(Bloomberg) — The Biden administration plans to send to Congress as soon as Thursday a proposal for weapons and humanitarian assistance to Ukraine that would last through September.
Russia said it stopped natural gas flows to Poland and Bulgaria, making good on a threat to cut off buyers if they refuse Russian President Vladimir Putin’s demand to pay in rubles.
Some European companies already acceded to the ultimatum, which the European Commission warned would breach sanctions. European gas prices surged more than 20% on the move before settling back. The European Union’s gas coordination group met to chart a joint response, and EU energy ministers set a May 2 meeting to discuss Ukraine. Germany signaled it’s open to banning Russian oil imports in new sanctions.
(See RSAN on the Bloomberg Terminal for the Russian Sanctions Dashboard.)
Key Developments
- Germany Ready to Back EU Ban on Russian Oil If It’s Gradual
- How Russia’s Gas Ban Rips Through the Core of European Industry
- Moldova Accuses Moscow-Backed Separatists of Fueling Tensions
- U.S. Sharing More Intelligence With Ukraine for Fight in Donbas
- Biden Swaps Prisoner With Russia in Surprise Sign of Accord
(All times CET)
Biden Administration Readies Long-Term Assistance Package (9:46 p.m.)
The White House plans to send to Congress this week a proposal for emergency funds for Ukraine that will cover the rest of the current fiscal year that ends Sept. 30, White House Press Secretary Jen Psaki said.
The proposal will include “security or military assistance, humanitarian economic assistance” to “help address a range of needs the Ukrainians have,” Psaki said.
Separately, Secretary of State Antony Blinken told senators the proposal would also include funds to help remove land mines and to combat food insecurity.
EU Nations See Ambiguity in Bloc’s Advice on Russian Gas Demands (8:24 p.m.)
Several European Union nations are pushing for clearer guidance from the bloc on Russia’s demand to pay for gas in rubles, saying the current advice is too ambiguous.
The European Commission told the ambassadors at a closed-door meeting Wednesday that it will fine-tune the wording of its guidelines, according to people familiar with the discussions. A number of countries who raised the issue want the commission to clarify that buyers don’t have any workarounds to acquiesce to the Kremlin’s demands, one of the people said.
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Eni Prepares to Open Ruble Accounts for Gas (7:21 p.m.)
Italian energy giant Eni SpA is preparing to open ruble accounts at Gazprombank JSC, potentially allowing it to comply with Russian demands that gas be paid for in local currency if doing so isn’t found a breach of sanctions, people familiar with the matter said.
The move is described as precautionary as Eni seeks more guidance from the Italian government and European authorities. Earlier on Wednesday, European Commission President Ursula von der Leyen warned companies not to bend to Russia’s demands to pay for gas in rubles, saying that doing so would go against sanctions.
Finland to Boost Ukraine Aid With Seized Bitcoin Sale (7:16 p.m.)
Finland’s government will donate part of the proceeds from the sale of a Bitcoin stash seized in drug busts to help Ukraine’s defense against Russia, newspaper Helsingin Sanomat reported.
Ukraine will receive “a sizable part” of the planned sale of 1,981 Bitcoins — valued at about $78 million and forfeited to the state by court order — the newspaper said, citing government sources it didn’t identify. The exact share has yet to be determined, it added.
Russia Began Preparing Ukraine Cyberattacks in Early 2021 (7:14 p.m.)
Russian-affiliated hackers were positioning themselves for cyberattacks against Ukraine as early as March 2021, according to researchers at Microsoft Corp.
A handful of hacking groups secured access to Ukrainian organizations –- including defense, IT and energy networks — for strategic and battlefield intelligence collection, the technology giant revealed in a report published on Wednesday. The campaigns appeared to be setting the groundwork for attacks before and after the invasion began in February.
U.S. Sharing More Intelligence With Ukraine for Donbas Fight (7:04 p.m.)
The U.S. has lifted some restrictions on sharing intelligence with Ukraine as it confronts a renewed Russian military assault in the east and south, where it has backed separatist groups since annexing Crimea in 2014, according to a person familiar with the matter.
Director of National Intelligence Avril Haines told Congress of the moves this month after Representative Mike Turner, the top Republican on the House Intelligence Committee, wrote a classified letter urging the Biden administration to remove the restrictions. The expanded sharing is designed to help Ukraine defend and potentially retake territory in the Donbas region, the person said, speaking on condition of anonymity about the sensitive matter.
