US backs $1.5bn weapon sale to NATO allies

Russia plans to reject requests from foreign banks to sell their units in the country while sanctioned Russian banks are unable to sell their business abroad.
Image: Erin Trieb/Bloomberg

The US State Department said it supports selling a total of $1.45 billion in weapons to NATO allies Estonia and Norway. Ukraine’s defense minister earlier said the first M270 Multiple Launch Rocket System arrived in the country and would bolster the country’s ability to hit long-range targets.

The UK summoned Russia’s ambassador following reports that a British man taken prisoner by Russian-backed separatists had died. Foreign Secretary Liz Truss said Moscow bears “full responsibility.”

Russia plans to reject requests from foreign banks to sell their units in the country while sanctioned Russian banks are unable to sell their business abroad. And President Vladimir Putin ousted his top defense-industry official as Russia digs in for a long war.

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

Key Developments

  • EU Stalls on Ukraine Aid as Fears Spike of Gas Crisis at Home
  • Putin Ousts Defense-Industry Head as Kremlin Looks to Long War
  • EU Proposes New Russia Sanctions, Fixes to Earlier Actions
  • Surging Crimea Shipments Point to Stealing of Ukraine Grain

On the ground

Almost five months into the war, Moscow’s forces have repeatedly hit civilian targets in the past week. In the past day hours there were at least 31 rocket strikes in the Mykolaiv region on civilian infrastructure, two universities, and residences, said governor Vitaliy Kim. Strikes on the southern city and elsewhere in Ukraine have intensified recently. At least 23 people, including a four-year-old girl, were reported dead and dozens are injured or unaccounted for after three missiles hit Vinnytsia, about 250 kilometers (155 miles) southwest of Kyiv, Governor Serhiy Borzov said.

MFA of Ukraine ????????

@MFA_Ukraine

#Mykolaiv under #Russian massive attack. At least 10 missiles were launched at the city: 2 universities were damaged.

Well-educated #Ukrainians, a prosperous nation is a “threat” to #Russia. This is the war for freedom and the future of the world.

????Mykolaiv OVA

#StopRussianWar

Sent via Twitter for Android.

View original tweet.

(All times CET)

G-20 Meeting Expected to End Without Formal Communique: Reuters (3 a.m.)

The G-20 finance ministers meeting is expected to conclude without a formal communique as the Ukraine-Russia war continues to divide the group, Reuters reports, citing two unidentified people familiar with the matter.

Japan Will Aim to Keep Stake in Russia’s Sakhalin-2, Nikkei Says (2 a.m.)

Japan will seek to maintain its stake in the Sakhalin-2 natural gas project in Russia’s far east, the Nikkei newspaper said, after Putin signed a decree transferring rights to a new Russian company just over two weeks ago.

The decree gave stakeholders a month to say whether they’ll take a holding in the new company. The Japanese government has proposed to trading companies with stakes in the existing operator that they remain as shareholders after the transfer, the paper reported, without saying where it got the information.

Wheat Falls to Pre-War Low (10:45 p.m.)

Chicago wheat futures extended losses back to the lowest since before Russia invaded Ukraine in February, capping its worst week in a decade with surging shipments of agricultural goods in Crimea underscoring how grain is still entering world markets despite the war.

Futures slumped as much as 3.7%, briefly wiping out all of the gains from 2022, before trimming losses and settling 1.8% lower at $7.81 a bushel.

Ukraine Accuses US, European Banks Over Russia Links: FT (10:30 p.m.)

Ukraine has told banks this week in the US and Europe to cut ties with groups that trade Russian oil, the Financial Times reported, citing letters it had seen.

Oleg Ustenko, an economic adviser to the Ukrainian president, wrote to banks, including Jamie Dimon of JPMorgan and Noel Quinn of HSBC asking them to stop financing firms that trade Russian oil and sell shares in state-backed companies Gazprom and Rosneft. Letters were also sent to Citigroup and Crédit Agricole.

The banks were accused of “prolonging” the war by giving credit to firms that ship Russian oil. They were also told they would be blocked from participating in post-war reconstruction in Ukraine, the report said.

State Department Backs Weapons Sales to Estonia, Norway (9:27 p.m.)

The US State Department said it supports the sale of $950 million worth of AIM-120 missiles to Norway and $500 million for HIMARS Rocket Systems to Estonia — both key NATO allies bordering Russia.

In a statement announcing the decision, the State Department said the sales will enhance the national security of the US. The principal contracts benefiting from the sale are Lockheed Martin Corp. and Raytheon Missile Systems Co.

