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World

Russia Expands Use of Iranian Combat Drones in Ukraine

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Ukraine shot down more than a dozen Iranian combat drones across the front lines this week as Russia expands the use of a foreign-weapons system that Ukrainian commanders say has inflicted serious damage on their forces.

In his nightly address on Friday, Ukrainian President

Volodymyr Zelensky

said his country’s antiaircraft forces had shot down Iranian drones in the eastern Dnipropetrovsk region and the southern city of Odessa, including the nearby Pivdennyi port, used for exporting grain.

In Russia, renewed protests against President

Vladimir Putin’s

order to mobilize new forces to bolster his flagging offensive in Ukraine led to hundreds of detentions across the country on Saturday.

The Ukrainian Air Force identified the weapons shot down as Shahed-136 unmanned kamikaze drones, or loitering munitions, and Mohajer-6 drones that can carry missiles and be used for reconnaissance. It published a video showing one of the drones it shot out of the sky in the Dnipropetrovsk region.

The Iranian drones are relatively small and fly at a very low altitude, making it hard for Ukrainian air-defense systems to detect them. At least one of the drones made it past Ukrainian defenses, hitting the navy’s headquarters in Odessa on Friday. Ukraine’s southern military command said one civilian was killed and an administration building in the port area was destroyed.

A drone that Ukrainian authorities consider to be an Iranian-made Shahed-136 flew over the city of Odessa on Friday.



Photo:

STRINGER/REUTERS

Footage broadcast by Ukrainian news channels showed soldiers unsuccessfully trying to shoot it down with small arms before it crashed in a ball of fire. Soldiers can be heard shouting, “Where the hell is air defense?”

Another online video showed one of the downed drones being towed in the water to shore.

The air force said it had destroyed seven more Iranian drones, including four Shahed-136s, in the southern Mykolaiv region on Thursday, and another one on Tuesday.

Shahed-136 delta-wing drones, repainted in Russian colors and rebranded as Geranium 2, started appearing this month over Ukrainian armor and artillery positions in the northeastern Kharkiv region, said Col.

Rodion Kulagin,

commander of artillery of Ukraine’s 92nd Mechanized Brigade.

Ukrainian servicemen in the Mykolaiv region, where Ukraine says it shot down several Russian-operated drones this week.



Photo:

genya savilov/Agence France-Presse/Getty Images

In his brigade’s operational area alone, the Iranian drones—which usually fly in pairs and then slam into their targets—have destroyed two 152-mm self-propelled howitzers and two 122-mm self-propelled howitzers, as well as two BTR armored infantry vehicles, Col. Kulagin said.

Russia’s use of Shahed-136 drones in Ukraine represents the most challenging expansion of Tehran’s arsenal beyond the Middle East, where Iran has used its unmanned aerial vehicles to pressure the U.S. and its allies in the region. It also highlights the deficiencies in Russia’s own drone program, which hasn’t been able to match the firepower of armed UAVs deployed by Ukraine.

The immediate battlefield impact of the introduction of Iranian drones into Ukraine war is difficult to assess, but the deployment gives Tehran an opportunity to test out its products against North Atlantic Treaty Organization defense systems, said

Bernard Hudson,

former counterterrorism director for the Central Intelligence Agency.

“This allows Tehran a risk-free path to improve their drone technology and tactics and to make them more capable and lethal. The lessons of Ukraine will inform how Iran will later use these systems in the Middle East,” said Mr. Hudson, founder and chied executive of Looking Glass Global Services, which works in the drone sector in Eastern Europe and the Middle East.

Late Friday, Mr. Zelensky said Ukraine had revoked the accreditation of the Iranian ambassador and had reduced the number of diplomatic personnel at the Iranian Embassy in Kyiv in response to Iran sending the drones. He said he had tasked the Ukrainian Foreign Ministry with developing a response to Iranian support of Russia: “The world will know about every fact of collaboration with evil.”

Kremlin-orchestrated referendums to annex territory Russia controls in Ukraine started in four regions on Friday. People in Russia said goodbye to their loved ones after President Vladimir Putin’s call-up for troops to fight in Ukraine. Photo: Associated Press

Israel and the West have accused Iran and its proxies of flying armed drones to attack Saudi Arabia’s oil industry, the capital of the United Arab Emirates and American soldiers in Syria, as well as tankers in the Gulf of Oman in recent years. Iran-backed Houthi forces in Yemen have repeatedly used delta-wing drones to carry out attacks on neighboring Saudi Arabia.

In an interview published Saturday by French newspaper Ouest-France, Mr. Zelensky said he regretted that Israel hadn’t provided Ukraine with antiaircraft defenses. “This shocks me because at the same time Israel exports its armaments to other countries,” he said, blaming Russian influence in Israel. Israel has previously said that it opposed Russia’s invasion of Ukraine but that it will provide humanitarian rather than military aid.

Ukraine has asked Western allies, which have already supplied billions of dollars’ worth of military equipment, to supply more advanced antidrone and air-defense technologies.

In a separate incident, Ukraine’s southern military command said Saturday that an unmanned aircraft had dropped a poisonous chemical substance on Ukrainian positions, without specifying the location. It said there were no significant casualties.

In Russia, Col. Gen.

Mikhail Mizintsev,

who was sanctioned by the European Union in June for overseeing the bombardment of the strategic Ukrainian port city of Mariupol, was promoted to deputy defense minister for logistics on Saturday. Since the beginning of the war, Russia’s army has struggled with supplying and maintaining its troops in the field and providing them with adequate equipment, critically hobbling Moscow’s invasion plans.

A heavily damaged Russian tank near Kupyansk, a northeastern city recently recaptured by Ukraine.



Photo:

sergey kozlov/Shutterstock

Russians on Saturday turned out to protest in more than a dozen cities nationwide against Mr. Putin’s order to mobilize hundreds of thousands of people to fight in Ukraine. Also Saturday, Mr. Putin signed into law fresh legislation punishing soldiers who refuse to fight, desert the army or surrender with up to 10 years in prison.

In Moscow, riot police detained protesters en masse and with force, carrying them by their limbs and the scruff of their necks and stuffing them into police wagons. Most protesters weren’t able to pull out placards before they were detained.

The rallies were the second this week after protests broke out in the wake of Mr. Putin’s directive on Wednesday. That evening demonstrators chanted “Let our children live!” and “Send Putin to the trenches!” Officers detained more than 1,400 people across the country and handed draft notices to some protesters right at the police station, according to the independent Russian OVD-Info rights monitor and interviews by The Wall Street Journal.

As of Saturday evening, another nearly 750 people had been detained, according to OVD-Info.

Write to Stephen Kalin at stephen.kalin@wsj.com and Evan Gershkovich at evan.gershkovich@wsj.com

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World

Ukrainian Troops Advance in East as Kyiv Seizes the Initiative

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An unexpected Ukrainian military offensive in the east near the country’s second-largest city of Kharkiv is gaining ground, testing Russian occupation forces that are also under pressure in southern Ukraine, in the latest sign that Ukraine’s defenders are seizing the military initiative.

