EU Approves Oil Sanctions; Gift drone from Turkey

(Bloomberg) – The European Union finally overcame Hungarian objections to approve the bloc’s sixth sanctions package against Moscow, including a partial ban on Russian crude imports, just as the OPEC+ cartel agreed to increase the scale of its oil supply increases.

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Ukraine’s central bank has more than doubled its benchmark interest rate in a bid to stem inflation and protect a currency battered by the Russian invasion. And in another sign of the economic toll of the war, Russia’s finance ministry said it was ready to settle claims on 2022 Eurobonds found to have breached their terms after missing an interest payment.

(See RSAN on the Bloomberg Terminal for the Russian sanctions dashboard.)

Key developments

  • OPEC+ opens wider oil taps, factoring in US but keeping Russia on side

  • Ukraine raises rate to 25%, resumes policy measures after invasion

  • EU approves partial ban on Russian oil and sanctions on Sberbank

  • US wavers over next Russia sanctions as divisive fears grow

  • Putin bets on Ukraine winning before its economy shuts down

Yachts “linked to Putin” hit by American sanctions (4:45 p.m.)

The US Treasury Department announced a new round of sanctions targeting what it said were yachts linked to Vladimir Putin as well as the Russian president’s allies, in the latest round of sanctions over the war in Ukraine.

EU backs partial Russian oil ban, Sberbank sanctions (4:15 p.m.)

The European Union has approved a sixth sanctions package, including a partial ban on Russian oil imports after Hungary dropped objections that had held it back for weeks. The package includes an insurance ban linked to the shipment of oil to third countries and will also see Russia’s biggest bank, Sberbank, shut down the SWIFT international payment system.

EU envoys agreed to remove Patriarch Kirill, who heads the Russian Orthodox Church and has been a strong supporter of President Vladimir Putin and the war, from the EU’s proposed list of those sanctioned. Hungary has angered many EU ambassadors by demanding Kirill’s withdrawal after EU leaders reached a sanctions deal earlier in the week, but they eventually accepted the request to ensure the adoption.

Sweden steps up military aid to Ukraine (4:00 p.m.)

Sweden has pledged to increase financial and military aid to Ukraine by one billion crowns ($102 million), the Nordic country’s government said in a statement posted on its website. A contribution to Ukraine’s central bank fund to support the armed forces will include around 578 million crowns, with some 262 million crowns in military aid including Sweden’s Robot 17 anti-ship missile system, armored vehicles, automatic rifles and ammunition.

The Russian Space Agency is now part of the military (3:45 p.m.)

Roscosmos, the Russian space agency that operates the national section of the International Space Station, has essentially become part of the military, its head Dmitry Rogozin said, according to Interfax. The agency will complete several new satellites for the Russian military this year, although it lacks adequate funding, Rogozin said, Interfax reported.

Ukraine asks Russia for grain guarantees (3 p.m.)

For grain shipments to be freed, Russia should withdraw its navy from waters near Ukraine and provide guarantees that ports and commercial vessels will not be attacked, Ukrainian Foreign Ministry spokesman said , Oleh Nikolenko, on Facebook.

Nikolenko was responding to Russian Foreign Minister Sergey Lavrov’s comments urging Ukraine to remove sea mines from ports as a precondition for unblocking ships carrying Ukrainian grain. Ukraine is working with the UN on ways to ensure the navigation of ships delivering Ukrainian agricultural products.

German minister backs Ukrainian EU candidate status (2:45 p.m.)

German Foreign Minister Annalena Baerbock said she supports Ukraine’s EU candidacy status. “It’s a historic moment,” Baerbock told public broadcaster WDR. “We cannot slam the door in Ukraine’s face.”

The European Commission will make a final decision on Ukraine’s candidacy status in June, Baerbock said, “but we as Germans have a special responsibility at this time.” She also clarified, however, that Ukraine will not receive any special treatment in the further accession process.

Turkey offers a combat drone for Ukraine (1:50 p.m.)

Turkey has decided to donate a Bayraktar TB2 combat drone to a Lithuanian crowdfunding campaign which raised 5.9 million euros in three days to buy the weapon for Ukraine.

Campaign organizers will pay 1.5 million euros to buy ammunition for the drone, according to Andrius Tapinas, a journalist behind the initiative. Turkish officials preferred that the rest of the donated money be spent on humanitarian aid, logistics or rebuilding Ukraine, he said.

The company confirmed the news in a post on Twitter.

Ukraine raises policy rate to 25% (1:20 p.m.)

The National Bank of Ukraine more than doubled its key rate to 25% in the first such measure in four months, reactivating policy tools to stem inflation and protect the currency battered by the Russian invasion.

