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Ukraine Latest: US Opens Door to Sending Fighter Jets to Ukraine

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·10 min read
Ukraine Latest: US Opens Door to Sending Fighter Jets to Ukraine
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(Bloomberg) -- The Pentagon is looking into the feasibility of providing fighter jets to Ukraine, a move previously seen as off-limits for fears Ukraine would expand the conflict into Russian territory. But any move is a long ways off, according to the National Security Council’s spokesman.

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Officials from Russia and Ukraine signed parallel agreements with Turkey and the United Nations for the transit of millions of tonnes of Ukrainian grain through Black Sea ports for an initial three-month period.

Three ports -- Odesa, Chernomorsk and Pivdennyi -- will be covered by the pacts, UN Secretary-General Antonio Guterres said at a signing ceremony in Istanbul. Defense Minister Sergei Shoigu represented Russia at the event.

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

Key Developments

  • Ukraine and Russia Reach Deal to Unblock Grain Stranded by War

  • Russia Cuts Rates Below Pre-War Level in Surprise Jumbo Move

  • Ukraine Grain Challenge: Clear Mines, Find Ships and Trust Putin

  • US Treasury Gives Blessing for Swaps Auction on Russian Bonds

  • Banned in Europe, Kremlin-Backed RT Channel Turns to Africa

On the Ground

Russian troops continued their advance on Vuhlehirska power station in the eastern Donetsk region, Ukraine’s military said in a statement Friday. At least five people were killed and 10 wounded in Donetsk over the past 24 hours, with Russian troops also striking the city of Kramatorsk. Elsewhere, Russian troops struck Dniptopetrovsk in the southeast. Fighting continued in Luhansk, where Russian forces are pushing to capture the remaining Ukrainian holdouts.

(All times CET)

US Opens Door to Getting Fighter Jets to Ukraine (8:40 p.m.)

In what would be a major shift for the US and its allies, National Security Council spokesman John Kirby said the Pentagon is looking into the feasibility of providing fighter jets to Ukraine, though the effort is in the very early stages.

The effort is focused on providing US aircraft, not ex-Soviet jets, which means Ukrainian pilots would need to be trained on the fighters as well as how to maintain them, Kirby said, adding “So this is not something that’s going to happen anytime soon.”

Kirby spoke as the White House announced an additional $270 million in arms for Ukraine, a package that includes as many as 580 additional Air Force Phoenix Ghost anti-armor/reconnaissance drones.

US Says Global Condemnation Forced Russia Into Grain Deal (8:00 p.m.)

Putin agreed to the deal to allow exports of Ukraine’s grain because “Russia ultimately felt the hot breath of global opprobrium, and it was losing the global south,” Victoria Nuland, US undersecretary of state for political affairs, said at the Aspen Security Forum in Colorado.

Expressing US skepticism that Russia will deliver on the grain accord, NSC spokesman Kirby told reporters in Washington that “Russia’s word is never good enough on its face. It really comes down to their willingness to actually implement.” He said “we’re clear-eyed about it and we’re going to be watching very, very closely.”

Nuland said Moscow had failed to convince developing countries that sanctions by the US and European allies on Russia were causing rising food and energy prices, creating hardship and political instability around the world, rather than Russian impediments to exports.

UN Says Russia Signs Accord on Russian Food, Fertilizer (7:40 p.m.)

Just before the agreement to allow Ukraine grain exports, Russia signed a separate memorandum of understanding with the UN for the world body to aid in unimpeded exports of Russian food and fertilizer, UN spokesperson Farhan Haq said.

Emphasizing that goods such as food aren’t targeted by sanctions against Russia, he said the UN will establish a task team “focused on addressing the disruptions to the food and fertilizer trade largely due to the de-risking and overcompliance of the private sector, particularly in the sectors of finance and insurance and logistics.”

Ukraine Official Predicts Grain Exports Within Days (6:16 p.m.)

Ukraine is ready to start grain exports from its ports via the Black Sea within several days, Ukrainian infrastructure minister Oleksandr Kubrakov said on Ukrainian TV.

He credited Ukraine’s navy, saying “they’ve liberated the Snake Island, opened up the Danube’s mouth, and now we can unblock the ports of greater Odesa.”

Ukraine sees no danger of Russian ships entering the “green corridors,” which will be used to export grain, as they’re barely leaving Crimea’s waters, let alone entering Ukranian-controlled waters that are protected by anti-ship missiles, Kubrakov said. He added that Ukraine will continue to seek alternative ways to export its grain.

US Sees Fight for Donetsk Lasting Through Summer (5:01 p.m.)

The fight for Donestsk in Ukraine’s Donbas region is likely to last through the summer with Russia achieving slow gains at a high cost, a senior US defense official, who spoke on condition of anonymity, told reporters.

Moscow’s forces are taking hundreds of casualties daily, the official said, adding that the death toll includes thousands of lieutenants and captains, and many generals.

Ukrainian forces using US-provided HIMARS and other long-range rocket systems and artillery have destroyed more than 100 high-value targets such as Russian command posts, ammunition depots, air-defense sites, radar and communication nodes, and long-range artillery positions, the official said.

Black Sea Grain Deal to Allow for ‘Significant Volumes’ (4:20 p.m.)

Friday’s signing will allow for “significant volumes of commercial food exports,” UN Secretary General António Guterres said at a press conference in Istanbul, as Russia signed a pact with the UN and Turkey. Ukraine signed a parallel agreement.