Ukrainian units are advancing eastward from Kharkiv, according to Ukrainian officials and Russian war bloggers, targeting a critical Russian supply route.

The dual offensives in eastern and southern Ukraine show how the country’s military is increasingly forcing Russia to react to its moves. Ukraine’s forces are growing gradually stronger as the country receives advanced weapons from the U.S. and other Western countries, while Russia is struggling to deploy extra well-trained manpower after suffering heavy losses since it launched its full-scale invasion in February.

Russia still holds an advantage in the quantity of artillery and shells, however, and advancing remains difficult for either side’s forces, particularly across the flat and open ground that characterizes large parts of eastern and southern Ukraine.

After pushing Russian troops back from the Ukrainian capital of Kyiv this spring, Ukrainian forces had been gradually retreating from cities in the east that Russia was leveling with artillery and airstrikes. But Russia’s eastern offensive appears exhausted, with manpower and supply shortages exacerbated by Ukraine’s use of long-range rockets provided by the U.S. to strike command posts and ammunition and fuel depots.

One target of the offensive is the city of Kupyansk, a road hub for Russian supplies heading south from the border into eastern Ukraine. A continued Ukrainian advance could also threaten to isolate Russian forces in the city of Izyum, which Russia has been seeking to use as a staging point for its own offensive in eastern Ukraine.

Ukrainian forces surrounded the city of Balakliya on Tuesday and advanced along a road northeast, seizing villages, according to Russian bloggers who are close to the Russian military. Ukraine’s military didn’t comment, but an adviser to President

Volodymyr Zelensky

confirmed the gains.

“There are surprises along the whole front,” said the adviser,

Oleksiy Arestovych.

Russia’s Defense Ministry on Wednesday didn’t comment on Ukraine’s eastern counteroffensive but said Russian forces had successfully struck Ukrainian targets in Kharkiv and the eastern Donetsk region. The ministry added that Ukraine had paused its counteroffensive in the south over the past day after incurring large losses in manpower and military equipment.

Also on Wednesday, Russian President

Vladimir Putin

signaled defiance in the face of Ukraine’s counteroffensives, saying Moscow had only gained from the invasion and that it would continue the military campaign “until the end,” in comments at an economic forum.

The advance near Kharkiv comes a week after Ukraine launched an offensive in the south, retaking several villages and expanding a bridgehead across the Inhulets River. Ukraine is trying to cut off thousands of Russian troops in the southern regional capital of Kherson, which Russia seized early in its invasion.

Damaged windows in Kharkiv, northeastern Ukraine.



Photo:

Anastasia Taylor-Lind for The Wall Street Journal

Ukraine also claimed fresh success in the south on Wednesday, seizing a village and striking Russian military facilities, pontoon bridges used to supply troops in Kherson and ammunition depots.

Ukraine spoke openly of its intention to launch a southern offensive, prompting Russia to reinforce its units in the south with thousands of troops from the east. That appears to have opened opportunities for Ukrainian forces in the east to advance.

Ukrainian firefighters work at a destroyed residential building in Slovyansk, eastern Ukraine.



Photo:

AMMAR AWAD/REUTERS

“Russia’s deployment of forces from Kharkiv and eastern Ukraine to Ukraine’s south is likely enabling Ukrainian counterattacks of opportunity,” the Institute for the Study of War, a Washington-based think tank, wrote in an analysis late Tuesday.

Ukraine has launched an assault in the south of the country in an effort to reclaim the Russian-occupied Kherson region. Meanwhile, Russian shelling has forced some of the last residents of Ukraine’s east to flee. WSJ’s Matthew Luxmoore reports from near Ukraine’s front lines. Photo: Dimitar Dilkoff/AFP/Getty Images

Mr. Arestovych, the Ukrainian presidential adviser, said multiple offensives were keeping the Russians off balance and leaving them unable to shore up all positions with reserves.

“It’s clear who has the initiative at the moment,” he said.

On Tuesday, Ukraine said its forces had also made limited advances in the eastern region of Luhansk, almost all of which was captured by Russia during its now-stalled eastern offensive.

Firewood in the hall of a residential building in Kramatorsk, eastern Ukraine.



Photo:

juan barreto/Agence France-Presse/Getty Images

—Olya Fokaf contributed to this article.

Write to James Marson at james.marson@wsj.com

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US

Inside a U.S. Navy Maritime Drone Operation Aimed at Iran

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MANAMA, Bahrain—The U.S. Navy is working with Israel, Saudi Arabia and other Middle Eastern nations to build a network of unmanned drones as it seeks to constrain Iran’s military in the region—a program the Pentagon hopes will be a model for operations around the world.

A ship operated by Iran’s Islamic Revolutionary Guard Corps attempted to seize an American maritime drone—equipped with cameras, radar and other sensors—but abandoned that effort on Tuesday when a U.S. warship and helicopter approached, U.S. officials said.

U.S. officers declined to disclose the number of aerial and maritime drones deployed by the U.S. and its allies or to give details about where and how they are used, saying that information is classified. But they said the unmanned vessels and aircraft are giving them better visibility over the region’s waters.

The U.S Navy is working with Middle East nations to build a network of unmanned maritime drones.



Photo:

U.S. NAVY

By next summer, the Navy said, it expects to have 100 small surveillance drones—contributed by various countries—operating from the Suez Canal in Egypt to waters off the Iranian coast and feeding information to a command center in Bahrain, headquarters of the U.S. Fifth Fleet.

“I think we are truly on the cusp of an unmanned technological revolution,” said Capt. Michael Brasseur, who heads the U.S. Navy task force working to build the drone fleet in the Middle East.

The drone initiative, now in its sixth month, is part of a burgeoning cooperative relationship among the U.S., Israel and Gulf nations following the Abraham Accords. It mirrors another U.S.-led effort to unite Israel and its Gulf neighbors to create a regional air-defense network.

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From the Robotic Operation Center here in Manama, U.S. Navy personnel and private contractors monitor the drones’ progress. Video screens display blinking red alerts when the drones identify “dark targets” or suspected threats.

The drones—some of which can float at sea for up to six months—can send back detailed images and other data. Analysts review the images and try to determine what they show.

Vice Adm. Brad Cooper, the commander spearheading the effort, said the fleet has proven its value by detecting activity such as a Chinese naval ship moving through the area, suspicious ship-to-ship transfers and vessels using electronic trackers to disguise their identities.

“We’ve been able to detect activity that we simply did not know was previously happening,” he said.

A handout picture from the Iranian Army in July showing a military drone launched from an Iranian navy submarine.



Photo:

Iranian Army office/Agence France-Presse/Getty Images

The Israeli-linked tanker Mercer Street was struck by a drone off the coast of Iran in August 2021.



Photo:

karim sahib/Agence France-Presse/Getty Images

The drones now being tested are unarmed. But defense analysts expect the Navy to move toward equipping some with weapons in the future—something that would likely prompt intense debate.

U.S. lawmakers have raised concerns about Navy plans to build larger unmanned ships, a program that could cost billions of dollars. And the military still has to determine how to make use of smaller drones, protect them from attack and act on the information they transmit.

