UKRAINE UPDATE: 29 SEPTEMBER 2023
Nato chief Stoltenberg visits Kyiv; Zelensky urges strengthening of air defence
Nato Secretary-General Jens Stoltenberg made a surprise visit to Kyiv, where he met President Volodymyr Zelensky and discussed ways for alliance members to supply additional air defence systems to Ukraine. Zelensky reiterated that Nato membership for Ukraine is ‘only a matter of time’.
Earlier, Zelensky met UK Defence Secretary Grant Shapps, according to the presidential website. They spoke about the importance of strengthening Ukrainian air defence ahead of winter, and the use of long-range weapons.
Estonia proposed a full trade embargo against Russia as the European Union prepares its 12th sanctions package, with measures including a ban on the transit of sanctioned goods.
- Pentagon says it can’t afford to replace arms sent to Ukraine
- Estonia proposes full EU trade embargo against Russia
- Polish plan to cut support for Ukraine refugees alarms aid group
- Nato turns to underwater drones and AI in bid to deter Russia
Russian oil is trading closer to $100 than the G7 price cap
Russian oil is continuing to rise, defying an increasingly redundant price cap put in place by the Group of Seven and its allies.
Crude from the country’s western ports has rallied along with headline futures in recent days, Argus Media data show. Russia’s flagship Urals grade is trading at $85.35 a barrel from the Baltic port of Primorsk and $86 from the Black Sea port of Novorossiysk.
G7 officials have been long indicating that they have no intention of revisiting the cap for the time being, despite spot prices surging far above the threshold for Russian exports, which is $60 a barrel when Western shipping or insurance services are involved. The measure is designed to limit Moscow’s oil revenues while keeping the nation’s barrels flowing.
After Russia’s invasion of Ukraine, its crude supplies plunged to deep discounts relative to global markets, at times trading more than $30 cheaper than benchmark Brent prices. But over the past few months, its barrels have steadily been rallying both in absolute and relative terms.
That’s in part because the country has, in tandem with Saudi Arabia, been reducing its seaborne shipments. The curbs have had the twin effects of tightening the global crude market and boosting the premiums of precisely the type of crude that the two countries pump.
Since Urals, which shipped from Russia’s western ports, first breached the price cap in mid-July, US officials have argued that the policy has still helped to divert revenues away from battlefields in Ukraine. Russia has assembled a burgeoning fleet of shadowy tankers, which is cash that could have been deployed in the military, they argue.
But surging crude prices are a sign that any benefits from the cap are diminishing, particularly given the continued involvement of European insurers and shipowners in Russian oil exports.
Bulgaria bans Russian oil in blow to Lukoil refinery
Bulgarian legislators on Thursday approved a motion to gradually end imports of Russian crude, bringing the country in line with other European Union members.
The move will force Lukoil’s local Neftohim refinery, the biggest in southeast Europe, to look for alternative feedstock. That’s a tall order since the plant processes mostly Russian crude, and the most obvious replacement barrels — from Kazakhstan — are already in demand in neighbouring Romania.
Bulgaria and a handful of other EU countries are exempt from the bloc’s ban on Russian crude imports until the end of 2024, but Sofia is bringing that forward. Lawmakers voted to curb the use of Russian oil at Lukoil’s refinery to 80% by the end of this year, and phase it out completely by next October.
Polish plan to cut support for Ukraine refugees alarms aid group
Poland’s plan to phase out support for about a million Ukrainian refugees living in the country risks putting them back in harm’s way, the International Rescue Committee (IRC) said.
“We are concerned that the withdrawal of humanitarian aid and legal pressures may compel some refugees to return to Ukraine before it is safe to do so,” the IRC’s country director in Poland, Alan Moseley, said.
Poland is unlikely to extend the support for refugees, which is scheduled to expire next year, the government spokesman said this month. The remarks added to the growing tensions between the two countries as Poland heads into a tightly contested parliamentary election on 15 October.
Poland has spent about 2.4 billion zloty ($550-million) in child support for Ukrainian families who have fled to Poland to avoid the war. Other forms of assistance include waiving residency requirements and the granting of work permits, free access to schools, medical treatment and family benefits.
Pentagon can’t afford to replace $5bn of arms it can send Ukraine
A government shutdown would slow the pace of replacing weapons stockpiles sent to Ukraine, the US Defense Department’s comptroller said, especially if new money for the war against Russia is left out of the ultimate spending package.
Without additional Ukraine funding, the Pentagon has congressional authority to send Ukraine $5-billion more in weapons and equipment from existing stocks but has only $1.6-billion left to issue contracts to industry and replace that equipment, Comptroller Mike McCord said in an interview.
