Earlier, Kremlin spokesman Dmitry Peskov said Russia wasn’t interested in cutting gas supplies to Europe and would reinstall a repaired Nord Stream turbine once it arrives after Canada granted a waiver from sanctions to allow it to be returned. Ukraine said it had received the first three Gepard anti-aircraft systems from Germany.

Moscow also said that its missile strike on Odesa targeted a military area and wouldn’t affect plans to resume grain exports from the Black Sea port. Wheat prices have surged since the Russian attack, which came a day after it signed a Turkish-mediated deal to allow safe transit for Ukrainian grain shipments blocked since the war. Ukraine is continuing to prepare for those exports.

Key developments

• Long-range guns given to Ukraine open door to new phase of war
• Kremlin says gas flows depend on Nord Stream turbine turnover
• Wheat jumps as port attack sparks worry over Ukraine export deal
• Ukraine grain challenge: Clear mines, find ships and trust Putin
• Cyprus gas discoveries boosted by EU move from Russia supplies

On the ground

Russia’s war in Ukraine enters its sixth month with Ukraine’s forces bolstered by high-precision artillery systems provided by the US. Ukrainian troops repelled assaults on the Kramatorsk and Bakhmut axes in the eastern region of Donetsk, Ukraine’s General Staff said in a statement. Moscow is seeking to solidify its hold on the region and eventually hold referendums there and in other parts of the southeast as a prelude to annexation. Russian forces struck the Dnipropetrovsk area overnight, damaging houses and agricultural hangars, local governor Valentyn Reznichenko said on Telegram. Russian forces also hit the Kharkiv and Sumy regions in the northeast of Ukraine.

German ministers visit Kyiv to coordinate aid

Two German Cabinet ministers made a joint visit to Ukraine to discuss further cooperation in areas including medical assistance and integration of refugees into Europe’s biggest economy.

Interior Minister Nancy Faeser, who was accompanied by Labour Minister Hubertus Heil, formally handed over two trucks and power generators to Ukraine’s emergency services. “We are constantly coordinating further deliveries based on the needs of Ukraine,” Faeser said in a tweet.

Ukraine asks UN, Turkey to ensure grain export safety

Ukraine is calling on the United Nations and Turkey — its key partners in a grain export deal — to ensure safety for ships carrying cereals, President Volodymyr Zelensky said.

“We will definitely start exporting to prove to the entire world once again that it is not Ukraine who is blocking exports,” Zelensky told journalists in Kyiv at a joint press conference with his Guatemalan counterpart. “We will start exporting and let our partners take care of security. We have done everything, prepared everything. There is a corridor from our side.”

Zelensky said Ukraine trusts Turkey and the UN, adding that Russia’s departure from Snake Island helps safeguard grain shipments.

European gas prices spike as Gazprom slashes flows again

European gas futures extended gains by more than 10% after Gazprom said it will slash flows through the Nord Stream pipeline to 20% of capacity. Another turbine for the pipeline is due to be taken out for maintenance, Gazprom said.

Nord Stream flows had already been reduced to 40% of capacity since last month as a separate turbine is delayed following repairs in Canada after uncertainty over the impact of sanctions on Russia. President Vladimir Putin warned last week flows could drop to 20% if the turbine issues weren’t resolved.

Read more: Russia steps up gas spat with another cut to Nord Stream flows

Ukraine wins €1.59bn loan from EU’s lending arm 

The European Investment Bank approved a €1.59-billion loan for Ukraine to cover some of the nation’s expenses and urgent bills as it struggles to find resources five months into Russia’s invasion.

The emergency package was delayed as European Commission officials responsible for the bloc’s budget increased guarantees to back up the loan in case Ukraine defaults. Ukraine needs about $5-billion per month from donors to pay salaries and other current expenditures.

Ukraine probes former ministers for treason 

Two former Ukrainian government ministers have been declared suspects “in absentia” in a treason probe regarding events that took place last decade under pro-Russian President Viktor Yanukovych.

Former Foreign Minister Kostyantyn Hryshchenko and ex-Justice Minister Oleksandr Lavrynovych were behind the sealing of the so-called Kharkiv agreement in April 2010 that allowed Russia’s navy to be based in the Black Sea, which Kyiv believes helped Russian President Vladimir Putin invade Ukraine 12 years later. Both suspects are currently unreachable after fleeing Ukraine following the so-called Revolution of Dignity in 2014.

Last year, Ukraine began probes against Yanukovych and his former prime minister, Mykola Azarov, who also fled to Russia in 2014 after their administration was toppled. Zelensky on Monday also fired the deputy secretary of the Security Council, Ruslan Demchenko, who was also involved in the Kharkiv agreement.

Russia says Odesa strikes were against military targets

Russian Foreign Minister Sergei Lavrov defended cruise missile strikes on Odesa’s sea port, saying that “high-precision” strikes on Saturday targeted a Ukrainian naval ship and Harpoon anti-ship missiles recently delivered to Ukraine. Lavrov spoke at a press conference in Democratic Republic of the Congo on Monday.

