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UKRAINE UPDATE: 25 JULY 2023

Drones strike Danube River port infrastructure; Russia raises age limit for reservists to boost military troops

Drones strike Danube River port infrastructure; Russia raises age limit for reservists to boost military troops
The Transfiguration Cathedral damaged by a missile attack in the Odesa region, southern Ukraine, 23 July 2023. (Photo: EPA-EFE / Igor Tkachenko)

Russia used a wider variety of weapons, including Iranian-made Shahed drones, to attack Danube River port infrastructure, ruining a grain storage and damaging reservoirs for other cargo storage during the night, the military said. Seven people were injured in the overnight attack, Odesa’s regional governor said on Telegram.

Russian President Vladimir Putin signed a law on Monday raising the age limit for troops in reserve units who can be mobilised, the latest sign of strain being felt by the military.

Senior officers up to 65 years of age can now be mobilised, with the limit for junior officers moving up to 60. On Tuesday, the Duma will also consider a bill that would raise the age limit for the draft from 27 to 30.

Latest developments

 

 

 

Russian attack highlights risk to Ukraine’s last grain export route

Wheat and maize prices surged after Russia attacked one of Ukraine’s biggest Danube River ports, ramping up the risks facing Kyiv’s last major grain export route and global food trade.

A drone attack overnight hit the Danube port of Reni, according to people familiar with the matter, who asked not to be named discussing sensitive information. Ukraine’s southern operational military command earlier said on Facebook that a grain hangar at a Danube port had been ruined, without specifying which one or giving details.

Wheat futures for September delivery surged by as much as 8.6% in Chicago on Monday, extending gains of more than 5% last week. Maize contracts for December rose by as much as 5.6% to the highest level in nearly a month.

Reni, along with Izmail, is one of Ukraine’s biggest river ports for grain and is located on the Danube at the border with Romania. Local traders had been expanding capacity there in response to Russia’s sea blockade.

The attack was the latest in a series of moves by Russia to stifle Ukrainian exports, which have historically made an important contribution to the global food supply. The collapse of the Black Sea grain deal last week – blocking Ukraine’s maritime corridor – and Russia’s subsequent attacks on Odesa port spurred expectations that Kyiv would have to double down on alternative routes, the most obvious being the Danube.

Russia also unleashed a fresh missile barrage against Odesa at the weekend, the largest in a string of almost daily strikes on the Black Sea port city after Moscow pulled out of the grain deal.

Ukraine needs its female refugees to return for a shot at economic recovery

Ukraine needs its female refugees to come home, and soon.

Almost a year and a half into President Vladimir Putin’s faltering invasion, the cost of resistance for Russia’s neighbour has been devastating. Unless Ukraine’s 6 million-plus refugees return, some of that damage will be permanent.

Most men aged 18-60 aren’t allowed to leave the country, which explains why 68% of Ukrainian refugees are women, with an even greater gender disparity among adults. Failure to persuade any of the 2.8 million working-age women to return would cost Ukraine 10% of its annual pre-war gross domestic product, according to Alexander Isakov of Bloomberg Economics.

That’s $20-billion a year in a worst-case scenario that would easily outweigh the European Union’s proposed four-year aid package for Ukraine, worth an annual €12.5-billion.

“For me personally, victory is when Ukrainian families unite in Ukraine, not abroad,” Deputy Economy Minister  Tetyana Berezhna said in an interview in her office in Kyiv, part of a government zone that’s surrounded by checkpoints. “So the most important task now for Ukraine, for the Ukrainian government, is to make everything possible so that women with children come back to their husbands and unite in Ukraine.”

The government has ambitious plans for post-war reconstruction that would double the economy’s size by 2032, but the economy ministry says Ukraine is 4.5 million short of the number of workers and entrepreneurs needed to achieve that goal. It aims to plug the gap with a mix of returning refugees – 60% of whom have degrees – and foreign talent.

To that end, it’s working on incentives to bring women back into the workforce, including a new labour law, attempts to narrow the gender pay gap, and grants to help the spouses of those fighting at the front start businesses.

Taken together, Ukraine’s refugees and internally displaced people (IDPs) amount to almost a third of the 37.3 million population the government said was living on territory it controlled before Putin launched his all-out invasion. And while some of those displaced inside the country may still be able to contribute to Ukraine’s economy, those now living abroad are beginning to find work, pay tax and boost output elsewhere.

“Only people make the GDP of an economy,” Oleg Gorokhovsky, chief executive of Monobank, a mobile-only bank service provider, said at his office in Kyiv. “I’m afraid that a lot of intelligent and smart people, young people, especially women, leave Ukraine.”

Women, he says, have a disproportionate impact on consumer demand because they tend to be the primary decision-makers when it comes to household purchases. “Without them, it will be super hard,” he added.

Russia’s weekly oil processing drops for first time since June

Russia’s weekly refining runs declined for the first time since late June amid repair works at smaller facilities.

The nation’s primary processing rates averaged 5.6 million barrels a day in the week to July 19, according to a person with knowledge of the matter. That’s down about 78,000 barrels a day from the period before and the first drop in three weeks, Bloomberg calculations show.

The decline is due to planned works at Gazprom’s Surgut condensate-processing plant, maintenance at the Yayskiy refinery in western Siberia, and lower runs at Rosneft’s Angarsk refinery, according to Mikhail Turukalov, an independent US-based oil analyst.

Still, average crude processing for the month through July 19 was 5.64 million barrels per day, up from roughly the same period in June, when Russian refineries processed an average of 5.46 million barrels per day, historical data show.

 

 

 

Russia’s Arctic shipping route gets busy with oil traffic to China

Three oil tankers will meet up shortly in the Arctic waters of the Kara Sea, signalling that the navigation season along Russia’s Northern Sea Route is open for business.

Two Aframax tankers, each hauling about 730,000 barrels of Urals crude from the Baltic ports of Primorsk and Ust-Luga, are heading east to Rizhao in China. A third similar-sized ship, sailing in ballast, is coming in the opposite direction, having started its latest voyage from the Chinese port of Yingkou, according to vessel-tracking data monitored by Bloomberg.

Tapping the Northern Sea Route can sharply reduce the journey time from Russia’s Baltic ports to refiners in northern China, making it likely that more Russian crude carriers will make such voyages in the coming months, probably assisted by ice-breakers.

Russia blames Ukraine for fresh drone attack on Moscow

Russian forces intercepted two Ukrainian drones over Moscow, the Defence Ministry said in a Telegram statement.

The drones were downed using electronic jamming and there were no casualties, according to the ministry. The unmanned aircraft crashed into two non-residential buildings at around 4am on Monday, Moscow Mayor Sergei Sobyanin wrote on Telegram.

Social media reports showed the drones fell in southwestern and southern areas of Russia’s capital.

This was the latest in a series of drone attacks on Moscow that Russian officials have blamed on Ukraine. The government in Kyiv has denied involvement in earlier incidents. DM

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