MbZ becomes president at a time of tension with U.S.
He led a Middle East realignment, forging ties with Israel
UAE has also deepened ties with Russia and China
Economic development a priority driving foreign policy
DUBAI, May 14 (Reuters) – The United Arab Emirates’ de facto leader Sheikh Mohammed bin Zayed al-Nahyan was elected president of the Gulf Arab state by a federal supreme council on Saturday, solidifying his rule over the OPEC oil producer and key regional player. read more
He becomes president at a time when the UAE’s long-standing ties with the United States have been strained over perceived U.S. disengagement from its Gulf allies’ security concerns and as Western countries seek support from the region to help isolate Russia over the Ukraine conflict.
The council, which groups the rulers of the seven emirates of the UAE federation, elected Sheikh Mohammed, known as MbZ, a day after the death of his half-brother, President Sheikh Khalifa bin Zayed, who was also ruler of Abu Dhabi.
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“We congratulate him and pledge allegiance to him as do our people,” said Dubai ruler Sheikh Mohammed bin Rashid al-Maktoum, who is also UAE vice-president and premier.
MbZ, 61, has wielded power behind the scenes for years and led a realignment of the Middle East that created a new anti-Iran axis with Israel.
The UAE, a trade and tourism hub, has also deepened ties with Russia and China at a time when Washington’s political capital with Abu Dhabi and Riyadh has been eroded by differences over the Yemen war, Iran and U.S. conditions on arms sales.
“Mohammed bin Zayed has set not only the future course for the UAE but for much of the Gulf in his approach to state building and power projection,” said Kristin Diwan, senior resident scholar at Arab Gulf States Institute in Washington.
“The future direction under him is set and is mirrored in other Gulf leaders adopting state-led and globally-oriented economic diversification.”
‘EXTRAORDINARY FOUNDATION’
The Biden administration has moved to mend ties with oil heavyweights Saudi Arabia and the UAE. Both have refused to take sides in the Russia-Ukraine conflict and rebuffed Western calls to pump more oil to help tame crude prices. read more
President Joe Biden said in a statement on Saturday that he looked forward to working with Sheikh Mohammed “to build from this extraordinary foundation to further strengthen the bonds between our countries and peoples.”
Vice President Kamala Harris will head a U.S. delegation to the UAE on Monday to offer condolences following Khalifa’s death and will meet with MbZ, press secretary Kirsten Allen said.
French President Emmanuel Macron, British Prime Minister Boris Johnson and Israeli President Isaac Herzog are due to arrive on Sunday. read more S8N2S7032
MbZ as president would not lead the UAE to break with the United States or other Western partners though he will diversify the country’s international partners, Emirati political scientist Abulkhaleq Abdulla told Reuters.
MbZ has shifted away from a hawkish foreign policy and military adventurism, that saw the UAE wade into conflicts from Yemen to Libya, to focus on economic priorities. This has seen the UAE engage with foes Iran and Turkey after years of animosity, as well as Syria’s president.
“MbZ will need to take further steps to cement the UAE’s position as the region’s leading financial, logistics, and trading hub,” James Swanston of Capital Economics said in a note, referring to a push by Gulf states to diversify economies amid a global energy transition away from hydrocarbons.
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Reporting by Enas Alashray, Lisa Barrington, Saeed Azhar, Alexander Cornwell, Steve Holland and Ari Rabinovitch; Writing by Ghaida Ghantous; Editing by Kirsten Donovan and Christina Fincher
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Ukraine halts major route for Russian gas to Europe
Russia imposes sanctions on Gazprom units in Europe, U.S.
Ukrainian forces seek to cut Russian battlefield supply lines
KYIV/BRUSSELS, May 12 (Reuters) – Finland is expected to announce on Thursday its intention to join NATO with Sweden likely to follow soon after, diplomats and officials said, as Russia’s invasion of Ukraine reshapes European security and the Atlantic military alliance.
NATO allies expect Finland and Sweden to be granted membership quickly, five diplomats and officials told Reuters, paving the way for increased troop presence in the Nordic region during the one-year ratification period. read more
In the wider Nordic region, Norway, Denmark and the three Baltic states are already NATO members, and the addition of Finland and Sweden would likely anger Moscow, which says NATO enlargement is a direct threat to its own security.
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Russian President Vladimir Putin has cited the issue as a reason for his actions in Ukraine, which has also expressed a desire to eventually join the alliance.
Moscow has also repeatedly warned Finland and Sweden against joining the alliance, threatening “serious military and political consequences”.