The U.S. drone operations come as there is mounting concern about Iran’s expanding influence in one of the world’s most important economic thoroughfares. Tehran has deployed ships and submarines equipped with aerial drones and has warned it is prepared to use them.

“If the enemies make a mistake, these drones will present them with a regrettable response,”

Abdolrahim Mousavi,

an Iranian army commander, told reporters during a recent visit by President Biden to the region.

An M5D-Airfox drone launched during a multinational training event in the Middle East in February.



Photo:

U.S. NAVY

The U.S. accused Iran of using drones to target an Israeli-affiliated merchant tanker off the coast of Iran last year in an attack that killed two crew members. Iran said it didn’t carry out the strike.

In July, Israeli Defense Minister

Benny Gantz

said Iran’s forces were “a direct threat to international trade, energy supply and the global economy.”

According to people familiar with the operations, Israel last year struck an Iranian cargo ship suspected of spying in the Red Sea. The explosion crippled the ship and Iran sent a replacement.

Bahrain’s Crown Prince Salman bin Hamad Al Khalifa, center, at a briefing about unmanned aerial vehicles in Bahrain in January.



Photo:

U.S. NAVY

When an Iranian ship was discovered Tuesday towing one of the U.S. Navy’s 23-foot Saildrones that was conducting surveillance in the central Persian Gulf, U.S. forces warned the vessel that the drone was U.S. property. The Iranians dropped the tow line and eventually left the area, they said.

On Wednesday, the IRGC Navy called the U.S. military’s version of the incident “ridiculous,” according to Iranian state television. The IRGC said it took control of the U.S. vessel to prevent “unsafe sailing” and decided to release it after warning the U.S. Navy to not let such “illegal behavior” happen again.

Earlier this year, the U.S. created a new military task force to focus on the Red Sea. Israel, which established diplomatic relations with Bahrain in 2020 as part of the U.S.-brokered Abraham Accords, has, for the first time, a military adviser working out of the Fifth Fleet headquarters in Manama.

The U.S. Navy is testing a range of unmanned craft, including one that looks like a speedboat and can reach speeds of nearly 90 miles an hour. It is also working with Predator-style aerial drones and the Saildrone, which can stay at sea for six months.

The true test of the drones will be whether they provide intelligence that leads to action—such as the seizure of contraband cargo.

“Just watching alone might limit Iran’s behavior,” said Stacie Pettyjohn, director of the Defense Program at the Center for a New American Security. “But if they realize that they are not going to follow through and do anything, it may not be much of a deterrent.”

The Saildrone can stay at sea for up to six months.



Photo:

U.S. NAVY

Write to Dion Nissenbaum at dion.nissenbaum@wsj.com

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World

U.S. Army Grounds Entire Fleet of Chinook Helicopters

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The Army has about 400 Chinook helicopters in its fleet, a U.S. official says. Soldiers approach a Chinook during a training exercise in Pirkkala, Finland, earlier in August.



Photo:

Roni Rekomaa/Bloomberg News

The U.S. Army has grounded its entire fleet of CH-47 Chinook helicopters because of a risk of engine fires, U.S. officials said.

Army officials are aware of a small number of engine fires with the helicopters, and the incidents didn’t result in any injuries or deaths, the U.S. officials said. One of the officials said the fires occurred in recent days.

The U.S. Army Materiel Command grounded the fleet of hundreds of helicopters “out of an abundance of caution,” but officials were looking at more than 70 aircraft that contained a part that is suspected to be connected to the problem, officials said.

The grounding of the Chinook helicopters, a battlefield workhorse since the 1960s, could pose logistical challenges for American soldiers, depending on how long the order lasts.

The grounding was targeted at certain

Boeing Co.

-made models with engines manufactured by

Honeywell International Inc.,

people familiar with the matter said. The grounding took effect within about the last 24 hours, these people said. The Army has about 400 helicopters in its fleet, one of the U.S. officials said.

Boeing declined to comment, referring questions to the Army.

A Honeywell spokesman said the engine maker worked with the Army to determine that certain components known as O-rings didn’t meet the company’s design specifications. He said the parts were installed during routine maintenance at an Army facility. While he declined to name the company that made the parts, the Honeywell spokesman said the company is working to supply the Army with replacements.

An Army spokeswoman said the service has identified the root cause of fuel leaks that caused “a small number of engine fires among an isolated number” of the helicopters. She said the Army is taking steps to resolve the issue.

“The safety of our soldiers is the Army’s top priority, and we will ensure our aircraft remain safe and airworthy,” the spokeswoman said.

The Chinook is a heavy-lift utility helicopter that is used by both regular and special Army forces, ferrying more than four dozen troops or cargo. It has been a staple of the Army’s helicopter fleet for six decades.

Write to Andrew Tangel at Andrew.Tangel@wsj.com and Gordon Lubold at Gordon.Lubold@wsj.com

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Appeared in the August 31, 2022, print edition as ‘Army Grounds Entire Chinook Helicopter Fleet.’

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World

Drone Hits Headquarters of Russia’s Black Sea Fleet in Crimea

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A drone hit the headquarters of Russia’s Black Sea Fleet in Crimea on Saturday, reaching the heart of a heavily fortified naval base that has long allowed Moscow to project power in the region.

The incident follows a series of explosions and possible acts of sabotage that have exposed the peninsula’s vulnerability, piling pressure on Russia to shore up its defenses there. Until recently Moscow could count on Crimea as a reliably safe rear base to oversee Russia’s occupation of the territory along Ukraine’s southern coast.

The drone’s ability to penetrate Russian-controlled airspace, arriving at the nerve center of Moscow’s naval operations, delivers a symbolic blow to the Black Sea Fleet, which was recently placed under a new commander.

Videos posted on social media showed a column of smoke rising over the Crimean city of Sevastopol, where the fleet is based.

Mikhail Razvozhaev,

the Russian-installed governor of the strategic port city, said on the Telegram messaging app that the drone “flew onto the roof” of the building. He later issued what he called a clarification, saying the drone fell on the roof and caught fire after being shot down by Russian air defenses.

The incident strengthened Nikita’s resolve to sell his barber shop and leave Crimea as soon as possible. The 34-year-old, who lives in Sevastopol, said Russian tourists had packed up following an explosion at an air base on the peninsula less than two weeks ago, and many of his own friends have also left since then.

Some were concerned they could be mobilized to fight against Ukraine, he said. Others were worried about getting trapped if the bridge connecting Crimea with the Russian mainland is disabled. Officials in Kyiv have recently said the Kerch bridge is a legitimate target.

Mr. Razvozhaev blamed the incident on Ukraine’s government in Kyiv, saying there was no serious damage to the headquarters and no one was harmed. He said all approaches and entrances to the site had been blocked by police and urged citizens to “remain calm and stay at home.”

A Ukrainian soldier launched a reconnaissance drone in northern Ukraine’s Kyiv region earlier this month.