Multiple Launch Rocket System Arrives in Ukraine (6:41 p.m.)

Ukraine’s Defense Minister Oleksiy Reznikov said on Twitter that the country received the first M270 MLRS intended to help hit targets further from the frontlines.

Oleksii Reznikov

@oleksiireznikov

Long Hand Family of #UAarmy has been enlarged: the first MLRS M270 have arrived!

They will be good company for #HIMARS on the battlefield.

Thank you to our partners .

No mercy for the enemy.

*Photo by @SkyNews

Sent via Twitter for iPhone.

View original tweet.

Russia Plans to Thwart Sale of Foreign Bank Units (5:34 p.m.)

Putin’s government plans to reject requests from foreign banks to sell their units while sanctioned Russian banks are unable to sell their business abroad.

If a foreign bank seeks to sell branches in Russia, the authorities will block the move, the Interfax news service cited Deputy Finance Minister Aleksey Moiseev as saying. Citigroup Inc. said earlier that it’s considering a “full range of possibilities” on exiting its Russia business.

Surging Crimea Shipments Point to Stealing of Ukraine Grain (5 p.m.)

The Russian-occupied peninsula of Crimea is shipping more than 50 times the volume of food it usually does, likely indicating that seized Ukrainian grain is being taken abroad, according to analysts and the Kyiv School of Economics.

The port of Sevastopol shipped about 462,200 tons of agricultural goods since the beginning of March, according to Geneva-based researcher AgFlow. Last year, the port shipped about 8,000 tons.

Putin Shuffles Defense-Industry Officials (4:41 p.m.)

Russia’s president reassigned the top official responsible for military production as the Kremlin digs in for a long war in Ukraine that’s tested an industry long plagued by inefficiency and corruption.

He named Yury Borisov, formerly deputy prime minister, to head Russia’s space agency. Responsibility for defense production passed from Borisov to Industry Minister Denis Manturov, who was promoted to deputy prime minister.

Putin Thursday signed a law allowing the Russian government to impose special measures, including night shifts and overtime work, to boost weapons repairs and production of military equipment, citing a “short-term increased need.”

Truss Says Moscow Bears Full Responsibility for UK Prisoner Death (4:09 p.m.)

The UK Foreign Office said it had summoned Russian ambassador Andrey Kelin following reports British national Paul Urey had died in captivity after being taken prisoner by Moscow-backed separatists in April.

“I am shocked to hear reports of the death of British aid worker Paul Urey while in the custody of a Russian proxy in Ukraine. Russia must bear the full responsibility for this,” Foreign Secretary Liz Truss said in a statement.

A representative of the self-proclaimed Donetsk People’s Republic in eastern Ukraine said Urey died on July 10, according to Interfax. The reported cause of death was chronic disease including type 1 diabetes.

Kyiv Gains Access to EU Health Program (3:05 p.m.)

Ukraine will get access to EU’s 5.3 billion-euro health program, allowing it to support its health care sector in the long-term, after an agreement signed by the bloc’s Health Commissioner Stella Kyriakides on Friday during a visit to Lviv, western Ukraine. The EU4Health program will also help mitigate immediate combat-related damage.

Stella Kyriakides

@SKyriakidesEU

Many war victims need prostheses and rehabilitation.

I heard most powerful stories by those wounded. I congratulate the team of the rehabilitation centre for their great work!

The EU will continue to support Ukraine with the same commitment.

Sent via Twitter for iPhone.

View original tweet.

Moscow Aims to Control Oil Pricing With New Benchmark (1:16 p.m.)

Russia’s government has made a plan to create a national oil benchmark next year, as it seeks to protect itself from efforts by the West to restrict the flow of petrodollars to the country.

Key ministries, domestic oil producers and the central bank plan to launch oil trading on a national platform in October, according to a document seen by Bloomberg News.

Donetsk Separatists Say British Prisoner Has Died: Interfax (12:40 p.m.)

A representative of the Donetsk separatist republic said Paul Urey, a British man in captivity, died on July 10, according to Interfax. The reported cause of death was chronic disease including type 1 diabetes.

Urey was detained along with another British man, Dylan Healy, at a checkpoint in southern Ukraine in late April while he was working independently as an aid volunteer, according the BBC. Two other British men, Shaun Pinner and Aiden Aslin, as well as Moroccan Brahim Saadoun, were sentenced to death last month in the region, Tass reported, citing the Donetsk News Agency.

© 2022 Bloomberg

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