Asked on Wednesday if Finland would provoke Russia by joining NATO, President Sauli Niinisto said Putin would be to blame. “My response would be that you caused this. Look at the mirror,” Niinisto said. read more
On the frontlines, Ukraine on Wednesday said it had pushed back Russian forces in the east and shut gas flows on a route through Russian-held territory, raising the spectre of an energy crisis in Europe.
Ukraine’s armed forces’ general staff said it had recaptured Pytomnyk, a village on the main highway north of the second-largest city of Kharkiv, about halfway to the Russian border.
In another village near Kharkiv recaptured by Ukrainian forces in early April, resident Tatyana Pochivalova returned to find her home blasted to ruins.
“I have not expected anything like this, such aggression, such destruction,” a weeping Pochivalova said. “I came and I kissed the ground, I simply kissed it. My home, there is nothing. Where am I to live, how am I to live?”
The advance appears to be the fastest that Ukraine has mounted since it drove Russian troops away from the capital Kyiv and out of northern Ukraine at the beginning of April.
If sustained, it could let Ukrainian forces threaten supply lines for Russia’s main attack force, and put rear logistics targets in Russia itself within range of artillery.
In the south, Ukraine’s military said early on Thursday it had destroyed two tanks and an ammunition depot in the Russian-controlled Kherson region.
The Kremlin calls its actions in Ukraine a “special military operation” to demilitarise a neighbour threatening its security. It denies targeting civilians.
Ukraine says it poses no threat and that the deaths of thousands of civilians and destruction of towns and cities show that Russia is waging a war of conquest.
GAS SUPPLIES
Wednesday’s move by Ukraine to cut off Russian gas supplies through territory held by Russian-backed separatists was the first time the conflict has directly disrupted shipments to Europe.
Gas flows from Russia’s export monopoly Gazprom to Europe via Ukraine fell by a quarter after Kyiv said it was forced to halt all flows from one route, through the Sokhranovka transit point in southern Russia.
Ukraine accused Russian-backed separatists of siphoning supplies. read more
Should the supply cut persist, it would be the most direct impact so far on European energy markets.
Moscow has also imposed sanctions on the owner of the Polish part of the Yamal pipeline that carries Russian gas to Europe, as well as Gazprom’s former German unit, whose subsidiaries service Europe’s gas consumption.
The implications for Europe, which buys more than a third of its gas from Russia, were not immediately clear.
Berlin said it was looking into the announcement. An Economy Ministry spokesperson said the German government was “taking the necessary precautions and preparing for various scenarios”.
BURNED OUT TANKS
As fighting continued, the governor of the Russian region of Belgorod, on the other side of the border from Kharkiv, said a village had been shelled from Ukraine, wounding one person.
Ukraine authorities have so far confirmed few details about the advance through the Kharkiv region.
“We are having successes in the Kharkiv direction, where we are steadily pushing back the enemy and liberating population centres,” said Brigadier General Oleksiy Hromov, Deputy Chief of the Main Operations Directorate of Ukraine’s General Staff.
In southern Ukraine, where Russia has seized a swathe of territory, Kyiv has said Moscow plans to hold a fake referendum on independence or annexation to make its occupation permanent.
The Kremlin said on Wednesday it was up to residents living in the Russian-occupied Kherson region to decide whether they wanted to join Russia, but any such decision must have a clear legal basis.
Russian forces have also continued to bombard the Azovstal steelworks in the southern port of Mariupol, last bastion of Ukrainian defenders in a city
“If there is hell on earth, it is there,” wrote Petro Andryushchenko, an aide to Mariupol Mayor Vadym Boichenko, who has left the city.
Ukraine says it is likely that tens of thousands of people have been killed in Mariupol. Ukrainian authorities say between 150,000 and 170,000 of the city’s 400,000 residents are still living there amid the Russian-occupied ruins. read more
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Reporting by Reuters bureaus; Writing by Costas Pitas and Stephen Coates; Editing by Lincoln Feast
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Gas pipelines are pictured at the Atamanskaya compressor station, facility of Gazprom’s Power Of Siberia project outside the far eastern town of Svobodny, in Amur region, Russia November 29, 2019. REUTERS/Maxim Shemetov.
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KYIV/LONDON, May 10 (Reuters) – Ukraine said on Tuesday it would suspend the flow of gas through a transit point which it said delivers almost a third of the fuel piped from Russia to Europe through Ukraine, blaming Moscow for the move and saying it would move the flows elsewhere.
Ukraine has remained a major transit route for Russian gas to Europe even after Moscow’s invasion.
GTSOU, which operates Ukraine’s gas system, said it would stop shipments via the Sokhranivka route from Wednesday, declaring “force majeure”, a clause invoked when a business is hit by something beyond its control.
