Ukraine Update: Macron, Putin to Discuss Mariupol Evacuation

(Bloomberg) -- Russia’s military said it’s focusing on taking full control of Ukraine’s eastern Donbas region, a signal that the Kremlin may be backing away from more ambitious military gains after a month of fighting. 

The U.S. and European Union unveiled an agreement to help Europe wean itself off Russian fuel imports. President Joe Biden met with U.S. troops in eastern Poland not far from the Ukrainian border. Russian Foreign Minister Sergei Lavrov accused the U.S. and EU of aiming to “destroy” Russia through “hybrid war, a total war.” 

Authorities in Ukraine’s southeastern port of Mariupol said that about 300 people were killed when Russian forces struck a theater there this month. French President Emmanuel Macron said he’ll talk with Russia’s Vladimir Putin by Monday about an evacuation plan for the city.

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

Key Developments

• Russia Says Donbas Is Ukraine Focus in Possible Shift in War Aim
• U.S., EU Reach LNG Supply Deal to Cut Dependence on Russia
• Vucic Welcomes Russian Overture as EU Pressure on Serbia Builds
• As War Rages On, Kyiv Drugmaker Inks Deal for Pfizer Covid Pill
• What Russia Invasion, Sanctions Mean for Global Economy

All times CET:

Zelenskiy Says Russia Realizing Talks Are Necessary (7:10 a.m.)

President Volodymyr Zelenskiy said Ukraine’s military defense is forcing Russia’s leadership to realize that “talks are necessary,” after earlier bemoaning a stalemate amid ultimatums and demands he cede territory.

“The conversation must be meaningful. Ukrainian sovereignty must be guaranteed, Ukraine’s territorial integrity must be ensured,” Zelenskiy said in a video address late Friday. The Russian Defense Ministry said earlier in the evening that its forces, which have failed to take several major cities, would focus on taking control of the full eastern Donbas region.

In the past week, Ukraine set up 18 humanitarian corridors, allowing 37,606 people to flee from blockaded cities, Zelenskiy said. The situation in Mariupol, the southeastern port city that’s seen some of the most brutal fighting, remains “absolutely tragic,” he said, adding that the Russia military must bear responsibility for crimes against the Ukrainian people.

Ukraine Will Seek New Security Guarantees, Yermak Says (7 a.m.) 

Ukraine will seek a new “structure of security guarantees” after the war, presidential adviser Andriy Yermak told the Atlantic Council in a video interview.

“Give the world the model that will prevent Russia from conducting an aggressive policy for many years, not only after the end of fighting on Ukraine territory,” he said. 

Yermak reiterated that Ukraine won’t abandon any of its territory and urged western nations to grant more military aid, exchange intelligence data, and “close the sky” above Ukraine by providing anti-missile systems and fighter jets.

UN Women’s Body Condemns Invasion (5 a.m.) 

The UN Commission on the Status of Women condemned Russia’s invasion of Ukraine, saying it is “deeply concerned” for the safety of civilians, including women and girls. 

It singled out the bombing of a maternity hospital in Mariupol as of particular concern, and said it is deeply worried about the continuing deterioration of the situation, especially for pregnant women and nursing mothers, and the increased risk of sexual and gender-based violence. 

Macron Rejects Putin Demand to Pay for Gas in Rubles (10:36 p.m.)

French President Emmanuel Macron rejected Putin’s demand that purchases of Russian gas must be paid in rubles. “All the texts signed are very clear: it is forbidden,” Macron said at a press conference in Brussels. He said contracts signed with European buyers stipulate a payment in euros and must be respected. 

Russia to Bar Some Foreign Shipping in Retaliatory Move (9:47 p.m.)

Russia’s government said it will limit access to Russian sea ports and internal waterways for ships from countries that have banned Russian shipping from their ports. The ministry of transport is due to fill in the details of the restrictions, and the countries involved, within five working days. 

Macron to Discuss Mariupol Evacuation With Putin (8:55 p.m.)

Macron said he will call Putin by Monday to discuss a humanitarian evacuation from Mariupol. The operation will be coordinated with the governments of Turkey and Greece. “The sooner, the better,” Macron said at a news conference in Brussels, adding that he expects the evacuation to start in coming days.

About 2,800 people were able to leave Mariupol in private cars on Friday, part of an overall evacuation of more than 7,300 people from combat areas, Ukrainian deputy Prime Minister Iryna Vereshchuk said. 

EU Leaders Agree to Focus on Enforcing Sanctions (8:07 p.m.)

Leaders of European Union countries agreed at their two-day summit in Brussels to focus on enforcing sanctions against Russia in cooperation with global partners, the head of the bloc’s executive arm told reporters.

“We agreed now to really look deep into the loopholes we discover now, or the circumventions that some try to take, and to do everything within their own respective system to close the loopholes and make the circumventions impossible,” Ursula von der Leyen, head of the European Commission, said after the meeting.