Photo:

Efrem Lukatsky/Associated Press

Ukrainian officials did not immediately comment on the incident, but they have hinted at involvement in a string of blasts that have tested  Moscow’s grip on Crimea in recent weeks. Russian authorities have downplayed the recent incursions in the peninsula, which became a Russian stronghold after Russia annexed it in 2014.

Officials in western Crimea said Russian air defense worked to repel small drones that flew over the city of Yevpatoria on Saturday morning.

Russian air defenses had “successfully hit all targets over Crimea,” said the peninsula’s Russian-backed governor,

Sergei Aksyonov,

adding there were no casualties or damage.

A spate of explosions at Russian ammunition depots, airfields and bridges have appeared to intensify the strategy Ukrainian forces have adopted in recent weeks—hitting Moscow’s supply lines in hopes of starving Russian troops west of the Dnipro River in the occupied Kherson region of resources and ultimately forcing them to retreat.

An explosion Tuesday at an ammunition depot in Crimea was the result of sabotage, according to Russia.



Photo:

stringer/Agence France-Presse/Getty Images

Ukraine’s immediate goal isn’t to retake Crimea, but to degrade Russia’s ability to wage war in the south and east, where Kyiv is seeking to regain territory captured by Moscow’s armies elsewhere.

A blast at an air base in Crimea earlier this month put more than half of the Black Sea Fleet’s naval aviation combat jets out of use, according to a Western official. It is not clear what caused the explosion.

Moscow blamed sabotage for an explosion earlier this week at an ammunition depot on the peninsula. An official in Kyiv said it was the work of Ukraine’s supporters.

“The issue on the agenda is the step-by-step demilitarization of the peninsula with its subsequent de-occupation,”

Oleksiy Danilov,

secretary of Ukraine’s National Security and Defense Council, said on Friday. Residents of Crimea who previously collaborated with Russia will receive a lighter sentence if they share information about Russian troops and equipment in the area, Mr. Danilov said.

Acts of sabotage and strikes deep in Russian-held territory have increased as the frontlines between Russian and Ukrainian troops become static following almost six months of combat that have worn both sides down.

Over the past week there have been minimal changes in territorial control, the U.K.’s Ministry of Defense said. In the east, Russian forces have advanced on Bakhmut but have yet to break into built-up areas of the city, the ministry said in its daily intelligence briefing. Increasingly frequent explosions behind Russian lines are, the ministry said, “probably stressing Russian logistics and air basing in the south.”

Ukrainian servicemen load munitions at the front line in the eastern Donetsk region.



Photo:

anatolii stepanov/Agence France-Presse/Getty Images

Ukrainian air defenses intercepted four Russian missiles over the central city of Dnipro on Saturday, according to

Valentyn Reznichenko,

head of the region’s military administration.

Also on Saturday, seven people—including several children—were wounded when Russian missiles struck a multistory residential building in the southern Ukrainian city of Voznesenk, said

Vitaliy Kim,

the head of the Mykolaiv regional military administration.

United Nations Secretary-General

António Guterres

said Saturday that a U.N.-brokered grain-export agreement was bringing hope to countries stricken by a global food crisis amid the Russian invasion of Ukraine.

Mr. Guterres was speaking in Istanbul at the end of a three-day visit to the region, which included a trip to Odessa where on Friday he witnessed the loading of wheat onto a ship preparing to leave Ukraine under the agreement.

“I was so moved watching the wheat fill up the hold of the ship,” he said. “It was the loading of hope for so many around the world.”

He also said he hoped that the “extraordinary spirit and commitment” demonstrated by the participants in the agreement could eventually be harnessed to lead to peace.

While in Istanbul, Mr. Guterres also joined an inspection team on board one of the grain ships, the Invincible II.

Officials from Ukraine, Russia, Turkey, and the U.N. signed an agreement in July to resume Ukraine’s exports of grain and other foodstuffs through three of its Black Sea ports. The deal was the result of months of negotiations brokered by the U.N. and Turkey.

The grain agreement is a key achievement for the U.N. during the Ukraine war. The U.N.’s top decision-making body, the Security Council, has been powerless to push back on the Russian invasion or de-escalate the conflict, largely due to Russia’s veto power on the council.

Russia’s assault on Ukraine in February trapped millions of tons of grain in the country, paralyzing exports. Ukraine supplied about 10% of the world’s wheat exports prior to the war.

Dozens of ships have left Ukraine’s ports since the signing of the agreement, exporting more than 650,000 tons of corn, wheat and other products since shipments resumed on Aug. 1, according to the U.N.

—Jared Malsin in Istanbul contributed to this article.

Write to Ann M. Simmons at ann.simmons@wsj.com and Isabel Coles at isabel.coles@wsj.com

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Business

Boeing Profit Falls as Executives Point to Turnaround

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The company said its second-quarter results showed it was making progress in stabilizing its operations after a series of production and regulatory problems have prevented it from delivering commercial aircraft on time and without quality issues.

“We do believe we’re in the middle of a momentum shift,” Chief Executive

David Calhoun

said in a call with analysts Wednesday.

Boeing shares were recently trading around even, having climbed more than 3% at one point.

Production of the 737 MAX has reached 31 planes a month, up from 16 a year ago, as it deals with supply-chain challenges such as engine shortages that are also affecting rival Airbus SE, which reports quarterly earnings later Wednesday. Boeing has said it stepped up 737 deliveries in June.

Executives said Wednesday Boeing appeared on the verge of receiving regulatory approval to resume deliveries of its wide-body 787 Dreamliner. A series of production issues has kept the plane maker from handing over that jet to customers for much of the last two years, leaving it with more than $25 billion of the aircraft in inventory.

A rebound in air travel has fueled airlines’ continued demand for new aircraft, which Mr. Calhoun said hasn’t slowed. “While we understand the sort of recession fears that are growing out there, so far it has not impacted the aviation industry or our customers,” Mr. Calhoun said.

Boeing is typically nearly tied for orders with rival Airbus entering the annual Farnborough Air Show, but this year it’s well behind. WSJ’s George Downs reports from the show on how Boeing is trying to catch up and what it will take to restore balance to the aviation duopoly. Illustration: Rami Abukalam

The company on Wednesday reported a profit of $160 million, or 32 cents a share, for the three months to June 30, down from $567 million, or $1, during the same period a year earlier.

The adjusted per-share loss of 37 cents, which excludes pension charges, fell short of the 13-cent loss consensus among analysts polled by FactSet. Sales in the quarter fell 2% to $16.7 billion, with analysts expecting $17.6 billion.

Results of Arlington, Va.-based Boeing’s defense business continued to be weighed down by around $400 million in charges during the quarter. This included $93 million on its Starliner space capsule in the quarter. Boeing successfully launched the Starliner in May, but it has incurred higher costs after earlier failed attempts to launch and dock with the International Space Station. It also took a $147 million charge on its MQ-25 refueling drone as costs rose to meet requirements set by the U.S. Navy.

Boeing faces a possible strike at three of its defense plants from Aug. 1 after workers rejected a new contract, which Mr. Calhoun said on CNBC could disrupt deliveries.

The company said it had positive operating cash flow in the second quarter. It reiterated the target of generating surplus cash for the full year.

