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Ukraine latest: EU Russia oil ban called risk for UK inflation

The European Union is proposing to give Hungary and Slovakia two years to comply with its plan to ban oil imports from Russia.
Image: Bloomberg

The European Union is proposing to give Hungary and Slovakia two years to comply with its plan to ban oil imports from Russia, and provide extra time to the Czech Republic as well. Hungarian leader Viktor Orban earlier compared the proposal for a import ban by year-end to a “nuclear bomb” being dropped on his nation’s economy.

More civilian evacuations are planned from Mariupol on Friday, a top Ukrainian aide said, even as holdout fighters in the Azovstal steel plant remain under air and ground assault from Russian forces.

Ukraine President Volodymyr Zelenskiy will speak to the Chatham House think tank in London on Friday via video link. Russia’s May 9 Victory Day commemoration is looming, with President Vladimir Putin likely to speak on Moscow’s “special operation” in Ukraine.

Key Developments

  • EU Revises Russia Oil Sanctions Plan to Give Hungary More Time
  • Orban Wants Billions and an Exemption to Back EU Oil Sanctions
  • U.S. Warns Russian Moguls of ‘No Hiding Place’ in Yacht Seizure
  • Russia Finds New Use for Nord Stream 2 as Europe Shuns Its Gas
  • Israel Says Putin Apologizes After Dispute Over Hitler Remarks
  • Megayachts Racing Across Oceans Show Oligarchs’ Desperation

All times CET:

Russian Energy Ban Would Make U.K. Inflation Worse: BOE’s Pill (10:51 a.m.)

A full European embargo on Russian energy supplies would drive inflation in the U.K. even higher, the Bank of England’s chief economist said.

Huw Pill told CNBC said there are “upside risks” to consumer prices if the European Union steps up efforts to sanction oil and natural gas imports from Russia in response to its invasion of Ukraine.

The BOE’s forecast for inflation to peak at 10.2% in October assumes energy costs stabilize over time.

Dubai Aerospace Writes Off Half a Billion on Planes Tied to Russia (10:49 a.m.) 

Dubai Aerospace Enterprise, the Middle East’s biggest plane-leasing firm, wrote off $538 million for aircraft stranded in Russia, after the Kremlin issued a law preventing foreign-owned jets from leaving the country without state permission. The company also filed insurance claims of $1 billion, and said this figure may rise.

Moscow has blocked the repossession of planes, as required by sanctions, stranding roughly 400 jets leased earlier to Russian companies.

Von der Leyen Says Oil Sanctions Plan May Take ‘Some Days’ (9:57 a.m.)

European Commission President Ursula Von der Leyen said finding unity on the proposed ban on Russian oil imports among the EU’s 27 member states isn’t easy, and may take “some days” longer.

She told an audience in Germany on Friday that she’s confident a deal will be reached.

EU Revises Russia Oil Plan to Placate Hungary (9:03 a.m.) 

The EU has proposed a revision to its planned Russia oil import ban that would give Hungary and Slovakia until the end of 2024 to comply, said people familiar with the matter. The Czech Republic would be granted an exemption until June 2024.

The revision would also extend the time frame for when a ban on shipping oil to third countries would kick in, from one month to three months. EU ambassadors meet on Friday to discuss the proposal.

All other member states would phase out their imports by the end of 2022 as originally proposed. Hungary has said it wants a five-year exemption, and Slovakia said Thursday it needs until the end of 2025 to comply.

Orban Rejects EU Proposal on Russian Oil Ban (8:09 a.m.) 

Hungarian Prime Minister Viktor Orban said he rejects the European Union’s latest proposal to ban Russian oil by the end of 2022, calling it tantamount to dropping a “nuclear bomb” on his country’s economy.

Orban said he wants a five-year exemption to comply with any ban. An embargo on Russian oil would require unanimous approval from all 27 EU member states.

Hungary’s leader on Thursday wrote to European Commission President Ursula von der Leyen, calling the potential adoption of a ban by year-end “a historical failure in the court of European integration.”

