US intelligence indicates Moscow believes a winter deadlock in its war in Ukraine will ultimately advantage Russia by draining Western support, Biden administration officials said ahead of Ukrainian President Volodymyr Zelensky’s visit to Washington.

Ukraine’s largest mobile phone operator said Russia was most likely behind a “powerful” cyberattack that disrupted phone and internet services on Tuesday for about 24 million people in the country.

Donald Tusk pledged to rally flagging support for Ukraine among allies and put an end to Poland’s isolation within the European Union, sketching out a more assertive role for his country as he prepared to take office as prime minister.

Zelensky’s appeal fails to sway Republicans over border deal

Republican senators emerged from a closed-door meeting with Zelensky on Tuesday steadfast in their demands that Democrats accept tougher border restrictions as the price for more US aid to Ukraine.

The Senate Armed Services Committee’s top-ranking Republican, Roger Wicker of Mississippi, said he’d prefer to get Ukraine aid wrapped up before the end of the year, but said congressional approval would more likely slip to early January as the border talks continue. 

“The house is not on fire,” Wicker said of Ukraine’s need for ammunition and other weaponry.  

Zelensky said in a post on the social media platform X that he had “a friendly and candid conversation” with senators and informed them about “Ukraine’s current military and economic situation” as well as “the significance of sustaining vital US support”.

Newly declassified intelligence shared with some congressional officials puts Russian losses in the war so far at 315,000 deaths or injuries, a person familiar with the talks said. The Russians have also lost about 63% of their tanks, which had been a fleet of 3,500 before the invasion, and the war has set back efforts to modernise its ground forces by about 15 years, according to the person.

Zelensky told senators Ukraine was considering conscripting men over 40 years old to bolster its frontline troop levels, Wicker said, a sign his government was struggling to replace killed and wounded soldiers. 

Many Republicans voiced support for Ukraine and called the meeting with Zelensky inspirational. But they demanded changes to US immigration and border policies before approving additional aid. 

“There will be no supplemental without border security reform,” Republican Senator Lindsey Graham of South Carolina said he told Zelensky.

Read More: How a US partisan clash over immigration has stalled Ukraine aid

Democrats are resisting most of the Republican demands, leaving both sides locked in a standoff and delaying military assistance to help Ukraine at a critical moment in its fight against Russia’s invasion.  

Ukraine mobile operator hit by ‘powerful’ cyberattack

Ukraine’s largest mobile phone operator said Russia was most likely behind a “powerful” cyberattack that disrupted phone and internet services on Tuesday for about 24 million people in the country.

As fighting on the frontlines continues, Ukraine said in October that such attacks by Russia were becoming more sophisticated as they aimed to disrupt vital infrastructure during wartime.

“This is definitely a cyberattack and the probability that Russian entities are behind it is very close to 100%,” Oleksandr Komarov, chief executive officer of Kyivstar, told Bloomberg by phone. It was the biggest such attack since the Kremlin started its invasion in February 2022, he said. 

The disruption was widespread. Air raid alerts were unavailable in the northern city of Sumy because of the lack of Kyivstar services, the municipal military administration said on Telegram. Ukraine’s largest lender, state-run Privatbank, said ATM machines and self-service terminals had been disrupted, leaving many customers unable to make cashless payments.  

US House approves Russian uranium import ban

The US House voted on Monday to approve legislation that would bar the importation of enriched Russian uranium, sending the measure to the Senate where it has support but limited time for passage this year.

The Prohibiting Russian Uranium Imports Act, which was approved by voice vote, would bar Russian uranium imports 90 days after enactment while allowing a temporary waiver until January 2028.

Russia provided almost a quarter of the enriched uranium used to fuel the US’s fleet of more than 90 commercial reactors, making it the No 1 foreign supplier to the US last year, according to Energy Department data. Russia is also the only commercially available source of special highly enriched reactor fuel known as Haleu that is needed for a new breed of advanced nuclear reactors that are under development, according to Chris Gadomski, head nuclear analyst for BloombergNEF. 

The US spends an estimated $1-billion per year on nuclear fuel from Russia. 

US says Russia sees advantage in winter war deadlock in Ukraine

US intelligence indicates Moscow believes a winter deadlock in its war in Ukraine will ultimately advantage Russia by draining Western support, Biden administration officials said ahead of Zelensky’s visit to Washington.

President Vladimir Putin still aims to conquer Ukraine despite more than 13,000 Russian military casualties along the Avdiivka-Novopavlivka axis since Moscow’s offensive there began in October, National Security Council spokesperson Adrienne Watson said on Tuesday.

Russia has also had about 220 combat vehicle losses, newly declassified US intelligence shows.

Russia is continuing its offensive, including around Avdiivka, Lyman and Kupyansk, Watson said, despite “persistent shortages” of trained personnel, munitions and equipment.  

