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Ukraine Latest: Pentagon Says Russia Learned From War Mistakes
(Bloomberg) -- Russian forces made advances in eastern Ukraine as the Pentagon said Moscow has learned from mistakes it made earlier in the war.
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UK Prime Minister Boris Johnson urged more military support for Kyiv, including long-range missiles that could hit Russian artillery, and dismissed calls for a negotiated settlement that would involve Ukraine ceding territory.
As Vladimir Putin’s invasion approached the 100-day mark, Russian oil exports loaded onto tankers have reached a record, with most shipments headed to India or China as other nations impose restrictions. But the country’s prospects of avoiding a debt default are receding, with investors due about $100 million in interest payments on Friday.
(See RSAN on the Bloomberg Terminal for the Russian Sanctions Dashboard.)
Key Developments
Europe’s Push to Punish Putin Is Falling Short of the Rhetoric
Russian Wins in Eastern Ukraine Spark Debate Over Course of War
EU Leans Toward Delaying a Pipeline Ban to Clinch Oil Deal
Johnson Urges More Missiles for Ukraine to Hit ‘Crocodile’ Putin
Russia Faces Biggest Debt Test Yet After US Ban on Payments
All times CET:
Europe’s Push to Punish Putin Is Falling Short of the Rhetoric (6 a.m.)
Diplomats and officials are getting increasingly frustrated the EU may be reaching the limits of the short-term pain it can inflict on Russia already three months after its invasion of Ukraine.
Member states are failing to deliver on promises to hit Putin where it hurts: the lucrative energy industry. The focus has been on Hungary’s refusal to back sanctions, but other countries are yielding to Putin’s demands for gas payments in rubles.
The unflattering optics highlight the limits of the EU’s strategy to back tough rhetoric with action that requires unanimity among all its 27 members. Ahead of a two-day summit starting Monday, some leaders are now leaning toward a diluted agreement that would allow deliveries through a key pipeline to continue for Hungary and others.
Komatsu Restarts Parts Supplies to Ukraine, Nikkei Says (4:30 a.m)
Komatsu Ltd. has resumed supplying Ukraine with construction machinery parts, its chief executive officer told the Nikkei, noting reduced transportation risks in some areas of the war-torn nation. The Japanese manufacturer is also preparing to restart exporting finished products to Ukraine, Hiroyuki Ogawa was quoted as saying.
Komatsu has no plans to withdraw from Russia, where it has continued to offer parts replacement and other services through agencies to ensure safety at construction and mining sites, he said. The company expects its sales in Russia and other Commonwealth of Independent States to fall 64% in the year ending March 31 to 67 billion yen ($527 million), according to a filing.
Greylock’s Humes Says He Isn’t Comfortable Investing in Russia (11:50 p.m.)
There are plenty of better opportunities than Russia in distressed emerging markets, according to the head of Greylock Capital Management. It’s a matter of not feeling comfortable in Russia, said Hans Humes, chief executive officer of Greylock, which has been involved in most emerging-market restructurings over the past quarter-century. He pointed to opportunities in debt from the likes of Venezuela, Lebanon and Ukraine.
“Investing in a post-Putin Russia is more appetizing to me than going in currently,” he said on Bloomberg TV. “The politics and, obviously, the invasion have gotten a number of investors to be a little shy about jumping fully in right now.”
Ukraine Credit Rating Cut by S&P on ‘Protracted’ War Risk (10:35 p.m.)
S&P Global Ratings cut Ukraine’s rating by one notch, citing a more protracted conflict than originally forecast when Russia invaded the nation in February, and said the government’s ability to keep making debt payments is “contingent on the flow of donor support.”
The foreign-currency rating was reduced to CCC+, only five notches above default. S&P also assigned a negative outlook to the country.
Ukraine Branch of Russia’s Church Separates from Moscow (9:08 p.m)
The Ukrainian unit of the Russian Orthodox Church said it would break away from Moscow, signaling a rift between the Kremlin and its ally, which has served as Russia’s agent of influence in the neighboring country for decades. The church that has the largest number of parishioners in Ukraine proclaimed its independence in a council meeting in Kyiv on Friday, condemning the war that entered its fourth month.
It also urged Russia and Ukraine to renew peace talks.
Finland Calls Turkey-NATO Talks ‘Constructive’ (8:45 p.m.)
Finland is in “open, constructive” talks with Turkey regarding the questions raised over the Nordic nation’s application to join the NATO alliance, Finnish Foreign Minister Pekka Haavisto told reporters in Washington, D.C.
“It’s understandable that different issues may be raised by different allies along the process,” Haavisto said, speaking in a joint news conference with US Secretary of State Antony Blinken. “We take every NATO member’s concerns seriously. With Turkey we are now in an open, direct and constructive dialogue process to clarify all issues. This is important.”
Blinken said he was confident NATO “will work swiftly” through the admission process of Finland and Sweden, adding that both countries’ talks with Turkey will move forward. “The most important thing is that Finland and Sweden are speaking directly with Turkey” and “working through some of the concerns that Turkey has raised,” Blinken said.
