Ukraine Latest: US Slams Putin’s Food-for-Sanctions Relief Plan

·10 min read

(Bloomberg) -- The US rejected a plan by Russian President Vladimir Putin to facilitate grain and fertilizer exports only if sanctions on his country are lifted, pinning the blame on the Kremlin for blocking shipments and stoking concerns of global food shortages.

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The US may announce a new package of aid for Ukraine as soon as next week that would include long-range rocket systems and other advanced weapons, CNN reported unidentified government officials as saying.

A record volume of Russian oil is on board tankers, with most of that heading to India or China as other nations restrict imports because of the war in Ukraine.

(See RSAN on the Bloomberg Terminal for the Russian Sanctions Dashboard.)

Key Developments

  • Russia Has Record Oil Volume at Sea as Cargoes Shift to Asia

  • Putin Ties Grain Exports to Demand That Sanctions on Russia Go

  • Russia Faces Biggest Debt Test Yet After US Ban on Payments

  • Double Crises From Ukraine to China Take Toll on Global Recovery

  • Russia Halts Ruble Rally With Rate Cut That Tops Most Forecasts

  • Russia Says It’s Opening Sea Corridors From Ukraine Ports

All times CET:

Russia Has Record Oil Volume at Sea (4:43 a.m.)

Between 74 million and 79 million barrels from the OPEC+ producer were in transit and floating storage over the past week, more than double the 27 million barrels just before the February invasion of Ukraine, according to Kpler. Asia overtook Europe as the largest buyer of Russian oil for the first time last month, and that gap is set to widen in May, according to the data and analytics company.

The sharp jump in Russian oil in transit by sea underscores how the global energy trade has been thrown into turmoil by the invasion, with US, UK and many EU companies turning their backs on its cargoes and forcing Moscow to look for buyers in Asia. China and India have snapped up millions of barrels from the country to take advantage of hefty discounts on the flows.

Read more: Russia Has Record Oil Volume at Sea as Cargoes Shift to Asia

US Eyes New Security Aid Package, CNN Says (11:42 p.m.)

The Biden administration is concerned about whether the long-range rocket systems sought by the Ukrainian government could be used for strikes inside Russia, CNN said. The US may be looking to provide shorter-range rocket systems instead, the cable news broadcaster said.

West Mulls Plan For Oligarchs to Buy Way Out of Sanctions, AP Says (10:36 p.m.)

Major leading democracies are considering a plan that would allow Russian oligarchs to buy their way out of sanctions by using their money to rebuild Ukraine, the Associated Press reported, citing government officials familiar with the matter.

White House Rejects Putin’s Food-Trade Proposal (10:35 p.m.)

The US rejects Russia’s proposal that measures to ease food exports hit by the war should be linked to the removal of sanctions, White House Press Secretary Karine Jean-Pierre told reporters.

Sanctions imposed by the US and allies are “not preventing the export of Ukrainian or Russian agriculture, including food and fertilizer, nor are they preventing the ordinary transactions that are necessary for these exports such as banking or shipping,” Jean-Pierre said. There’s been no discussion of removing the sanctions, she said.

Putin Ties Grain Exports to the Lifting of Sanctions (7:30 p.m.)

Putin said he’s willing to facilitate grain and fertilizer exports as global concern mounts about food shortages and rising prices -- provided that sanctions on his country are eased.

Russia is “willing to make a significant contribution to overcoming the food crisis through the exports of grain and fertilizers on the condition that the West’s politically-motivated restrictions are lifted,” Putin said in a phone call Thursday with Italian Prime Minister Mario Draghi, according to a Kremlin statement. Putin said disruptions to global food supplies were exacerbated by the sanctions imposed by the US and its allies.

The president didn’t specify whether he was referring to Russian exports or those from Ukraine that have been stopped by Moscow’s blockage of ports since its invasion began in late February.

Ukraine Says Russia Has Occupied 95% of Luhansk Region (3:20 p.m.)

Ukrainian troops in the eastern Luhansk region are coming under constant shelling from the Russians who have established control over about 95% of the territory, Governor Serhiy Haiday -- a Ukrainian official -- said on his Telegram channel. Russia had occupied about 90% of Luhansk last week, he said.

There are over 40,000 civilians in the parts of Luhansk still under Ukrainian control, including nearly 15,000 people in the town of Sievierodonetsk.

The Russians have superior artillery and air power, Ukrainian military spokesman Oleksiy Hromov said at a briefing. The fighting has reached “maximum intensity,” Deputy Defense Minister Hanna Malyar said at the same briefing.

Google Pays Fines of 7.7 Billion Rubles in Russia (2:55 p.m.)

Russia collected 7.7 billion rubles ($120 million) in fines from Alphabet Inc.’s Google for not removing content deemed illegal, Interfax reported, citing the Federal Bailiff Service database.

Alphabet’s Russian unit said earlier this month that it will file for bankruptcy after its local bank account was frozen, although Google will continue to provide the country with free services like Gmail and YouTube.

Zelenskiy Warns Against Trying to Appease Russia (2:10 p.m.)

Some “rather powerful” global actors mistakenly believe in appeasing Russia, Ukrainian President Volodymyr Zelenskiy said in his video address to the Latvian parliament.

It is an affront to Ukraine “when they say we have to give up part of our land because this is, allegedly, a required compromise”, Zelenskiy said.

