(Bloomberg) — Ukraine reported heavy fighting as it started an offensive in the region around Kherson, a river port that was one of the first cities to fall to Russian forces at the start of the war.
Artillery hit Russian positions around the Kherson region, according to the Ukrainian military’s southern command, which said a counteroffensive began Monday along several points on the front. Russia’s Defense Ministry confirmed the attacks in a statement, and said the push “failed miserably.”
Europe’s energy crisis escalated as Russian natural-gas giant Gazprom PJSC said it will halt supplies to French utility Engie SA because of a disagreement over payments. Moscow has increasingly choked shipments of the fuel to Europe in retaliation for sanctions related to its invasion of Ukraine.
(See RSAN on the Bloomberg Terminal for the Russian Sanctions Dashboard.)
Key Developments
- Ukraine Counterattacks in South, Leaves World Guessing on Scale
- EU Agrees To Pursue Work on Ukraine Military Training Mission
- EU Reaches Gas Storage Goal Early Despite Russian Supply Cut
- France, Germany Want to Hit Support for Putin With TikTok, Visas
- Russia Curbs Gas Supply to France’s Engie as Squeeze Worsens
- EU Power Market Not Working Thanks to Putin, Von Der Leyen Says
On the Ground
Heavy fighting is taking place over large parts of the southern Kherson region, and Ukraine has destroyed most major bridges across the Dnipro river in the area, the presidential office in Kyiv said in a military update. Ukrainian artillery hit 13 control centers of Russian forces around Kherson, the country’s southern command said on Facebook. Russia struck the city of Zaporizhzhia overnight, Interfax-Ukraine reported, citing local authorities. To the east, Russian forces shelled the Donetsk, Sumy and Kharkiv regions, the Ukrainian military said. Four civilians were killed in central Kharkiv, according to local authorities.
(All times CET)
Russia Halts Gas Supply to France’s Engie as Crisis Intensifies (9:35 p.m.)
Europe’s energy crisis escalated as Russian natural-gas giant Gazprom PJSC said it will halt supplies to French utility Engie SA because of a disagreement over payments.
Gazprom has notified Engie about a full cutoff of gas from Sept. 1 becayse the utility hasn’t paid in full for July deliveries, the Russian gas producer said in a statement. Earlier, Gazprom said it would reduce gas supplies starting Tuesday. It also plans to shut the Nord Stream pipeline to Germany for three days of maintenance beginning Wednesday.
Read the full story here.
Russia’s Iranian Drones Are Failing in Ukraine, US Says
Iranian drones that Russia has imported for use over Ukrainian battlefields have “already experienced numerous failures,” according to US State Department spokesman Vedant Patel.
He contended that US sanctions and export controls were hitting Russia’s arms industry and forcing Moscow to rely on “unreliable countries” such as Iran, an alliance he called a “profound threat.”
The US assesses that a shipment of Iranian drones was airlifted into Russia this month as part of a plan to import hundreds of pilotless aerial vehicles able to conduct air-to-surface attacks and electronic warfare and help Russia more accurately hit targets, Patel said in a telephone briefing in Washington.
Ukrainian Grain Arrives in Djibouti, Blinken Says (9:05 p.m.)
US Secretary of State Antony Blinken said in a statement that he welcomed the arrival in Djibouti of the ship Brave Commander, bearing 23,300 metric tons of Ukrainian grain for distribution in Ethiopia and Somalia, which “are dangerously food insecure after four years of drought.”
United Nations Secretary-General Antonio Guterres told reporters last week that he had seen the vessel, chartered by the World Food Program and “proudly flying the UN flag with its cargo destined for the Horn of Africa,” during his travel to Istanbul.
US Lawmakers Klobuchar, Portman Meet With Zelenskiy (8:04 p.m.)
US Senators Amy Klobuchar, a Minnesota Democrat, and Rob Portman, an Ohio Republican, met in Kyiv with President Volodymyr Zelenskiy, according to an emailed statement from his office.
Zelenskiy told them he expects sanctions against Russia to be tightened, including by imposing visa restrictions on Russians. They also discussed the situation at Ukraine’s Zaporizhzhia nuclear power plant that’s occupied by Russian troops. According to the statement, Zelenskiy reiterated that it must be returned to Ukrainian control.
