Ukraine Latest: US Pledges More Military Aid Including Rockets

(Bloomberg) -- The US pledged an additional $1 billion in military assistance to President Volodymyr Zelenskiy’s government that includes artillery and advanced rocket systems, as Russia pushes to capture Ukraine’s last major foothold in the eastern region of Luhansk.

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Germany’s Olaf Scholz, France’s Emmanuel Macron and Italy’s Mario Draghi are planning to visit Ukraine on Thursday to meet Zelenskiy, even as the Kremlin further tightens its grip on European energy markets by curbing gas shipments.

Shipments via the key Nord Stream pipeline dropped by about 60%, a move Germany’s vice chancellor said was politically motivated, “to unsettle and drive up prices.” Asian LNG prices surged to a two-month high on mounting concerns over supplies.

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

Key Developments

• Germany Sets Path for Beefed-Up NATO Defenses on Eastern Flank

• US Hires New Crew, Sails Seized Russian Megayacht Toward Hawaii

• Putin Is Seen Keeping Leverage by Stalling on Ukraine Grain Deal

• US Giving Artillery, Rockets, Ammo in $1 Billion Ukraine Package

• Xi in Call With Putin Reaffirms Support for Russia’s Security

• Germany Says Latest Russian Gas-Flow Cuts Politically Motivated

(All times CET)

Germany Lagging on Weapons Deliveries: Institute (7:30 a.m.)

The volume of weapons promised to Ukraine has increased significantly in recent weeks though Germany in particular is lagging behind on actual deliveries, according to the latest data collected by the Kiel Institute for the World Economy.

Poland and the UK have pledged and delivered considerably more than Germany, while Canada and Norway have made slightly smaller pledges but also sent much more, the institute said, citing data through June 7.

In absolute terms, the US has already provided weapons worth around 10 times more than Germany, it added. “This helps to explain the Ukrainian government’s urgent appeals to the German government,” according to Christoph Trebesch, a Kiel Institute research director and head of the team compiling the Ukraine Support Tracker.

US Sails Seized Russian Megayacht Toward Hawaii (6:00 a.m.)

US authorities are sailing the $325 million yacht they seized last week that’s linked to Russian billionaire Suleiman Kerimov toward Hawaii -- a big win for the Biden administration as it looks to confiscate Russian assets and punish oligarchs for their country’s invasion of Ukraine.

The 348-foot Amadea, now sailing under an American flag and manned by a new crew, is headed for the Hawaiian Islands, according to vessel data compiled by Bloomberg and space-based analytics firm Spire Global Inc.

Follow the Amadea’s journey here.

Asian LNG Prices Surge to Two-Month High (5:35 a.m.)

Natural gas supply disruptions around the globe pushed Asian prices to the highest level in two months, threatening to further strain economies and accelerate inflation.

Asian spot LNG prices Thursday were seen rising above $30 per million British thermal units for the first time since April, according to traders. That’s the highest level for this time of year, and a roughly 50% jump in the last month.

Read more: Asian LNG Prices Surge to Two-Month High on Mounting Supply Woes

Gazprom Plans to Cut Gas Supplies to OMV: Vedomosti Says (2:19 a.m.)

Russia’s Gazprom notified OMV that it plans to reduce natural gas supplies, Vedomosti reported, citing an unidentified representative of the Austrian company. The OMV representative didn’t disclose the volume of the planned supply cut, the Russian business newspaper reported.

Read more: Russia Steps Up Energy Wars With Gas Cuts to Europe’s Top Buyers

US Pledges $1 Billion More in Military Aid (10:23 p.m.)

President Joe Biden called Zelenskiy and vowed to provide an additional $1 billion in security assistance for the country as it seeks to stave off Russian forces in eastern battle zones.

The package includes “additional artillery and coastal defense weapons, as well as ammunition for the artillery and advanced rocket systems that the Ukrainians need to support their defensive operations in the Donbas,” Biden said in a statement Wednesday.