Germany Approves Howitzer Deliveries (7:55 a.m.)

Germany plans to send seven PzH 2000 rapid-fire howitzers to Ukraine in its latest effort to provide heavy weapons, according to a report by broadcaster ARD. The approval comes as Chancellor Olaf Scholz’s administration continues to struggle to secure ammunition for anti-aircraft tanks it agreed to transfer to Ukraine.

Tensions between Germany and Ukraine are showing signs of easing. Scholz said on Twitter that Foreign Minister Annalena Baerbock will visit Kyiv after Zelenskiy cleared up a spat with German President Frank-Walter Steinmeier.

Jill Biden Leaves for Eastern Europe Trip (4:45 a.m.)

Jill Biden left the U.S. for a trip that takes her to Romania and Slovakia, where she will visit U.S. troops, reaffirm ties with the two NATO allies and hear from Ukrainian refugees, her office said in a statement.

She also plans to meet Ukrainian mothers and children forced to flee their country due to Putin’s war. On Sunday in Slovakia, she will participate in events with displaced Ukrainian families to mark Mother’s Day, it said.

“It’s so important to the president and to me that the Ukrainian people know that we stand with them,” she told reporters before leaving.

Boehly’s Group Close to Deal for Chelsea (1:50 a.m.)

Chelsea is close to signing a sale agreement with a group led by former Guggenheim Partners President Todd Boehly, putting an end to a weeks-long bidding process for one of the most successful football clubs of the past two decades.

Boehly’s consortium could reach an agreement as soon as Friday with Chelsea and its owner, the sanctioned Russian oligarch Abramovich, according to people familiar with the situation who asked not to be identified because it was private. Representatives for the buyer group and the club didn’t immediately respond to requests for comment.

Envoy Says Frozen Funds Should Help Rebuild Ukraine (9:55 p.m.)

Ukraine’s ambassador to the U.S., Oksana Markarova, said funds from frozen Russian assets should be used to help rebuild the country.

“We fully support the idea to use those frozen assets in the future to compensate Ukraine and to use this money to for the rebuilding and reconstruction effort,” Markarova said at an event sponsored by the Christian Science Monitor. The ambassador said the move was justified because there is “no such thing as private banks or drilling companies in Russia.”

Ukraine Aid Bogs Down in U.S. Congress (9:34 p.m.)

Congress is moving slowly to meet President Joe Biden’s request for Ukraine aid amid an ongoing fight over Covid relief money and immigration and a drive to vote on abortion-related legislation in the Senate next week.

Biden last week requested $33 billion in military and humanitarian aid for Ukraine and other countries affected by Russia’s invasion. Behind-the-scenes talks among lawmakers this week have so far failed to produce a draft bill.

Zelenskiy Speaks to Bush by Video Link (9:15 p.m.)

Zelenskiy spoke with former President George W. Bush via video link to discuss Russia’s invasion in Ukraine and the U.S support for Kyiv, according to an emailed statement. They also discussed the “tragic events that happened” in the U.S. on Sept. 11, 2001, nine months after Bush was inaugurated.

“For me our conversation is important because you are an example of a strong leader,” Zelenskiy’s statement said he told the former president, inviting Bush to visit Ukraine. Bush said in a statement he was “honored” to speak with Zelenskiy, whom he called “the Winston Churchill of our time.”

Senate to Consider Biden’s Ukraine Envoy Pick (8:39 p.m.)

The Senate Foreign Relations Committee will take up the nomination of Bridget Brink to be the U.S. ambassador to Ukraine on May 10, with Democratic Chairman Bob Menendez pledging to “swiftly” confirm her to the position. The U.S. hasn’t had a confirmed ambassador to Ukraine since 2019.

Brink is the current ambassador to Slovakia and has spent her career working in Eastern Europe and on issues in the region for the State Department.

© 2022 Bloomberg

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It’s an ill wind that blows no-one any good. This may just be the tipping point to rescuing earth from the fossil fuel impact on our ecosystems. A side benefit would be Russia being put in its place as a minor economy with a mad leader.

End of comments.

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