Monday, March 27

Ukraine Update: Russia Says Used ‘Kinzhal’ Missile in Strike

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Bloomberg News

(Bloomberg) —

Russia said it used a “Kinzhal” hypersonic missile for the first time to strike a western Ukraine target on Friday. Ukrainian President Volodymyr Zelenskiy said peace talks are Russia’s “only chance” given the growing number of countries imposing sanctions against it, urging Moscow to engage in negotiations.

U.S. President Joe Biden warned his Chinese counterpart of “implications and consequences” if Beijing provides material support to Russia. Xi Jinping told Biden that China regrets the war, but criticized American sanctions. That’s according to official accounts of a two-hour conversation between the leaders on Friday, their first since the invasion of Ukraine last month.

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Some investors said they received interest payments on Russian debt, easing fears of a default triggered by financial sanctions. Oilfield services providers Schlumberger and Halliburton Co. are curbing their Russia operations. Oil edged higher as the International Energy Agency warned of a supply crunch.

Key Developments

Biden Warned Xi of ‘Consequences’ for Backing Russia in WarInside Russia’s 96-Hour Cliffhanger to Sidestep Bond DefaultEU Officials Mull Using Sanctioned Russians’ Assets for UkraineRussia Peace Talks May Last Several Weeks, Kyiv Negotiator Says

All times CET

Russia Says It Used ‘Kinzhal’ Missile for First Time (8:22 a.m.) 

Russia used a “Kinzhal” hypersonic missile for the first time on Friday to target a large underground warehouse in western Ukraine, a Russian defense ministry spokesman said, according to Interfax.

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Igor Konashenkov told a a daily briefing that the strike in the village of Delyatyn, in Ukraine’s Ivano-Frankivsk region, also took out aviation ammunition. There was no immediate confirmation from Ukraine of the strike. 

Russia has previously used long-range missiles to strike targets in Ukraine’s far west, not far from the border with Poland. The Kinzhal system of air-to-ground missiles is one of a series of advanced strategic weapons unveiled by Russian President Vladimir Putin in 2018. 

Hypersonic Weapons — Who Has Them and Why It Matters: QuickTake

LG Halts Shipments to Russia (5:12 a.m.)

LG Electronics Inc. is suspending all shipments to Russia, joining Samsung Electronics Co. in halting sales to the country because of its invasion of Ukraine. LG is “deeply concerned for the health and safety of all people” and is committed to humanitarian support, the company said Saturday by email.

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Samsung suspended shipments to Russia earlier this month and South Korea’s government has also joined a list of countries announcing sanctions against the country.

Schlumberger to Suspend Russia Investment (4:23 a.m.)

Schlumberger said it will suspend new investment and technology deployment to its Russian operations. The oilfield contractor will “continue to actively monitor this dynamic situation and will fulfill any existing activity in full compliance with applicable international laws and sanctions,” Chief Executive Officer Olivier Le Peuch said in a statement.

The company previously said it would take an earnings hit from the combined effects of Russia’s attack on Ukraine and an increasingly snarled global supply chain that is slowing product shipments. Russia accounts for about 5% of its revenue, according to a filing.

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Zelenskiy Reiterates Need for Talks With Moscow (3:33 a.m.)

Ukrainian President Volodymyr Zelenskiy, in a nighttime Facebook video message from Kyiv, said that Russia’s “occupation forces were stopped in almost all directions” and that its initial plan to seize Ukraine has failed. Because of the growing coalition of countries imposing sanctions, peace negotiations are “the only chance for Russia,” he said. “It’s time to meet, it’s time to talk,” he said, addressing Moscow.

Blinken, Kuleba Discuss Civilian Casualties (12:45 a.m.)

Blinken and Kuleba discussed “the growing number of civilian casualties” in the war, State Department spokesman Ned Price said in a statement on Friday.

During their call, Blinken “reiterated robust U.S. support for the people of Ukraine through security, humanitarian, and economic assistance,” Price said, adding the Secretary commended the Ukrainians for defending their country against Russian forces. Kuleba and Blinken met at the Polish-Ukrainian border earlier this month.

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Halliburton Winding Down Russia Operations (12:25 a.m.)

Halliburton Co. said it’s winding down operations in Russia and will halt future business there amid sanctions imposed in response to President Vladimir Putin’s invasion of Ukraine. 

Halliburton, the world’s biggest provider of fracking, is alone among the three major oilfield-service providers to publicly declare a pullout from one of the world’s largest crude producers. The Russian oil sector relies on foreign technology, gear and expertise to sustain domestic output of of the Kremlin’s key sources of revenue.

Halliburton followed some of the largest oil explorers in announcing plans to abandon Russia including BP Plc and Shell Plc. The Houston-based fracker’s stock has climbed 15% since Russian troops began the assault on Ukraine late last month, almost four times the advance in the broader market. “The war in Ukraine deeply saddens us,” Halliburton Chief Executive Officer Jeff Miller said Friday in a statement. 

