07/10/2022

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Odesa Attack Condemned, US Lawmakers Visit Kyiv

(Bloomberg) —

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The US said a cruise-missile strike on Odesa’s port “casts serious doubt” on Russia’s commitment to an accord it co-signed to allow the safe transit of millions of tonnes of Ukrainian grain through the Black Sea port.

Ukrainian President Volodymyr Zelenskiy said Friday that Ukraine has about $10 billion in grain, including 20 million tonnes from last year’s harvest, available to export.

The Pentagon is looking into the feasibility of providing fighter jets to Ukraine, a measure previously seen as off-limits for fears Ukraine would expand the conflict into Russian territory.

(See RSAN on the Bloomberg Terminal for the Russian Sanctions Dashboard.)

Key Developments

  • Russian Strike on Odesa Tests Day-Old Grain Export Deal

  • Russia Cuts Rates Below Pre-War Level in Surprise Jumbo Move

  • Ukraine Grain Challenge: Clear Mines, Find Ships and Trust Putin

  • US Treasury Gives Blessing for Swaps Auction on Russian Bonds

  • Banned in Europe, Kremlin-Backed RT Channel Turns to Africa

On the Ground

As Russia’s invasion nears the five-month mark, Russian troops are concentrating on the Slobozhansk region to repel the advance of Ukrainian troops to the state border of Ukraine in the north and northeast of the Kharkiv region, according to Ukraine’s Military Office. Moscow’s forces launched assaults in the direction of Pokrovsky and the territory of the Uglegorsk thermal power plant. Ukraine’s troops have continued an offensive in Kherson oblast, west of the Dnipro river, the UK said on Twitter. Supply lines of the Russian force west of the Dnipro “are increasingly at risk” after Ukrainian strikes, the UK said.

(All times CET)

Blinken: Russia Shows Lack of Credibility (10:37 p.m.)

Russia’s missile strike on Odesa “casts serious doubt on the credibility of Russia’s commitment” to a deal to allow Ukrainian agricultural exports to resume through the Black Sea, US Secretary of State Antony Blinken said.

The attack undermines efforts by Turkey, the United Nations and Ukraine to get food to world markets, Blinken said in a statement Saturday. “Russia bears responsibility for deepening the global food crisis,” he said.

US Lawmakers Pledge Support, Visit Bucha (5:30 p.m.)

House Armed Services Committee chairman Adam Smith said US support for Ukraine remains assured after leading a bipartisan delegation that met President Volodymyr Zelenskiy in Kyiv.

The five lawmakers — Smith, three other Democrats and a Republican — also visited Bucha and Irpin, where they saw “evidence of the Russian atrocities” from the early days of the war, they said.

“We will continue to seek ways to support President Zelenskiy and the Ukrainian people as effectively as possible,” the group said in a statement.

Abramovich Spotted at Grain Deal Signing (5:30 p.m.)

Roman Abramovich attended the signing Friday of the agreement to restart Ukraine’s grain exports from the Black Sea, according to media reports.

Reuters and Turkey’s Haberler reported that the Russian billionaire was in the audience at Istanbul’s Dolmabahce Palace. Abramovich also visited Turkey in the spring during a meeting of Ukrainian and Russian delegations.

Zelenskiy Briefs US Lawmakers After Odesa Strike (3:10 p.m.)

US lawmakers led by Adam Smith, chairman of the House Armed Services Committee, met in Kyiv with President Volodymyr Zelenskiy.

Ukraine’s leader briefed them on Saturday’s Russian missile attack on Odesa, hours after Moscow signed a deal to unblock Ukrainian grain exports.

“This proves only one thing: no matter what Russia says and promises, it will find ways not to implement it,” Zelenskiy said. “Geopolitically, with weapons, bloodily, or not, it has several vectors, as it always acts.”

Hungary’s Orban Says Time to Stop Arming Ukraine (12:57 p.m.)

The West should stop arming Ukraine and work for a peace settlement instead, Hungary’s Prime Minister Viktor Orban said at an annual retreat for supporters in Baile Tusnad, Romania. He said Moscow hadn’t been weakened by sanctions and that the rest of the world isn’t joining in the repudiation of Russia.