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But Gazprom (GAZP.MM), which has a monopoly on Russian gas exports by pipeline, said it was “technologically impossible” to shift all volumes to the Sudzha interconnection point further west, as GTSOU proposed.
GTSOU CEO Sergiy Makogon told Reuters that Russian occupying forces had started taking gas transiting through Ukraine and sending it to two Russia-backed separatist regions in the country’s east. He did not cite evidence.
The company said it could not operate at the Novopskov gas compressor station due to “the interference of the occupying forces in technical processes”, adding it could temporarily shift the affected flow to the Sudzha physical interconnection point located in territory controlled by Ukraine.
Ukraine’s suspension of Russian natural gas flows through the Sokhranivka route should not have an impact on the domestic Ukrainian market, state energy firm Naftogaz head Yuriy Vitrenko told Reuters.
The state gas company in Moldova, a small nation on Ukraine’s western border, said it had not received any notice from GTSOU or Gazprom that supplies would be interrupted.
The Novopskov compressor station in the Luhansk region of eastern Ukraine has been occupied by Russian forces and separatist fighters since soon after Moscow began what it describes as a “special military operation” in February. read more
It is the first compressor in the Ukraine gas transit system in the Luhansk region, the transit route for around 32.6 million cubic metres of gas a day, or a third of the Russian gas which is piped to Europe through Ukraine, GTSOU said.
GTSOU said that in order to fulfil its “transit obligations to European partners in full” it would “temporarily transfer unavailable capacity” to the Sudzha interconnection point.
Gazprom said it had received notification from Ukraine that the country would stop the transit of gas to Europe via the Sokhranivka interconnector from 0700 local time on Wednesday.
The Russian company said it saw no proof of force majeure or obstacles to continuing as before. Gazprom added that it was meeting all obligations to buyers of gas in Europe.
The United States has urged countries to lessen their dependence on Russian energy and has banned Russian oil and other energy imports in retaliation for the invasion of Ukraine.
U.S. State Department spokesperson Ned Price said Tuesday’s announcement does not change the timeline to lessen global dependence on Russian oil “as soon as possible.”
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Reporting by Susanna Twidale and Pavel Polityuk; additional reporting by Nina Chestney in London, Daphne Psaledakis in Washington and and David Ljunggren in Ottawa;
Editing by Alexander Smith, Cynthia Osterman and Rosalba O’Brien
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Green, digital booms fuel demand for rare minerals
China is pre-eminent in critical minerals supply
GRAPHIC-S.Korea’s reliance on China:
SANGDONG, South Korea, May 9 (Reuters) – Blue tungsten winking from the walls of abandoned mine shafts, in a town that’s seen better days, could be a catalyst for South Korea’s bid to break China’s dominance of critical minerals and stake its claim to the raw materials of the future.
The mine in Sangdong, 180 km southeast of Seoul, is being brought back from the dead to extract the rare metal that’s found fresh value in the digital age in technologies ranging from phones and chips to electric vehicles and missiles.
“Why reopen it now after 30 years? Because it means sovereignty over natural resources,” said Lee Dong-seob, vice president of mine owner Almonty Korea Tungsten Corp.
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“Resources have become weapons and strategic assets.”
Sangdong is one of at least 30 critical mineral mines or processing plants globally that have been launched or reopened outside China over the last four years, according to a Reuters review of projects announced by governments and companies. These include projects developing lithium in Australia, rare earths in the United States and tungsten in Britain.
The scale of the plans illustrates the pressure felt by countries across the world to secure supplies of critical minerals regarded as essential for the green energy transition, from lithium in EV batteries to magnesium in laptops and neodymium found in wind turbines.
Overall demand for such rare minerals is expected to increase four-fold by 2040, the International Energy Agency said last year. For those used in electric vehicles and battery storage, demand is projected to grow 30-fold, it added.
Many countries view their minerals drive as a matter of national security because China controls the mining, processing or refining of many of these resources.
The Asian powerhouse is the largest supplier of critical minerals to the United States and Europe, according to a study by the China Geological Survey in 2019. Of the 35 minerals the United States has classified as critical, China is the largest supplier of 13, including rare earth elements essential for clean-energy technologies, the study found. China is the largest source of 21 key minerals for the European Union, such as antimony used in batteries, it said.
“In the critical raw material restaurant, China is sitting eating its dessert, and the rest of the world is in the taxi reading the menu,” said Julian Kettle, senior vice president for metals and mining at consultancy Wood MacKenzie.
The stakes are particularly high for South Korea, home of major chipmakers like Samsung Electronics. The country is the world’s largest consumer of tungsten per capita and relies on China for 95% of its imports of the metal, which is prized for its unrivalled strength and its resistance to heat.
