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Ukraine Latest: Chemical Plant Reported Ablaze in Embattled City

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(Bloomberg) --

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European Commission President Ursula von der Leyen visited Kyiv and said Ukraine is making progress on its bid to eventually join the European Union. Ukraine said Russian shelling set off a fire at a chemical plant in the country’s east.

In the US, the average price of gasoline climbed to more than $5 per gallon for the first time, exacerbated by western sanctions on Russian energy.

Discord emerged after US President Joe Biden said his Ukrainian counterpart, Volodymyr Zelenskiy, brushed off his warnings about an imminent invasion. Zelenskiy’s office said Ukraine’s partners didn’t heed its plea for preemptive sanctions that could have persuaded Russia to withdraw its troops from the border before Feb. 24.

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

Key Developments

  • Von der Leyen Visits Kyiv Ahead of Key Week for Ukraine’s EU bid

  • Biden Says Zelenskiy Brushed Off Warnings of Russia’s Invasion

  • Iran Has Lessons on Grim Survival for Russia Under Sanctions

  • US Gasoline Tops $5 a Gallon on Average in New Inflation Marker

(All times CET)

Sri Lanka Open to More Russian Oil, AP Says (5 a.m.)

Sri Lanka may be forced to purchase more oil from Russia as the island struggles with a severe shortage of fuel amid an economic crisis, the Associated Press reported, citing Prime Minister Ranil Wickremesinghe.

Authorities are attempting to get oil and coal from suppliers in the Middle East, but “may have to go to Russia again,” he said.

Ukraine Says Chemical Plant Ablaze (10:16 p.m.)

Russian shelling led to an “intense fire” at the Azot chemical plant at Sievierodonetsk, Ukrinform cited the head of the Luhansk regional military administration, Serhiy Haidai, as saying. Hours of heavy-weapons fire ignited leaking oil, he said.

Russian forces have been fighting to capture Sievierodonetsk, a city in the Luhansk region where Russia has made advances since focusing its attacks in eastern Ukraine.

EU Leaders Weighing Ukraine Trip, Bild Says (9:50 p.m.)

The leaders of Germany, France and Italy are considering a joint trip to Ukraine to signal concerted European support, according to Bild am Sonntag, which cited people close to French and Ukrainian governments it didn’t identify. Chancellor Olaf Scholz, President Emmanuel Macron and Prime Minister Mario Draghi could make the trip before Germany hosts a Group of Seven summit from June 26 to June 28, the German newspaper said.

Ukraine Sees Reconstruction Plan by Early July (7:20 p.m.)

Ukraine is planning to finalize drafting its reconstruction plan in early July in time for a donors’ conference scheduled for July 4-5 in Lugano, Switzerland, members of the parliament said.

The plan aims to strengthen Ukraine’s economic resilience and modernize the country, Danilo Getmantsev, a governing-party lawmaker, told reporters in Kyiv. “We want to present something aligned with our partners” who will help finance reconstruction, opposition lawmakers Yaroslav Zheleznyak said.

The European Union has said it expects to finance the bulk of Ukraine’s reconstruction costs.

US Average Gasoline Price Breaches $5 a Gallon (7:10 p.m.)

Gasoline topped an average of $5 per gallon in the US, the latest pain point for American consumers in a price rally that President Joe Biden blames in part on fallout from Russia’s invasion of Ukraine.

A global shortage has been exacerbated by European and US efforts to sidestep oil from Russia to punish President Vladimir Putin for the invasion, and record prices at the pump are fueling the highest US inflation rate in 40 years. Pump prices rose to $5.004 a gallon early Saturday, according to auto club AAA.

Von der Leyen: EU Will Be ‘Shoulder to Shoulder’ (6:13 p.m.)

European Commission President Ursula von der Leyen pledged wide-ranging cooperation with Ukraine, saying on Twitter that the two sides have much work to do on everything from infrastructure to climate action or resilience.

“We will do it, shoulder to shoulder,” she said.

Ukraine also has work to do on reforms to fight corruption, von der Leyen said earlier Saturday during an appearance with Zelenskiy in Kyiv.

German Missile System for Ukraine Next Week (3:40 p.m.)

Ukraine expects to get the advanced German air defense system IRIS-T in August, the country’s ambassador to Germany, Andrij Melnyk, told NV.ua. The system can defend a territory the size of Kyiv from air attacks. Ukraine expects to put such systems near the major cities within next three to four years, said Melnyk, who has been a regular critic of German government for being hesitant to supply military aid to Ukraine.

Von der Leyen Visits Kyiv in Boost for Ukraine’s EU Bid (2:03 p.m.)

The head of the EU’s executive arm made her second visit to Kyiv since the start of the war and met Zelenskiy. She said officials were working day and night on Ukraine’s bid to join the European Union.

The European Commission is expected to recommend on June 17 that Ukraine be granted candidate status to join the bloc, starting a process that could last more than a decade in which the country must adopt EU rules and standards.

“We will take stock of the joint work needed for reconstruction and of progress made by Ukraine as it pursues its European path,” von der Leyen said before the visit. “This will feed into our assessment, which we will present soon.”

Ukraine Steps Up European Diplomacy (12:32 p.m.)

Ukrainian Foreign Minister Dmytro Kuleba tweeted that he spoke with Polish counterpart Zbigniew Rau to discuss the next deliveries of heavy weapons and a seventh EU sanctions package on Russia. Defense Minister Oleksii Reznikov met UK Defence Secretary Ben Wallace and had a “productive and frank discussion.”

Ukrainian lawmaker Fedir Venislavskyi said the country was taking all necessary measures to save the two Britons and a Moroccan captured by Russia and sentenced to death, Reuters reported.

Ukraine Open to Prisoner Swap for Britons, Telegraph Says (9:19 a.m.)

Ukraine is open to a prisoner swap to secure the release of two Britons sentenced to death by Russia, the Telegraph reported, citing Vadym Prystaiko, Ukraine’s ambassador to the UK. The two men, who have lived in Ukraine for several years, were serving members of the Ukrainian military. The UK is keen to avoid treating their capture as a bilateral issue, the Telegraph said.

US, Ukraine Spar Over Invasion Warning (9:17 a.m.)

Biden said Zelenskiy tuned out warnings that Russia would invade Ukraine in the lead-up to the February attack.

“I know a lot of people thought I was maybe exaggerating, but I knew, and we had data to sustain, he was going in off the border. There was no doubt. And Zelenskiy didn’t want to hear it, nor did a lot of people,” Biden said Friday. The president acknowledged that the possibility of Russian President Vladimir Putin launching a full-scale invasion may have seemed far-fetched at that time.

Zelenskiy’s spokesman, Serhiy Nikiforov, said the Ukrainian president had had multiple calls with Biden before the invasion where the two leaders shared their assessments of the situation. Besides, Zelenskiy had called upon the country’s partners to prepare preemptive sanctions to push Russia to de-escalate, but “our partners didn’t want to hear us.”

BASF CEO Favors Technology Sanctions (9:00 a.m.)

The chief executive officer of BASF SE, which would have to shut down its main site in Ludwigshafen if Russian gas supplies are cut off, said he favors sanctions on the technology industry instead. Curbs on aircraft replacement parts, semiconductors or software updates would have a much bigger impact on Russia than a possible gas embargo, Martin Brudermueller said in an interview with Sueddeutsche Zeitung.

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