White House ‘Has Concerns’ on India Exercises With Russia (7:52 p.m.)
The White House press secretary expressed disappointment when asked about India’s participation in joint military exercises with Russia.
“The United States has concerns about any country exercising with Russia while Russia wages an unprovoked, brutal war against Ukraine,” Karine Jean-Pierre told reporters aboard Air Force One en route to Wilkes-Barre, Pennsylvania. “But of course every participating country will make its own decisions, and I’ll leave it at that”
EU Power Market Isn’t Working Due to Putin: Von Der Leyen (7:01 p.m.)
The European Union’s power price-setting system is no longer functioning properly and requires changes after Russian President Vladimir Putin turned energy into a weapon, according to Commission President Ursula von der Leyen.
“The electricity market is no more a functioning market because there’s one actor — Putin — who’s systematically trying to destroy it and to manipulate it so we really have to react to that and that’s why we’re addressing now the composition of the electricity market,” she told a news conference in Denmark.
The commission, the EU’s executive arm, is devising a plan to step into the energy market, intervening in the short term to damp down soaring power costs and overhauling its design in the longer term to break the link between gas and electricity prices.
Ukraine Fills Gas Storage to 68% of Plan, Premier Says (6:11 p.m.)
Ukraine has 13 billion cubic meters of gas stored as of end-August, Prime Minister Denys Shmyhal said, more than two-thirds of its plan to have at least 19 bcm before the winter heating season begins.
The country put more than 1 bcm into underground storage last month and is in talks with Norway to receive 200 million euros to purchase natural gas as well, he said.
China Fills Void as Foreign Brands Flee Russian Market Amid War (6:01 p.m.)
Chinese cars, televisions and smartphones are replacing German and South Korean imports in Russia as its market is reshaped by sanctions and an exodus of brands in the wake of Putin’s invasion of Ukraine.
The result is upending trade, with Russia seeking to insulate itself from further disruptions by pivoting to goods from countries that haven’t joined sanctions imposed by the US and its allies. Moscow is also rewriting rules to allow its sovereign wealth fund to invest in the currencies of China, India and Turkey, after penalties blocked euro and dollar purchases.
Zelenskiy Meets IAEA Director in Kyiv (5:15 p.m.)
Ukrainian President Volodymyr Zelenskiy said he sees the IAEA mission to the Russian-occupied Zaporizhzhia nuclear power station as “tactical,” while a “strategic” solution would be to force Moscow’s troops to leave the plant.
“This is how we will get rid of the risks associated with nuclear energy,” he said after meeting IAEA Director General Rafael Grossi in Kyiv.
EU Agrees To Pursue Work on Ukraine Military Training Mission
EU countries agreed to start hammering out details of a proposed training mission for Ukraine’s armed forces, with countries including Belgium and Slovakia offering to host.
The bloc’s defense ministers agreed “on launching the work necessary to define the parameters for an EU military assistance mission for Ukraine,” Josep Borrell, the EU’s foreign policy chief, told reporters after a meeting in Prague.
Member states have already agreed to allocate as much as 2.5 billion euros ($2.5 billion) to support the delivery of weapons and other aid to Ukraine.
EU Reaches Gas Storage Goal Early Despite Russian Supply Cut
The EU met its gas storage filling goal two months ahead of target as the bloc braces for a tough winter with Russia limiting supplies and energy contracts trading at elevated levels throughout the continent.
European Commission President Ursula von der Leyen celebrated the milestone on Monday, telling an audience at an energy conference in Denmark that the reserves hit an average of 80%, a target the EU had aimed to reach by Nov. 1.
Vatican Clarifies Pope’s Condemnation of Russia (3:51 p.m.)
Pope Francis considers the war “initiated by the Russian Federation” in Ukraine as “morally unjust, unacceptable, barbaric, senseless, repugnant and sacrilegious,” the Vatican said in a statement.
The clarification follows harsh criticism of Francis from Ukrainian authorities and Catholics worldwide for his apparent ambiguity on the war and his refusal to condemn Russia for the invasion.
