Ukraine Latest: Russia Pressing ‘Symbolic’ Assault Near Bakhmut

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(Bloomberg) —

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Biden administration officials are trying to reassure oil market participants that the newly agreed $60 price cap on Russian crude won’t trigger supply disruptions and price volatility after it kicks in Monday. The Group of Seven is set to impose the cap, which is well above where Russian oil now trades.

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Kremlin troops continue to press an assault around Bakhmut in Donetsk, an effort that “has become primarily a symbolic, political objective for Russia” given the town’s limited strategic value, the UK said. 

Vladimir Putin’s government said he remains open to negotiations over the war after President Joe Biden raised the prospect of talks if the Russian leader is committed to end it. Still, the Kremlin said Putin had no plans to end Moscow’s military campaign in Ukraine, and a White House spokesman said conditions weren’t right for direct talks under those circumstances. 

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Key Developments

On the Ground

Over the past day Ukrainian troops have repelled attacks of Russian forces in Luhansk and Donetsk regions in the east of the country, with attacks continuing in the vicinity of Avdiivka and Bakhmut, according to Ukraine’s General Staff. Russian forces launched five rocket attacks, 27 air strikes and 44 assaults with multiple launch rocket system on the civilian infrastructure and positions of the Ukrainian troop along the front line. There is still a threat of Russian missile attacks on the energy system and critical infrastructure throughout the country. Ukraine’s aviation forces made 17 strikes on the areas of concentration of Russian personnel, weapons and military equipment and thee attacks on Russia’s anti-aircraft missile system.  

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(All times CET)

Russia Assembles ‘Shadow’ Tanker Fleet to Work Around Oil Sanctions: FT (8:30 a.m.)

Russia has amassed a fleet of more than 100 tankers to help circumvent western restrictions on Russian oil sales following its invasion of Ukraine, the Financial Times reported, citing shipping brokers and analysts.

Moscow intends to use the vessels to supply oil to countries such as India, China and Turkey, which have continued to buy Russian crude as Europe has cut back, the newspaper said. 

Russia Continues to Focus on Bakhmut Assault, UK Says (8 a.m.)

Moscow’s troops “continue to invest a large element of their overall military effort and firepower” on a 15-kilometer (9 mile) stretch of entrenched front around Bakhmut in the Donetsk region, the UK defense ministry said on Twitter. 

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Russia has prioritized the city, with a pre-war population of about 70,000, since early August, the ministry said. While capturing the town “would have limited operational value,” it would allow Kremlin forces to threaten larger urban areas of Kramatorsk and Slovyansk. 

Kremlin forces “continued to make minimal advances” to the south and southeast of Bakhmut on Friday, the Institute for the Study of War said in a daily update. 

US Seeks to Ease Oil Market Jitters on Price Cap (12:40 a.m.)

Those who watch the oil price cap issue carefully have raised the risk of “over-compliance,” in which companies not prohibited by law from working in a given area nevertheless exit entirely because of concerns about violating US policies, or for other reasons like reputation risks.

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A senior Treasury official acknowledged the unprecedented nature of the price cap during a call with reporters on Friday, but said the US has tried to counter that by engaging extensively with industry players before the implementation. The countries in the price cap coalition have tried to make the policy as easy as possible to follow, the official said, speaking on condition of anonymity due to the sensitive nature of the talks.

Ukraine Gets $1.5 Billion US Grant Through World Bank (7:43 p.m.)

Ukraine has received a $1.5 billion grant from the US via the World Bank to be used for pensions and other social payments, the country’s Finance Ministry said on its website.

It’s the first installment of $4.5 billion pledged by the US to help with budget spending and to maintain governance amid the war. 

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EU Agrees to Set $60 Price Cap Level for Russian Oil Exports (7:10 p.m.)

The Group of Seven is set to impose a price cap on Russian oil that’s well above where it now trades. If there was any doubt what the premise of the cap was, it’s now clear: the US and its allies want Russia’s crude to keep flowing.

European Union ambassadors backed limiting the price of Russian oil, a key source of income for President Putin’s war machine, at $60 a barrel after fraught talks that dragged into the night more than once. Crucially, that’s above the $50 that Russia’s flagship Urals grade already trades at, according to data from Argus Media.

“We don’t care what the price cap will be. We’ll negotiate with our partners directly,” Russian Foreign Minister Sergei Lavrov said on Thursday. “And partners who continue working with us won’t look at those caps.” WTI crude futures shrugged off news that the EU finally agreed on a price cap.

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Read more here.

Not the Time for Biden-Putin Talks: White House (7:04 p.m.)

The White House said Friday that conditions weren’t ripe for direct talks between Biden and Putin because the Kremlin has shown no indication of willingness to end the conflict in Ukraine.

“We’re just not at a point right now where talks seem to be a fruitful avenue to approach right now,” National Security Council spokesman John Kirby told reporters, adding that the White House’s focus remains sending security assistance and other aide to Ukraine.

The US also would consider talks only if they were endorsed by Ukrainian President Volodymyr Zelenskiy, Kirby said. Biden said in a news conference on Thursday he would be willing to meet with Putin if the Russian leader were serious about ending the conflict, and after consultation with NATO partners.

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Monitors Closer on Nuclear Safety Zone in Ukraine, IAEA Says (5:50 p.m.) 

International monitors are getting closer to an agreement between Ukraine and Russia that would set up a security zone around Europe’s largest nuclear energy plant, potentially easing concerns about an accident. Rafael Mariano Grossi, director general of the International Atomic Energy Agency, told Bloomberg TV that the sides are nearing a deal. 

IAEA monitors are at the Zaporizhzhia nuclear power plant, whose six reactors are shut down after months of attack, while Grossi tries to persuade Kyiv and Moscow to cease military activities around the facility. 

“We are getting closer to something that could be acceptable,” Grossi said in an interview. The Argentine diplomat said he expects to sit down separately with Zelenskiy and Putin in the near future to push negotiations forward.

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Ukraine Touts International Tribunal for Russia’s Crimes (2:24 p.m.)

Ukraine’s government is holding special road-shows in Europe and the US to garner support for a special international tribunal for Russia’s crimes of aggression after Kremlin-led forces invaded in February.

Meetings are planned for Berlin, Washington and London and have already taken place in Paris, according to President Volodymyr Zelenskiy’s office. A special working group, led by his chief of staff Andriy Yermak, is doing the groundwork on a legal and political basis for the tribunal. 

The International Criminal Court, founded in 2002, lacks the necessary powers and investigates specific war crimes, allowing punishment of direct perpetrators and possibly their direct commanders, but not high officials.

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Read more: Ukraine Touts International Tribunal for Russia’s Crimes

Putin, Scholz Hold Hour-Long Call on Ukraine (12:30 p.m.) 

Putin discussed the situation in Ukraine on Friday with German Chancellor Olaf Scholz, the Kremlin said. Germany said Scholz “pushed for a diplomatic solution” in the hour-long call. 

The discussion was initiated by Germany, according to the Kremlin. Putin decried what he termed “the destructive policy” of western countries, including Germany, by supplying weapons to and training the Ukrainian military.

The pair also discussed the Black Sea grain initiative and unblocking exports of food and fertilizers from Russia.