Ukraine Update: Repositioning of Russian Troops Continues

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Bloomberg News

(Bloomberg) —

Ukraine warned of a possible Russian naval landing operation at Mariupol. Air raid sirens were head in Kyiv for a second day. Troops continue to move from positions within Russia and from Belarus toward eastern Ukraine ahead of what’s likely to be a protracted conflict.  

Billionaire Roman Abramovich is attempting to restart talks between Ukraine and Russia, which both sides say are stuck. Ukrainian central bank and finance officials will head to Washington for next week’s meetings of the International Monetary Fund and the World Bank. Shelling resumed near Kyiv and the Lviv region close to Poland saw its first known missile attack in weeks. Russia has warned the U.S. over its weapons shipments. 

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The U.K. said destroyed roads are hampering humanitarian aid deliveries. Ukraine’s economy may shrink by as much as half, Finance Minister Serhiy Marchenko said.

Key Developments

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All times CET: 

Work on Oil Embargo ‘Under Way’: Von Der Leyen (8:50 a.m.)

The EU is working on ways for an oil embargo to be added to a forthcoming package of sanctions on Russia, European Commission President Ursula von der Leyen told Germany’s Bild am Sonntag. 

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At issue is that since oil is a globally traded commodity, “what shouldn’t happen is that Putin charges even higher prices in other markets for supplies that otherwise go to the EU,” von der Leyen said.  

Ukraine has repeatedly urged Europe to stop buying Russian oil and gas to cut off the massive flow of funds to Moscow. Putin has said Russia can redirect exports to the east. 

Eastward Movement of Russian Units Continues (8:10 a.m.)

Combat and support equipment for Russian forces is on the move from Belarus, including to locations close to Kharkiv and Severdonetsk, the U.K. Defense Ministry said. Russian artillery continues to strike positions throughout the east of Ukraine, where Moscow is thought likely to increase its offensive activity in the coming days. 

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Moscow hasn’t changed its “ultimate objective” in Ukraine, the U.K. said, and remains committed to “asserting its own regional dominance.”

The Ukrainian General Staff said in a morning update that Russian units continue to move toward eastern Ukraine from the nearby Kursk, Bryansk and Voronezh regions. Russia also targeted the southern city of Mykolaiv with Kalibr missiles on Sunday, disrupting water and power supplies, the region’s governor said on Telegram.

Ukraine Says Russia Continues to Pound Mariupol (8:01 a.m.)

Russia continues to pound the port city of Mariupol, according to the General Staff of the Ukrainian Armed Forces, amid Moscow’s window for troops in the besieged city to surrender.

Air strikes and preparations for a naval landing by Russian forces appear to be under way, Ukraine said. Russia has said it will spare the lives of soldiers who surrender from 6:00 a.m. Moscow time, with the window set to last for several hours. 

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Gaining control of Mariupol remains a key objective for Russia as it attempts to create land bridge to the Crimean peninsula. 

Russia Demands Mariupol Defenders Surrender (11:30 p.m.) 

Russia called on Ukrainian forces in the besieged industrial port city of Mariupol to lay down their arms to avoid being killed. Ukraine has rejected similar Russian demands in the past.

Colonel General Mikhail Mizintsev, head of Russia’s National Defense Control Center, cited a “catastrophic situation” at Azovstal, a sprawling steel plant that has become a last stand in the city’s defense. 

“All those who lay down their arms are guaranteed the preservation of life,” Tass quoted Mizintsev as saying. 

Austria Needs Russian Gas; Putin’s ‘War Logic’ (9:30 p.m.)

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Austria could end Russian natural gas imports “maybe in a few years,” Chancellor Karl Nehammer told NBC’s “Meet the Press.” Austria is 80% dependent on Russian gas, so “it is not possible today, tomorrow,” he said. 

Nehammer was received by Russian President Vladimir Putin in Moscow on Monday, the first European leader to do so since Russia invaded Ukraine. 

He told NBC that Putin “is in his own war logic” and that the Russian leader believes he’s winning the war. 

Zelenskiy Says Russia Talks at Dead End (7:53 p.m.)

Ukrainian President Volodymyr Zelenskiy said talks with Russia are at a “dead end because we will not trade our territory and our people.” 

If Russian forces follow through on a threat to destroy the remaining Ukrainian troops fighting in Mariupol, that would “put an end” to talks, he said in an interview with Ukrainian online media.

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Abramovich Seeks to Jump-Start Talks (6:52 p.m.) 

Billionaire Roman Abramovich has traveled to Kyiv in a bid to restart peace talks between Russia and Ukraine, which stalled after evidence emerged of Russian atrocities against civilians.