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Russia Default Fears Ease as Payments Reach Investors (10:38 p.m.)

Fears of a bond default by Russia eased after $117 million of interest payments due this week started to reach international investors, promising to temporarily avert a lapse that would have injected even more uncertainty into world credit markets. 

Money managers based in the U.K., Germany and the U.S. said on Friday they had received coupon payments on two Russian Eurobonds that were originally due on Wednesday. Credit rating companies still see a significant risk of default after sanctions largely cut Russia off from global finance.

EU Mulls Using Sanctioned Assets for Ukraine (10:15 p.m.)

EU officials are discussing the possibility of using the assets of sanctioned Russian tycoons to help fund Ukraine’s war recovery efforts, according to three people familiar with the matter.

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The idea is at a very early stage and no decision has been taken, the people said. Any decision over how to handle the assets would ultimately need to be made by member states.

“At this point the assets are only frozen,” said Eric Mamer, spokesman for European Commission President Ursula von der Leyen, when asked for comment. “The president has not asked for this to be explored.”

Ukraine Says Another 9,000 Civilians Evacuated (9:25 p.m.)

More than 9,000 civilians were evacuated from combat zones on Friday, including almost 5,000 from the besieged southern city of Mariupol, Ukraine’s Deputy Prime Minister Iryna Vereshchuk said in a video statement. 

Vereshchuk said seven humanitarian corridors, out of the nine routes that had been agreed, were open for evacuees, while a cease-fire was not respected in the Kharkiv region among others. Ukraine is seeking evacuations from the southwestern city of Kherson on Saturday.

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Oil Edges Higher as IEA Warns of ‘Emergency’ (9:15 p.m.)

Oil rose for a second day as the International Energy Agency warned markets are in an “emergency situation” that could get worse, pointing to looming supply strains from the loss of Russian exports. WTI for April delivery rose $1.72 to settle at $104.70 a barrel in New York.

No End in Sight for Ukraine-Russia Talks (8:39 p.m.)

Mykhailo Podolyak, Ukraine’s chief negotiator in talks with Russia, said Friday the talks could take weeks or longer as the two sides discuss security guarantees, a cease-fire, withdrawal of Russian troops and a resolution of disputed areas. Ukraine, he said, will not give up any territory. 

Podolyak defined the Russian invasion as a “Syrian or Afghan type of war” as Russian forces target civilians and large cities. 

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White House Weighs in on Xi Call (7:58 p.m.)

Biden warned warned Xi of “implications and consequences” should China support Russia’s invasion of Ukraine in a video conference on Friday, the White House said. 

“The president underscored his support for a diplomatic resolution to the crisis,” the White House said. “The two leaders also agreed on the importance of maintaining open lines of communication, to manage the competition between our two countries.” 

EU Discussing New Fund to Help Ukraine Finance Defense (7:30 p.m.)

European Council President Charles Michel said he discussed with Ukrainian President Volodymyr Zelenskiy the idea of creating an international fund to help the country provide services amid the invasion by Russia.

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The Ukraine Solidarity Fund, which would be paid for by international donors, would help Ukraine with immediate defense efforts and basic services, as well as the eventual rebuilding of the country. EU leaders will discuss the fund proposal when they meet in Brussels next week.

IAEA Says Repairs on Nuclear Plant Power Line Has Begun (6:33 p.m.)

Ukrainian engineers have begun repairing one of three disconnected power lines linking the Zaporizhzhya Nuclear Power Plant and expect it to be working again early next week, the International Atomic Energy Agency (IAEA) Director General Rafael Mariano Grossi said in a statement, citing Ukraine’s regulator.

Xi Laments War, Criticizes Sanctions in Call With Biden (5:50 p.m.)

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Xi told Biden that China didn’t want to see war in Ukraine, according to summaries released by the Chinese side, and observed that “the prevailing trend of peace and development is facing serious challenges”‘ and “the world is neither tranquil nor stable.”

But he criticized Western sanctions against Russia, saying that ordinary people will suffer and that further escalation “will also trigger a serious crisis in global trade and economy, finance, energy, food, industrial supply chain.” 

Ukraine Says 222 People Killed in Kyiv Since Start of War (5:15 p.m.)

Since Russia launched its invasion on Feb. 24, 222 people have been killed in Ukraine’s capital, including 60 civilians, four of which were children, Deputy Mayor Mykola Povroznyk said. 

Casualties in Kyiv also included 889 wounded, including 241 civilians, of which 18 were children.

Fifty-five buildings in the city — including 36 residential buildings, five private houses, and 11 schools and kindergartens — suffered damage from shelling.

©2022 Bloomberg L.P.



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