“We could easily have used that $1.6-billion already,” McCord said on Wednesday. “We are hoarding it or holding on to it because it is my only thing to make a difference. That’s all I have left since I don’t know if we are going to get this supplemental or when we are going to get this supplemental.”
The Biden administration in August requested $24-billion in supplemental Ukraine aid, about $13-billion of which is for defence. Additional funding faces opposition from a growing number of House Republicans. The Senate on Tuesday proposed a stopgap funding measure that includes $6-billion for Ukraine. So far, that’s a nonstarter in the House, significantly increasing the chances of a government shutdown this weekend when government funding lapses.
“You want to be refilling the hole and sending that consistent demand signal of funding and contracts to industry to keep those lights going, and that is what we have already had to slow down because we have seen there’s a real prospect of a shutdown,” McCord said of replenishing equipment for Ukraine. “Having to be a little prudent here, we don’t want to be dead broke.”
Mystery Russian plane in Pyongyang stokes concerns of arms deals
An unscheduled Russian military VIP plane touched down in Pyongyang this week, days after North Korean leader Kim Jong-un made a rare trip to his neighbour for talks the US said probably focused on arms transfers.
Tracking data from FlightRadar24 shows the Russian Air Force Ilyushin IL-62M flying from Moscow to Pyongyang, arriving on Tuesday morning. The tail number on the plane indicates it was the same aircraft Russia sent to North Korea in August, just days after Defence Minister Sergei Shoigu travelled to Pyongyang and was guided by Kim through a collection of his country’s latest weaponry.
Data from FlightRadar24 also indicates the plane returned to Russia on Thursday after having been on the ground in North Korea for about two days. North Korean state media has made no mention of the plane and the Russian Defence Ministry did not respond to a request for comment sent by email.
Specialist service NK News, which spotted the plane’s arrival, said the silence surrounding the flight could indicate there were military officials on board for talks on weapons or technology transfers.
Poland’s row with Ukraine risks business ties, says InPost CEO
Poland’s increasingly pointed standoff with Ukraine over grain exports is eroding the business opportunities of Polish companies in the war-torn country, according to one of the country’s leading entrepreneurs.
Rafal Brzoska, the founder and chief executive officer of parcel locker operator InPost, called for a quick end to the dispute, which has fanned anti-Ukrainian sentiment in Poland before next month’s elections and strained relations between the east European neighbours.
“I would be very disappointed if the current chaos around grain imports led to the destruction of a good climate between Ukrainians and Poles,” Brzoska said in an interview. “I hope that both countries will find a proper formula to resolve issues.”
Facing an uphill battle to win a majority in 15 October elections, Poland’s ruling party has lashed out against Ukraine in a bid to attract far-right voters. The row flared up after the government in Warsaw extended its ban on grain imports from Ukraine.
Last week, Prime Minister Mateusz Morawiecki said Poland was no longer transferring weapons to Ukraine before his government walked back some of the remarks, which raised concern among Nato allies.
Nato turns to underwater drones and AI in bid to deter Russia
The Nato military alliance is racing to develop technologies to allow real-time detection of suspicious activity near critical underwater infrastructure after the Nord Stream pipeline blasts one year ago laid bare the difficulty of monitoring.
Fourteen nations from the alliance, along with Sweden, are testing sea drones, sensors and the use of AI in a 12-day exercise off the coast of Portugal that ends on Friday. The exercise comes as Russia continues to map allied cables and pipelines as possible future targets, according to Nato.
Nato has yet to formally accuse any actor for the Nord Stream pipeline explosions, highlighting the challenge both governments and private companies face in attributing such attacks.
Real-time detection “sends a deterrence signal to the enemy, be it Russia or somebody else,” said Lieutenant General Hans-Werner Wiermann, head of Nato’s cell for protecting undersea infrastructure.
Russia has denied early accusations from some Western nations it was responsible for the Nord Stream blasts. But incidents in recent months of what appear to be Russian spy ships operating near allied systems have heightened concern, especially in light of Russia’s advanced sub-sea capabilities. These remain largely intact compared to Moscow’s land forces bogged down in its invasion of Ukraine.
Nato warned in May of a significant risk that Moscow could target infrastructure in Europe and North America, particularly to gain leverage against nations helping Ukraine. Moscow is using a combination of its navy warships, scientific ships as well as commercial fishing trawlers, container ships and tankers to trace Nato allies’ critical undersea systems, Wiermann said.
Undersea data cables carry about $10-trillion worth of financial transactions every day and about 95% of global internet traffic, Nato says. Two-thirds of the world’s oil and gas is either extracted at sea or transported by sea. Some of the systems are thousands of kilometres long and hundreds of metres deep below the sea, which makes monitoring complex. DM