Pentagon Official Warns of Russia’s Electronic Warfare (6:47 p.m.)
U.S. Air Force Secretary Frank Kendall said that the Russian forces invading Ukraine have “the ability to deploy and employ a wide range of ground-based electronic warfare capabilities.”
Kendall said in prepared testimony to the House Armed Services Committee that those capabilities include jamming GPS navigation, satellite communications and radar.
EU’s Breton Sees ‘Very Careful’ Moves on Buying Russian Oil (6:39 p.m.)
EU Internal Markets Commissioner Thierry Breton told Bloomberg Television’s Maria Tadeo that if European companies don’t buy Russian oil in euros or dollars “it’s a breach of the sanctions, so i think everyone will be very careful now.”
Breton also said that “if there is a shutdown for one country to another, we are ready to support the country which will be affected.”
Germany’s Tank Offer Faces Bullet Shortage (5:52 p.m.)
Germany risks stumbling in its effort to bolster Ukraine’s defense with 50 anti-aircraft tanks as there’s little ammunition readily available for the vehicles.
Currently, there is only enough for about 20 minutes of intense action, according to a report by tabloid Bild. Germany is in talks with Brazil, Qatar and Jordan to fill the gap, but could also run into issues with transfer approvals from the Swiss government.
Ukraine’s Central Bank Buys More Government Bonds (5:36 p.m.)
Ukraine’s central bank has expanded its portfolio of so-called government war bonds by 50 billion hryvnia this month to a total 70 billion.
The central bank in Kyiv has expanded its portfolio of government bonds to fill a financing gap that’s not covered by budget revenue and aid from Ukraine’s international donors.
Germany Ready to Back Gradual Russian Oil Ban (4:38 p.m.)
Berlin is prepared to back a gradual ban on Russian oil as EU countries scramble to respond to Moscow’s decision to cut off gas supplies to member states Poland and Bulgaria.
Germany would support a phased approach to targeting oil rather than some of the other options that have been discussed, such as a price cap or payment mechanisms to withhold parts of Moscow’s revenue, according to people familiar with talks among EU ambassadors.
Any ban would need to come with a transition period, said the people, similar to how the EU approached a delayed coal ban earlier this month. This would be part of the EU’s sixth sanctions package, with formal proposals being put forward for approval as early as next week.
Swiss Adopt EU Ban on Russian Coal Imports (4:29 p.m.)
The Swiss federal government enacted further sanctions against Russia and Belarus following an April 13 decision to adopt the European Union’s latest package of sanctions.
The new measures include far-reaching sanctions on goods, including a ban on imports of lignite and coal as well as on products that are important sources of revenue for Russia. Any support to Russian entities in public ownership or under public control are also prohibited.
Putin Warns of Retaliation If West Interferes in His War (4:03 p.m.)
Those posing “threats of a strategic nature that are unacceptable to us” will face a “lightning-fast” response, Putin told lawmakers in St. Petersburg. “We have all the tools for this, such as no one can boast of now. And we won’t brag. We will use them if necessary. And I want everyone to know about it.”
Putin’s warning follows comments this week by Russian Foreign Minister Sergei Lavrov that there’s a “serious” risk of nuclear war over Ukraine. The U.S. called Lavrov’s remarks “the height of irresponsibility” and said they were an attempt to distract from Russian military failures in Ukraine.
Germany Says It’s Taking Russian Gas Threat Seriously (3:09 p.m.)
Germany is taking Russia’s threats to halt gas supplies seriously after the country stopped deliveries to Poland and Bulgaria over disputed payment terms.
“They’re ready to put a stop to gas deliveries,” Economy Minister Robert Habeck said on Wednesday in Berlin. “We have to take that seriously, and that also goes for other European countries.” A sudden halt of Russian gas, which still accounts for 35% of German supplies, would trigger a recession, he added.
U.S., Russia Agree on Surprise Prisoner Swap (3 p.m.)
Russia has exchanged American Trevor Reed for a Russian held in the U.S. after being convicted of conspiracy to smuggle cocaine, in a rare example of cooperation between the two countries amid the confrontation over Moscow’s war in Ukraine.