Over the last couple of years, Boeing has dealt with production and regulatory problems that have impeded a recovery from two crises: a nearly two-year grounding of its 737 MAX after two fatal crashes in 2018 and 2019, and the pandemic’s hit to demand for new aircraft.

A year ago, Mr. Calhoun expressed optimism, telling analysts in July 2021: “We are turning a corner, and the recovery is gaining momentum.”

More recently, Mr. Calhoun has said this year would mark a turning point. “I can’t measure it week by week or month by month or even quarter by quarter, but I know the year is going to be substantially better,” he said at a June analyst event.

Airbus has been producing its A320 narrow-body family at a monthly rate of about 50, with a goal of reaching 75 by 2025. But Mr. Calhoun said Wednesday he couldn’t predict when Boeing would be in a position to increase its 737 MAX production rates, citing supply constraints as a barrier to ramping up.

“If I thought I had an engine supply, I’d do it today,” he said.

Boeing has had to slow production of its narrow-body aircraft this year due to supply bottlenecks, and getting stored MAX jets out of inventory has taken longer than the company anticipated. Scores of the planes have been in storage since the MAX grounding. Many of the MAX jets are bound for customers in China, which hasn’t allowed the aircraft to return to service in the country.

After previously saying it expected to deliver about 500 of 737 MAX jets by the end of the year, Boeing finance chief

Brian West

on Wednesday said the company now estimates it will deliver closer to 400 of the aircraft by the end of 2022. As of June 30, the company had handed over 181 of the aircraft to customers.

Write to Andrew Tangel at Andrew.Tangel@wsj.com and Doug Cameron at doug.cameron@wsj.com

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World

Russia Strikes Odessa Port After Signing Deal to Unblock Ukrainian Grain Exports

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KYIV, Ukraine—Russia launched a missile attack on Ukraine’s key grain-exporting port of Odessa, officials said, hours after signing an international agreement to ease its blockade of the Black Sea coastline and allow for the safe transport of grain and other foodstuffs necessary to alleviate a looming global food crisis.

The attack on Odessa appeared to violate the terms of the United Nations-brokered agreement signed by Russia and Ukraine in Istanbul on Friday, which stipulated that both countries would refrain from attacking port facilities or civilian ships used for grain transport, according to a copy of the agreement reviewed by The Wall Street Journal. U.N. Secretary-General

António Guterres

condemned the strike, saying in a statement that all parties had committed to ensuring the safe movement of Ukrainian grain shipments.

At least two Russian Kalibr cruise missiles hit Odessa, the only major Ukrainian port resisting Russian occupation, damaging infrastructure at the site, Ukraine officials said. Another two of the missiles, which Russia has been launching from warships and submarines, were shot down by aerial defenses, officials said.

A railcar discharging point and a warehouse used for loading grain were destroyed in the attack, according to international grain traders.

The target of the strike was likely a nearby shipbuilding yard, workers at the port said.

“It’s obvious that the agreement with Russia is not even worth the paper it was signed on…Russia is a terrorist state,” said Ukraine’s ambassador to Turkey,

Vasyl Bodnar,

who was present at the signing of the agreement.

Ukrainian Foreign Ministry spokesman

Oleg Nikolenko

said the attack on Odessa was like spitting in the face of the U.N. and Turkey, which facilitated and hosted the negotiations.

“We urge the U.N. and Turkey to ensure Russia’s compliance with its obligations to provide a safe corridor for the grain exports,” Mr. Nikolenko said in a statement posted to Facebook.

A resident of Kharkiv, northeastern Ukraine, on Saturday carried items out of an apartment damaged by a Russian attack.



Photo:

STRINGER/REUTERS

Russia’s Defense Ministry didn’t respond to a request for comment, nor was there any comment from the Kremlin.

Turkish officials who helped broker the agreement said they had been in contact with Russia, which denied being behind the attack.

“The Russians told us that they had absolutely nothing to do with this attack and that they were examining the issue very closely and in detail. The fact that such an incident occurred right after the agreement we made yesterday regarding the grain shipment really worried us as well,” said Turkey’s Defense Minister

Hulusi Akar

in a statement on Saturday.

Mr. Akar signed the agreements with Ukraine and Russia on behalf of Turkey on Friday. He added that Ankara would continue to fulfill its duties under the grain agreement, which calls on Turkey to help monitor the accord and inspect shipments.

Russia also struck a military airport and a railway station on Saturday in central Ukraine, authorities said, in another long-range attack reaching far beyond the immediate front lines. Ukraine, meanwhile, is continuing to take advantage of Western weapons to stall Russia’s military advance.

Andriy Raikovych,

head of the Kirovohrad region in central Ukraine, said 13 missiles were fired at infrastructure and military facilities overnight, leaving at least three people dead and 13 wounded. Another strike, on Mykolaiv in the south, destroyed a warehouse, authorities there said.

Odessa, the only key port city on the Black Sea still held by Ukraine, was also shelled Saturday, with local media reporting seven missile strikes inside the urban area.

Ukraine’s forces meanwhile used U.S.-made Himar rocket launchers in a systematic shelling campaign seemingly aimed at cutting off vital supplies from the strategically important southern region of Kherson, which Russia has occupied since early in the invasion, Russian and Ukrainian officials said.

Kyiv’s use of Himars launchers to bombard two strategic bridges over the Dnipro and Inhulets rivers has already made tank and truck traffic between Kherson and Russia near-impossible, according to officials and footage from the ground circulating on social media. Ukrainian officials have said that they are preparing a counteroffensive to liberate the Kherson region.

Residents of cities throughout Ukraine have largely become accustomed to the sound of air-raid sirens portending a possible rocket attack, with the majority disregarding advice to find the nearest underground shelter and wait until the danger has passed. Mr. Raikovych asked them to reconsider.

“I continually urge you to not ignore the sirens and immediately go to a shelter,” he wrote on the Telegram messaging app.

The latest round of attacks beyond the front lines comes as Ukrainian forces slow the Russian campaign to take the Donbas region in the east. Ukraine’s strikes on arms depots and strategic bridges in Russian-occupied territory, and its effective use of Himars rocket systems and other Western-supplied arms, have made it much harder for Russia to solidify its occupation in certain regions and to maintain the relentless artillery barrages that have underpinned its piecemeal but steady advance since April.

Analysts say a brief operational pause earlier this month following Russia’s capture of the eastern Luhansk region has given its troops too little time to recover before their campaign resumed this week.

Part of a rocket protrudes from a wheat field in the Kharkiv region.



Photo:

sergey bobok/Agence France-Presse/Getty Images

“Russian forces are degraded, they are beat up, tired and exhausted, and they need to regroup in order to be able to regain some of the combat effectiveness which they’d lost over the course of the Donbas campaign and the overall war,” said George Barros, an analyst at the Washington-based Institute for the Study of War. “An approximately 10-day operational pause is not sufficiently long for the Russian forces to be able to regain the strength that they need.”

