(Bloomberg) — The U.S. and the European Union announced an agreement to help Europe wean itself off Russian fuel imports. A European Union summit focused on Russia continues in Brussels with a modest tightening of sanctions likely.
U.S. President Joe Biden heads to Poland on Friday. He’s called for Russia’s removal from the G-20 group of major economies, and Europe rejected Putin’s demand that they pay in rubles for natural gas imports. Russia is on course for a deep recession and 20% inflation, according to a Bloomberg survey. Foreign minister Sergei Lavrov said the West is looking to destroy through sanctions.
Ukrainian troops are pushing Russian forces further from Kyiv. The U.S. and its allies warned Russian leader Vladimir Putin against using biological, chemical or nuclear weapons in Ukraine. Ukrainian President Volodymyr Zelenskiy scolded NATO leaders for not responding to his plea for a no-fly zone over his country, and called for more weapons deliveries.
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Key Developments
- Putin Stirs U.S. Concern That He Feels Cornered and May Lash Out
- U.S., EU Reach LNG Supply Deal to Cut Dependence on Russia
- NATO Boost Forces in East Amid Warnings on Chemical Incidents
- Russia Seen on Course for Deep Two-Year Recession, 20% Inflation
- EU Leaders to Agree on Modest Tightening of Sanctions on Russia
- U.S. Targets Russia’s Giant Stash of Gold in New Sanctions
All times CET:
Nordic Grids to Help Baltics If Russia Cuts Power (1:38 p.m.)
The Nordic network managers are taking steps to help their Baltic counterparts in case Russia curbs or completely cuts electricity exports to its smaller neighbors. In such a situation, the Baltic system would require frequency support from the Nordics, Finland’s Fingrid Oyj said in a statement.
Estonia, Latvia and Lithuania are still reliant on their neighbor in the east for a large chunk of their electricity needs, even though they’ve boosted connections and links with some of the Nordic nations. Earlier this month they reduced the transmission capacity for electricity imports from Russia to mitigate risks to their network in case of sudden disruptions.
Russian Shelling in Kharkiv (12:53 p.m.)
Almost 1,000 buildings in Kharkiv have been destroyed by shelling from Russian soldiers. In the latest assault, a hospital where people were getting humanitarian help was hit, killing five and injuring seven people, according to the Kharkiv region’s governor.
Mariupol Says 300 Civilians Killed in Theater Bombing (11:52 a.m.)
Mariupol’s city council said about 300 civilians were killed when a theater was struck by a Russian aerial bomb attack on March 16, according to a statement posted on Telegram. Russian forces have been accused of deliberately targeting the building and other locations that were known shelters for those fleeing the port city’s siege. Mariupol says more than 80% or residential housing has been destroyed.
The bombing has featured prominently in accusations, including by the U.S., that Russian forces have committed war crimes. Satellite imagery showed the building marked with large white letters spelling out the words “children” at the front and rear. Russia has denied deliberately attacking civilians.
President Volodymyr Zelenskiy said this week that almost 100,000 civilians are still trapped in Mariupol without food, medicine, electricity and water as humanitarian corridors and aid deliveries have been blocked.
Lavrov Says West Seeks to Destroy Russia (11:31 a.m.)
Russian Foreign Minister Sergei Lavrov accused the West of waging “hybrid war, a total war” through sanctions against his country. European leaders want to “destroy, strangle the Russian economy and Russia as a whole,” Lavrov told a meeting of the Gorchakov Public Diplomacy Fund in Moscow on Friday.
Russia has no intention of being isolated and has “many friends, allies, partners in the world” that it will continue to work with, Lavrov said.
German, Italy Business Confidence Plunges on War (10:41 a.m.)
Business confidence in two of the euro area’s biggest economies slumped this month, with the war in Ukraine prompting predictions for slower economic growth and higher inflation as energy markets and trade are disrupted.
“Companies in Germany are expecting tough times,” said Clemens Fuest of the Munich-based Ifo Institute, which saw its business-expectations gauge fall to the lowest level since May 2020. Separate data from Italy showed the weakest manufacturing confidence reading since January 2021.