China controls over 80% of global tungsten supplies, according to CRU Group, London-based commodity analysts.
The mine at Sangdong, a once bustling town of 30,000 residents that’s now home to just 1,000, holds one of the world’s largest tungsten deposits and could produce 10% of global supply when it opens next year, according to its owner.
Lewis Black, CEO of Almonty Korea’s Canadian-based parent Almonty Industries, told Reuters that it planned to offer about half of the operation’s processed output to the domestic market in South Korea as an alternative to Chinese supply.
“It’s easy to buy from China and China is the largest trading partner of South Korea but they know they’re over-dependent,” Black said. “You have to have a plan B right now.”
Sangdong’s tungsten, discovered in 1916 during the Japanese colonial era, was once a backbone of the South Korean economy, accounting for 70% of the country’s export earnings in the 1960s when it was largely used in metal-cutting tools.
The mine was closed in 1994 due to cheaper supply of the mineral from China, which made it commercially unviable, but now Almonty is betting that demand, and prices will continue to rise driven by the digital and green revolutions as well as a growing desire by countries to diversify their supply sources.
European prices of 88.5% minimum paratungstate – the key raw material ingredient in tungsten products – are trading around $346 per tonne, up more than 25% from a year ago and close to their highest levels in five years, according to pricing agency Asian Metal.
The Sangdong mine is being modernised, with vast tunnels being dug underground, while work has also started on a tungsten crushing and grinding plant.
“We should keep running this kind of mine so that new technologies can be handed over to the next generations,” said Kang Dong-hoon, a manager in Sangdong, where a “Pride of Korea” sign is displayed on a wall of the mine office.
“We have been lost in the mining industry for 30 years. If we lose this chance, then there will be no more.”
Almonty Industries has signed a 15-year deal to sell tungsten to Pennsylvania-based Global Tungsten & Powders, a supplier to the U.S. military, which variously uses the metal in artillery shell tips, rockets and satellite antennae.
Yet there are no guarantees of long-term success for the mining group, which is investing about $100 million in the Sangdong project. Such ventures may still struggle to compete with China and there are concerns among some industry experts that developed countries will not follow through on commitments to diversify supply chains for critical minerals.
Seoul set up an Economic Security Key Items Taskforce after a supply crisis last November when Beijing tightened exports of urea solution, which many South Korean diesel vehicles are required by law to use to cut emissions. Nearly 97% of South Korea’s urea came from China at the time and shortages prompted panic-buying at filling stations across the country.
The Korean Mine Rehabilitation and Resources Corporation (KOMIR), a government agency responsible for national resource security, told Reuters it had committed to subsidise about 37% of Sangdong’s tunnelling costs and would consider further support to mitigate any potential environmental damage.
Incoming President Yoon Seok-yeol pledged in January to reduce mineral dependence on “a certain country”, and last month announced a new resource strategy that will allow the government to share stockpiling information with the private sector.
South Korea is not alone.
The United States, European Union and Japan have all launched or updated national critical mineral supply strategies over the last two years, laying out broad plans to invest in more diversified supply lines to reduce their reliance on China.
Mineral supply chains have also become a feature of diplomatic missions.
Last year, Canada and the European Union launched a strategic partnership on raw materials to reduce dependence on China, while South Korea recently signed collaboration deals with Australia and Indonesia on mineral supply chains.
“Supply-chain diplomacy will be prioritised by many governments in the coming years as accessing critical raw materials for the green and digital transition has become a top priority,” said Henning Gloystein, director of energy and climate resources at the Eurasia Group consultancy.
In November, China’s top economic planner said it would step up exploration of strategic mineral resources including rare earths, tungsten and copper.
Investment globally of $200 billion in additional mining and smelter capacity is needed to meet critical mineral supply demand by 2030, 10 times what is being committed currently, Kettle said.
Yet projects have faced resistance from communities who don’t want a mine or smelter near their homes.
In January, for example, pressure from environmentalists prompted Serbia to revoke Rio Tinto’s lithium exploration licence while U.S. President Joe Biden’s administration cancelled two leases for Antofagasta’s copper and nickel mines in Minnesota. read more
In Sangdong, some residents are doubtful that the mine will improve their lives.
“Many of us in this town didn’t believe the mine would really come back,” said Kim Kwang-gil, 75, who for decades lived off the tungsten he panned from a stream flowing down from the mine when it operated.
“The mine doesn’t need as many people as before, because everything is done by machines.”
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Reporting by Ju-min Park and Joe Brock; Additional reporting by Beijing Newsroom and Gavin Maguire; Editing by Kevin Krolicki and Pravin Char
Our Standards: The Thomson Reuters Trust Principles.
Chinese and U.S. flags flutter outside the building of an American company in Beijing, China January 21, 2021. REUTERS/Tingshu Wang
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HONG KONG, May 6 (Reuters) – U.S. and Chinese regulatory officials are in talks to settle a long-running dispute over the auditing compliance of U.S.-listed Chinese firms, three people briefed on the matter told Reuters.
The standoff, if not resolved, could see Chinese firms kicked off New York bourses.
The U.S. Public Company Accounting Oversight Board (PCAOB) denied an earlier Reuters report that said a team from the agency had arrived in Beijing for talks.
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This week the U.S. Securities and Exchange Commission (SEC) added over 80 firms, including e-commerce giant JD.com (9618.HK) and China Petroleum & Chemical Corp (600028.SS) to the list of companies facing possible expulsion. read more
The talks between officials from the PCAOB and their counterparts at the China Securities Regulatory Commission (CSRC) can be described as “late stage” after China made concessions in recent months, the people said.
But a PCAOB spokesperson said, “Recent reports that PCAOB officials are currently in China, or that PCAOB officials were in China earlier this year to conduct face-to-face negotiations, are untrue. The PCAOB has not sent any personnel to China since 2017.”
He said the board continues to engage with the Chinese authorities but “speculation about a final agreement remains premature.” As a result, the PCAOB is planning “for various scenarios”.
The CSRC on Friday did not respond directly on the status of discussions. It referred Reuters to official statements from both sides but did not specify which statements.
The sources asked not to be identified due to the sensitivity of the issue.
Authorities in China have long been reluctant to let overseas regulators inspect local accounting firms, citing national security concerns.
But in a key concession, Chinese regulators last month proposed revising confidentiality rules for offshore listings and scrapping requirements that on-site inspections of overseas-listed Chinese firms be conducted mainly by domestic regulators. read more
Sources told Reuters last month that a preliminary framework for audit supervision cooperation between the two countries has been formed. read more
The spat over audit oversight of New York-listed Chinese companies, simmering for more than a decade, came to a head in December when the SEC finalised rules to delist Chinese companies under the Holding Foreign Companies Accountable Act. It said there were 273 companies at risk but did not name them.
As of Friday, the PCAOB has identified 128 Chinese firms as at risk of being delisted.
The issue has been a major factor dragging on American depositary receipts (ADRs) issued by Chinese firms, with the Nasdaq Golden Dragon China Index tumbling 57% over the past 12 months.
Goldman Sachs estimated in March that U.S. institutional investors held around $200 billion worth of Chinese ADRs.
In addition to the concessions by Chinese regulators, there have been other signs that a deal is in the offing.
In late March, sources said the CSRC asked some of the country’s U.S.-listed firms, including Alibaba Group Holding Ltd (9988.HK), Baidu Inc (9888.HK) and JD.com, to prepare for more audit disclosures. Late last month, Fang Xinghai, the CSRC’s vice chairman said he expected a deal in the near future.
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Reporting by Xie Yu; Additional reporting by Katanga Johnson in Washington, Selena Li in Hong Kong and Jing Xu in Beijing; Editing by Edwina Gibbs and William Mallard
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May 6 (Reuters) – Elon Musk and Twitter Inc (TWTR.N) were sued on Friday by a Florida pension fund seeking to stop Musk from completing his $44 billion takeover of the social media company before 2025.
In a proposed class action filed in Delaware Chancery Court, the Orlando Police Pension Fund said Delaware law forbade a quick merger because Musk had agreements with other big Twitter shareholders, including his financial adviser Morgan Stanley (MS.N) and Twitter founder Jack Dorsey, to support the buyout.
The fund said those agreements made Musk, who owns 9.6% of Twitter, the effective “owner” of more than 15% of the company’s shares. It said that required delaying the merger by three years unless two-thirds of shares not “owned” by him granted approval.
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Morgan Stanley owns about 8.8% of Twitter shares and Dorsey owns 2.4%.
Musk hopes to complete his $54.20 per share Twitter takeover this year, in one of the world’s largest leveraged buyouts.
He also runs electric car company Tesla Inc (TSLA.O), leads The Boring Co and SpaceX, and is the world’s richest person according to Forbes magazine.
Twitter and its board, including Dorsey and Chief Executive Parag Agrawal, were also named as defendants.
Twitter declined to comment. Lawyers for Musk and the Florida fund did not immediately respond to requests for comment.
The lawsuit also seeks to declare that Twitter directors breached their fiduciary duties, and recoup legal fees and costs. It did not make clear how shareholders believed they might be harmed if the merger closed on schedule.