Pentagon Sees Russia Learning From Mistakes (7:12 p.m.)
Russia has learned from previous mistakes on the battlefield, even if its progress in Ukraine remains “incremental,” Pentagon spokesman John Kirby told reporters on Friday.
Russia has attempted to remedy some of the challenges it faced in “logistics and sustainment,” which left Putin’s troops without crucial supplies in the early days of the war, Kirby said. Part of the improvement stems from the fact that the Donbas region is closer to Russia and part comes from a higher degree of caution about “getting too far ahead,” he added.
The Russian military has had only limited success in its attempts to improve the integration of its air and ground operations. “They’re using smaller units now in smaller places and smaller movements,” Kirby said. Russia also continues to face problems with the “command and control” of its troops in the field, he added.
Scholz Says He’ll Keep Talking to Putin (6:50 p.m.)
German Chancellor Olaf Scholz said he’ll keep talking with Putin and rebuffed criticism that his country’s military support for Ukraine has lagged.
“We’re doing a lot and it’s simply not true what is being said there,” Scholz said during a panel discussion in Stuttgart on Friday. Scholz’s last publicly announced conversation with Putin was on May 13.
“I had several phone calls with him and I will continue doing this,” he said.
Ukraine Spring Planting Is Down by 22%, Ministry Says (5:45 p.m.)
Ukraine’s Agriculture Ministry said farmers are nearing the completion of the spring planting season for grains and legumes, with the area sown for plants such as wheat and corn down by 22% from last year in wartime conditions.
The total area, including oilseed crops such as sunflower and soybeans, is expected to fall by about 16% this year. The main challenge for producers is shipping the harvest to foreign markets given the maritime blockade of Black Sea ports crucial to Ukrainian exports.
Austrian Chancellor Urges Putin to Open Food Corridor (5:06 p.m.)
Chancellor Karl Nehammer urged the Russian leader to work with the United Nations to open a corridor for grain exports from Ukrainian ports. Six weeks after meeting Putin in the Moscow, the Austrian followed-up in a 45-minute call in which he warned of a global food crisis.
Nehammer expressed hope that Russia might send signals on compromise over the coming days, adding that Putin’s “own war logic” remains at odds with the rest of Europe.
The Kremlin said following the call that Putin reiterated Russia’s demand for Ukraine to remove mines from its ports. He also again rejected blame for the disruptions in food supplies to world markets, saying those resulted from US and EU sanctions on Moscow. On potential peace talks, the Kremlin said Putin accused Kyiv of sabotaging the process, but gave no further details.
Finance Minister Says Russia Wants to Be Seen as Reliable (3:37 p.m.)
Russian Finance Minister Anton Siluanov said his country wants to maintain its reputation as a reliable borrower and will keep paying its debts in rubles after it is barred from making dollar payments.
“If we say, ‘your governments don’t want us to pay you, so we won’t pay,’ these times will pass but the memory will remain,” Siluanov told students at Moscow’s Finance University. “So we will do everything to reaffirm our role as a reliable borrower even in these conditions.”
Russians Take Rail Hub in Donbas as Kherson Sealed Off (2:37 p.m.)
Russian forces have seized most of the strategically important city of Lyman in the Donbas region, according to Russian and Ukrainian authorities. The capture of the rail hub north of the Siverskyi Donets river is part of the Kremlin’s ambition to take territory and potentially enclose Ukrainian positions to the east.
Meanwhile, Russian occupying forces in the Kherson region in the south have blocked passage for civilians escaping to Ukrainian-controlled territory as they use resources to build defensive barriers, Serhiy Lahuta, the military administrator there, told reporters in Kyiv. Producers are unable to ship grain, fruit and vegetables from Kherson, with deliveries rerouted to Russian-held Crimea, he said.
Elsewhere, a Russian missile strike on the city of Dnipro in central Ukraine hit a military barracks complex, killing at least 10 people and injuring about 35 others, Henadiy Korban, who leads the city’s territorial defense, told broadcaster Dnipro TV.
Zelenskiy to Speak at EU Summit as Leaders Seek Oil Deal (1:29 p.m.)
The Ukrainian president will join European Union leaders by video link when they meet in Brussels on Monday, as the bloc struggles to reach an agreement on a new sanctions package against Russia. Some European Union leaders are leaning toward a deal that would ban seaborne oil while temporarily sparing deliveries through a key pipeline -- a way to give landlocked Hungary more time.
EU governments are discussing a plan with the European Council and European Commission that would make shipments of oil through the giant Druzhba pipeline exempt for a limited period of time from a broader ban on oil deliveries to the bloc, according to people familiar the matter.
Read more: EU Leans Toward Delaying a Pipeline Ban to Clinch Oil Deal
Russia Restricts Local Operations for Italy’s UniCredit, Intesa (12:29 p.m.)
Russia’s central bank has imposed a new temporary round of restrictions affecting Italian companies, consulates and citizens with accounts at local units of lenders UniCredit SpA and Intesa Sanpaolo SpA, people with knowledge of the matter said.
Zelenskiy Hopes War Will End By Indonesia’s G20 Summit (11:51 a.m.)