The weapons package includes for the first time launchers for vehicle-mounted Harpoon anti-ship missiles, according to people familiar with the matter. Denmark has said it will supply the missiles. The US package also includes $320 million for secure radios and related equipment, $55 million for thermal night-vision optics and $160 million for training, according to one of the people.

Ukraine Steelmaker Says Russia Stole Its Metal (9:21 p.m.)

A Ukrainian steelworks owned by billionaire Rinat Akhmetov accused Russia of taking its metal from Mariupol for resale back home and asked Zelenskiy to sanction the “pirates.”

Metinvest said the River Sea freight company transported the metal to the Russian port of Rostov-on-Don in late May.

River Sea director Gennady Arustamov declined to comment, and Moscow denies targeting civilian installations and infrastructure.

Putin Seen Stalling Grain Deal for Leverage (7:35 p.m.)

Senior European officials are not optimistic about the chances of Putin agreeing to a deal that would allow Ukraine to resume its grain exports, even as Moscow and Kyiv may take part in UN-facilitated discussions this week.

One of the people said the Kremlin had manufactured the debate as a means to get sanctions lifted and was intent on using the threat of global hunger as a bargaining tool in any future peace talks.

A number of issues remain unsolved while alternative plans to get the grain out of Ukraine are fraught with security and logistical challenges, the people said. More than 25 million tons of grain, sunflower oil and other commodities are estimated to be stuck in Ukraine.

Scholz, Macron, Draghi Plan Kyiv Visit (7:15 p.m.)

The three European leaders would be making the highest-profile visit to Ukraine since Russia invaded at the end of February. Romanian President Klaus Iohannis is also set to take part in the visit, according to people familiar with the matter.

Macron has come under fire from officials in Ukraine for his efforts to engage diplomatically with Putin. It will be the first visit to Kyiv since Russia’s invasion for Macron, Draghi and Scholz.

Ukraine Gets Western Balkan Backing for EU Ambitions (5:26 p.m.)

Zelenskiy met with the prime ministers of Albania and Montenegro, who traveled to Kyiv to offer their backing for the nation and its ambitions to join the European Union. The leaders, Edi Rama and Dritan Abazovic, visited areas that had been under Russian occupation, expressing their support for candidacy status.

“Our countries must be full-fledged members of the European Union, and we agree that our countries are not competing on the European path but reinforce possibilities of each other,” Zelenskiy said during a joint press conference in Kyiv.

Putin Opponent Navalny Moved to Strict-Regime Prison Colony (5:06 p.m.)

Russian opposition leader Alexey Navalny was transferred to a top-security penal colony to serve a new nine-year prison sentence, his supporters said Wednesday.

“Hi everyone from the strict-regime zone,” Navalny, 46, said in an Instagram post, recounting his transfer along with his book collection, which he said weighed 50 kilograms.

Turkey Says Position on NATO Won’t Change in Blow to June Summit (3:48 p.m.)

Turkey is maintaining its opposition to Sweden and Finland joining NATO unless they address its security concerns, President Recep Tayyip Erdogan said, leaving little hope that enlargement of the bloc could get underway by a summit meeting in Madrid this month.

“We will certainly not change our stance on the NATO issue until Sweden and Finland take clear, concrete and decisive steps in the fight against terrorism,” Erdogan told his ruling AK Party lawmakers in parliament.

Turkey Says Position on NATO Won’t Change in Blow to June Summit

Germany Says Latest Russian Gas-Flow Cuts Politically Motivated (1:32 p.m.)

Russia has tightened its grip on European energy markets, with German Economy Minister Robert Habeck saying Gazprom PJSC’s decision to curb natural gas shipments via the Nord Stream pipeline is “politically motivated.”

The Russian gas giant had blamed a drop in 40% in shipment capacity on technical issues, with a key gas turbine that was sent abroad for maintenance ending up stuck in Canada due to sanctions. Gazprom was also unable to ship a second turbine for repairs due to the penalties. Habeck said maintenance work that would have a “relevant” impact on supply isn’t due to be carried out until the fall and, and in any case, wouldn’t affect 40% of the infrastructure.