Ukraine’s Foreign Minister Says Russia Won’t Budge in Talks (7:18 p.m.)

Ukraine’s foreign minister bemoaned the state of talks between his country and Russia designed to end the month-old invasion. President Volodymyr Zelenskiy said earlier Friday they were at a stalemate.

“Ukraine’s position is clear: ceasefire, security guarantees, no compromises on territorial integrity. But Russia sticks to ultimatums,” Foreign Minister Dmytro Kuleba said on Twitter.  “To stimulate a more constructive approach we need two things: more sanctions and more military aid for Ukraine.”

Russia has demanded territorial concessions and Ukraine’s neutrality. Ukraine has said it won’t negotiate under ultimatums, won’t trade its land but is open to discussing neutrality.

Europeans Strongly Back Sanctions Against Russia, Poll Shows (4:05 p.m.)

In the European Union, 42% of citizens support current sanctions against Russia and 43% think they don’t go far enough, according to a poll of 24,509 people in 24 of the bloc’s 27 members, plus Switzerland and Serbia, by Gallup International.

Slightly more than half of respondents, or 52%, are in favor of Ukraine joining the EU, and 21% are against. More than nine out of 10 surveyed said it is “important” or “very important” for their country to switch to renewable energy sources and cut reliance on Russia. The largest concerns of EU citizens from the invasion are inflation, that the conflict could expand into a world war or involve nuclear weapons, and that energy supplies may fail, according to the poll.

Biden Visits U.S. 82nd Airborne Troops Near Ukrainian Border (3:45 p.m.)

A little more than an hour’s drive from Ukraine’s western frontier, Biden landed at an airbase in the southeastern Polish city of Rszezow, the runway lined by Patriot anti-aircraft missile batteries.

Sharing an exchange with personnel at a base barbershop, the president parried with a serviceman who invited him to finish his haircut. “I don’t have that much hair to take off,” Biden told one soldier. Later, the commander in chief greeted troops in a dining hall. 

Russia Says Ukraine ‘Operation’ Focused on Donbas (2:49 p.m.)

After a month of fighting that’s yielded limited territorial gains, the Russian military said it’s focusing efforts on taking full control of Ukraine’s eastern Donbas region, potentially a sign it’s backing away from hopes of taking larger swathes of the country or removing the government. Part of the region had already been under the control of Moscow-backed separatists.

“Our forces will focus on the main thing -- the complete liberation of Donbas,” Sergei Rudskoi, first deputy chief of the General Staff, said Friday, according to the Interfax news service. Saying the operation is “successful,” Rudskoi cast Russia’s failure to take major cities as deliberate, with the military aiming to pin down Ukrainian troops. 

Rudskoi put military losses at 1,351 killed and 3,835 wounded, the first official accounting since March 2. Western officials say as many as 15,000 personnel have been killed. 

Russian Shelling in Kharkiv (12:53 p.m.)

Almost 1,000 buildings in Kharkiv have been destroyed by shelling from Russian soldiers. In the latest assault, a hospital where people were getting humanitarian help was hit, killing five and injuring seven people, according to the Kharkiv region’s governor.

Mariupol Says 300 Civilians Killed in Theater Bombing (11:52 a.m.) 

Mariupol’s city council said about 300 civilians were killed when a theater was struck by a Russian aerial bomb attack on March 16, according to a statement posted on Telegram. Russian forces have been accused of deliberately targeting the building and other locations that were known shelters for those fleeing the port city’s siege. Mariupol says more than 80% or residential housing has been destroyed.  

The bombing has featured prominently in accusations, including by the U.S., that Russian forces have committed war crimes. Satellite imagery showed the building marked with large white letters spelling out the words “children” at the front and rear. Russia has denied deliberately attacking civilians. Zelenskiy said this week that almost 100,000 civilians are still trapped in Mariupol.

Lavrov Says West Seeks to Destroy Russia (11:31 a.m.)

Russian Foreign Minister Sergei Lavrov accused the West of waging “hybrid war, a total war” through sanctions against his country. European leaders want to “destroy, strangle the Russian economy and Russia as a whole,” Lavrov told a meeting of the Gorchakov Public Diplomacy Fund in Moscow on Friday.

Russia has no intention of being isolated and has “many friends, allies, partners in the world” that it will continue to work with, Lavrov said.

Refugees to Poland Now Over 2.2 Million (10:30 a.m.)

Some 32,500 people were cleared at the Polish border on Thursday and another 6,900 crossed early Friday, taking total refugees entering from Ukraine to 2.237 million, Polish border authorities said. 

Germany Aims to End Russian Gas Imports by Mid-2024 (9:43 a.m.) 

German Economy Minister Robert Habeck revealed plans to reduce Russian fossil fuel imports that would make the country almost completely independent of Russian gas by the middle of 2024, according to a statement.

U.S., EU Reach Energy Supply Deal to Cut Russia Reliance (9:41 a.m.) 