Abramovich met Ukrainian negotiators to discuss ways of reviving the negotiations, according to people with knowledge of the matter. 

In Russia, Abramovich “represents the side that backs a diplomatic resolution and end of the war,” Ukrainian President Volodymyr Zelenskiy told online media. “Nobody can guarantee that it isn’t a  game.”

Ukraine’s Putin Ally Medvedchuk Kept in Custody (6:41 p.m.)

A Ukrainian court ordered the continued detention of Kremlin-friendly politician Viktor Medvedchuk after he tried to escape the country, according to a statement on the court’s Facebook page. 

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Prosecutors suspect Medvedchuk, a tycoon sanctioned by the U.S. since 2014, of high treason and terrorist financing. His assets were frozen in 2021. He denies any wrongdoing. 

Medvedchuk had been under house arrest since last year but fled during Russia’s initial invasion. He was apprehended by Ukrainian security forces this week at an undisclosed location.

Zelenskiy Has Calls With Leaders of U.K., Sweden (6:22 p.m.)

Ukraine President Volodymyr Zelenskiy spoke Saturday Swedish Prime Minister Magdelena Andersson and with Boris Johnson, a week after the U.K. prime minister’s visit to Kyiv. They discussed “the need for a long-term security solution for Ukraine,” according to a Downing Street readout.  

The situation in Mariupol was a topic on both calls as besieged Ukrainian forces prepare for a potential last stand there. 

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Russian Ships Barred From Italian Ports After Sanctions (6:14 p.m.)

Russian ships won’t be able to anchor at Italian ports as of Sunday, Ansa news agency reported. The move is part of the recent package of European Union sanctions against Moscow for the invasion of Ukraine, Ansa said.

The change also applies to ships that changed their flag to any other nationality from Russia after Feb. 24, Ansa said. Vessels moored in Italy should depart as soon as possible. 

Ukrainian Central Bankers to Visit Washington (5:17 p.m.)

Central bank governor Kyrylo Shevchenko and deputy Serhiy Nikolaychuk will travel to Washington for spring meetings of the World Bank and International Monetary Fund, bank spokeswoman Halyna Kalachiva said. They’ll be accompanied by prime minister Denys Shmyhal and finance minister Serhiy Marchenko. The meetings start Monday. 

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The IMF has established a new account designed to give donor nations a secure way to provide support to Ukraine’s economy. Canada in its recent budget proposed as much as CAD 1 billion ($795 million) to be disbursed through the account, and it will be available for other IMF members or intergovernmental entities that wish to use it as a vehicle to provide assistance, the IMF said.  

Minister Vows Kyiv Will Service Foreign Debt (2:12 p.m.)

More than 80% of the debt Ukraine has to repay this year is domestic, “which we can easily cover” or refinance, Finance Minister Serhiy Marchenko said in a television interview. 

He said the repayment schedule for foreign debt is “quite moderate and simple,” with a peak in September when Kyiv is due to pay interest on $500 million in Eurobonds. The minister said Ukraine has cut spending by 180 billion hryvnia ($6 billion) and needs $5 billion to $7 billion a month to finance its budget while the war continues. 

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The Ukrainian economy may shrink between 30% to 50%, Marchenko said. 

Ukraine Economy to Fall 45% in 2022, World Bank Says

Putin, Saudi Crown Prince Upbeat on OPEC+, Kremlin Says (12:40 p.m. CET)

Russian President Vladimir Putin and Saudi Crown Prince Mohammad bin Salman gave a “positive assessment” of their cooperation in the OPEC+ producers group to stabilize the world oil market, the Kremlin said in a statement on Saturday.

The phone conversation came at the initiative of Saudi Arabia, the Kremlin said, and the leaders also discussed the situations in Ukraine and Yemen. The Crown Prince spoke on Friday with Chinese President Xi Jinping and also discussed Ukraine, according to state television. 

Saudi Arabia and other major Persian Gulf oil producers have so far resisted U.S. calls to increase output as prices have surged amid the crisis in Ukraine and concerns about possible sanctions on Russian exports.

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Russia Has Captured Over 1,000 Civilians, Official Says (12:43 p.m.) 

Over half the civilians taken by Moscow’s forces are women, said Deputy Prime Minister Iryna Vereshchuk, who demanded in a televised briefing that they be released immediately. “We won’t swap military people for civilians. It would violate the Geneva Conventions,” she said. 

Ukraine has captured more than 700 Russian soldiers, and Russia has captured about 700 of Ukrainian soldiers, with further prisoner exchanges possible, she said.

Ukraine and Russia agreed on nine humanitarian corridors on Saturday to evacuate civilians. Russian troops shelled the center of Lysychansk in the Luhansk region while people gathered for evacuation, she said.

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