“I have the impression that what happened yesterday is a political decision and not a decision that can be justified in technical terms,” he told reporters in Berlin.

China’s Xi Holds Second Phone Call With Putin Since War Started (12:55 p.m.)

The Chinese leader reaffirmed Beijing’s support for Russia’s sovereignty and security concerns in a phone call with counterpart Putin, the state broadcaster China Central Television reported.

The call, which came on Xi’s 69th birthday, was the second between the two heads of state since the Russia’s invasion of Ukraine in February. “China is willing to continue mutual support with Russia on issues related to sovereignty, security and issues of major concern,” Xi said, according to the CCTV report. The two leaders discussed economic cooperation, trade and military-technical ties, according to the Kremlin.

Read more: Xi in Call With Putin Reaffirms Support for Russia’s Security

Kishida to Be First Japanese Premier to Attend NATO Summit (12:42 p.m.)

Prime Minister Fumio Kishida plans to attend a NATO summit later this month, showing support for its efforts during Russia’s war in Ukraine by becoming the first Japanese premier to take part in such a meeting of the military alliance.

Read more: Kishida to Be First Japanese Premier to Attend NATO Summit

NATO Nations to Agree on Long-Term Support Package for Ukraine (12:27 p.m.)

NATO member states are set to agree to a long-term support package for Ukraine as well as a new force model for the alliance when defense ministers gather in Brussels later today and tomorrow, NATO Secretary General Jens Stoltenberg told reporters.

The package is to help Ukraine’s armed forces transition from Soviet to modern equipment over the long-term and increase their interoperability with NATO standards, Stoltenberg said.

The new model would maintain more forces at higher readiness with specific contingents preassigned to allies, he said. It would also fit into the alliance’s broader plans to overhaul its long-term defense posture, with a significant increase in troops, ships and jets apportioned to defend the eastern flank.

Macron Says Talks Needed With Putin at Some Point (11:05 a.m.)

The French leader said fresh discussions between Ukraine and the European Union were needed to send a “signal of support” in a critical moment -- and that a line to the Kremlin must remain open. His comments come after he caused an uproar by saying that the allies shouldn’t “humiliate” Moscow and risk a peaceful solution.

“At some point, President Zelenskiy will need to negotiate with Russia and we’ll also need to be at the table, bringing security guarantees,” Macron told reporters during a visit to a military base in Romania’s Black Sea coast. “This is the reality and this needs to happen.”

“Russia is a big power and we don’t want to start a war with the Russian people, but for Ukraine to win and the war to end we need to negotiate,” he said, declining to comment on reports of an imminent visit to Kyiv.

Russia’s Oil Revenue Jumps to $20 Billion in May, IEA Says (10:30 a.m.)

Russia’s oil-export revenues surged to around $20 billion in May despite shipping lower volumes, as a rally in global energy prices buoyed its coffers, according to the International Energy Agency.

That’s a 11% increase from a month earlier, taking Russia’s total revenue for shipping crude and oil products roughly back to levels before the invasion of Ukraine, even as exports fell by about 3%, the IEA estimates in its monthly report published Wednesday.

Rosneft Examines Idea of Dubai Trading Unit (10:21 a.m.)

Russia’s state oil producer has explored the idea of creating a trading venture in Dubai, the latest sign of how sanctions against Moscow are disrupting the nation’s export system.

Officials from Rosneft PJSC visited the emirate in the past month and met with advisers who could assist in setting up a new entity, according to people with knowledge of the matter, who asked not to be identified as the details are private. Rosneft didn’t immediately respond to a request for comment.

Eni Said to Be in Talks With Egypt on LNG Sales (10:08 a.m.)

Eni SpA is in talks to boost gas imports from Egypt to Italy and Europe, as Rome looks for ways to wean itself off Russian supplies of energy, people familiar with the matter said.

The Italian oil giant already has a deal with Egyptian state energy firm EGAS to boost flows of liquefied natural gas to Europe by 3 billion cubic meters per year, and the new agreement would see Eni and Egypt add capacity for export to Italy beyond that level within the next two years, the people said, asking not to be named discussing confidential deliberations.

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