The Catholic leader has said that NATO was partly to blame for the war, placed a Russian and a Ukrainian woman side-by-side in an Eastern rite ceremony and recently called Darya Dugina — the daughter of Russian nationalist ideologue Alexander Dugin’s who firmly supported the war before she was killed by a car bomb — an “innocent victim.” The Vatican said the pope speaks to defend human life and promote peace, and that his words aren’t political statements.
Ukraine Expects to Get $1.5 Billion in US Aid Next Month (3:24 p.m.)
Ukraine expects to get a $1.5 billion tranche of US aid in September to help finance its budget, Finance Minister Serhiy Marchenko told public television.
The government also sees the EU starting to disburse aid to the country in late September or the start of October, he said.
EU Close to Tightening Rules on Russian Visas (2:48 p.m.)
European Union countries appear to be moving toward an agreement on tightening the visa regime for Russian citizens, according to Czech Foreign Minister Jan Lipavsky, who is hosting his counterparts from the bloc in Prague.
“I am sensing positive signals that key players are on board,” Lipavsky said when asked about his proposal to suspend the visa-facilitation agreements with Russia. Foreign ministers are due to discuss visas and the invasion of Ukraine on Wednesday morning.
Such a move would mean that Russians traveling to the EU will have to pay more and face additional bureaucracy to obtain short-term visas.
Exxon Files Dispute With Russia Over Sakhalin-1 Exit (2:41 p.m.)
Exxon Mobil Corp. filed a dispute with the Russian government after a decree from President Vladimir Putin blocked the oil major from exiting its only remaining operation in the country.
Exxon has been trying to exit the Sakhalin-1 project in the country’s Far East since March but was recently prevented from doing so by a presidential decree, the company said Tuesday in a statement.
One in Six Ukrainian Refugee Wants to Stay in Poland (2:39 p.m.)
Only 16% of refugees who fled from Ukraine to Poland want to stay there permanently, according to a report from the central bank in Warsaw.
Almost two-thirds of Ukrainians in Poland plan to leave after less than a year, according to the survey conducted in April among 3,165 adults. Almost 6 million people have entered Poland from Ukraine since the war began on Feb. 24.
Ukraine to Hit Dnipro Crossings, Military Says (1:50 p.m.)
Ukraine’s army will destroy all alternative crossings over the Dnipro river attempted by Russian troops, military spokeswoman Natalia Humenyuk said. The Russian army is not able to move resources from the east bank to the west bank of the Dnipro near Kherson after Ukrainian attacks destroyed transport links and made all bridges unusable.
“The main goal is the de-occupation” of the Kherson region, she said. “Powerful resistance in the Kherson region is yet more proof that Kherson is Ukraine,” Humenyuk added, saying that a “powerful” push to rid the area of Russian occupiers would happen in the near future.
“Battles are ongoing now,” she said.
Poland Plans to Boost Defense Spending Because of War (1:50 p.m.)
Poland will more than double military spending next year, to as much as 138 billion zloty ($29 billion), to strengthen its army in the face of the war in neighboring Ukraine.
Warsaw has been on a buying spree for arms since the war began and just last week signed a $5.8 billion deal to buy tanks and artillery in South Korea. The government also plans to expand its troop count by more than 20,000 in 2023, Premier Mateusz Morawiecki said in Warsaw on Tuesday.
Ukraine’s Attacks Show ‘Logic,’ Belgian Minister Says (1:27 p.m.)
Ukrainian soldiers are trying to disperse Russian means and logistics when they attack both Crimea and Kherson in parallel, Belgian Defense Minister Ludivine Dedonder said in an interview.
“There’s a logic,” Dedonder said on the sidelines of a gathering of EU defense ministers in Prague.
Dedonder said Ukrainian forces have been resisting well and regaining territory if they lose it, meaning the front line has been “pretty stable” recently. She said she expected that to remain the case for some time as a harsh winter will make any major advances more complicated.
Russia Replacing Dollar With Chinese Yuan (12:30 p.m.)
The yuan is becoming the preferred vehicle for Russia’s government and companies to overcome their isolation from Western capital markets.
