Saturday, May 28

Ukraine Latest: Russia Says It Cut Gas Flows to Poland, Bulgaria

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(Bloomberg) — Russia said it stopped natural gas flows to Poland and Bulgaria on Wednesday, making good on a threat to cut off buyers if they refuse Russian President Vladimir Putin’s demand to pay in rubles. European gas prices surged more than 20% on the move and the euro fell to its lowest against the dollar since April 2017.

Shenzhen-based drone-maker DJI, the world’s largest producer of unmanned aerial vehicles, halted all business activities in Russia and Ukraine, becoming the highest-profile Chinese company to withdraw from the war-torn region.

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United Nations Secretary-General Antonio Guterres met Putin in Moscow, seeking to revive diplomatic efforts to end the war more than two months after the Russian president ordered the invasion of his neighbor. Guterres next heads to Ukraine for talks with President Volodymyr Zelenskiy.

Key Developments

Gazprom Says It Cuts Gas to Poland, Bulgaria on Non-PaymentDJI Becomes Most Prominent Chinese Firm to Halt Russia BusinessRussia Left Swaths of Ukraine Seeded With Mines, Aid Group SaysMoldova Accuses Moscow-Backed Separatists of Fueling TensionsGerman Minister Says Full Embargo on Russian Oil ‘Manageable ‘Why Russia’s View of ‘Tactical’ Nukes Raises Alarms: QuickTake

Bulgaria Says It Has Gas for at Least a Month (8:55 am)

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Bulgaria has secured uninterrupted supplies of gas for at least a month from alternative sources, Energy Minister Alexander Nikolov told reporters in Sofia.

“Natural gas is used more as a political and economic weapon in the current war, and not in the context of legal, commercial relations,” Nikolov said, adding that Bulgaria hasn’t violated any contracts and has paid its April invoices in US dollars . “Bulgaria won’t hold negotiations under pressure and with its head low.”

Russia Cuts Gas to Poland and Bulgaria (8:27 am)

Gazprom PJSC said it has halted gas flows to Poland and Bulgaria and will keep the supplies turned off until the two countries agree to Moscow’s demand to pay for the fuel in rubles.

Gas surged more than 20% on Wednesday as traders digested the sudden move and calculated which countries will be hit next.

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Chinese Drone Maker DJI to Suspend Business (6:04 am)

Drone-maker SZ DJI Technology Co. is temporarily suspending business to comply with regulations in various jurisdictions, it said in a brief statement without elaborating. Its halt follows US sanctions on Russia for invading Ukraine, which Washington has threatened to enforce broadly.

DJI’s move to halt business sets it apart from other major Chinese corporations. China has urged an end to the war in Ukraine but refuses to criticize the invasion, vowing instead to maintain trade relations with Russia, a key global energy supplier.

Read more: DJI Becomes Most Prominent Chinese Firm to Halt Russia Business

Euro Falls, Oil Gains on Gas Flow Worries (3:59 am)

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The euro touched the weakest level versus the greenback since 2017 amid worries that Moscow may choke gas flows to Europe, hurting the region’s growth in the fallout from Russia’s invasion.

Oil extended gains, with West Texas Intermediate futures climbing above $102 a barrel after rising 3.2% on Tuesday.

Ammunition Depot Fire in Russia’s Belgorod, Tass Says (3:58 am)

An ammunition depot caught fire in Russia’s Belgorod region in the vicinity of border with Ukraine, Tass reported, citing a post on Telegram from Vyacheslav Gladkov, a local governor. The governor said there were no reports of injuries or damage to civilian buildings.

Renault May Transfer Russia Unit to Local Owner, IFX Says (11:30 pm)

French carmaker Renault SA may hand its 68% stake in Russian unit AutoVAZ to a research institute that reports to the Moscow government, Interfax reported, citing Russian Industry Minister Denis Manturov.

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The sale may take place for a token sum with Renault keeping an option to get the shares back within five or six years if it decides to return to Russia, Manturov told Interfax. A spokesperson for Renault declined to comment when contacted by Bloomberg News.

US Weapons Stockpile Risks Running Low (10:45 pm)

US weapons stockpiles could run out in several months if the Biden administration continues to send war-fighting supplies to Ukraine, defense experts told Congress. “It’s a huge threat to our security,” Ellen Lord, former under secretary of defense for acquisition and sustainment , said at an Armed Services Committee hearing.

Lord said the US has sent almost a quarter of its stockpile of Stinger missiles to Ukraine. David Berteau, president of the Professional Services Council, said that since the Russian invasion of Ukraine, the US is readying almost one-third of available weapons stockpiles with no current contracts to replenish them.