Russia must learn that an aggressor bears the main cost of a war, Zelenskiy said, urging EU to adopt a sixth sanctions package that would include an embargo on the purchase of oil and petroleum products.

US Official Warns of Russian ‘Springboard’ (12:15 p.m.)

The US ambassador to the OSCE warned that Russia could use any territory it controls in Ukraine to launch future attacks on the country.

“For as long as the Kremlin retains control of parts of Ukraine, it will use these territories as a springboard to launch additional attacks and conquer more terrain -- leaving a growing wake of destruction and atrocities,” Michael Carpenter told the OSCE’s permanent council in Vienna on Thursday.

Germany’s Scholz Wants Wider Effort to Isolate Russia (11:26 a.m.)

German Chancellor Olaf Scholz called for a broader effort to isolate Russia and thwart what he called President Vladimir Putin’s efforts to undermine the global order.

“This is an attempt to bomb us back to a time when war was a common political tool, when our continent and the world lacked a stable order of peace,” he said Thursday in a speech at the World Economic Forum in Davos, Switzerland.

Scholz’s plea comes as the European Union struggles to maintain a united front in talks over further sanctions against Moscow, and many emerging powers in Asia, Africa and South America show little readiness to punish or even criticize Russia over its invasion of Ukraine.

Pakistan Considers Gas Import Deal With Russia, Others (11:04 a.m.)

Pakistan said it is considering signing a liquefied natural gas purchase agreement with countries including Russia as it seeks to secure supply and ease a crippling shortage.

The government “will go for the most favorable deal,” the Ministry of Energy said in a statement to Bloomberg News. Pakistan is mulling a government-to-government contract to import the power-plant and industrial fuel, according to the statement.

Read more: Pakistan Mulls Gas Import Deal With Countries Including Russia

Ukrainians With Positive Views of Russia Plunge to 2% (10:57 a.m.)

Just 2% of Ukrainians have a positive impression of Russia following the invasion that’s heading toward its 100th day, compared with a pre-war level of 34%, according to the survey conducted by Kyiv International Institute of Sociology. Of the 92% who reported feeling negative toward Russia, most characterized their impressions of the invasion as “rage, indignation, hatred and disgust.”

Russia Makes Third Rate Cut in Just Over a Month (9:31 a.m.)

The Bank of Russia lowered its benchmark to 11% from 14% on Thursday at an extraordinary meeting announced only a day earlier.

Encouraged by a faster-than-expected slowdown in inflation aftershocks to demand, the decision also shows the central bank’s determination to get in the way of the ruble’s blistering ascent. It added to two rate cuts of three percentage points each in April, reversing most of an emergency monetary tightening after the invasion of Ukraine three months ago.

After nine points of easing since April, the central bank said it still “holds open the prospect” of more cuts at meetings ahead.

Ukrainians Crossing Back From Poland Approach 1.6 Million (9:05 a.m.)

Some 1.58 million Ukrainians have crossed the border from Poland since Feb. 24, Polish border authorities said, compared with 3.61 million who’ve left Ukraine for Poland. On Wednesday, 26,600 people were cleared to enter Ukraine from Poland and 21,700 departed.

Overall, 2.1 million Ukrainians entered the country from the start of the war through May 24, according to United Nations figures -- versus the 6.6 million who’ve fled and millions more displaced within the country. The cross-border movement can be “pendular,” the UN said.

Vitali Klitschko, mayor of Kyiv, has warned that the 1.5 million people who’ve returned to the capital since Russian troops were driven out of the area are doing so at their own risk.

Ukraine Says Russia’s Offer to Unblock Seaports Is ‘Blatant Bullying’ (8:45 a.m.)

Russia’s offer to unblock Ukraine’s seaports to resume a maritime shipping in the Black Sea after international pressure over famine fears is “blatant bullying of the civilized world,” a Ukrainian trade official said.

“It’s clear that the resumption of a maritime shipping in the Black Sea depends on confidence in security,” Ukraine’s Deputy Economy Minister Taras Kachka told Bloomberg News in a text message. “Without guarantees from third countries, trade won’t work just being based on trust to Russia’s statements.”

Ukraine wants guarantees that safe passage wouldn’t allow Russian forces to enter the harbor and attack Odesa, Foreign Minister Dmytro Kuleba said.

NATO’s Stoltenberg Says Prepare for Long War (8:14 a.m.)

“This war may last a long time and we need to be prepared,” NATO Secretary General Jens Stoltenberg said in interview with Greece’s Capital.gr, calling on allies to be prepared to provide support for a long time and to be restocked.

He also said the aim remains a fast procedure for the accession of Finland and Sweden, and it’s attempting to iron out issues between Turkey, Sweden and Finland. Stoltenberg spoke Thursday with Turkey’s foreign minister.

Oligarch’s Megayacht Reappears in Mediterranean (6:37 a.m.)

A $150-million ultra-luxurious yacht tied to Russia’s second-richest citizen Leonid Mikhelson, who is facing sanctions, reappeared after nearly two weeks without broadcasting its location. Its final destination is unclear.

The 85-meter (280 feet) Pacific, which can accommodate two helicopters, was cruising past Malta in the Mediterranean Sea after reappearing near the Canary Islands on May 20, when its location transponder was turned on again, vessel data compiled by Bloomberg News show.

Read more: Oligarch’s Megayacht Reappears in Med, Final Destination Unknown

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