reverse his decision to resign at a time when Europe is bracing for a recession and wrestling with rising inflation. After Draghi addresses parliament tomorrow, lawmakers in both the lower house and the Senate will vote to indicate if they support the government. On the rise | Gazprom has [declared]( force majeure on shipments to several European buyers in the past month, signaling that the Russian gas giant may intend to keep supplies capped. With the focus back on supply risks amid a major heatwave across the continent, European natural gas prices [rose]( again today. Best of Bloomberg Opinion - [At Last, a Road Map for Europe’s Energy Crunch: Maria Tadeo]( - [Putin Shows Food Is Becoming the Ultimate Weapon: Hal Brands]( - [Even Republicans Are Now Tiring of Trump: Julianna Goldman]( Emergency call | Democrats in the US Senate are urging President Joe Biden to declare a “climate [emergency](” while dismissing any optimism that a package to reduce carbon emissions can be approved in September. Such a move could give Biden broad executive authority to redirect funds for clean energy projects, restrict offshore drilling or curtail the movement of fossil fuels. Explainers you can use - [How Global Warming Makes Extreme Weather More Likely]( - [Brain Startup Completes First Device Implant for US Patient]( - [Sick Honeybees Find Possible Rescue in Covid Vaccine Technology]( Not listening | Brazilian President Jair Bolsonaro is [shunning]( the advice of his political allies and marketing advisers to run a more conventional campaign for re-election in October. As [Daniel Carvalho]( and [Simone Iglesias]( report, guidance on topics that should be addressed or avoided in public are usually ignored by the president and even mocked by his inner circle. Bloomberg TV and Radio air Balance of Power with [David Westin]( weekdays from 12 to 1 p.m. ET, with a second hour on Bloomberg Radio from 1 to 2 p.m. ET. You can watch and listen on Bloomberg channels and online [here]( or check out prior episodes and guest clips [here](. News to Note - The battle to succeed Boris Johnson as UK prime minister is heating up, with Penny Mordaunt, Liz Truss and Kemi Badenoch [vying]( to join Rishi Sunak in the final run-off. - A three-way contest has [emerged]( to pick a president to lead Sri Lanka out of the worst economic crisis of its independent history after Gotabaya Rajapaksa fled to Singapore and resigned. - The House committee investigating the Jan. 6, 2021, [attack]( on the US Capitol, which had planned to finish its inquiry by September, will extend that deadline because more information keeps coming in. - The White House supports [stopping]( semiconductor companies from expanding certain investments in China if they take new subsidies to build plants in the US under legislation the Senate is set to begin debating today. - A US [airstrike]( killed two members of an al-Qaeda-affiliated group in Somalia in the first major action by American forces in the East African nation since Biden sent Special Operations troops back there in May. And finally ... The East Coast main line from London to Edinburgh will be shut for much of today because it can’t cope with temperatures above 38 degrees Celsius (100.4 Fahrenheit). Rail links are among the casualties of a [record]( heatwave across much of the UK that has seen airport runways melt and infrastructure buckle. Passengers on some London Underground lines have had to endure temperatures higher than those allowed to transport cattle. A sign at London Bridge station reminds commuters to stay hydrated during a heatwave in London yesterday. Photographer: Jose Sarmento Matos/Bloomberg Like getting this newsletter? [Subscribe to Bloomberg.com]( for unlimited access to trusted, data-driven journalism and subscriber-only insights. You received this message because you are subscribed to Bloomberg's Balance of Power newsletter. [Unsubscribe]( | [Bloomberg.com]( | [Contact Us]( [Ads Powered By Liveintent]( | [Ad Choices]( Bloomberg L.P. 731 Lexington, New York, NY, 10022