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Russia to Cut Gas Supplies to Poland and Bulgaria (9:36 pm)

Russia will cut off the gas to Poland and Bulgaria on Wednesday in a major escalation in the standoff between Moscow and Europe over energy supplies and the war in Ukraine.

Moscow is making good on a threat to halt gas flows to countries that refuse President Vladimir Putin’s new demand to pay for the fuel in rubles. The European Union has rejected the move in principle but now payment deadlines are starting to fall due, governments across Europe need to decide whether to accept Putin’s terms or lose crucial supplies — and face the prospect of energy rationing.

European gas prices surged as much as 17% and the euro tumbled to its lowest against the dollar since April 2017.

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Putin Open to UN Role in Mariupol, Guterres Says (8:44 pm)

Putin “agreed in principle” to involvement by the United Nations and the International Committee of the Red Cross in evacuating civilians from the besieged Azovstal steel plant in Mariupol, according to a UN statement after Secretary-General Guterres met the Russian president in Moscow.

Putin said during the meeting that Russia isn’t refusing to negotiate with Ukrainians, according to an excerpt shown on state TV. Officials from both Russia and Ukraine have said the talks are at a dead end. Guterres plans to visit Ukraine on Wednesday.

China Hasn’t Yet Supported Russia’s Invasion, Blinken Says (7:48 pm)

The US hasn’t yet seen China provide “significant” military support for Russia’s invasion of Ukraine, Secretary of State Antony Blinken told the Senate Foreign Relations Committee.

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Blinken said China’s refusal to take a stand against the invasion is creating “significant reputational risk” for Beijing.

Kremlin Weighs Suspending Regional Elections (4:32 pm)

The Kremlin is considering a plan to suspend regional elections set for September amid concerns about growing social tension due to the war and sanctions imposed by the US and its allies, according to people familiar with the discussions.

The proposal could be brought formally to Putin as soon as Wednesday, Kommersant and RBC newspapers reported. While polls show support for Putin has surged since the invasion, the discussions are an indication of the Kremlin’s worry about the rising political and economic costs as fighting continues and living standards decline.

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Kremlin Sees Ukraine Breaking Into Several States (3:32 pm)

Ukraine may collapse into several states, Russian Security Council Secretary Nikolai Patrushev said, in the latest comments by a senior Kremlin official that appear to go beyond attempts to cement control over separatist-held territory.

Patrushev blamed the conflict on the “policy of the West” and Ukrainian authorities in an interview with the state-run Rossiiskaya Gazeta newspaper.

Moldova Says Transnistria Forces Behind Blasts (3:30 pm)

Moldova’s President Maia Sandu said forces within the separatist region of Transnistria that back Russia’s war in Ukraine were behind the recent blasts that rocked several sites there.

“We condemn any provocation and attempts to drag Moldova into actions that may endanger peace within the country,” Sandu told journalists as her government raised its level of security readiness at key institutions and infrastructure sites.

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An observation mission from the Organization for Security and Co-operation in Europe may arrive in Moldova this week to aid communication between the government in Chisinau and the self-proclaimed administration in Transnistria.

Putin Says Ukraine Should Tell Mariupol Troops to Surrender (2:55 pm)

Ukraine should order its troops in Mariupol’s blockaded Azovstal steel plant to lay down their arms and surrender, Putin told Turkish leader Recep Tayyip Erdogan, the Kremlin said in a statement.

Putin has ordered Russian troops not to storm the complex and seal it off instead. Ukrainian officials said at the weekend attacks continued on the plant and it wasn’t possible to relieve forces and citizens trapped there.

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Germany Says Embargo on Russian Oil ‘Manageable’ (2:52 pm)

Germany has cut its reliance on Russian oil enough to make an embargo “manageable,” Economy Minister Robert Habeck told reporters in Warsaw.

Oil from Russia accounts for about 12% of German imports currently, down from 35% before the invasion, Habeck said. Germany’s long-standing reluctance to stop buying Russian energy has put the country at odds with Ukraine, which accuses it of financing the Kremlin’s war machine.

UN Projects Up to 8.3 Million Refugees (11:30 am)

As many as 8.3 million refugees are expected to flee Ukraine by the end of this year, according to the UN Refugee Agency.

More than 5.2 million people have fled since Russia attacked on Feb. 24, a spokesperson for the agency said at a briefing in Geneva. The UN agency initially projected Russia’s invasion could create 4 million refugees. The UN Office for the Coordination of Humanitarian Affairs doubled its appeal for aid to $2.25 billion due to the “worsening situation.”

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