Ukrainian officials said two Kalibr missiles hit the port’s infrastructure and two were shot down by air defence systems. The attacks, hours after the signature of the grain deal, were condemned by the US, European Union and UN.

Ukraine prepares to resume agriculture exports this week  

Kyiv is set to resume its agriculture exports through the Black Sea this week, with the first shipments to be dispatched from the seaport Chornomorsk, one of three allowed to be used under a deal with Turkey and Russia, Interfax reported.

Ukrainian officials have already arrived in Istanbul to coordinate exports within the so-called Coordination Centre, set up to help exports under the deal, the news service said, citing Ukraine’s Infrastructure Ministry.

UK to host Eurovision on Ukraine’s behalf  

The Eurovision Song Contest will be hosted by the UK next year on behalf of Ukraine, this year’s winner, the European Broadcasting Union and the BBC announced on Monday.

The organisers had decided that it was too unsafe to host the popular song contest in Ukraine, so instead they asked this year’s runner-up, the UK. A host city contest will begin this week.

EU nations eye watered-down gas-cut plan 

European Union countries are considering revisions to a plan for reducing demand for gas through the winter after some governments demanded more flexibility.

The revised plan would increase the number of countries that have to request that a 15% demand-reduction target be made mandatory to five, according to a draft document seen by Bloomberg. An earlier provision was for three countries.

EU ambassadors are due to discuss a plan for emergency regulation Monday, on the eve of a meeting of energy ministers. Governments want a higher threshold for triggering mandatory cuts.

Ukraine gets German air defence systems

Ukraine has received the first three Gepard anti-aircraft systems from Germany, Ukrainian Defence Minister Oleksiy Reznikov said on Monday.

Kyiv was also hoping to reach an agreement with Germany for the delivery of “dozens” of Leopard tanks once crews are trained, he told local television. Reznikov confirmed reports that Ukraine had received a batch of Polish PT-91 Twardy battle tanks, but declined to say how many.

Naftogaz plans new debt-relief proposal

Ukraine’s state-owned oil and gas company plans to prepare a new debt-relief plan after failing to get bondholders’ approval for its last-minute proposal to freeze payments on about $1.4-billion of bonds.

Naftogaz Ukrainy didn’t give details on the timing of the plan in a regulatory filing published on Monday. It didn’t say what the new plan may involve.

The company is in a race against time to avoid defaulting on dollar bonds that matured last Tuesday. The notes have a five-day grace period that ends on 26 July.

Ukraine’s Naftogaz to put forward new debt-relief proposal

Nord Stream turbine to be reinstalled: Kremlin 

Gazprom will reinstall the repaired Nord Stream 1 turbine once it arrives in Russia and flows will resume at levels that are technically possible, the Kremlin spokesman Dmitry Peskov said on Monday.

“The turbine will be installed after all the technological formalities have been completed and the flows will be at the levels that are technologically possible,” he told reporters, adding that Russia is “not interested” in cutting off its gas supplies to Europe.

“If Europe continues its course of absolutely recklessly imposing sanctions and restrictions that hit itself, the situation may change. But once again, Russia is not interested in this.”

UK blocks non-essential aid – FT

Britain’s overseas aid programme has been thrown into confusion after the Treasury blocked “non-essential” new payments for the rest of the summer over concerns that the cost of relief work in Ukraine will breach a spending cap, the Financial Times reported.

Last year, Boris Johnson’s government cut its commitment to overseas aid to 0.5% of GDP due to the impact of Covid.

Treasury Chief Secretary Simon Clarke last week told the Foreign Office and other departments to suspend “non-essential aid spending” until a new prime minister was in place because the lower limit was about to be breached, according to the FT.

Wheat prices rise after Russia hits Odesa 

Wheat prices jumped after Russia attacked the seaport of Odesa with cruise missiles at the weekend, just hours after signing a deal to unblock grain exports from Ukraine.

Futures in Chicago surged by as much as 4.6%, before paring gains to trade 3% higher at $7.82 a bushel by 11:20am in Singapore. Prices slumped almost 6% on Friday to close at the lowest level since early February after the agreement was reached to allow shipments.

Millions of tonnes of grain are stuck in Ukraine after Russia’s invasion blocked its major ports. While a small volume has been rerouted by road and rail, customers in the Middle East and North Africa have had to look elsewhere, pushing up prices and worsening food insecurity.

Russia aims to remove Ukraine ‘regime’, Lavrov says 

Foreign Minister Sergei Lavrov said Russia aims to remove what he called the “regime” in Ukraine, reiterating an ambitious goal that the Kremlin has periodically set for its invasion of its southern neighbour.

“The Russian and Ukrainian people will continue to live together,” Interfax quoted Lavrov as telling Arab League officials during a visit to Cairo Sunday. “We definitely will help the Ukrainian people rid themselves of the anti-people regime.”

With its military struggling to advance amid fierce Ukrainian resistance, Russia has sent mixed signals about its goals in its invasion. Lavrov last week said the Kremlin is seeking to take land beyond the Donbas regions it had initially sought to occupy, suggesting broader territorial ambitions. DM