Former U.S. Marine Reed, who had been in detention since 2019, was swapped for Konstantin Yaroshenko, a Russian pilot jailed more than a decade ago. “The negotiations that allowed us to bring Trevor home required difficult decisions that I do not take lightly,” President Joe Biden said in a statement.
Companies Would Break Sanctions With Ruble Payments, EU Says (2:37 p.m.)
European Commission President Ursula von der Leyen warned companies that bending to Moscow’s demands to pay for gas in rubles would be a breach of sanctions.
“We have round about 97% of all contracts that explicitly stipulate payments in euros or dollars, so it’s very clear. The request from the Russian side to pay in rubles is a unilateral decision and not according to the contracts,” she said. “Companies with such contracts should not accede to the Russian demands. This would be a breach of the Russian sanctions.”
Germany Vows to Continue to Pay for Gas in Euros (2:15 p.m.)
Germany said its companies will continue to pay for Russian gas in euros or dollars, hours after European Union partners Poland and Bulgaria were cut off by Gazprom PJSC for refusing to pay in rubles as President Vladimir Putin has demanded.
Responding to the dramatic escalation, which sent gas prices soaring, Economy Minister Robert Habeck said Germany’s gas supply situation is “stable” and “we are doing everything we can to keep it that way.”
Zelenskiy Thanks Indonesia for Invite to G-20 Summit (1:54 p.m.)
Ukrainian President Volodymyr Zelenskiy said he’s been invited to attend this year’s Group of 20 summit in Indonesia, raising the prospect he crosses paths with Vladimir Putin if the Russian leader opts to attend in person.
Zelenskiy thanked Indonesian President Joko Widodo “for the support of Ukraine’s sovereignty and territorial integrity, in particular for a clear position in the UN.” The U.S. and its allies had been frustrated by Indonesia’s refusal to withdraw a summit invitation to Putin and pressed it to invite Zelenskiy as a guest to the Group of 20 summit in November.
Russia Breaks Up Protest in Kherson (12:45 p.m.)
Ukrainian protesters in the Russian-occupied city of Kherson were dispersed by tear gas Wednesday, Ukraina 24 television channel reported. Three people were injured with burns and one suffered a broken leg, according to a local hospital.
Russian forces had blocked Ukrainian Kherson city council workers from entering the official building on Monday, and Russia’s military introduced a new chairman of the city administration, the city’s mayor, Ihor Kolykhayev, said in a letter to Ukraine’s president posted on his Facebook account on Monday.
Gas Prices Ease as Traders Bet Germany Will Avoid Cutoff (12:42 p.m.)
Gas prices eased back after an initial surge of more than 20% as traders started to bet that Germany would avoid a gas cutoff.
After flows to Poland and Bulgaria were switched off, the question for markets is what happens to Germany. Uniper SE, a massive buyer of Russian gas, has said it believes it can meet the Kremlin’s demands without violating sanctions. The EU, which last week left the door open to a possible compromise, hasn’t responded to specific moves by companies.
Some EU Gas Buyers Said to Have Paid in Rubles (11:41 a.m.)
Four European natural gas buyers have already paid for supplies in rubles as Putin demanded, according to a person close to Russian gas giant Gazprom.
Ten European companies have opened accounts at Gazprombank to facilitate the transactions, the person said, speaking on condition of anonymity to discuss confidential matters.
Even if other buyers reject the Kremlin’s terms, more cutoffs after the halt in gas flows to Poland and Bulgaria aren’t likely until the second half of May, when the next payments are due, according to the person.
Polish Premier Accuses Russia of Gas Imperialism (11:25 a.m.)
Russia has pushed the boundaries of its “gas imperialism” by another step by halting gas deliveries to Poland, Prime Minister Mateusz Morawiecki said on Wednesday.
“It’s a direct attack on Poland,” he told lawmakers in Warsaw, adding that Russia was attacking the European economy through inflationary measures. Morawiecki also said that Poland has enough gas in storage for more than 1.5 months, or longer if temperature rises.
Germany Says It’s Meeting With EU Countries on Gas (11:25 a.m.)
Germany said it’s discussing the decision by Russia’s Gazprom PJSC to halt gas flows to Poland and Bulgaria with EU partners, and although it views the move with concern, security of supply is currently guaranteed.