Refugees to Poland Now Over 2.2 Million (10:30 a.m.)
Some 32,500 people were cleared at the Polish border on Thursday and another 6,900 crossed early Friday, taking total refugees entering from Ukraine to 2.237 million, Polish border authorities said.
Russia on Course for Deep Recession (9:50 a.m.)
Russia’s economy is on course to contract in two consecutive years for the first time since the collapse that followed the Soviet breakup three decades ago.
Gross domestic product will shrink 9.6% in 2022 and contract 1.5% in 2023, according to Blooomberg’s poll of 24 analysts conducted March 18-23. Before the attack on Ukraine in late February, the economy was on track to expand for a second year.
Inflation is now forecast to average 20% this year, which would be the fastest in about two decades.
Panicked Russians Don’t Buy Official Advice That Economy Is Fine
Germany Aims to End Russian Gas Imports by Mid-2024 (9:43 a.m.)
German Economy Minister Robert Habeck revealed plans to reduce Russian fossil fuel imports that would make the country almost completely independent of Russian gas by the middle of 2024, according to a statement.
U.S., EU Reach Energy Supply Deal to Cut Russia Reliance (9:41 a.m.)
An agreement to try and boost the supply of U.S. liquefied natural gas to European countries by the end of 2022 with at least 15 billion cubic meters will be announced by President Joe Biden and European Commission President Ursula von der Leyen ahead of an appearance together in Brussels.
The pact includes the formation of a joint task force to help the continent wean itself off Russian fuel imports.
European natural-gas prices fell for a second day, with benchmark Dutch futures trading about 10% lower.
Bank of Russia Says Gold Reserves Stored Domestically (9:00 a.m.)
Russia’s central bank said all its gold reserves are stored domestically, according to a Q&A posting on its website about operating the financial system under sanctions.
The comments comes after the U.S. Treasury issued a notice that gold transactions with Russia are prohibited, and U.K. Prime Minister Boris Johnson said there are signs Russia is using the precious metal to escape sanctions.
Russia spent years building the fifth biggest stash of gold in the world, and it’s being targeted now because sales of it could shore up the ruble.
Russian Miner Says Unable to Sell Gold After Sanctions (9:10 a.m.)
Petropavlovsk said it’s urgently considering the implications of sanctions on Gazprombank that prohibit further sales of gold to it. The bank takes 100% of Petropavlovsk’s gold production as a condition of its loans, and the miner has a $200 million committed term loan and $86.7 million m in revolving credit facilities with Gazprombank.
Russian Stock Market Reverses Gains (9:22 a.m.)
Russia’s stock index erased early gains to fall 2.6% on during the second day of trading after a record long shutdown. The gauge climbed 4.4% in Thursday’s shortened session. European equities and U.S. stock futures slipped.
Nickel rose to an intraday record in Shanghai after another spike in London put imports out of reach for many Chinese buyers. Nickel has been extremely volatile since Russia’s invasion of Ukraine, with Western traders shunning Russian metals, though nickel flows to China are continuing.
Meanwhile, oil swung between gains and losses, with West Texas Intermediate crude holding above $110 a barrel, as the U.S. and European Union looked set to announce plans to reduce the region’s reliance on Russian fossil fuels.
Final Russia-EU Rail Link Closes (8:30 a.m.)
Passenger train service between Helsinki and St. Petersburg will end Monday “for the time being,” Finland’s state railway company said. It was the final rail link left for passengers between Russia and the European Union.
The 1,300-kilometer (800-mile) border between the two countries can still be crossed by car. Tens of thousands of people have left Russia since the invasion of Ukraine, with many heading first to former Soviet states, the Middle East, and Turkey. The Helsinki rail connection was seen by many as the easiest way to get to Europe.
Zelenskiy Calls on Orban to Shun Russia (8:20 a.m.)
In his video-address to the EU on Thursday, President Volodymyr Zelenskiy criticized Hungary it for not showing full support when it comes to Ukraine’s membership in the bloc, sanctions on Russia, or transit of weapons through Hungarian territory.
Zelenskiy urged Prime Minister Viktor Orban to “once and for all” give his full support to Ukraine and shun Russia. “There is no time to hesitate,” he said. “It’s time to decide.”
Ukraine Pushes Russian Forces Further From Kyiv, U.K. Says (8:04 a.m.)
Counter-attacks have helped Ukraine reoccupy towns and defensive positions as far as 35 kilometers (22 miles) east of Kyiv, the U.K. defense ministry said in an intelligence update. Ukrainian forces are likely to continue to attempt to push Russian troops back along the northwest axis from Kyiv toward Hostomel airfield.
In the south, Russia is still attempting to circumvent Mykolaiv in a bid to drive west toward Odesa, the U.K. said. Progress is being slowed by Ukrainian resistance and “logistical issues.”
Russia’s defense ministry said in an update that it used Kalibr guided missiles to strike a fuel depot near Kyiv.
Chinese Traders Help Russia’s Rusal (8:10 a.m.)
United Co. Rusal International PJSC, the huge aluminum producer fighting blow-back from Russia’s war in Ukraine, is getting some help from traders in China to keep its smelters running.
Some 30,000 tons of alumina — used to make aluminum metal — have been loaded onto two vessels headed for Siberia after leaving China in recent weeks, said traders familiar with the matter. The action comes at a time of intense global scrutiny of China’s role in responding to Russia’s growing economic isolation.
Traders in China Strike Rare Deal With Russia’s Rusal on Alumina
Sanctioned Mogul’s Yacht Heads Home to Russia (3:13 a.m.)
One of the world’s biggest super yachts, reportedly owned by sanctioned billionaire Alexey Mordashov, is headed home to Vladivostok, a Russian port city near Japan.
The 465-foot Nord — a $500 million vessel with two helipads, a cinema and 20 luxury cabins — is currently in the South China Sea. Other Russian-linked yachts are turning off their transponders, leaving Europe and sailing toward the Middle East, where they might get less scrutiny.
China May Send Tech Hardware to Putin, Says EU (2:47 a.m.)
European Union officials suspect that China may be ready to supply semiconductors and other tech hardware to Russia as part of an effort to soften the impact of sanctions imposed over the invasion of Ukraine.
The EU is concerned that China is ready to help President Vladimir Putin’s government weather the economic penalties it has put in place along with the U.S., the U.K. and Japan with particular focus on the availability of high-tech components, according to two people with knowledge of the bloc’s internal assessments.
Johnson Says Allies Can Strengthen Ukraine Outside NATO (9:38 p.m.)
U.K. Prime Minister Boris Johnson said that even if Ukraine is unable to join NATO, allies can help it create a deterrent by sending equipment, training and intelligence, giving Ukrainians the “tools to protect themselves.”
Johnson also said he’s not optimistic that Putin wants peace, and warned that Russia may bomb Ukraine’s cities the way it did in Chechnya during wars fought two decades ago.
Baltic Leaders Meet with Zelenskiy in Kyiv (7:57 p.m.)
The speakers of the Lithuanian, Estonian and Latvian parliaments visited Kyiv Thursday to meet with Zelenskiy.
“The Ukrainian nation trusts your countries and Poland the most,” Zelenskiy told them in his office in the capital city. He said Russian troops deliberately attack civilians and ruin civilian infrastructure as they try to besiege cities, creating humanitarian catastrophes. Ukraine needs air defense systems, jets, armored vehicles and protection for civilians, and it wants tighter sanctions on Russia, the president said.
EU Leaders to Agree on Modest Tightening of Sanctions (7:02 p.m.)
Leaders of the European Union are expected to back a modest tightening of earlier sanctions against Russia for its invasion of Ukraine, but refrain from imposing major new measures, as countries remain divided on whether to tackle energy supplies.
Under pressure from the U.S. and with Biden in Brussels as their guest, the leaders are likely to approve sanctioning more Russian tycoons and the closing of some loopholes as early as Thursday night, according to EU diplomats. They are expected to avoid a major cut-off of oil and gas purchases despite a push from several countries. Austria said it won’t agree to an energy embargo.
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