Sunday, December 3

Ukraine Latest: Kharkiv-Area Offensive Retakes More Territory

Ukrainian President Volodymyr Zelenskiy said the nation’s army has recaptured “more than 30 settlements” in the Kharkiv region, with units of the National Police moving in as Russian forces are expelled. The Institute for the Study of War estimates Ukraine has recaptured 965 square miles of territory around Kharkiv.

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(Bloomberg) — Ukrainian President Volodymyr Zelenskiy said the nation’s army has recaptured “more than 30 settlements” in the Kharkiv region, with units of the National Police moving in as Russian forces are expelled. The Institute for the Study of War estimates Ukraine has recaptured 965 square miles of territory around Kharkiv. 

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The UN’s nuclear agency ramped up its warning about Ukraine’s Zaporizhizhia nuclear power plant, saying the facility may soon lose power and shut down its last remaining operating reactor after sustained shelling in the area. “This is an unsustainable situation and is becoming increasingly precarious,” the agency’s chief said.

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The World Bank and the European Commission estimated that reconstruction of Ukraine will cost at least $349 billion, based on damage inflict by early June, and the figure is expected to grow as the war goes on.

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

Key Developments

  • US Treasury Releases Guidance on Russian Oil-Price Cap Plan
  • US Sees Economic Reasons for Russia to Comply With Oil-Price Cap
  • Ukraine Military Breakthrough in North Threatens Russian Grip
  • Russian-Occupied Reactor at Increased Safety Risk, UN Warns
  • Russia Current-Account Surplus at Record Amid Signs Growth Slows

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On the Ground

Russia’s invasion of Ukraine is halfway through its seventh month. Kyiv’s forces are pushing back in the Kherson region to the south and around Kharkiv in the north. In the past day, Moscow’s forces launched 13 missile attacks and 22 air strikes, Ukraine’s General Staff said in an update. To strengthen the Russian grouping in the occupied territories of the Kherson region, a unit of the so-called “Kadyrovtsy”, formed on a national basis, arrived, numbering up to 1,300 people. The General staff also says private military companies in Russian-occupied areas have suffered significant losses. The claims can’t be independently verified. Russian forces were “likely taken by surprise” by Kyiv’s Kharkiv offensive, the UK defense department said.

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(All times CET)

Germany’s Baerbock Visits Kyiv (8:50 am)

Germany’s foreign minister arrived in Kyiv early Saturday in a previously unannounced visit, DPA reported.

Annalena Baerbock’s second visit to Ukraine’s capital since Russia’s invasion in February was intended to show that “that we will continue to stand by Ukraine as long as it takes,” Baerbock said. The trip comes a week after Ukraine’s prime minister visited Berlin.

Ukraine Seeks $1.5B From US Eximbank to Buy Gas (8:49 am)

Ukrainian Prime Minister Denys Shmyhal spoke with US Treasury Secretary Janet Yellen late Friday. The pair discussed energy security, including the upcoming heating season, according to an emailed statement.

Shmyhal said Ukraine is in talks to get $1.5 billion from the US Eximbank to purchase gas. Ukraine may have 15 billion cubic meters of gas in storage by Nov. 1, Ukrainian state-run energy company Naftogaz CEO Yuriy Vitrenko said Friday.

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Yellen stressed the need to identify “near-term, high-impact projects critical to rebuilding Ukraine’s economy.”

Ukraine Has Recaptured 2,500 Square Kms, ISW Estimates (7:30 am)

Ukraine is “likely clearing pockets of disorganized Russian forces caught in the rapid Ukrainian advance to Kupyansk, Izyum, and the Oskil River,” according to the Institute for the Study of War, a US-based think tank. “Ukrainian forces will likely sever Russian ground lines of communication to Izyum within the coming days, possibly collapsing Russian positions in this area,” it said.

ISW estimates Ukraine’s forces have captured 2,500 square kilometers (965 square miles) in Kharkiv region counteroffensives as of Friday. That’s double the most recent estimate from Ukrainian officials including Zelenskiy.

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Moscow’s troops were “likely taken by surprise” by Ukraine’s offensive operations in the Kharkiv region this week because of their focus on Kherson, the UK defense ministry said.

