‘Air defence is a significant part of the answer to the question of when this war will end, and whether it will end justly for Ukraine,” Ukrainian President Volodymyr Zelensky told Nato defence ministers during a visit to Brussels. “We all need this kind of push now, a step forward in our defence, air defence.”

Ukraine’s allies discussed military aid for Ukraine as the Israel-Hamas conflict risks diverting weapons and focus from Ukraine’s defence against Russia’s military campaign.

US Defense Secretary Lloyd Austin told reporters after the meeting in Brussels that the US can “do both”, continuing to help arm Ukraine while also aiding Israel after it was attacked by Hamas militants. He also said Ukraine won’t be ready to fly F-16 jets contributed by allies until at least spring.

Latest developments

• Israel-Hamas conflict adds dangers for Ukraine’s war effort
• Nato pledges response if Finland pipeline damage intentional
• UN denies Russia a seat on human rights council in US victory
• Yellen backs EU windfall tax on frozen Russian assets
• Slovakia’s Fico set to return to power with EU unity at risk

Yellen’s support pledge ignores Republican threat to Ukraine aid

US Treasury Secretary Janet Yellen said the US remained committed to supporting Ukraine and punishing Russia through sanctions without acknowledging forces that could undermine both efforts.

“The United States will support Ukraine alongside our allies for as long as it takes,” Yellen said on Wednesday in remarks prepared for delivery to global financial leaders at a meeting in Marrakech, Morocco, devoted to the embattled eastern European nation.

Back home in Washington, Republican lawmakers who recently deposed House Speaker Kevin McCarthy were threatening to oppose additional Ukraine aid that President Joe Biden is seeking in his 2024 budget.

Earlier in the day, Yellen deflected a question on the issue, saying she expected bipartisan support for Ukraine, adding, “We’re going to leave it to members of Congress to figure out how to move forward on the promises once a speaker is in place.”

The Treasury chief also pledged to keep up pressure on Russia through sanctions, singling out the US-led oil price cap that she said had “successfully targeted Russia’s key source of revenue”.

Brazil keeps importing Russian diesel to ease price pressure

Brazil will keep importing Russian diesel as long as it helps to contain fuel prices for Brazilian motorists, Mines and Energy Minister Alexandre Silveira said in an interview.

Russia has consolidated its position as Brazil’s top supplier of the fuel this year, surpassing the US. Silveira, who was in Washington to discuss collaboration in the energy transition, sees no pressure coming from the Biden administration to halt the imports.

“If the import of diesel, whether Russian or from any other nation, favours keeping domestic prices down, then it is not a concern,” Silveira said. There is an “understanding that developing countries need to expand commercial ties to strengthen economically and combat inequality”.

The US and its allies are trying to limit the flow of petrodollars into Russia to reduce available funds to wage war in Ukraine.

Read more: Brazil binges on record Russian fuel as Moscow seeks new markets

Brazil’s state-controlled oil giant Petrobras also has to compete with importers and its next five-year strategic plan will focus on making the country self-sufficient in gasoline and diesel production, Silveira said.

Israel-Hamas conflict compromises Ukraine’s war effort

Russia is set to benefit from the Israel-Hamas conflict, as Israel’s requests for US military aid risk diverting weapons and focus from Ukraine while the rising price of oil bolsters Moscow’s economy.

US and Nato allies have rebuffed concerns about their ability to continue supporting Ukraine militarily in the aftermath of Gaza-based militant group Hamas’s attack on Israel, which already receives billions in aid from Washington every year.

Yet Zelensky said on Tuesday that the violence engulfing Israel and Gaza may well have a knock-on effect. “There is a risk that international attention will turn away from Ukraine, and that will have consequences,” he said in an interview with French broadcaster France 2.

There’s also a clear understanding in the Kremlin that the war between Israel and Hamas will work in Russia’s favour, according to two people with knowledge of the situation, who asked not to be identified because of the sensitivity of the issue. The conflict may, at the very least, work to distract US and European attention from the war in Ukraine, the people said, even while Russia has concerns about its escalation.

For the most part, there is no major overlap between Israel and Ukraine’s military requests, and Tel Aviv’s existing supplies are relatively robust in light of years of stockpiling, officials and experts say. Israel is seeking Iron Dome missiles, precision-guided munitions and artillery rounds from the US, according to a person familiar with the matter, as it readies its next response to Hamas’s attack.

But the pressure on supplies could increase if Israel launches a ground war into the Gaza Strip, as is expected.

“That’s when they’ll start using munitions in a big way — precision munitions — and they’ll probably use a lot of them,” said Mark Cancian, a former US Marine colonel who’s now an adviser at the Center for Strategic & International Studies in Washington. While they already have big stocks, he said, “they may not have enough for a long campaign.”

Belgium to use tax revenue from frozen Russian cash for Kyiv

Belgium will invest €1.7-billion next year to assist Ukraine by drawing on its own tax revenue from frozen Russian assets, Prime Minister Alexander de Croo said, as the European Union mulls a broader windfall levy on profits from the sanctioned cash.

Most of the frozen Russian central bank assets — now more than €200-billion — are held in Europe, with the bulk of them at settlement giant Euroclear in Belgium. Those proceeds are subject to a 25% corporate tax in Belgium.

After meeting with Zelensky in Brussels, De Croo told reporters on Wednesday that Belgium’s tax proceeds will be used to finance military equipment, reconstruction and humanitarian aid for Ukraine.

“We have decided that 100% of the taxation of the proceeds is going to the Ukrainian people,” De Croo said. “It has been the case last year, it will be the case for 2024. Our methods could be an inspiration for other countries.”

Ukraine ships food, metal to Europe and Asia via new route

Ukraine’s commodities were again heading directly to traditional buyers across Europe and Asia via its new shipping corridor in the Black Sea.

Three vessels were en route to Spain and one each to the Netherlands, Egypt and Singapore, ship-tracking data compiled by Bloomberg show. Ships that left Ukraine’s Black Sea ports had already arrived in Romania, Israel, Italy and Bulgaria with cargoes such as grain and metals.

The trips show how Ukraine’s risky bet to go it alone in the Black Sea appears to be paying off. It may allow shipments to ramp up, securing much-needed revenue since grain exports are running 28% below last year so far this season. Kyiv set up its own temporary route from ports in Greater Odesa after Russia exited a safe-corridor deal backed by the United Nations and Turkey.

Yellen backs EU windfall tax on frozen Russian assets

US Treasury Secretary Janet Yellen gave her strongest backing yet for a European Union plan to impose a windfall tax on profits generated by frozen Russian sovereign assets, offering a key endorsement to a measure that would raise fresh funds to support Ukraine.

Speaking at a press conference in Marrakech, Morocco, at the start of annual meetings of the International Monetary Fund and the World Bank, Yellen said she supported “harnessing windfall proceeds from Russian sovereign assets immobilised in particular clearinghouses and using the funds to support Ukraine.

“We must continue to impose severe and increasing costs on Russia and continue efforts to ensure Russia pays for the damage it has caused,” she added.

Some EU governments have been waiting for a formal US endorsement of the plan to use profits generated by more than €200-billion in frozen Russian central bank assets before giving the plan a green light. DM