On Thursday, Musk said he had raised around $7 billion, including from sovereign wealth funds and friends in Silicon Valley, to help fund a takeover. read more
Musk had no financing lined up when he announced plans to buy Twitter last month.
Some of the new investors appear to share interests with Musk, a self-described free speech absolutist who could change how the San Francisco-based company moderates content.
Florida’s state pension fund also invests in Twitter, and Governor Ron DeSantis said this week it could make a $15 million to $20 million profit if Musk completed his buyout.
In afternoon trading, Twitter shares were down 60 cents at $49.76.
The case is Orlando Police Pension Fund v Twitter Inc et al, Delaware Chancery Court, No. 2022-0396.
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Reporting by Jonathan Stempel in New York
Editing by Howard Goller and Mark Potter
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German Chancellor Olaf Scholz addresses the media during a news conference following a special German cabinet meeting at the government’s guest house Schloss Meseberg in Meseberg, Gransee, Germany May 4, 2022. REUTERS/Michele Tantussi
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BERLIN, May 4 (Reuters) – Chancellor Olaf Scholz urged Ukraine on Wednesday to help unblock an embarrassing diplomatic impasse, after the German president was stopped from visiting Kyiv amid disquiet over his past support of rapprochement with Russia.
Ukraine’s ambassador to Germany has called Scholz an “offended liver sausage” for refusing to visit the country before President Frank-Walter Steinmeier is welcomed there.
“It is a problem for the German government and for the German people that the president was asked not to come,” Scholz told reporters following talks with his cabinet.
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“Ukraine must also play its part,” he said, without elaborating how.
The row has put an awkward twist on relations at a time when Germany’s opposition to Russia’s invasion is crucial to Ukraine, given its weight in the European Union and the bloc’s deliberations on sanctions against Moscow.
Steinmeier had planned to visit the Ukrainian capital in April but the trip was cancelled, causing a scandal in Germany where policymakers have been scrambling to reverse a long-standing “Wandel durch Handel” – change through trade – approach to dealing with Russia.
Steinmeier, a fellow member of Scholz’s centre-left Social Democrats (SPD), was long considered a proponent of reconciliation with Moscow but he has since conceded that he made mistakes.
German media had previously reported that Ukrainian President Volodymyr Zelenskiy refused to welcome Steinmeier in Kyiv over his years-long support for the Nord Stream 2 gas pipeline connecting Russia to Germany, which was cancelled days before Russia began its invasion of Ukraine on Feb. 24.
Highlighting the government’s delay in sending someone to Ukraine, Germany’s main opposition leader, Friedrich Merz of the conservative Christian Democrats (CDU), visited the war-torn country on Tuesday.
Scholz said he was in touch with his political rival regarding the trip, during which Merz toured the bombed-out town of Irpin before heading to nearby Kyiv for talks with Zelenskiy.
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Reporting by Rachel More; Editing by Miranda Murray and Hugh Lawson
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Russian President Vladimir Putin delivers a speech during a meeting of the Council of Legislators at the Federal Assembly in Saint Petersburg, Russia April 27, 2022. Sputnik/Alexei Danichev/Kremlin via REUTERS
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Putin begins Russia’s bite-back over Ukraine sanctions
Gives wide powers to cut raw material, produce exports
Forbids transactions with sanctioned entities
Retaliatory moves could wreak chaos across markets
Who will be on sanctions lists will now be key
LONDON, May 3 (Reuters) – Russian President Vladimir Putin put the West on notice on Tuesday that he could terminate exports and deals, the Kremlin’s toughest response yet to the sanctions burden imposed by the United States and allies over the Russian invasion of Ukraine.
Putin, Russia’s paramount leader since 1999, signed a broad decree on Tuesday which forbade the export of products and raw materials to people and entities on a sanctions list that he instructed the government to draw up within 10 days.
The decree, which came into force with its publication, gives Moscow the power to sow chaos across markets as it could at any moment halt exports or tear up contracts with an entity or individual it has sanctioned.
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The Russian government has 10 days to draw up lists of those it will sanction beyond the Western politicians it has already.
Putin explicitly framed the decree as a response to what he cast as the illegal actions of the United States and its allies meant to deprive “the Russian Federation, citizens of the Russian Federation and Russian legal entities of property rights or the restricting their property rights”.
The decree sets out “retaliatory special economic measures in connection with the unfriendly actions of some foreign states and international organizations”.
Russia’s Feb. 24 invasion of Ukraine prompted the United States and its allies to impose the most severe sanctions in modern history on Russia and Moscow’s business elite, steps Putin casts as a declaration of economic war.
The West’s attempt to economically isolate Russia – one of the world’s biggest producers of natural resources – has propelled the global economy into uncharted waters with soaring prices and warnings of food shortages.
Putin, 69, has repeatedly warned that Moscow will respond in kind, though until Tuesday the Kremlin’s toughest economic response had been to cut off gas supplies to Poland and Bulgaria and demand a new payment scheme for European buyers of gas.
Tuesday’s decree forbids the export of products and raw materials to people and entities that the Kremlin has sanctioned. It forbids any transactions with such people or entities – even under current contracts.
Putin tasked the government with drawing up the list of foreign individuals and companies to be sanctioned, as well as defining “additional criteria” for a number of transactions that could be subject to restrictions.
“This is a framework decree,” said Tatiana Stanovaya, a non-resident scholar at Carnegie Moscow Center and founder of the R.Politik political analysis firm.
“Now all the specific lists should be developed by the government. That’s the main thing and we need to wait for.”
Since the West imposed sanctions on Russia, the $1.8 trillion economy has been heading for its biggest contraction since the years following the 1991 break-up of the Soviet Union, amid soaring inflation.
A significant transfer of Russian assets has begun as the Russian state gains even more influence over the economy, many major Western investors – such as energy giants BP (BP.L) and Shell (SHEL.L) – exit, and oligarchs try to restructure their business empires.
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Writing by Guy Faulconbridge; Editing by Kevin Liffey and Mark Heinrich
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Civilians trying to leave Mariupol after weeks of siege
Moscow steps up assault in Ukraine’s south, eastern Donbas
KYIV/LVIV, May 2 (Reuters) – The European Union was preparing sanctions on Russian oil sales over its invasion of Ukraine after a major shift on Monday by Germany, Russia’s biggest energy customer, that could deprive Moscow of a large revenue stream within days.
The European Commission is expected to propose a sixth package of EU sanctions this week against Russia over its Feb. 24 invasion of Ukraine, including a possible embargo on buying Russian oil.
Kyiv says Russia’s energy exports to Europe, so far largely exempt from international sanctions, are funding the Kremlin war effort with millions of euros every day.
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“This package should include clear steps to block Russia’s revenues from energy resources,” Ukrainian President Volodymyr Zelenskiy said in his nightly video address.
Germany said on Monday it was prepared to back an immediate EU embargo on Russian oil.
“We have managed to reach a situation where Germany is able to bear an oil embargo,” German Economy Minister Robert Habeck said. read more
Chancellor Olaf Scholz, who has been more cautious than other Western leaders in backing Ukraine, has been under growing pressure to take a firmer line.
Scholz vowed sanctions will not be lifted until Russian President Vladimir Putin signs a peace deal with Ukraine that Kyiv can support, he said in an interview with ZDF public television. read more
Weaning Europe off Russian oil is likely to be easier than reducing dependence on Russian natural gas. Moscow has demanded European customers pay for gas in roubles, which the EU rejects. Last week, Moscow cut off supplies to Poland and Bulgaria.
EU ministers meeting on Monday warned that complying in full with Moscow’s demand for gas payments in roubles would breach existing EU sanctions.
Ambassadors from EU countries will discuss the proposed oil sanctions when they meet on Wednesday.
The first civilians to be evacuated from a giant steel plant in Mariupol arrived on Monday in the Ukrainian-held city of Zaporizhzhia after an overnight bus journey across the front-line.
Ukraine says hundreds of civilians have been trapped inside the Azovstal plant along with the city’s last Ukrainian defenders. Dozens were able to leave on Sunday in an evacuation organised by the United Nations, the first to escape since Putin ordered the plant barricaded last week.
Captain Sviatoslav Palamar, 39, a deputy commander of Ukraine’s Azov Regiment, told Reuters from inside the plant that fighters could hear voices of women, children and elderly people trapped below ground, and lacked the equipment to dig them out. read more
“We were planning to tear up the bunkers, the entrance to which is blocked, but all night into Monday naval artillery and barrel artillery were firing. All day today aviation has been working, dropping bombs,” Palamar said by Zoom.
Efforts to organise the evacuation of civilians from other parts of the city, now held by the Russians, ran into delays. Ukraine says 100,000 people are still in the ruined city, enduring desperate conditions after months of Russian siege.
“Our house is completely destroyed. We had a two-story building, it’s not there anymore. It burned to the ground,” said Natalya Tsyntomirska, a Mariupol native who reached Zaporizhzhia on Monday in a funeral service van.
Zelenskiy said the evacuation effort was continuing and he expected more movement of people through humanitarian corridors on Tuesday from Berdyansk, Tokmak and Vasylivka.