Ukraine’s leader hopes Russia’s invasion will be resolved in time for him to attend the Group of 20 summit in Bali Nov. 15-16.
Zelenskiy held a briefing Friday with the Foreign Policy Community of Indonesia, vowing to attend the gathering in person if possible or via online meetings if not. “I believe that at that summit, we will have just the friendly states, the partner states, and we won’t have any occupiers or aggressors,” Zelenskiy said.
Indonesian President Joko Widodo has invited both Zelenskiy and Putin to Bali, saying that the country wants to play a role in advancing peace negotiations. Jokowi, as he’s known, said previously that Putin had accepted the invitation.
Turkey Wants Concrete Moves by Sweden, Finland on Terror Concerns (11:45 a.m.)
Turkey has informed Swedish and Finnish officials of its concerns about what it views as those countries’ support of terrorism, and now they have to take concrete steps to address them, said Foreign Minister Mevlut Cavusoglu.
The Nordic nations should also end defense industry export restrictions against Turkey to gain Ankara’s support for their bids to join the NATO alliance, he said. Cavusoglu added that North Macedonia’s NATO membership process lasted for many years due to issues raised by Greece.
Read more: Turkey Urges Action After NATO Talks With Sweden and Finland
Johnson Urges More Missiles for Ukraine (11:08 a.m.)
Boris Johnson urged further military support for Ukraine, including more offensive weapons such as Multiple Launch Rocket Systems that can strike targets from much further away.
His comments came as Russian-backed separatists say they have captured the strategic town of Lyman in the Luhansk region, a gateway to cities still under Ukraine’s control. Ukraine has asked nations to supply it with the MLRS as it grapples with advances by Russian troops that Johnson called slow but “palpable.” Fierce fighting has been reported in the Donbas region on Friday.
“How can you deal with a crocodile when it’s in the middle of eating your left leg?” the British prime minister said in an interview on Friday, when asked about the prospect of negotiating with Russian President Vladimir Putin. “The guy’s completely not to be trusted.”
Lithuanian Civilians Raise 2.5 Million Euros for Ukraine (10:48 a.m.)
Lithuanian civilians have donated 2.5 million euros ($2.7 million) in two days to buy the Bayraktar unmanned aerial drones for Ukraine.
The crowdfunding initiative, which has received a green light from both the Lithuanian and Turkish defense ministries, aims to raise 5 million euros within three weeks to buy the Turkish-made drone and ammunition.
“We are not going to stand and watch how old Europe is unwilling to help Ukraine,” said Andrius Tapinas, a TV journalist who launched the campaign. “No, Lithuanians are going to buy Bayraktars for Ukraine.”
Gas Heads for Weekly Drop in Europe as Supply Fears Wane (8:50 a.m.)
European natural gas prices headed for a third straight weekly decline as fears over further disruptions to Russian supplies waned.
Benchmark futures for July delivery fell as much as 4%. Russian shipments are expected to remain stable on Friday, even as flows through one cross-border point in Ukraine remains cut off because of the war. Concerns over a payment dispute -- the biggest headache for the market for months -- have also eased with major European buyers finding ways to meet Moscow’s demands for rubles and still not fall afoul of EU sanctions.
China Hires More Tankers to Ship Russian Crude (8:06 a.m.)
China’s oil trading giant Unipec has sharply increased the number of hired tankers to ship a key crude from eastern Russia as Beijing has emerged as a willing buyer of oil shunned by Europe and the US.
Unipec has chartered at least 10 tankers this month to transport Russian ESPO crude from Kozmino port near Vladivostock for what’s usually a direct, five-day journey to China, according to traders and a shipbroker, a fivefold increase on April.
While a resurgence of Covid-19 has sapped Chinese demand, Russian barrels are typically being sold at a discount, making them attractive to some major consumers.
Russian Looking to Encircle Sievierodonetsk, UK Says (6:50 a.m.)
Russian ground forces continue their bid to surround Sievierodonetsk and Lyschansk, having recently captured several villages near Popasna, the UK said in an intelligence update. Ukraine so far is denying Russia full control of the Donbas region, it said.
Russian troops continue to advance in the Bakhmut region north of Donetsk and toward nearby Slovyansk, Ukraine’s military said in an update. Ukraine’s foreign minister made an urgent call this week for multiple rocket launch systems for the Donbas campaign.
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 in April, and that gap is set to widen in May.
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 Moscow looking for buyers in Asia. China and India have snapped up millions of barrels to take advantage of hefty discounts.
Russia Faces Biggest Debt Test Yet (3:52 a.m.)
The path for Russia to keep sidestepping its first foreign default in a century is turning more onerous as another coupon comes due on the warring nation’s debt.
Investors are supposed to receive about $100 million of interest on Russian foreign debt in their accounts by Friday, payments President Vladimir Putin’s government says it has already made.
That’s unlikely to satiate concerned bondholders who are itching to see the cash after the US Treasury closed a loophole that previously allowed American banks and individuals to accept such payments.
(An earlier version corrected a dropped word in the 6:50 a.m. item.)
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