While the battlefield picture has ossified in recent days, diplomatic avenues to resolve the crisis have made some headway. In the agreement aimed at ending the grain crisis caused by the war, Ukraine and Russia paved the way for the resumption of exports from Black Sea ports blocked by Russian ships. Delegates from the two countries signed parallel deals Friday at a ceremony in Istanbul, following months of diplomacy led by Turkey and the United Nations.

The agreement could free up about 18 million tons of wheat, corn and other supplies that have been stuck at Ukrainian ports and grain silos for weeks. Grain analysts have said they expect it could take weeks for grain shipments to begin flowing again, if both sides remain committed to the deal.

Late on Friday, Ukraine said operations at some of its ports may resume in as little as three days. Yury Vaskov, Ukraine’s deputy infrastructure minister and a member of the country’s delegation at the talks in Istanbul, told Ukrainian media on Friday that the port of Chornomorsk south of Odessa is preparing to handle the first vessel carrying grain.

River traffic on Thursday near the port of Reni, on the Ukrainian stretch of the Danube.



Photo:

Sergii Kharchenko/Zuma Press

The most active wheat futures contract fell 5.9%, to $7.59 per bushel, in trading on the Chicago Board of Trade Friday, as the deal raised hopes that a restart to Ukrainian grain exports would ease a brewing global food-supply crisis.

The deal has been seen as a limited but promising step toward bringing the two sides closer to a peace deal. Some European Union countries have suggested Ukraine should make concessions to Russia in exchange for peace. But in an interview with The Wall Street Journal on Friday, Ukrainian President

Volodymyr Zelensky

said any pause in the fighting could merely give battered Russian forces a chance to regroup and rearm.

Instead he called for further weapons supplies from the West, and credited the support of Ukraine’s allies for shifting the balance on the battlefield and allowing Ukraine to bog down Russian troops fighting to capture swaths of the country’s east. Shortly after he spoke, the White House on Friday announced another $270 million worth of weapons for Ukraine, including four more Himars and hundreds more Phoenix Ghost drones.

The U.S. also said that the Pentagon is considering providing Ukrainian forces with jet fighters. It is “making some preliminary explorations into the feasibility of potentially providing fighter aircraft to the Ukrainians,” said John Kirby, the National Security Council coordinator for strategic communication. U.S. officials have previously resisted supplying Ukraine with jet fighters over concerns that they could risk a more direct conflict with Moscow.

Write to Matthew Luxmoore at Matthew.Luxmoore@wsj.com, Bojan Pancevski at bojan.pancevski@wsj.com and Jared Malsin at jared.malsin@wsj.com

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World

Chinese Firms Are Selling Russia Goods Its Military Needs to Keep Fighting in Ukraine

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BEIJING—Chinese exports to Russia of microchips and other electronic components and raw materials, some with military applications, have increased since Moscow’s invasion of Ukraine, complicating efforts by the U.S. and Western allies to isolate the country’s economy and cripple its military.

Chip shipments from China to Russia more than doubled to about $50 million in the first five months of 2022, compared with a year earlier, Chinese customs data show, while exports of other components such as printed circuits had double-digit percentage growth. Export volumes of aluminum oxide, which is used to make the metal aluminum, an important material in weapons production and aerospace, are 400 times higher than last year.

The rise in reported export values may partly be explained by inflation. But the data shows that many Chinese tech sellers have continued to do business with Russia despite U.S. scrutiny.

The Chinese exports, while just a sliver of the country’s overall exports, are a source of concern for U.S. officials. The Commerce Department added five Chinese electronics companies to a trade blacklist last month for allegedly helping Russia’s defense industry, both before the invasion and after it began.

“Our government and our national leadership has been very clear from February 24th on that China should not provide material, economic and military support for Russia in this war,”

Nicholas Burns,

the U.S. ambassador to China, said last week.

The Commerce Department said in a written response that while it didn’t believe China had sought to systematically evade U.S. export controls on Russia, it was closely monitoring trade between the countries and “will not hesitate to employ our full legal and regulatory tools against parties that provide support to the Russian military.”

The China-Russia trade in chips and other components with potential military applications involves both small, private outfits and sprawling state-owned enterprises. Incomplete data and complex networks of subsidiaries and middlemen make it hard to trace all the activity.

Chinese officials have said the country isn’t selling weapons to Russia. And overall exports from China to Russia have fallen substantially this year as many Chinese companies fear running afoul of the U.S.

With fireworks and fanfare, China and Russia opened a new bridge for freight traffic that links the two countries. As Russia’s isolation grows following its invasion of Ukraine, China is willing to keep their partnership going but not at any cost. Photo: Amur Region Government/Zuma Press

China’s support, broadly speaking, is critical to Moscow. Oil and gas revenues make up a sizable chunk of Russia’s economy. As European nations such as Germany seek to draw down Russian energy purchases, Russian President

Vladimir Putin

has stressed the importance of selling far more energy to China and others in Asia in the future.

China is also gaining leverage in its relationship with Russia. While China historically has relied on Russia, and before that the Soviet Union, for many advanced technologies, that is gradually changing as China closes the technology gap and emerges as a defense exporter in its own right.

Chinese leader

Xi Jinping

has repeatedly reaffirmed Beijing’s support for Russia, saying the two countries share a friendship with “no limits.” 

A shared dissatisfaction with the U.S.-led post-World War II international system has gradually driven the countries together during Mr. Xi’s decade in power, despite a long history of strategic mistrust.

A trade fair for semiconductor technology in Shanghai. The China-Russia trade in chips and other components with potential military applications involves both small, private outfits and sprawling state-owned enterprises.



Photo:

aly song/Reuters

Researchers at C4ADS, a Washington-based nonprofit organization that tracks security threats, have been looking at trade between Russian defense firms and China Poly Group, a conglomerate controlled by China’s central government.

Poly’s subsidiaries include a key Chinese weapons producer and exporter of small arms, missile technology and, more recently, antidrone laser technology.

Between 2014 and January 2022, C4ADS researcher Naomi Garcia identified 281 previously undisclosed shipments of so-called dual-use goods, which have both civilian and military uses, from Poly subsidiaries to Russian defense organizations, she writes in a report to be released Friday.

In one of the most recent shipments, in late January, according to the research, Poly Technologies sent antenna parts to sanctioned Russian defense company Almaz-Antey. Ms. Garcia said she hasn’t discovered Poly shipments to Russian defense firms since the Ukraine invasion began in late February.

Russian customs records reviewed by C4ADS say the antenna parts were specifically to be used in a radar that is part of Russia’s advanced S-400 surface-to-air missile system. Russian media, citing the country’s Defense Ministry, has said the S-400 system has been used in the Ukraine war.

“Poly Technologies is undeniably facilitating the Russian government’s acquisition of missile-system parts,” Ms. Garcia said.

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Poly Technologies was sanctioned by the State Department in January for engaging in proliferation of missile technologies. A State Department spokesperson said the sanctions were related to the company’s transferring of ballistic-missile technology to another country, but didn’t name which country.

Poly didn’t reply to a faxed request for comment and an official in its press office hung up when asked about its work with Russia. Almaz-Antey, Russia’s Ministry of Economic Development and Ministry of Industry and Trade didn’t respond for comment.