“Putin is clearly watching what happens in Congress,” Watson said.

Tusk says he’ll end Poland’s isolation in EU

Donald Tusk pledged to rally flagging support for Ukraine among allies and put an end to Poland’s isolation within the European Union, sketching out a more assertive role for his country as he prepared to take office as prime minister.

Speaking in parliament on Tuesday ahead of a vote of confidence in his Cabinet, Tusk said he’d had enough of European officials voicing their exhaustion with the war in Ukraine. The new pro-European coalition “will return the country to the position it should have” in the EU and remain a close ally of the US, he said.

“The new government’s task, but also the task of all of us, is to loudly and firmly demand full determination from the entire Western community to help Ukraine in this war,” Tusk said in Warsaw. “I’ll do this from day one.”

The return of the former European Council president to lead the EU’s sixth-largest economy promises to draw a line under eight years of rancorous nationalist rule. Poland’s initial embrace of Ukraine after Russia’s invasion in February 2022 has been replaced by growing distrust, which culminated in a ban on grain imports and a month-long blockade of the border by Polish truckers.

Tusk, who governed Poland from 2007 to 2014, also said that his government would remain assertive toward its eastern neighbour when it comes to the interest of its farmers and companies. 

Russia’s crude flows surge as Black Sea port rebounds from storm

Russia’s seaborne crude exports climbed on a four-week average basis, driven by a big jump in weekly flows after storms that disrupted Black Sea shipments finally abated. Loadings soared at the port of Novorossiysk, with a full week of uninterrupted activity.

About 3.2 million barrels a day of crude were shipped from Russian ports in the four weeks to 10 December, tanker-tracking data monitored by Bloomberg show. That was up by 114,000 barrels a day from the revised figure for the period to 3 December. The more volatile weekly average leapt to the highest since early July.

While still depressed by the very low flows seen from the Black Sea during the recent storms, four-week average crude shipments were about 385,000 barrels a day below their May-June level — the baseline used by Moscow for the export reduction it has pledged to its partners in the Opec+ group. 

Russia will deepen its oil export cuts to 500,000 barrels a day below the May-June average during the first quarter of next year, after Saudi Arabia said it would prolong its unilateral one-million-barrel-a-day supply reduction and several other members of the group agreed to make further output cuts. 

EU offers initial steps for tapping sanctioned Russian assets for Ukraine

The European Union on Tuesday proposed the first steps toward applying a windfall tax to the profits generated by frozen Russian central bank assets, a move aimed at directing the proceeds for Ukraine’s reconstruction.

The proposal sets out a “Step 0” identifying which frozen funds the measure would apply to and a “Step 1” outlining the actions the central securities depositories holding those funds would need to take.

“After deduction of expenses and national taxes, the ensuing profits would be clearly identified and accounted for in line with statutory capital and risk management requirements. This will make possible their transfer and assignment to the EU budget for the benefit of Ukraine at a later stage,” according to the draft proposal.  

The proposals include recommendations to shield the entities holding the assets from legal risks and retaliation, as well as exemptions for central securities depositories holding small amounts. 

The EU, Group of Seven nations and Australia have frozen about €260-billion in Russian Central Bank assets in the form of securities and cash, with more than two-thirds of that immobilised in the EU. The majority of the EU-based assets are held in Belgium by the clearing house Euroclear, where they have earned about €3-billion so far this year.

Despite backing from the G7 for the windfall measure, the EU is taking a gradual approach, given concerns raised by the European Central Bank, the International Monetary Fund and several member states.

The plan’s “Step 2,” which envisions transferring the net revenue generated by the frozen funds to the EU’s 2024-2027 budget, would require those concerns to be overcome before the commission presents a further proposal.

Based on current interest rate assumptions, the EU estimates that the taxable proceeds could reach €15-billion over the next four years. 

Kyiv is running out of options to fund the fight against Russia

Policymakers in Kyiv are trying to work out how they can fund Ukraine’s war effort if its allies fail to come through with promised aid. The options are fraught with risk. 

The financial toolkit includes raising tax revenue, an obvious challenge in a battered economy, or cutting spending for an already beleaguered public. Monetary-policy options are devaluing the Ukrainian currency or returning to the central bank’s taps, a move Finance Minister Serhiy Marchenko told Bloomberg would have “negative consequences.”  

Zelensky was in Washington to make an urgent appeal to US Congressional Republicans who are holding up more than $60-billion proposed by President Joe Biden. The European Union’s €50-billion package meanwhile is being blocked by Hungarian Prime Minister Viktor Orbán as part of a broader fight over the bloc’s budget. 

At stake is Ukraine’s financial lifeline after Kyiv’s counteroffensive failed to deliver gains and the second full winter since the Russian invasion brings new hardships. