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Ukraine Secures 1Bln Euros in Aid ‘To Get Through Winter’

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Ukraine’s Western allies pledged an additional one billion euros ($1.1 billion) in emergency winter aid on Tuesday, responding to pleas from President Volodymyr Zelensky to help the country withstand Russia’s onslaught against its energy grid.

Around 70 countries and international organizations gathered in Paris for a meeting aimed at enabling Ukrainians “to get through this winter,” said French President Emmanuel Macron.

In a video message, Zelensky said Ukraine needed assistance worth around 800 million euros in the short term for its battered energy sector.

“Of course it is a very high amount, but the cost is less than the cost of a potential blackout,” Zelensky told the conference via video link.

Pledges for the energy sector comprised 400 million euros of the funds raised on Tuesday, France’s Foreign Minister Catherine Colonna said. 

Ukraine needs spare parts for repairs, high-capacity generators, extra gas as well as increased electricity imports, Zelensky said.

“Generators have become as necessary as armored vehicles and bullet-proof jackets,” he said.

Ukrainian Prime Minister Denys Shmyhal said 40 to 50% of the country’s grid was out of action because of Russia’s strikes.

Many areas of the country have power for only a few hours a day.

Another 1.5 million people were left without power in southern Odesa over the weekend after Russian drone attacks. 

“They want to put us into darkness and it will fail, thanks to our partners all over the world,” Shmygal told delegates.

Bridge attack

On the battlefield Tuesday, local authorities in the Russian-occupied city of Melitopol said pro-Kyiv forces had used explosives to damage a strategic bridge.

Melitopol is an important transport hub for Russian forces in the region of Zaporizhzhia and is key for Ukraine’s hopes of liberating the south of the country.

The bridge in the eastern suburbs “was damaged by terrorists,” Vladimir Rogov, a Moscow-installed regional official, said on the Telegram messaging app.

He did not specify the extent of the damage, but images on his social media accounts showed that a middle section of the bridge had collapsed.

Elsewhere on Tuesday, Belarus held a surprise inspection of its armed forces, raising fears of a possible escalation in the conflict.

Belarus is a close ally of Moscow, but Belarusian leader Alexander Lukashenko has repeatedly said he does not plan to send Belarusian troops to Ukraine.

Ukrainian PM Shmyhal also said Tuesday that the UN nuclear watchdog IAEA had agreed to dispatch permanent teams to monitor the country’s nuclear plants.

They are expected to take up positions in the Russian-controlled Zaporizhzhia plant, a hotspot of fighting, which has been a source of global concern in recent months.

A deal to de-militarize the site, which would see both sides withdraw forces, has proved impossible so far despite international diplomatic efforts.

‘War crimes’

Tuesday’s conference in Paris, titled “Standing with the Ukraine People,” also saw the launch of a new so-called Paris Mechanism to coordinate civilian aid to Ukraine.

The digital platform, announced by G7 leaders on Monday, will enable Ukraine to list its requirements and allow international donors to coordinate their responses in real time.

“A large number of countries will use this mechanism — all the members to the European Union, but it will go beyond to other partners, including non-European partners,” Colonna told reporters.

A similar platform exists for military aid, which is coordinated via meetings of Ukraine’s Western allies at the U.S.-run Ramstein military base in Germany.

Macron hosted Tuesday’s conference alongside Zelensky’s wife Olena, giving the French leader an opportunity to reaffirm his support for Kyiv.

He condemned Russia’s “cynical” and “cowardly” attacks on Ukrainian civilian infrastructure. 

“These strikes… which Russia openly admits are designed to break the resistance of the Ukrainian people, are war crimes,” Macron said in his opening address.

“They violate without any doubt the most basic principles of humanitarian law,” he said. 

“These acts are intolerable and will not go unpunished.”

The French president has riled some of his allies in Kyiv in the past, most notably in June when he said “we must not humiliate Russia.”

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G7 calls for ‘significant’ U.N. response to North Korea missile launches

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ROME, Nov 20 (Reuters) – The United Nations’ Security Council needs to take “significant measures” in response to the latest intercontinental ballistic missile launch by North Korea, foreign ministers of the Group of Seven (G7) major industrialised nations said on Sunday.

The Security Council is set to discuss North Korea in a meeting on Monday at the request of the United States, following the latest in a series of missile test launches this year.

“(North Korea’s) actions demand a united and robust response by the international community,” the ministers of the United States, Japan, Canada, Germany, Britain, France and Italy said.

Pyongyang tested on Friday a ballistic missile capable of reaching the U.S. mainland shortly after warning of “fiercer military responses” to Washington beefing up its security presence in the region.

The G7 statement said Friday’s test was a “reckless act” and “another blatant violation” of U.N. resolutions.

“The unprecedented series of unlawful ballistic missile launches conducted by (North Korea) in 2022 … pose a serious threat to regional and international peace and security,” the G7 statement said, adding that the country “cannot and will never have the status of a nuclear-weapon state”.