Beyond radar components and semiconductors, Chinese exporters also have helped fill a gap in basic materials that Russia is restricted from sourcing elsewhere.

In March, Australia prohibited the export of aluminum oxide and several other related products, citing their use in weapons development. Since then, Chinese exports of aluminum oxide to Russia have surged, hitting 153,000 metric tons in May, according to Chinese customs records, compared with 227 metric tons in the same month the year before.

Unlike state-owned conglomerate Poly, the Chinese companies that were targeted most recently by the Commerce Department are small, private hardware distributors run out of Hong Kong and China’s southern province of Guangdong. While there is relatively little information about the size of business they do with Russia, some of the companies named by the U.S. openly advertised their defense work.

One of the firms, Winninc Electronics Co., previously said on its website that it was a top distributor “for industrial, military, aerospace, and consumer electronics manufacturers worldwide.” That language has since been removed. “Hope we can get through this,” the website now says.

Another of the targeted companies, Sinno Electronics Co., also until recently said on its website that it was a “cooperative partner” of publicly traded U.S. hardware manufacturers including

Texas Instruments Inc.

and

Analog Devices Inc.

Texas Instruments didn’t respond to requests for comment. Analog Devices said it isn’t a partner of Sinno. It added that it had instructed its distributors to cease business with the company after the Commerce Department’s decision to blacklist it.

Sinno didn’t respond to a request for comment. A person who answered the phone at Winninc said the company wasn’t informed about the U.S. decision before it was made public but declined to comment further.

Maria Shagina, an expert on Russia sanctions at the International Institute for Strategic Studies in Berlin, said the latest action against the Chinese companies appeared to be intended to show that U.S. threats were credible, particularly considering how smaller companies may be better able to circumvent export controls than bigger ones.

“While the U.S. and its allies failed at deterrence with Russia, it’s important to prevent China early enough from systematically helping Russia,” she said.

Write to Brian Spegele at brian.spegele@wsj.com

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Business

Twitter Lawsuit Adds to Musk’s Tesla and SpaceX Challenges

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Tesla and SpaceX didn’t respond to requests for comment.

Tesla, still the world’s most valuable auto maker by far, earlier this month reported its first sequential decline in quarterly deliveries in more than two years, largely reflecting supply-chain disruptions and an extended factory shutdown in China because of Covid-19-related lockdowns there.

Elon Musk leaving court after testifying at the SolarCity trial in Wilmington, Del., last year.



Photo:

Samuel Corum/Bloomberg News

Mr. Musk also recently described the company’s new plants in Germany and Texas as “gigantic money furnaces.” The factories opened earlier this year, but the company has struggled to increase production at both, Mr. Musk said.

“Berlin and Austin are losing billions of dollars right now because there’s a ton of expense and hardly any output,” he said in a late May interview with a Tesla owners’ club. Mr. Musk, who has been expressing concerns about the global economy, initiated a round of job cuts at the car maker last month.

Tesla’s production challenges, some of which have been largely out of the company’s control, threaten to waste a “golden opportunity” to get electric vehicles to market ahead of rivals, said Gene Munster, a managing partner at research and investment firm Loup Ventures.

“You just can’t give oxygen to your competitors,” said Mr. Munster, a longtime Tesla watcher whose firm doesn’t hold the company’s stock.

On Wednesday,

Andrej Karpathy,

a longtime executive who played a key role in developing Tesla’s advanced driver-assistance system known as Autopilot, said he was leaving the company. Mr. Musk, on Twitter, thanked Mr. Karpathy for his contributions.

Last year, Mr. Musk warned that if a severe global recession dried up capital availability and liquidity while SpaceX was losing billions on its Starship rocket program and its satellite-broadband service, bankruptcy wasn’t impossible. The space company was the busiest U.S. rocket-launch provider last year, handling both human flights and satellite missions.

Tesla has struggled to increase production at its Texas manufacturing facility that opened earlier this year, Elon Musk has said.



Photo:

Suzanne Cordeiro/Agence France-Presse/Getty Images

The entrepreneur said he visited a company launch site in Texas after a fiery explosion on Monday under one of the company’s Super Heavy boosters. Those towering vehicles underpin the Starship rocket system, which Mr. Musk has said Space Exploration Technologies Corp., as the company is formally known, plans to use for its most ambitious missions, including a prospective human voyage to Mars.

The National Aeronautics and Space Administration is also counting on a version of Starship to ferry astronauts to the surface of the moon as soon as 2025.

“Yeah, actually not good,” Mr. Musk wrote on Twitter in response to the explosion, saying a SpaceX team was assessing the damage. He added that the booster’s base appeared sound, though SpaceX shut down the launchpad for safety reasons. Later, he tweeted: “Damage appears to be minor, but we need to inspect all the engines.”

Jeffrey Hoffman, an aerospace engineering professor at Massachusetts Institute of Technology and former astronaut, said SpaceX faces significant hurdles developing Starship, including showing that the engines clustered under its Super Heavy boosters are able to function as designed. “The parallel operation of 33 rocket engines at the same time is a big deal,” he said, referring to the design.

SpaceX, alongside other satellite companies, is also embroiled in a regulatory battle against

Dish Network Corp.

and others as the Federal Communications Commission mulls new rules for the radio frequencies used to carry its signals.

SpaceX rebounded after a Falcon 9 rocket exploded in Cape Canaveral, Fla., in 2016, destroying a Facebook satellite.



Photo:

U.S. Launch Report//Reuters

Soaring inflation is weighing on both Tesla and SpaceX, Mr. Musk has said. Some Tesla suppliers are requesting 20% to 30% more for parts than they did last year, Mr. Musk said in April, when the company reported record quarterly profit.

Meanwhile, some SpaceX employees signed a letter raising concerns and frustration over the CEO’s recent public statements and behavior, describing them as a source of embarrassment and distraction. The company fired at least some of the staffers involved in the effort.

Gwynne Shotwell,

SpaceX’s president, said the letter distracted employees and upset many of them.

Mr. Musk is also a founder of Boring Co., a tunneling enterprise, and Neuralink Corp., a neuroscience startup working on brain-implant technologies. He has at times bemoaned the workload he has heaped on himself. “It would be nice to have a bit more free time on my hands, as opposed to just working day and night from when I wake up till when I go to sleep seven days a week. It’s pretty intense,” he said last year during a Tesla analyst briefing.

Deep business challenges at Tesla and SpaceX are nothing new for Mr. Musk. The auto maker nearly went bust in 2018, Mr. Musk has said, as it struggled to increase production of its Model 3 sedan, the car that helped turn Tesla from a niche player to a mass market auto producer. Mr. Musk at one point slept on the factory floor of what was then the company’s lone U.S. car plant, in Fremont, Calif., to work through what he called “production hell.”

Once those problems were overcome, Tesla’s stock began its meteoric rise that helped turn Mr. Musk into the world’s richest man and padded the company’s coffers. Tesla was sitting on around $17.5 billion in cash as of the first quarter.