An agreement to try and boost the supply of U.S. liquefied natural gas to European countries by the end of 2022 with at least 15 billion cubic meters will be announced by President Joe Biden and European Commission President Ursula von der Leyen ahead of an appearance together in Brussels.

The pact includes the formation of a joint task force to help the continent wean itself off Russian fuel imports.  

European natural-gas prices fell for a second day, with benchmark Dutch futures trading about 10% lower.

Bank of Russia Says Gold Reserves Stored Domestically (9:00 a.m.) 

Russia’s central bank said all its gold reserves are stored domestically, according to a Q&A posting on its website about operating the financial system under sanctions.  

The comments comes after the U.S. Treasury issued a notice that gold transactions with Russia are prohibited, and U.K. Prime Minister Boris Johnson said there are signs Russia is using the precious metal to escape sanctions. 

Russia spent years building the fifth biggest stash of gold in the world, and it’s being targeted now because sales of it could shore up the ruble.

Russian Miner Says Unable to Sell Gold After Sanctions (9:10 a.m.) 

Petropavlovsk said it’s urgently considering the implications of sanctions on Gazprombank that prohibit further sales of gold to it. The bank takes 100% of Petropavlovsk’s gold production as a condition of its loans, and the miner has a $200 million committed term loan and $86.7 million m in revolving credit facilities with Gazprombank. 

Russian Stock Market Reverses Gains (9:22 a.m.)

Russia’s stock index erased early gains to fall 2.6% on the second day of trading after a record long shutdown. The gauge climbed 4.4% in Thursday’s shortened session. European equities and U.S. stock futures slipped. 

Nickel rose to an intraday record in Shanghai after another spike in London put imports out of reach for many Chinese buyers. Nickel has been extremely volatile since Russia’s invasion of Ukraine, with Western traders shunning Russian metals, though nickel flows to China are continuing. 

Meanwhile, oil swung between gains and losses, with West Texas Intermediate crude holding above $110 a barrel, as the U.S. and European Union looked set to announce plans to reduce the region’s reliance on Russian fossil fuels.  

Final Russia-EU Rail Link Closes (8:30 a.m.) 

Passenger train service between Helsinki and St. Petersburg will end Monday “for the time being,” Finland’s state railway company said. It was the final rail link left for passengers between Russia and the European Union.

The 1,300-kilometer (800-mile) border between the two countries can still be crossed by car. Tens of thousands of people have left Russia since the invasion of Ukraine, with many heading first to former Soviet states, the Middle East, and Turkey. The Helsinki rail connection was seen by many as the easiest way to get to Europe.

Zelenskiy Calls on Orban to Shun Russia (8:20 a.m.)

In his video-address to the EU on Thursday, President Volodymyr Zelenskiy criticized Hungary it for not showing full support when it comes to Ukraine’s membership in the bloc, sanctions on Russia, or transit of weapons through Hungarian territory.  

Zelenskiy urged Prime Minister Viktor Orban to “once and for all” give his full support to Ukraine and shun Russia. “There is no time to hesitate,” he said. “It’s time to decide.”

Ukraine Pushes Russian Forces Further From Kyiv, U.K. Says (8:04 a.m.)

Counter-attacks have helped Ukraine reoccupy towns and defensive positions as far as 35 kilometers (22 miles) east of Kyiv, the U.K. defense ministry said in an intelligence update. Ukrainian forces are likely to continue to attempt to push Russian troops back along the northwest axis from Kyiv toward Hostomel airfield. 

In the south, Russia is still attempting to circumvent Mykolaiv in a bid to drive west toward Odesa, the U.K. said. Progress is being slowed by Ukrainian resistance and “logistical issues.”  

Russia’s defense ministry said in an update that it used Kalibr guided missiles to strike a fuel depot near Kyiv.   

Chinese Traders Help Russia’s Rusal (8:10 a.m.)

United Co. Rusal International PJSC, the huge aluminum producer fighting blow-back from Russia’s war in Ukraine, is getting some help from traders in China to keep its smelters running.

Some 30,000 tons of alumina -- used to make aluminum metal -- have been loaded onto two vessels headed for Siberia after leaving China in recent weeks, said traders familiar with the matter. The action comes at a time of intense global scrutiny of China’s role in responding to Russia’s growing economic isolation. 

Traders in China Strike Rare Deal With Russia’s Rusal on Alumina

China May Send Tech Hardware to Putin, Says EU (2:47 a.m.)

European Union officials suspect that China may be ready to supply semiconductors and other tech hardware to Russia as part of an effort to soften the impact of sanctions imposed over the invasion of Ukraine. 

The EU is concerned that China is ready to help President Vladimir Putin’s government weather the economic penalties it has put in place along with the U.S., the U.K. and Japan with particular focus on the availability of high-tech components, according to two people with knowledge of the bloc’s internal assessments.

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