Ukraine latest: US to redeploy Europe-based troops to Nato’s eastern flank

Antony Blinken, US secretary of state, said he cancelled a planned meeting this week with Sergei Lavrov, Russia’s foreign minister, in the wake of Vladimir Putin’s decision to send troops into the Donbas region in eastern Ukraine.

Speaking alongside Blinken at a press conference, Ukraine’s foreign minister Dmytro Kuleba welcomed the US decision to impose sanctions on Russia.

“The world must respond with all its economic might to punish Russia for the crimes it has already committed. Ahead of the crimes it plans to commit, hit Russia’s economy now and hit it hard,” Kuleba said in Washington.

While the door for US-Russia diplomacy appears to have closed, Kuleba said Ukraine would “utilise every tool of diplomacy to deter Russia” and prevent escalation. “If that fails, Plan B is to fight for every inch of our land, and every city and every village,” he added.

US stocks fell, with the S&P 500 index dropping into a correction, while oil prices neared $100 a barrel on Tuesday after Russian president Vladimir Putin ordered troops into Ukraine.

The international crude oil benchmark Brent rose as high as $99.50 a barrel, the highest price since 2014, as traders weighed the possibility of disrupted supply from Russia. It later trimmed its gains to settle at $96.84 a barrel, up 3.5 per cent from the prior day.

The moves came after Putin directed his military to enter Ukraine’s rebel-held Donetsk and Luhansk regions, prompting Germany to halt the approval of the Nord Stream 2 natural gas pipeline and western powers to announce new sanctions against Moscow.

Wall Street’s benchmark S&P 500 ended the day down 1 per cent to its lowest closing level since late 2021, led lower by energy and consumer discretionary stocks. The decline on Tuesday brought the index into a correction, or 10 per cent below its recent peak in January.

The technology-heavy Nasdaq Composite fell 1.2 per cent. The Stoxx Europe 600 share gauge slipped as much as 1.9 per cent, before recovering to close 0.1 per cent higher.

Volatility indices showed traders expected equity markets to continue to swing on headlines concerning Ukraine, with the Vix gauge of expected volatility on the S&P 500 trading at 28.9.

US defence secretary Lloyd Austin on Tuesday ordered the redeployment of Europe-based American troops and military assets to Nato’s northeastern and southeastern flanks.

A senior defence official said the forces would include 800 troops who would move from Italy to the Baltic region.

The US would relocate eight F-35 fighter jets from Germany to the eastern flank of Nato. The Pentagon will also move 20 attack helicopters from Germany to the Baltic region, and another 12 helicopters will move from Greece to Poland.

“These additional personnel are being repositioned to reassure our Nato allies, deter any potential aggression against Nato member states, and train with host-nation forces,” the defence official said.

The announcement came after US President Joe Biden announced new sanctions on Russia as he accused Vladimir Putin of beginning an “invasion” of Ukraine.