Trading volumes in overnight yuan-ruble swaps on the Moscow Exchange doubled last week, reaching a record on Friday and outstripping the dollar-ruble pair.
Ukraine Says Russia Seeks to Prevent IAEA From Reaching Plant (12:10 p.m.)
Russia is deliberately shelling corridors that the International Atomic Energy Agency could use to reach the Zaporizhzhia nuclear power plant, Mykhailo Podolyak, a senior adviser to Ukraine’s president, said on Twitter.
Ukrainian Presidential Chief of Staff Andriy Yermak accused the Kremlin’s forces of “imitating combat action” by “firing at the territory near the plant” to disrupt the visit.
Occupation Official, From Russia, Says No Threat to Kherson (12:05 p.m.)
The deputy head of Russia’s occupation government in Kherson posted a video aimed at reassuring people that Ukraine’s counteroffensive wouldn’t succeed. But his message was undermined by the fact it was filmed in the Russian city of Voronezh, about 450 miles away.
“Kherson was, is and will remain a Russian city, and all attacks on it are pointless,” the official, Kirill Stremousov, said in a video that was recorded in a hotel on Voronezh’s main artery, Prospect Revolutsii.
Another deputy head of the occupation forces in Kherson, Oleksiy Kovalyov, was killed on Sunday in a gun attack, according to Russia’s Investigative Committee. He is the highest-ranking collaborator with Russian forces to be murdered.
Ukraine Seeks Monthly Food Exports of 5 Million Tons (10:40 a.m.)
Ukraine wants 100 to 150 vessels per month carrying as much as 5 million tons of agricultural products from its three unblocked food ports, the country’s Infrastructure Ministry said on Facebook. That’s up from a previous goal of 3 million tons announced Aug. 17.
Renewed shipments have helped ease global supply concerns. A ship carrying Ukrainian wheat arrived in Djibouti and six more ships loaded with 183,000 tons of food left Ukrainian ports, Infrastructure Minister Oleksandr Kubrakov said on Twitter.
Engie Says Gazprom to Cut Gas Deliveries (9:40 a.m.)
Russian energy giant Gazprom PJSC has informed Engie SA of a reduction in gas deliveries starting Tuesday because of disagreements over some contracts, the French utility said, signaling a further squeeze in Europe’s energy supplies.
The announcement follows Monday’s call from French Prime Minister Elisabeth Borne for businesses to cut energy use or face possible rationing this winter if Russia halts gas deliveries in retaliation for Europe’s support for Ukraine.
IAEA Team Have “Set Off” for Zaporizhzhia Plant (8:10 a.m.)
IAEA Director General Rafael Mariano Grossi and a team of inspectors “set off” for the Zaporizhzhia nuclear plant, Europe’s largest, to ensure the facility’s safety, the agency said in a tweet.
Ukrainian President Volodymyr Zelenskiy warned over the weekend that the situation at the plant remains dangerous, even after two power units were reconnected to the grid following a power failure.
US Seeks ‘Controlled Shutdown’ of Zaporizhzhia Nuclear Plant (9:49 p.m.)
The US believes that shutting down Ukraine’s Zaporizhzhia nuclear plant is the “safest and least risky option,” National Security Council spokesman John Kirby told reporters, amid renewed reports of shelling around the facility.
The plant’s reactors were taken offline briefly last week after fires broke out around the plant, which is now under Russian control. Both sides accuse the other of launching dangerous attacks nearby.
Why Ukraine’s Big Nuclear Plant Raises Worries Again: QuickTake
France, Germany Want to Beat Russian Doctrine With TikTok, Visas (9:16 p.m.)
Germany and France want the European Union to drive a wedge between President Vladimir Putin and the Russian people with a campaign to counter propaganda within Russia and a visa policy that signals Europe is still open to ordinary citizens.
In an unofficial paper, France and Germany say the EU needs to pursue “creative ways” to allow for the dissemination of independent information in Russia. The countries also call for open channels of communication with the Kremlin, even as they urge broadening sanctions against Russian officials and continued financial and military support for Ukraine.
Read the full story here.
More stories like this are available on bloomberg.com
©2022 Bloomberg L.P.