Zelenskiy Says More Than 30 Settlements In Kharkiv Region Liberated (7 am)

Ukraine’s army has liberated more than 30 settlements in the Kharkiv region so far, with units of the National Police returning to the areas, President Volodymyr Zelenskiy said late Friday.

“We are gradually taking control of new settlements — everywhere we are returning the Ukrainian flag and protection for all our people,” he said.

Zelenskiy urged bloggers not to report specific details of Ukraine’s defense operations before they’re announced by officials: “Do not complicate the task for our army with your haste.”

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US Releases Guidance on Russian Oil-Price Cap Plan (12:50 am)

The US Treasury issued rough compliance guidelines for its proposed cap on the price of Russian oil on Friday, shortly after officials said Russia would have an economic incentive to participate.

The guidance tasks private companies with enforcing the cap by seeking certification that Russian oil is sold at or below a price set by the US along with other Group of Seven members. The guidance is aimed at the insurance companies and financial firms that facilitate the international oil trade.

The cap is meant to be in place by the Dec. 5 for crude oil, and Feb. 5 for petroleum products, in line with the implementation of the European Union’s ban on services associated with seaborne oil and refined products.

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Ukraine Files Arbitration Case Against Gazprom (4:56 pm)

Ukraine’s state-run Naftogaz filed an arbitration case against Russia’s Gazprom PJSC for not paying for natural gas transit on time and in full, according to an emailed statement.

Naftogaz demanded Gazprom pay for transiting gas via Ukrainian territory as its contract includes a pump-or-pay clause — meaning the Russian firm must pay the minimum gas-transit fee even if it doesn’t move the contracted volumes. Russia cut its gas transit via Ukraine this year.

A hearing will be held in Zurich, according to statement. Gazprom didn’t immediately respond to a request for a comment sent by Bloomberg News.

Nuclear Plant Situation ‘Increasingly Precarious,’ UN Agency Says (4:30 pm)

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Operators at a Russian-occupied nuclear reactor in southeast Ukraine may soon have to draw on their last line of defense in order to prevent a nuclear accident, according to the direst warning yet issued by International Atomic Energy Agency monitors.

Continued attacks around the Zaporizhzhia nuclear power plant have cut power cables and rendered layers of safety-backup systems ineffective. Now, power systems in the nearby city of Enerhodar have been destroyed by shelling, IAEA chief Rafael Mariano Grossi said in a lengthy statement.

The IAEA called the situation “increasingly precarious.”

Kyiv’s Northern Breakthrough Threatens Russian Grip (2 pm)

A Ukrainian counteroffensive appears to be progressing in the north, but less so in the southern Kherson region that has attracted greater attention and Russian reinforcements.

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Ukrainian officials and Russian military bloggers alike on Thursday described a counteroffensive in the north that has surprised in its speed, the first time since the war began that Ukrainian forces have been able to push past Russian defenses on a more than tactical level.

Read more: Ukraine Army’s Breakthrough in North Threatens Russian Grip

Inflation in Ukraine Tops 23% as Prices Surge for Seventh Month (1:55 pm)

Ukraine’s inflation rate accelerated for a seventh month as the nation grappled with Russia’s invasion, which has devastated the economy and hampered logistics.

Consumer prices rose 23.8% in August from the previous year, driven by staples such as eggs and sugar, data published on Friday showed.

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Ukraine May Need $349 Billion to Recover from War Damage (1:30 pm)

The World Bank and the European Commission estimated that Ukraine’s reconstruction will cost at least $349 billion, according to an assessment that covered damage inflicted between Feb. 24 and June 1. The figure will only increase as the war, now in its seventh month, grinds on, the World Bank said.

The first stage will require $17 billion, of which $3.4 billion is needed already this year, Prime Minister Denys Shmyhal said. Ukraine’s government has to balance recovery projects and immediate needs, and the World Bank’s assessment will help the cabinet to prioritize.

Ukraine will need $105 billion over three years to restore education and health systems and heating infrastructure ahead of the winter season and to remove ruins and explosives, the World Bank estimated.



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