In an emailed statement, the bank said the “resolved” measure was aimed at protecting household incomes and savings in hryvnia, increasing the attractiveness of hryvnia assets, reducing pressure on the exchange rate and thereby strengthen its ability “to maintain exchange rate stability and curb inflationary processes during the war.

Germany says sanctions will work in the end (1:10 p.m.)

The Russian economy has been hit hard by international sanctions imposed following the invasion of Ukraine and the damage will become increasingly evident, German Economy Minister Robert Habeck said.

The revenue Russia derives from commodities like oil and gas doesn’t exactly reflect the pressure President Vladimir Putin is under because the country can “barely spend it,” Habeck told lawmakers in Berlin.

Read more: Russia’s economy tipped into contraction in April amid sanctions

Switzerland tightens rules for Ukrainian refugees (11:45 a.m.)

The Swiss government has said it may revoke refugee status for Ukrainians who spend more than 15 days a quarter in their home country, a sign it is tightening rules for people displaced by war. Nearly 7 million refugees have fled Ukraine since the Russian invasion at the end of February, including more than 54,000 people registered in Switzerland.

Zelenskiy calls for a seventh EU sanctions package (10:46 a.m.)

Ukrainian President Volodymyr Zelenskiy called on the EU to start working on a new round of sanctions against Russia days after the bloc’s leaders paved the way for a sixth package.

Addressing the Luxembourg parliament via video link, Zelenskiy said the measures should target any entity or person who may be contributing to or linked to the Russian war, while a legal mechanism should be prepared “not only to freeze those assets, but also to use to compensate and repair the prejudice of all those who suffered this aggression”.

Zelenskiy said Russian forces occupied 20% of his country.

Russia ready to settle claims on interest payments (10 a.m.)

Russia will review and, if necessary, settle claims by holders of its 2022 Eurobonds that additional interest payments are owed to them for the period between the maturity of the notes and the date of payment, the ministry said. of Finance of the country in a press release.

The Ministry of Finance blamed foreign counterparties for the delay, which was called a “default” by the Credit Derivatives Determination Committee.

Russian missiles hit infrastructure near Polish border (9:47 a.m.)

Four Russian cruise missiles launched from the Black Sea struck railway infrastructure in the Lviv region near the Polish border on Wednesday, causing significant damage, regional governor Maksym Kozytskyi said in a statement on Facebook.

Five people were injured and many trains were delayed due to the strikes, he said. Ukraine depends on rail and road links with Poland for trade, arms deliveries and humanitarian aid.

Sberbank finds a buyer for the Swiss unit (9:33 a.m.)

The Swiss unit of Sberbank, Russia’s largest lender, has found a new buyer who faces no sanctions that could allow it to resume commodity trade financing in a few weeks, Le Temps reported. .

Sberbank (Switzerland) AG expects to complete the transaction within a week, the Swiss newspaper reported, citing an email to customers it had seen. A resumption of operations would be significant given that its Russian parent company is expected to be barred from access to the SWIFT international payments system under the latest wave of European Union sanctions.

Read more: Swiss unit of Sberbank finds new unauthorized buyer, says Le Temps

Fiji court delays US seizure of Russian superyacht (9:30 a.m.)

A US bid to seize a $325 million superyacht believed to be owned by sanctioned billionaire Suleiman Kerimov has been delayed by a Fijian court, after the boat’s registered owner won a temporary stay of a previous judgment. The Supreme Court is expected to rule on the appeal on June 7, when the stay will expire, according to the Pacific island nation’s prosecution office.

The showdown in Fiji is a preview of the kind of courtroom tussle that could unfold as countries like the United States, Spain and Germany pursue the ships, villas and planes of the Russian tycoons who have been put on sanctions lists for their ties to Putin. Already more than a dozen yachts worth more than $2.25 billion have been seized as part of the push, sparked by the invasion of Ukraine.

Merkel breaks the silence on the war in Ukraine (9:08)

Six months after leaving office, former German Chancellor Merkel condemned Russia’s “barbaric war of aggression” in her first public comments on the invasion.

Merkel has backed efforts by the German government and its allies to stop the war, according to an attendee at a closed-door German DGB union event Wednesday night in Berlin who asked not to be identified.

The longtime chancellor has not commented on her policy towards Russia or her past support for the Nord Stream 2 gas pipeline, the person said. His successor, Olaf Scholz, shut down the pipeline after Putin decided to recognize two self-declared republics in Ukraine just before announcing the invasion. Merkel’s office could not be reached for comment.

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