Closely held SpaceX has dealt with setbacks in its business before. For instance, one of the company’s Falcon 9 rockets exploded during a test in 2016, destroying a Facebook satellite. At the time, it was the second catastrophic failure of such a launcher in 15 months. The company made adjustments and recovered. Four years later, it launched two NASA astronauts to the International Space Station, or ISS, the first launch of humans into orbit from U.S. soil since the agency’s last shuttle mission in 2011.

Mr. Musk’s businesses have notched notable successes in recent months. In addition to its record profits earlier in the year, Tesla reported its highest-ever vehicle production in June, with output at the Shanghai plant recovering. That month, NASA said it intended to hire SpaceX to handle five additional crewed flights to the ISS, a plan that would add to the nine flights the agency had already acquired under a contract valued at about $3.5 billion.

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SpaceX also regularly blasts satellites to orbit for commercial customers and U.S. spy agencies, while Starlink, its satellite-internet business, recently won regulatory approval to provide service to planes, boats and recreational vehicles.

Tesla’s share price has fallen more than 40% from its November high, but the company’s roughly $737 billion valuation as of Wednesday was still higher than the next eight auto makers combined. SpaceX’s valuation this year reached around $125 billion after it raised more than $1.7 billion, topping that of more established aerospace powerhouses Boeing Co. and

Lockheed Martin Corp.

Write to Rebecca Elliott at rebecca.elliott@wsj.com and Micah Maidenberg at micah.maidenberg@wsj.com

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World

Turkish Defense Industry Grows Cautious Over Selling Weapons to Ukraine

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ANKARA, Turkey—The head of Turkey’s weapons-production agency said the country must be cautious about delivering more arms to Ukraine, months after Turkish-made drones played a critical role in the defense against Russia’s invasion.

“We are much more careful,” said

Ismail Demir,

the president of Turkey’s Defense Industry Agency and a top official in President Recep

Tayyip Erdogan’s

government.

The comments show how Turkey is increasingly playing both sides of the Russia-Ukraine conflict, standing apart from some other members of the North Atlantic Treaty Organization that are sending more weapons to Ukraine in the hope of stalling Moscow’s ongoing assault on the country’s east. While Western countries have moved to isolate Russia, Turkey has maintained an open line to Moscow, welcoming inflows of Russian money and facilitating two rounds of peace talks that ended without an agreement.

“Turkey is the only country I guess that can give a call to both parties and call them to the peace table. How can you do this if you send tens of thousands of weapons to one side?” Mr. Demir said in an interview with The Wall Street Journal.

Turkey’s Bayraktar TB-2 drones were instrumental in Ukraine’s initial resistance to the Russian invasion, blowing up military convoys and sinking warships. The drones’ success against Russian forces was celebrated by Ukrainians and helped improve Turkey’s standing in the West.

Turkey initially sold the TB-2 drones to Ukraine in 2019, and the two countries signed a new agreement for delivery of more of the aircraft, along with plans to jointly produce the drones, in February 2022.

‘We have to be able to talk to both sides, someone should be close enough to both parties, to build trust,’ said Ismail Demir, the president of Turkey’s Defense Industry Agency.



Photo:

Ahmed Deeb for The Wall Street Journal

A U.S. official said Turkey indicated in March that more of the drones would be forthcoming. Asked if Turkey was continuing to supply weapons including TB-2s to Ukraine, Mr. Demir said: “There are things going on, but I’m not in a position to say, but we are much more careful.”

Ukrainian and Turkish officials have declined to comment on any further deliveries of TB-2 drones. Baykar, the Turkish company that makes the drones, said earlier in June that it would donate one of the drones to Lithuania after a group of Lithuanians raised more than $6 million to buy one for Ukraine.

Mr. Demir said Turkey had no hesitation over selling other types of equipment, such as protective gear, to Ukraine.

“We have to be able to talk to both sides, someone should be close enough to both parties, to build trust,” he said.

“Our priority is to make sure that peace prevails,” said Mr. Demir.

In occupied regions of Ukraine, Russia is handing out passports, teaching its version of history, and sending trucks blasting the Kremlin’s propaganda. But convincing people to support the invader can be complicated. WSJ’s Thomas Grove reports. Photo: Sergei Ilnitsky/EPA-EFE/Shutterstock

Mr. Demir’s comments came as Ukrainian officials have expressed concern that Turkey is gradually shifting its position toward Russia, after initially taking concrete steps to support Ukraine’s war effort in the early days of the invasion.

In recent days, Ukraine has accused Turkey of buying stolen wheat from Russia. A senior Ukrainian official said Ukraine is asking itself: “‘Is Turkey switching sides?”

“Turkey’s interests come first for Turkey,” the senior Ukrainian official said.

A Turkish official said the concerns about the country shifting its position on the conflict were “baseless.”

“We stand by Ukraine in political, humanitarian and other fields,” the official said.

The official also said Turkey is processing information Ukraine had provided about the allegedly stolen grain. Russian authorities provided documents saying the cargo had originated in Russia, the official said.

“It is technically very difficult to determine the geographic origin of grain,” the official said.

Mr. Erdogan has tried to maintain good relations with both Ukraine and Russia—two Black Sea neighbors that are major sources of commodities for Turkey. He has made moves that have pleased and displeased both sides.

Though Turkey didn’t impose economic sanctions against Russia, the country shut off access to the Black Sea for Russian warships and closed Turkish airspace to certain Russian military flights from Syria following a request from Ukraine.

Ukrainian officials initially welcomed the Turkish government’s role as a facilitator of peace talks, saying that Turkey was a more neutral site for the negotiations than their original location in Belarus, a Russian ally that aided in the assault on Ukraine.

In recent weeks, Turkey has also sought to broker a deal that would help export grain and other vital food products from Ukraine. As much as 20 million metric tons of grain has been trapped in Ukraine as a result of the Russian invasion, raising fears of a global food crisis.

Turkey broke with the Western consensus on the Ukraine crisis when Mr. Erdogan decided in May to block Sweden and Finland’s application to join NATO over concerns about the presence of Kurdish militants in the two countries. The three countries are continuing negotiations to try to resolve the dispute this week.

Mr. Erdogan has long had an unusual partnership with Russia’s President

Vladimir Putin,

authorizing purchases of Russian weapons while also sending Turkish forces to fight proxy wars against Russia in Syria and Libya.

In recent weeks, Mr. Erdogan has also called for a new military operation against Kurdish militants in Syria, an action that would likely require Russian approval because of the presence of Russian soldiers in the specific areas of Syria that Mr. Erdogan says it plans to attack.

The battlefield dynamic has also shifted in Ukraine, with Russia making gains in the east after failing to achieve its early objectives.

“As it becomes clear that there may not be an immediate victory, they’re starting to become more cautious,” said Asli Aydintasbas, a senior policy fellow with the European Council on Foreign relations.

“Turkey increasingly characterizes this as a contest between the West and Russia and does not want to get caught in that. The logic of neutrality is stronger in the country now than three or four months ago,” she said.

—Elvan Kivilcim contributed to this article.

Write to Jared Malsin at jared.malsin@wsj.com

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