“All in all, gas flows are currently at a stable level but we are monitoring the situation very closely,” the economy ministry in Berlin said Wednesday in an emailed statement.
Transnistria Says It Was Fired Upon From Ukraine (10:36 a.m.)
Shots were fired from Ukraine at a town in the breakaway Transnistria region of Moldova where Russia has ammunition warehouses, Interfax reported, citing the area’s police. Ukraine launched several drones overnight, including armed ones, Interfax said.
There has been a spike in violence in recent days in the self-proclaimed republic, where Russia has about 1,500 troops stationed. Moldova has blamed factions among the separatists for some of the attacks.
Russia Targets Bridge, Railway Near Odesa (10:05 a.m.)
Russian missiles hit the bridge across the Dniester estuary west of Odesa for the second consecutive day, state railway company CEO Oleksandr Kamyshyn said on Telegram. The bridge provides access to Transnistria via a navigable inlet from the Black Sea.
“The enemy is trying to cut off part of the Odesa region and to create tensions against the backdrop of events in Transnistria,” the head of the Odesa regional military administration, Maksym Marchenko, said on Telegram.
Russian Duma Speaker Backs Cutting Gas to ‘Unfriendly’ States (9:45 a.m.)
Russia should cut off natural gas supplies to other “unfriendly” states that refuse to pay in rubles, according to Vyacheslav Volodin, the speaker of the lower house of parliament and a close ally of Putin.
“Bulgaria and Poland had the chance to take up our president’s offer of payment for gas in rubles,” he wrote on Telegram Wednesday, saying the cutoff to those countries announced Wednesday had the full support of the parliament. “The leaders of these countries didn’t want to. Let them explain to their citizens how they will cope with this and in whose interests they were acting when they made this decision.”
EU Planning Coordinated Gas Response, Von Der Leyen Says (9:40 a.m.)
European Commission President Ursula von der Leyen said the EU’s gas coordination group is meeting to chart a joint response to Russia’s “unjustified and unacceptable” decision to use gas supplies as “blackmail.”
“Member states have put in place contingency plans for just such a scenario and we worked with them in coordination and solidarity,” she said in a statement Wednesday. “We will also continue working with international partners to secure alternative flows.” EU ambassadors are meeting Wednesday to discuss issues including a new sanctions package that would target Russian oil exports.
Russia Reports Explosions in Three Regions Near Ukraine (9:40 a.m.)
Three Russian regions near Ukraine reported explosions, including an ammunition depot that caught fire in the Belgorod area, state-run Tass reported, citing local authorities.
Officials in the Voronezh and Kursk regions, both of which border Ukraine, reported that local air defense systems were fired. Voronezh Governor Vyacheslav Gladkov said a small drone was destroyed, according to Tass. No casualties were reported in any of the incidents.
Bulgaria Says It Has Gas for at Least a Month (8:55 a.m.)
Bulgaria has secured uninterrupted supplies of gas for at least a month from alternative sources, Energy Minister Alexander Nikolov told reporters in Sofia.
“Natural gas is used more as a political and economic weapon in the current war, and not in the context of legal, commercial relations,” Nikolov said, adding that Bulgaria hasn’t violated any contracts and has paid its April invoices in U.S. dollars. “Bulgaria won’t hold negotiations under pressure and with its head low.”
Russia Cuts Gas to Poland and Bulgaria (8:27 a.m.)
Gazprom said it has halted gas flows to Poland and Bulgaria and will keep the supplies turned off until the two countries agree to Moscow’s demand to pay for the fuel in rubles.
Gas surged more than 20% on Wednesday as traders digested the sudden move and calculated which countries will be hit next.
Chinese Drone Maker DJI to Suspend Business (6:04 a.m.)
Drone-maker SZ DJI Technology Co. is temporarily suspending business to comply with regulations in various jurisdictions, it said in a brief statement without elaborating. Its halt follows U.S. sanctions on Russia for invading Ukraine, which Washington has threatened to enforce broadly.
DJI’s move to halt business sets it apart from other major Chinese corporations. China has urged an end to the war in Ukraine but refuses to criticize the invasion, vowing instead to maintain trade relations with Russia, a key global energy supplier.
Read more: DJI Becomes Most Prominent Chinese Firm to Halt Russia Business
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