For its part, Kyiv hopes a massive influx of Western military aid will allow it to repel that assault and then turn the tide with a counter-attack.
Russian forces shelled the city of Kharkiv five times on Monday, injuring five people, according to regional governor Oleh Sinehubov. Further south, Izyum remained a battleground, with most of the houses in the city destroyed, he said.
After being forced to abandon an assault on Kyiv at the end of March, Russia launched a major offensive in eastern Ukraine focused on the Donetsk and Luhansk provinces, parts of which were already held by Russian-backed separatists before the invasion. Russian troops are now trying to encircle a large Ukrainian force there, attacking from three directions with massive bombardment along the front.
Ukraine’s military said on Monday Russian forces were trying to take over the frontline Luhansk province town of Rubizhne and prepare an assault on nearby Sievierodonetsk.
The heaviest clashes were taking place around Popasna, farther south. Shelling was so intense it was not possible to collect bodies, said regional Governor Serhiy Gaidai.
”I don’t even want to speak about what’s happening with the people living in Popasna, Rubizhne and Novotoshkivske right now. These cities simply don’t exist anymore. They have completely destroyed them.”
Russia has also been striking targets far from the front line with missiles. A 14-year-old boy was killed and a 17-year-old girl was wounded in a missile strike in the southern port of Odesa when a missile hit a dormitory, Zelenskiy said. read more
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Reporting by Kate Abnett in Brussels, Hamuda Hassan and Jorge Silva in Dobropillia, Ukraine, Natalia Zinets in Kyiv; Additional reporting by Reuters journalists; Writing by Peter Graff and Doina Chiacu; Editing by Nick Macfie, Tomasz Janowski, Cynthia Osterman and Lincoln Feast.
Our Standards: The Thomson Reuters Trust Principles.
The European Union flags flutter ahead of the gas talks between the EU, Russia and Ukraine at the EU Commission headquarters in Brussels, Belgium September 19, 2019. REUTERS/Yves Herman/File Photo
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BRUSSELS, May 2 (Reuters) – The European Commission may spare Hungary and Slovakia from an embargo on buying Russian oil, now under preparation, wary of the two countries’ dependence on Russian crude, two EU officials said on Monday.
The Commission is expected to finalise on Tuesday work on the next, and sixth package of EU sanctions against Russia over its actions in Ukraine, which would include a ban on buying Russian oil. Exports of oil are a major source of Moscow’s revenue.
Hungary, heavily dependent on Russian oil, has repeatedly said it would not sign up to sanctions involving energy. Slovakia is also among the EU countries most reliant on Russian fossil fuels.
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To keep the 27-nation bloc united, the Commission might offer Slovakia and Hungary “an exemption or a long transition period”, one of the officials said.
Ukraine’s foreign minister, Dmytro Kuleba, thanked Slovakia for its support of Kyiv, in what seems a sign of understanding of Slovakia’s position.
“Ukraine will always remember what our Slovak friends did for us. Warm welcome for Ukrainians fleeing the war, humanitarian aid, arms supplies, support for granting Ukraine EU candidate status and allowing tariff-free exports to the EU,” Kuleba wrote on Twitter. “We are lucky to have Slovakia as a neighbor.”
The oil embargo is likely to be phased in anyway, most likely taking full effect from the start of next year, officials said.
Europe is the destination for nearly half of Russia’s crude and petroleum product exports – providing Moscow with a huge source of revenue that countries including Latvia and Poland say must be cut, to stop funding its military action in Ukraine.
EU countries have paid Russia nearly 20 billion euros since Feb. 24, when it invaded Ukraine in what Moscow calls a “special military operation”, according to research organisation the Centre for Research on Energy and Clean Air.
Overall, the EU is dependent on Russia for 26% of its oil imports.
Slovakia and Hungary, both on the southern route of the Druzhba pipeline bringing Russian oil to Europe, are especially dependent, receiving respectively 96% and 58% of their crude oil and oil products imports from Russia last year, according to the International Energy Agency.
Germany, the top buyer of Russian oil in the EU, has in recent days said it could manage an oil embargo, having initially resisted for fear of the economic cost.
At 555,000 barrels per day, Germany imported 35% of its crude oil from Russia in 2021, but has in recent weeks reduced that to 12%, the German economy ministry said in an update on energy security on Sunday.
“An oil embargo with a sufficient transitional period would now be manageable in Germany, subject to rising prices,” it said.
The EU sanctions package is to be presented to ambassadors of EU governments on Wednesday.
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Reporting by Jan Strupczewski, Kate Abnett; Editing by Louise Heavens, Kirsten Donovan and Leslie Adler
Our Standards: The Thomson Reuters Trust Principles.