Odesa, Chornomorsk and Pivdennyi ports are part of the agreement, he said. Guterres also announced establishment of a joint coordination center to monitor implementation. Turkish President Recep Tayyip Erdogan said that traffic would begin in “coming days.”

Russia Won’t Sell Oil to Countries That Impose Cap (4:07 p.m.)

Any price cap on Russia’s oil would lead to a spike in global prices and Moscow will not supply oil to countries that impose such price limits, Bank of Russia Governor Elvira Nabiullina told reporters on Friday. “We will re-direct our crude and oil products to those nations, that are ready to cooperate with us,” she said.

The Group of Seven nations in June agreed to explore how to curb Kremlin’s revenue by imposing a cap on the price of its oil. Amid international sanctions against Russia over is invasion of Ukraine, the typical discount on Russia’s export grade of crude oil, called Urals, has widened significantly. Nevertheless, the broader rally in global prices has meant the flow of petrodollars has continued unabated.

Ukraine Grain Challenge: Clear Mines, Find Ships, Trust Putin (2:42 p.m.)

Ukraine is about to finally secure a deal aimed at restarting Black Sea grain exports that have been crippled by Russia’s invasion. But getting them going won’t be easy.

A pact is expected to be signed Friday by representatives of both countries, which may help revive shipments from one of the world’s top wheat, corn and vegetable-oil exporters.

Moldova’s Transnistria Stays on Course to Join Russia (2:31 p.m.)

Moldova’s region of Transnistria is holding to its foreign policy course to gain independence and subsequently accede to Russia, Tass news agency reported, citing Vitaly Ignatiev, foreign minister of the unrecognized republic, in a TV interview. The breakaway region has pursued its goal since a 2006 referendum.

A sliver of land that runs roughly between the Dniester river in eastern Moldova and Ukraine, Transnistria held several plebiscites on its status. During the last one, almost 16 years ago, more than 97% backed joining Russia after independence.

Germany Bails Out Uniper in Fallout From Russian Squeeze (12:35 p.m.)

Germany hammered out a rescue package for Uniper SE to prevent the collapse of a linchpin in the country’s energy network in the wake of Russia’s moves to slash gas supplies.

The government will get about 30% in Uniper, a holding big enough to give it veto rights on important strategic decisions, Uniper said in a statement on Friday. Fortum Oyj, Uniper’s main shareholder, will retain a majority.

Read more: Germany Bails Out Uniper in Fallout From Russian Gas Squeeze

Russia Makes Surprise Jumbo Rate Cut (12 p.m.)

Russia’s central bank brought interest rates below their level before the invasion of Ukraine, easing monetary policy more than forecast as it navigates risks to inflation and the economy from sanctions.

Policy makers lowered their benchmark to 8% from 9.5% on Friday and signaled they will consider further cuts.

Nord Stream Turbine in Transit in Germany (9:03 a.m.)

A gas turbine for the operation of Gazprom’s Nord Stream 1 pipeline that’s the main route of gas transport from Russia to Germany is held up in transit after maintenance in Canada, the latest twist in an ongoing spat between the two countries.

The turbine is currently stranded at an undisclosed location in Germany because Russia hasn’t provided the necessary documentation to enable the shipment, a person familiar with the matter said under the condition of anonymity.

“Under normal circumstances, the maintenance of turbines is a routine operation for us. Naturally, we want to transport the turbine to its place of operation as quickly as possible. However, the time it takes is not exclusively within our control,” a spokesman for Siemens Energy, the manufacturer for the turbine, said in an emailed statement Thursday.

Russia Adds Five ‘Unfriendly’ European States (8:29 a.m.)

Russia added Croatia, Denmark, Greece, Slovenia and Slovakia to a list of “unfriendly states”, according to the Russian government’s website.

The measure restricts hiring at embassies and consulates in Russia. According to the new order, Greece has a limit of 34 people, for Denmark it’s 20, for Slovakia 16. Slovenia and Croatia will not be able hire employees in their diplomatic missions and consular offices in Russia.

Europe Gas Up on Nord Stream Uncertainty (7:42 a.m.)

European natural gas prices rose as Russian supply through a major pipeline remained at the center of traders’ attention despite shipments remaining stable for a second day.

Russian shipments via the key Nord Stream pipeline restarted Thursday and flows are expected to stay at about 40% of capacity on Friday. Focus is turning to next week, with Putin warning shipments could decline to 20% of capacity if a turbine that’s stuck in transit isn’t received in time to replace another that needs maintenance.

Kremlin-Backed RT Turns to Africa (7:51 a.m.)

RT, the Kremlin-backed TV network formerly called Russia Today, is setting up its first Africa bureau as President Vladimir Putin seeks to entrench support in a continent that’s largely refrained from criticizing his invasion of Ukraine.

The company said in a response to a query that it’s “currently focused on developing our English-language Africa hub in South Africa,” which will be headed up by Paula Slier, a South African broadcaster who ran RT’s Jerusalem bureau.

The entry into Africa contrasts with bans on RT put in place by the European Union, the UK and Canada shortly after Russia invaded Ukraine in February. RT countered in a June court appeal that the EU was illegally silencing its journalists.

Ships That Hauled Iran Oil Take Russian (5:12 a.m.)

Oil tankers that previously carried Iranian oil are switching to haul Russian crude, according to shipping analytics company Vortexa.

Eleven of the tracked ships that previously carried Iranian crude have loaded Russian oil and products since April, accounting for 16 loadings in that period, according to a note dated July 21. Most of the vessels are smaller aframaxes, which can typically haul 730,000 barrels, the analytics company said.

Ships That Hauled Iranian Oil Are Switching to Russian Crude

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