Orban directly blamed the arrival of Western long-range artillery shipments for Russian Foreign Minister Sergei Lavrov’s recent remark about annexing more Ukrainian territory, emphasizing the need to understand the Russian position of requiring security guarantees.

US, UN Condemn Russian Strike on Odessa (12:30 p.m.)

UN Secretary-General Antonio Guterres “unequivocally condemns” the reported strikes today in the Ukrainian port of Odesa, a spokesman said.

“Yesterday, all parties made clear commitments on the global stage to ensure the safe movement of Ukrainian grain and related products to global markets,” Farhan Haq, deputy spokesman for Guterres, said in a statement. “Full implementation by the Russian federation, Ukraine and Turkey is imperative.”

Bridget Brink, the US ambassador to Ukraine, said Russian “must be held to account.”

Russian Missiles Strike Odesa Sea Port (11:10 a.m.)

Russia attacked the Odesa sea port on Saturday, less than 24 hours after signing an agreement aimed at restarting Ukrainian grain exports from Odesa and two other Black Sea locations.

Two Kalibr missiles hit the port’s infrastructure and two were shot down by Ukraine’s air defenses, Serhiy Bratchuk, adviser to the head of the Odesa regional military administration, said on Telegram.

Zelenskiy Says 20M Tonnes of Grain From Last Year Can be Shipped (7 a.m.)

About 20 million tonnes of grain from last year’s Ukrainian harvest can be exported under the new Black Sea protocol, in addition to new-crop supplies now being harvested, said President Volodymyr Zelenskiy.

“We now have approximately $10 billion worth of grain,” Zelenskiy said in his nightly speech to the nation Friday night.

Separately, in an interview with the Wall Street Journal, Zelenskiy said there could be no cease fire with Russia that allowed Moscow to hold the territories seized since February. “They will not use this pause to change their geopolitics or to renounce their claims on the former Soviet republics,” he said.

US Opens Door to Getting Fighter Jets to Ukraine (8:40 p.m.)

In what would be a major shift for the US and its allies, National Security Council spokesman John Kirby said the Pentagon is looking into the feasibility of providing fighter jets to Ukraine, though the effort is in the very early stages.

The effort is focused on providing US aircraft, not ex-Soviet jets, which means Ukrainian pilots would need to be trained on the fighters as well as how to maintain them, Kirby said, adding “So this is not something that’s going to happen anytime soon.”

Kirby spoke as the White House announced an additional $270 million in arms for Ukraine, a package that includes as many as 580 additional Air Force Phoenix Ghost anti-armor/reconnaissance drones. Ukrainian officials said they’re employing monitoring mechanisms to track and account for the delivery of Western weapons.

UN Says Russia Signs Accord on Russian Food, Fertilizer (7:40 p.m.)

Just before the agreement to allow Ukraine grain exports, Russia signed a separate memorandum of understanding with the UN for the world body to aid in unimpeded exports of Russian food and fertilizer, UN spokesperson Farhan Haq said.

Emphasizing that goods such as food aren’t targeted by sanctions against Russia, he said the UN will establish a task team “focused on addressing the disruptions to the food and fertilizer trade largely due to the de-risking and overcompliance of the private sector, particularly in the sectors of finance and insurance and logistics.”

Black Sea Grain Deal to Allow for ‘Significant Volumes’ (4:20 p.m.)

Friday’s signing will allow for “significant volumes of commercial food exports,” UN Secretary General António Guterres said at a press conference in Istanbul, as Russia signed a pact with the UN and Turkey. Ukraine signed a parallel agreement.

Odesa, Chornomorsk and Pivdennyi ports are part of the agreement, he said. Guterres also announced establishment of a joint coordination center to monitor implementation. Turkish President Recep Tayyip Erdogan said that traffic would begin in “coming days.”

Ukraine Grain Challenge: Clear Mines, Find Ships, Trust Putin (2:42 p.m.)

Ukraine is about to finally secure a deal aimed at restarting Black Sea grain exports that have been crippled by Russia’s invasion. But getting them going won’t be easy.

A pact is expected to be signed Friday by representatives of both countries, which may help revive shipments from one of the world’s top wheat, corn and vegetable-oil exporters.

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