Reporting by Crispian Balmer; Editing by Alexander Smith and Raissa Kasolowsky

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Exclusive: Russian oil cap doubts spur insurer fears of ships left at sea

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LONDON/BRUSSELS, Nov 10 (Reuters) – Oil-laden tankers risk being left languishing at sea if insurers do not urgently get clarity on an unfinished G7 and European Union plan to cap the price of Russian crude, two senior industry executives told Reuters.

The Group of Seven (G7), which includes the United States, Britain, Germany and France, agreed in September to enforce a low price on sales of Russian oil.

U.S. officials said the move, which is due to start on Dec. 5, was aimed at allowing it to continue to flow, heading off a potential price shock after total EU bans were ratified in June.

And with just three weeks to go, time is running out to fully convince the shipping services industry it will work.

Concerns are centred around a scenario in which insurers discover that oil in transit at sea, which was believed to have been sold below the price cap, was in fact sold above it.

This would trigger the withdrawal of insurance cover as well as a refusal by buyers to accept delivery, leading to financial and logistical headaches and risking environmental dangers.

“If the time is too short, I think everyone will have a Plan B to de-risk, terminate, stay away, not maybe conclude any new contracts until there is some clarity,” said George Voloshin, Global Anti-Financial Crime Expert at ACAMS, the Association of Certified Anti-Money Laundering Specialists which consults with oil industry bankers, traders and insurers.

If insurance was withdrawn mid-voyage, buyers and traders would have to figure out what to do with a stranded cargo potentially exposed to sanctions, complicating a strategy to deprive Russia of funds over its invasion of Ukraine.

“It will probably be quite messy,” Voloshin said.

A European Commission official said the EU is aware that much more additional detail will be needed as time runs short for businesses to learn about their obligations, but that the issue must be dealt with at the G7 level.

The official spoke to Reuters on condition of anonymity because they are not authorized to speak about the matter.

U.S. State Department Ambassador James O’Brien, who heads the coordination of sanctions against Russia, said G7 countries will be ready with all the operational details and that technical talks were underway on pricing and governance.

‘SANCTION ISLANDS’

But if information gaps remain on the cap, it is possible oil-filled tankers could be left without insurance and marooned near ports, posing a major safety issue for nearby countries in the event of a spill, as well as any cleanup costs.

“In that situation, the vessel will go off risk and financial and technical services will be withdrawn and no one is going to take delivery of the cargo,” Mike Salthouse, head of claims at British-based global ship insurer North, told Reuters.

“This would be a bad development as no one will want uninsured ships sitting off coasts,” he added.

Salthouse said an owner of a ship which was potentially not earning anything for many months “will price that into any decision they make about carrying cargo in the future”, adding that this was likely to act as a disincentive.

“If that happens too often, it will run contrary to what the EU/G7 Coalition is trying to achieve.”

Although the EU ratified the price cap last month, insurers point to still unpublished legal details which must align with incomplete but more detailed U.S. Treasury guidance, especially over guarantees that insurers will not face surprise obstacles in the middle of a ship’s voyage.

“We need regulation in the G7 community which is similar, that is, the U.S. – where we have interim guidelines in the meantime – the U.K. and the EU,” said Lars Lange, secretary general of the International Union of Marine Insurance (IUMI).

“We fear that if we get different regulations from these three ‘sanction islands’ we will struggle to comply with all at the same time,” Lange said, adding that any vessels which are spurned by ports pose serious consequences.

The IUMI and the separate International Group insurance association have let G7 and EU governments know that their guidelines must include guarantees that the proof that a Russian cargo was sold in line with the cap is all that an owner is required to check before agreeing to load and carry the cargo.

Editing by Alexander Smith

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G7 urges China to abstain from threats, use of force

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MUENSTER, Germany, Nov 4 (Reuters) – The Group of Seven on Friday urged China to abstain from “threats, coercion, intimidation, or the use of force,” while expressing their aim for cooperation where possible to tackle global challenges including security, global health and climate.

The mildly-worded communique, wrapping up two days of meetings by the foreign ministers of the world’s seven wealthiest democracies, also reiterated the importance of peace and stability across the Taiwan Straits.

The G7 increasingly agrees on the need for a coordinated response to Chinese President Xi Jinping’s ambitions following a congress of the ruling Communist party, a senior U.S. State Department official said earlier, but the communique did not make a reference to a common goal.

The gathering coincided with a one-day visit by German Chancellor Olaf Scholz to China, which fuelled concern that Germany would continue to prioritize economic relations with its largest trading partner over security and strategic considerations.

This could risk divisions among Western allies that have sought to adopt a tougher stance towards China in recent years.

“We remind China of the need… to abstain from threats, coercion, intimidation, or the use of force,” the G7 communique said. “We strongly oppose any unilateral attempts to change the status quo by force or coercion.”

The G7 said it remained “seriously concerned about the situation in and around the East and South China Seas” after China earlier this year staged war games near Taiwan.

China claims the self-governed island as its own territory and has never renounced the use of force to bring the island under its control.

Moreover the G7 said they would continue to raise concerns with China on its reported human rights violations and abuses, including in Xinjiang and Tibet, and on the “continued erosion of Hong Kong’s rights, freedoms and autonomy”.

The U.S. State Department official told reporters there was had been an “increasing convergence of the views on what China’s ultimate strategy, both domestically but also globally, is” over the last 1-1/2 years.

“Coming out of the party congress, I think there’s an increasing recognition of ultimately what President Xi’s ambitions are and the need for a coordinated response to that,” he said, speaking on condition of anonymity.

“That’s something that I think will be a focus of this group as we head into Japan’s presidency next year,” he noted, referring to Japan taking over the G7’s rotating presidency from Germany at the start of next year.

Sino-Japanese relations have long been plagued by a dispute over a group of tiny uninhabited East China Sea islets, a legacy of Japan’s World War Two aggression and regional rivalry.

On Friday Japan’s Sankei newspaper reported that the Japanese and Chinese governments had started planning a meeting between Xi and Japanese Prime Minister Fumio Kishida for mid-November.

European Union foreign policy chief Josep Borrell cautioned earlier in the day that China should not be put in the same category as Russia, which invaded Ukraine in February.

“It is clear that China is… becoming much more assertive, much more on a self-reliant course,” Borrell told reporters.

“But for the time being, many member states have a strong economic relationship with China, and I don’t think we can put China and Russia on the same level.”

The G7 said in their statement that they aimed for “constructive cooperation with China, where possible and in our interest” on global issues such as health and climate change.

Reporting by Humeyra Pamuk, Sarah Marsh and Sabine Siebold; additional reporting by Sarah Marsh; editing by Philippa Fletcher and Jonathan Oatis

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World

EXCLUSIVE G7 coalition has agreed to set fixed price for Russian oil -sources

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WASHINGTON/LONDON, Nov 4 (Reuters) – The Group of Seven rich nations and Australia have agreed to set a fixed price when they finalize a price cap on Russian oil later this month, rather than adopting a floating rate, sources said on Thursday.

U.S. officials and G7 countries have been in intense negotiations in recent weeks over the unprecedented plan to put a price cap on sea-borne oil shipments, which is scheduled to take effect on Dec. 5 – to ensure EU and U.S. sanctions aimed at limiting Moscow’s ability to fund its invasion of Ukraine do not throttle the global oil market.

“The Coalition has agreed the price cap will be a fixed price that will be reviewed regularly rather than a discount to an index,” said a coalition source, who was not authorized to speak publicly. “This will increase market stability and simplify compliance to minimize the burden on market participants.”

The initial price itself has not been set, but should be in coming weeks, multiple sources said. Coalition partners agreed to regularly review the fixed price and revise it as needed, the source said, without disclosing further details.

Pegging the price as a discount to some index would have resulted in too much volatility and potential price swings, the source added.

The coalition worried that a floating price pegged below the Brent international benchmark might enable Russian President Vladimir Putin to game the mechanism by reducing supply, a second source with knowledge of the discussions said.

Putin could benefit from a floating price system because the price for his country’s oil would also rise if Brent spiked due to a cut in oil from Russia, one of the world’s largest petroleum producers. The downside of the agreed fixed price system is that it will require more meetings of the coalition and bureaucracy to review it regularly, the source said.

U.S. Treasury Secretary Janet Yellen and other G7 officials argue the price cap, set to begin Dec. 5 on crude and Feb. 5 on oil products, will squeeze funding to Russia without cutting supply to consumers. Russia has said it will refuse to ship oil to countries that set price caps.

Shipping services are eager to see more details about the G7 plan which is due to take effect in a month.

A steady price cap could enable insurers to more confidently roll over contracts and initiate new ones without fear that the price could be adjusted by the countries buying Russian oil, which could have potentially exposed insurers to sanctions.

No immediate comment was available from Treasury or the embassies of coalition members, which include the G7 rich nations, the European Union and Australia.

Separately, The Wall Street Journal reported on Friday that the United States and its allies had agreed on further details on which sales of Russian oil will face the price cap.

Each load of seaborne Russian oil will only be subject to the price cap when first sold to a buyer on land, the countries determined. Reuters could not immediately verify the report which cited people familiar with the matter.

Reporting by Andrea Shalal and Timothy Gardner in Washington and Noah Browning in London; editing by Heather Timmons and Matthew Lewis

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World

EU Likely to Approve G-7 Cap on Russian Oil Price in Two Steps

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BERLIN—The European Union has advanced work on a price cap for Russian oil under an approach that keeps the U.S.-led effort on track but holds off on final approval.

EU member states have agreed on a two-stage approach to the international price cap on Russian oil, which is being developed within the Group of Seven industrial economies. Member states signed off on the legislation needed to implement the measures on Wednesday morning but will hold off approving it until the rest of the G-7 is ready, diplomats and officials said.

The price-cap decision is part of an eighth package of sanctions against Russia over the invasion of Ukraine. The measures will come into effect Thursday morning.

The EU approach reflects concern among some member states about the proposal, which would place a maximum price on what can be paid for Russian seaborne oil. Hesitation is greatest in EU members with large shipping sectors, including Greece, Cyprus and Malta.

The emerging EU approach means the price-cap proposal remains on track to enter into force, but raises fresh questions about how quickly it can be implemented.

Washington has pushed the international oil-price cap as a way of minimizing the Kremlin’s revenue from foreign oil sales without inflating oil prices by preventing oil sales to Asia and Africa. The idea is to set a maximum price at which shippers from G-7 countries may legally transport Russian oil to countries in Asia and Africa. The plan would also permit those companies to buy insurance for Russian oil cargoes, a critical aspect of the shipping industry. The G-7 hopes other countries will join the system.

The G-7 still must agree on the details of the price cap, including the price at which to set the cap, its precise implementation methods and how many other countries they need to join the G-7 in launching the cap. U.S. lawmakers are advocating increasing penalties for foreign buyers who don’t abide by the price cap.

U.S. officials have been flexible about how the other G-7 countries decide to implement the cap.

The EU formally backed the measure at the G-7, but European officials have repeatedly raised concerns about how the mechanism would function and its effectiveness in crimping Russia’s oil revenues.

Greece, Malta and Cyprus have raised concerns that banning EU companies from carrying Russian oil that is sold at rates above the price cap could hurt their economies. They fear losing business to countries that stay outside the mechanism, and they have also raised concerns that some G-7 countries may not enforce the price cap as rigorously as the EU, diplomats said.

At a meeting Tuesday evening, EU ambassadors agreed on a proposal under which they could agree on the legislation, but only formally approve the mechanism at a later date if the other G-7 countries have cleared the way to implement the cap system.

That means the 27 EU member states will need to revisit the three central elements of the price cap proposal. First they would need to sign off an exemption into the June sanctions package that banned EU companies from providing insurance on Russian oil transport after Dec. 5. They would also need to implement a ban on EU shippers transporting Russian oil priced above the cap, and then they would need to sign off on the G-7’s price cap.

The European Union proposed a ban on Russian crude within six months; Moscow and Kyiv accused each other of breaking a cease-fire in Mariupol. Photo: Julien Warnand/Shutterstock

To assuage the concerns of Malta, the ambassadors agreed Tuesday to carry out an impact assessment of the oil price cap mechanism when it enters into force. That will take into account the price cap’s “expected results, international adherence to and informal alignment with the price cap scheme” of non-G-7 countries, according to diplomats. It would also assess its potential impact on the EU.

The European Commission, the EU’s executive body, last week proposed to lay the legal basis for the price cap mechanism as part of a new package of sanctions it was placing on Russia in response to the Kremlin’s claim that it was annexing four regions of Ukraine.

Those sanctions would place an import ban on €7 billion, equivalent to about $7 billion, of Russian sales to the EU and would ban the export to Russia of a number of goods that can be used by its military in the war in Ukraine.

It will also target around three dozen people and companies involved in the latest annexations by Russia of Ukrainian regions.

The EU’s backing for the price cap is critical because the bloc plays a critical role in both the shipping industry and in shipping insurance sector. Sanctions must be approved by all 27 member states.

Under a sanctions package passed in June, the EU agreed to place an oil embargo on Russian seaborne oil by Dec. 5 and, on the same date, ban the provision of services, including shipping insurance, for Russian oil sold outside the bloc. The insurance measure could have choked off oil supplies to Asia and Africa, pushing oil prices higher.

EU diplomats have said that if the G-7 price cap is fully ready and detailed well in advance of Dec. 5, then they can come back and sign off the measures. If the G-7 mechanism is only finalized a few days before the December deadline—or isn’t in place until after it—some member states may demand a transition period to fully implement the measure.

Only Australia has pledged to join the G-7 system. European and U.S. officials say it is unlikely that India, China and some other top buyers of Russian oil will formally participate. Still, U.S. officials hope that by agreeing the price cap, they will at least drive down the price that other countries are willing to pay for Russian oil.

—Andrew Duehren contributed to this article.

Write to Laurence Norman at laurence.norman@wsj.com

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Explainer: The G7’s price cap on Russian oil begins to take shape

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A model of 3D printed oil barrels is seen in front of displayed stock graph going down in this illustration taken, December 1, 2021. REUTERS/Dado Ruvic/Illustration/File Photo

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WASHINGTON, Sept 12 (Reuters) – The Group of Seven countries is working to cap the price of Russian oil in an attempt to limit Moscow’s ability to fund its invasion of Ukraine, a plan analysts say could work in the long term but might boost oil prices in coming months.

Officials in G7 countries, including U.S. Treasury Secretary Janet Yellen, say the unprecedented measure, set to begin Dec. 5, will cut the price Russia receives for oil without reducing its petroleum exports to world consumers.

Russian President Vladimir Putin could push back, causing stress in oil markets even as the plan comes together.

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Below are questions about the price cap and challenges it faces.

WHO’S IN THE PRICE CAP COALITION?

The G7 wealthy nations — the United States, Japan, Germany, Britain, France, Italy and Canada — and the EU are hammering out details of the plan. The G7 wants to enlist other countries, including India and China, which have been snapping up heavily-discounted oil from Russia since its Feb. 24 invasion of Ukraine.

Moscow has managed to maintain its revenues through those increased crude sales to India and China.

But even if India and China don’t join, a cap could help force down prices for Asia and other consumers. U.S. Treasury Assistant Secretary for Economic Policy Ben Harris said on Sept. 9 that if China negotiates a separate 30%-40% discount on Russian oil because of the price cap “we consider that a win.”

The consensus on the price cap level will be reached with the aid of a “rotating lead coordinator,” the U.S. Treasury Department said in guidance issued on Friday suggesting that countries in the coalition will have a temporary leadership role as the plan proceeds.

WHAT’S THE LEVEL OF THE PRICE CAP?

It will likely be weeks before the price of Russian crude oil and two oil products will be decided, Harris said.

Washington-based ClearView Energy Partners has said officials have been talking about a $40-$60 per barrel range for crude. The upper end of that range is consistent with historical prices for Russian crude, while the lower end is closer to Russia’s marginal production cost, analysts say. read more

Coalition members with long economic and military relations with Russia could push for a higher cap, while a limit too low could take market share away from Saudi Arabia and other oil producers. “The level will be determined by both quantitative and qualitative reasons,” said Bob McNally, president of Rapidan Energy Group.

Russian crude is priced at a discount to the international Brent benchmark and the G7 wants to keep that spread wide, to keep down Russian oil revenue.

However, achieving a wide spread could mean higher prices for Western consumers as Russia is the world’s second largest crude exporter, after Saudi Arabia.

WHAT DOES THE G7 EXPECT FROM MARITIME SERVICES?

The plan agreed by the G7 calls for participating countries to deny Western-dominated services including insurance, finance, brokering and navigation to oil cargoes priced above the cap. read more

To secure those services, petroleum buyers would make “attestations” to providers saying they bought Russian petroleum at or below the cap.

Maritime services providers will not be held liable for false pricing information provided by buyers and sellers of Russian petroleum, the U.S. Treasury said. read more

G7 officials believe the plan will work because the London-based International Group of Protection & Indemnity Clubs provides marine liability cover for about 95% of the global oil shipping fleet.

Traders point to parallel fleets that can handle Russian oil using Russian and other non-Western insurance that could be used to sidestep enforcement efforts. read more

It remains uncertain how many ports around the world will accept Russian-insured ships.

Craig Kennedy, an associate at Harvard University’s Davis Center for Eurasian and Russian Studies, said the G7 has long term leverage because Moscow is constrained by a small tanker fleet versus the vast scale of exports it needs to get out. If Russia doesn’t want to sell at the cap, it may have to shut in production, which could impose long-term costs on its oilfields.

HOW COULD RUSSIA FIGHT BACK?

Putin has said Russia will withhold exports to countries that enforce the cap, and fears about the threat could cause petroleum markets to rise before December.

Higher prices could also be risky for U.S. President Joe Biden ahead of midterm elections in November when his fellow Democrats hope to keep control of Congress.

Some analysts worry Moscow could respond by taking actions beyond Russia’s borders before the cap takes effect.

“My biggest concern is I think Putin is going to make it very, very painful on the way to Dec. 5,” Helima Croft, head of global commodity strategy at RBC Capital Markets, told a Brookings Institution event on Sept. 9. “They also have assets in other producing countries, whether it be Libya, whether it be Iraq, and they have an ability to cause some problems in other producer states.”

HOW WILL THE CAP BE ENFORCED?

The U.S. Treasury warned service companies to be vigilant about red flags indicating potential evasion or fraud by Russian oil buyers. Those could include evidence of deceptive shipping practices, refusal to provide requested price information, or excessively high services costs. read more

Deputy U.S. Treasury Secretary Wally Adeyemo said on Friday that those who falsify documentation or otherwise hide the true origin or price of Russian oil would face consequences under the domestic law of jurisdictions implementing the price cap.

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Reporting by Timothy Gardner; Additional reporting by David Lawder and London energy team; Editing by Daniel Wallis

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World

Ukrainian forces threaten Russian supply lines after breakthrough

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  • Zelenskiy says forces have recaptured towns and villages
  • Blinken visits Kyiv with new U.S. aid package

KYIV, Sept 9 (Reuters) – Swiftly advancing Ukrainian troops were approaching the main railway supplying Russian forces in the east on Friday, after the collapse of a section of Russia’s front line caused the most dramatic shift in the war’s momentum since its early weeks.

In a video address, President Volodymyr Zelenskiy said troops had “liberated dozens of settlements” and reclaimed more than 1,000 square km (385 square miles) of territory in Kharkiv region in the east and Kherson in the south in the past week.

Zelenskiy posted a video in which Ukrainian soldiers said they had captured the eastern town of Balakliia, which lies along a stretch of front stretching south of Kharkiv, Ukraine’s second largest city.

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The Ukrainian military said it had advanced nearly 50 km through that front after an assault that appeared to take the Russians by surprise.

It was the first lightning advance of its kind reported by either side for months, in a war mainly characterised by relentless grinding frontline battles since Russia abandoned its disastrous assault on the capital Kyiv in March.

Nearly 24 hours after Ukraine announced the breakthrough on the Kharkiv front, Russia had yet to comment publicly. The Kremlin declined to comment on Friday and referred questions to the Russian military.

Ukraine has not allowed independent journalists into the area to confirm the extent its advances. But Ukrainian news websites have shown pictures of troops cheering from armoured vehicles as they roar past street signs bearing the names of previously Russian-held towns, and Russian forces surrendering on the side of the road.

“We see success in Kherson now, we see some success in Kharkiv and so that is very, very encouraging,” U.S. Defense Secretary Lloyd Austin told a news conference with his Czech counterpart in Prague.

The Institute for the Study of War think tank said the Ukrainians were now within just 15 km of Kupiansk, an essential junction for the main railway lines that Moscow has long relied on to supply its forces on the battlefields in the east.

Since Russia’s forces were defeated near Kyiv in March, Moscow has used its firepower advantage to make slow advances by bombarding towns and villages. But that tactic depends on tonnes of ammunition a day reaching the front line by train from western Russia. Until now, Russia had successfully fended off Ukraine’s attempts to cut off that train line.

The Ukrainian general staff said early on Friday retreating Russian forces were trying to evacuate wounded personnel and damaged military equipment near Kharkiv.

“Thanks to skilful and coordinated actions, the Armed Forces of Ukraine, with the support of the local population, advanced almost 50 km in three days.”

Tens of thousands of people have been killed, millions have been driven from their homes and Russian forces have destroyed entire cities since Moscow launched what it calls a “special military operation” in February to “disarm” Ukraine. Russia denies intentionally targeting civilians.

In the latest reported strike on civilians, Ukrainian officials said Russia had hit a hospital near the international border in the northeastern Sumy region on Friday morning. Reuters could not independently confirm the report.

Firefighters work at the site of a residential building hit by a Russian military strike, amid Russia’s attack on Ukraine, in Kharkiv, Ukraine September 6, 2022. REUTERS/Sofiia Gatilova/File Photo

“Russian aviation, without crossing the Ukrainian border, fired at a hospital. The premises were destroyed, there are wounded people,” regional governor Dmytro Zhyvytskyi said on Telegram.

BREAKTHROUGH

The surprise Ukrainian breakthrough in the east came a week after Kyiv announced the start of a long-awaited counter-offensive hundreds of km away at the other end of the front line, in Kherson province in the south.

Ukrainian officials say Russia moved thousands of troops south to respond to the Kherson advance, leaving other parts of the front line exposed and creating the opportunity for the lightning assault in the east.

“We found a weak spot where the enemy wasn’t ready,” presidential adviser Oleksiy Arestovych said in a video posted on YouTube.

Less information so far has emerged about the campaign in the south, with Ukraine keeping journalists away and releasing few details.

Ukraine has been using new Western-supplied artillery and rockets to hit Russian rear positions there, with the aim of trapping thousands of Russian troops on the west bank of the wide Dnipro River and cutting them off from supplies.

Arestovych acknowledged progress in the south had not yet been as swift as the sudden breakthrough in the east.

Russia’s state news agency RIA quoted Russian-appointed Kherson authorities as saying some Ukrainian troops were captured during the counterattack and some Polish tanks they were using were destroyed. Reuters could not verify those reports.

The United Nations accused Moscow of denying access to thousands of prisoners of war, with the head of a U.N. human rights monitoring team in Ukraine, Matilda Bogner, describing documented cases of torture and ill-treatment of prisoners held by Russian forces and their proxies.

U.N. monitors had also documented incidents of torture and ill-treatment of POWs by Ukraine, which had given them unimpeded access, she said. Ukraine has said it will investigate any violations and take appropriate legal action.

Moscow denies abusing prisoners. Dozens of Ukrainian troops died in a fiery blast while being held by pro-Russian authorities in July in what Kyiv called a massacre. Moscow blamed Ukrainian shelling.

North of the battlefield, Russian missiles struck multiple areas in Kharkiv on Thursday, causing widespread damage and casualties, according to the regional prosecutor’s office.

“We are scared … You can’t get used to it, never,” resident Olena Rudenko told Reuters.

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Reporting by Reuters reporters
Writing by Peter Graff
Editing by Philippa Fletcher

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World

Putin casts doubt over Ukraine grain deal and gas supplies to Europe

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  • Putin accuses Kyiv and West of flouting grain deal
  • Says wants to discuss changing terms of deal
  • Threatens to cut energy exports if Europe caps prices

KYIV, Sept 7 (Reuters) – President Vladimir Putin said on Wednesday he wanted to discuss reopening a U.N.-brokered deal that allows Ukraine to export its grain via the Black Sea and threatened to halt all energy supplies to Europe if Brussels caps the price of Russian gas.

In a combative speech to an economic forum in Russia’s Far East region, Putin made little reference to his invasion of Ukraine, but said in answer to a question that Russia would not lose the war and had strengthened its sovereignty and influence.

On the ground, Ukrainian officials remained guarded about how a counter offensive they began late last month was faring but a Russian-installed official in eastern Ukraine said Ukrainian forces had attacked a town there.

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The grain pact, facilitated by the United Nations and Turkey, created a protected export corridor via the Black Sea for Ukrainian foodstuffs after Kyiv lost access to its main export route when Russia attacked Ukraine via land, air and sea.

Designed to help ease global food prices by increasing supplies of grain and oilseeds, the agreement has been the only diplomatic breakthrough between Moscow and Kyiv in more than six months of war.

But Putin said the deal was delivering grain, fertiliser and other foodstuffs to the European Union and Turkey rather than to poor countries whose interests he said were the pretext for the deal and added that he wanted to discussing changing its terms.

“It may be worth considering how to limit the export of grain and other food along this route,” he said, while also saying that Russia would continue to abide by its terms in the hope that it would fulfil its original goals.

“I will definitely consult the President of Turkey, Mr. (Tayyip) Erdogan, on this topic because it was he and I who worked out a mechanism for the export of Ukrainian grain first of all, I repeat, in order to help the poorest countries.”

His comments raised the possibility the pact could unravel if it cannot be successfully renegotiated or might not be renewed by Moscow when it expires in late November.

Ukraine, whose ports had been blockaded by Russia after it invaded in February, said the terms of the agreement, which was signed on July 22 for a period of four months, were being strictly observed and there were no grounds to renegotiate it.

“I believe that such unexpected and groundless statements rather indicate an attempt to find new aggressive talking points to influence global public opinion and, above all, put pressure on the United Nations,” said Mykhailo Podolyak, a presidential adviser. read more

The deal threw a lifeline to Kyiv, giving a much-needed source of revenue to an economy devastated by war. It does not say anything about which countries Ukrainian grain should go to and the United Nations has stressed it is a commercial – not humanitarian – operation that will be driven by the market.

According to data from the Istanbul-based coordination group which monitors the deal’s implementation, 30% of the total cargo, which includes that earmarked for or routed via Turkey, had gone to low and lower-middle income countries.

GRAIN AND GAS

Ukraine hopes to export 60 million tonnes of grain in eight to nine months, presidential economic adviser Oleh Ustenko said in July, cautioning that those exports could take up to 24 months if ports do not function properly.

Putin complained that another part of the deal meant to ease restrictions for Russian food exporters and shippers was not being implemented either.

Russian Foreign Minister Sergei Lavrov cast doubt on the deal too a day earlier, accusing Western states at the United Nations of failing to honour reciprocal pledges to help facilitate Moscow’s shipments. read more

Russia’s grain exports in August are expected to come in 28% lower than the same period last year, according to a forecast from Russia’s Sovecon consultancy.

The other main global repercussion of Russia’s invasion of Ukraine has been a surge in energy prices as the West responded with sanctions and Moscow restricted exports of gas to Europe, blaming Western restrictions and technical problems.

As the European Union prepared to propose a price cap on Russian gas to try to contain an energy crisis that threatens widespread hardship this winter, Putin threatened to halt all supplies if it took such a step.

“Will there be any political decisions that contradict the contracts? Yes, we just won’t fulfil them. We will not supply anything at all if it contradicts our interests,” Putin said.

“We will not supply gas, oil, coal, heating oil – we will not supply anything,” Putin said.

Europe usually imports about 40% of its gas and 30% of its oil from Russia.

UKRAINIAN BATTLEFIELD SUCCESS?

Asked about what Russia calls its “special military operation” in Ukraine by a moderator at the economic forum in Vladivostok, Putin said:

“We have not lost anything and will not lose anything … In terms of what we have gained, I can say that the main gain has been the strengthening of our sovereignty.”

The governor of Ukraine’s eastern Luhansk region, which Russia has said it has taken over on behalf of separatist proxies, told Ukrainian television on Tuesday that Ukraine was fighting back.

A “counter-attack is underway and … our forces are enjoying some success. Let’s leave it at that,” Serhiy Gaidai said on Tuesday, without giving locations.

An official with the pro-Moscow self-proclaimed Donetsk People’s Republic on Tuesday said there was fighting at Balakliia, an eastern town of 27,000 people between Kharkiv and Russian-held Izyum, site of a major railway hub used by Moscow to supply its forces.

“Today, the Ukrainian armed forces, after prolonged artillery preparation … began an attack on Balakliia … ” Daniil Bezsonov said on Telegram, adding that if the town were lost, Russian forces in Izyum would become vulnerable on their northwest flank.

Russia says it has repelled an assault in the south and has not reported any territorial losses.

Russia’s Defence Ministry said its forces had taken Kodema in eastern Ukraine’s Donetsk region from Ukrainian forces. The village of some 600 people is claimed by the Russian-backed Donetsk People’s Republic as part of its territory.

Reuters was unable to independently verify the battlefield accounts.

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Reporting by Reuters; Writing by Andrew Osborn; Editing by Philippa Fletcher

Our Standards: The Thomson Reuters Trust Principles.

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World

Ukraine nuclear plant loses power line, Moscow makes Europe sweat over gas

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  • IAEA says Zaporizhzhia plan still producing electricity
  • Zelenskiy: Russia plans ‘decisive energy blow on all Europeans’
  • Russia delays pipeline reopening in blow to Europe
  • G7 finance chiefs agree on Russian oil price cap

KYIV, Sept 4 (Reuters) – A nuclear power plant on the front line of the Ukraine war again lost external power, U.N. inspectors said on Saturday, fuelling fears of disaster while Moscow kept its main gas pipeline to Germany shut to hurt economies of Kyiv’s friends in the West.

The Zaporizhzhia plant, Europe’s largest, had its last remaining main external power line cut off, although a reserve line continued supplying electricity to the grid, the International Atomic Energy Agency (IAEA) said. read more

Only one of the station’s six reactors remained in operation, the agency said in a statement.

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The plant, seized by Russian troops shortly after their Feb. 24 invasion, has become a focal point of the conflict, with each side blaming the other for nearby shelling.

A standoff over Russian gas and oil exports ramped up last week as Moscow vowed to keep its main gas pipeline to Germany shuttered and G7 countries announced a planned price cap on Russian oil exports.

The energy fight is a fallout from President Vladimir Putin’s six-month invasion of Ukraine, underscoring the deep rift between Moscow and Western nations as Europe steels itself for the cold months ahead.

“Russia is preparing a decisive energy blow on all Europeans for this winter,” Ukrainian President Volodymyr Zelenskiy said in his nightly address on Saturday, citing the Nord Stream 1 pipeline’s continued closure.

Zelenskiy has blamed Russian shelling for an Aug. 25 cutoff, the first Zaporizhzhia was severed from the national grid, which narrowly avoided a radiation leak. That shutdown prompted power cuts across Ukraine, although emergency generators kicked in for vital cooling processes.

Moscow has cited Western sanctions and technical issues for energy disruptions, while European countries have accused Russia of weaponising supplies as part of its military invasion.

NUCLEAR CONCERNS

Kyiv and Moscow have traded accusations about attacks on the Zaporizhzhia plant, which is still operated by Ukrainian staff.

An IAEA mission toured the plant on Thursday and some experts have remained there pending the release of a report by the United Nations nuclear watchdog in coming days. read more

The remaining inspectors noted one reactor was still producing electricity “for cooling and other essential safety functions at the site and for households, factories and others through the grid,” the IAEA said on Saturday.

The plant said in a statement the fifth reactor was switched off “as a result of constant shelling by Russian occupation forces” and that there was “insufficient capacity from the last reserve line to operate two reactors.”

Deteriorating conditions amid the shelling have prompted fears of a radiation disaster that the International Red Cross has said would cause a major humanitarian crisis. read more

Ukraine and the West accuse Russia of storing heavy weapons at the site to discourage Ukraine from firing on it. Russia, which denies the presence of any such weapons there, has resisted international calls to relocate troops and demilitarise the area.

Russia’s defence ministry on Saturday accused Ukrainian forces of mounting a failed attempt to capture the plant. Reuters could not verify the report. read more

Turkey on Saturday also offered to facilitate the situation. read more

GAS AND OIL

Announcing that it would not make a planned restart of gas shipments through the Nord Stream 1 pipeline, one of Russia’s main supply lines to Europe, state-controlled energy giant Gazprom (GAZP.MM) blamed a technical fault.

Gazprom said on Saturday that Germany’s Siemens Energy (ENR1n.DE) was ready to help repair broken equipment but that there was nowhere available to carry out the work. Siemens said it has not been commissioned to carry out maintenance work for the pipeline but it is available. read more

The indefinite delay to restarting Nord Stream 1, which runs under the Baltic Sea to supply Germany and others, deepens Europe’s problems securing fuel for winter as energy prices lead a surge in living costs.

Finance ministers from the Group of Seven wealthy democracies – Britain, Canada, France, Germany, Italy, Japan and the United States – said on Friday the cap on the price of Russian oil aimed to reduce “Russia’s ability to fund its war of aggression whilst limiting the impact of Russia’s war on global energy prices”. read more

The Kremlin said it would stop selling oil to any countries that implemented the cap.

Russia calls its invasion of its neighbour “a special military operation.” Kyiv and the West say it is an unprovoked aggressive war against a former part of the Soviet Union.

The United States and other countries have pledged fresh military aid for Kyiv to fight against an invasion that had killed thousands of people and displaced millions.

Ukraine launched a counteroffensive last week targeting the south, particularly the Kherson region, occupied by Russians early in the conflict.

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Reporting by Tom Balmforth in Kyiv; Additional reporting by Michael Shields, Ron Popeski and Reuters bureaus; Writing by Susan Heavey and Simon Cameron-Moore; Editing by Nick Zieminski and William Mallard

Our Standards: The Thomson Reuters Trust Principles.

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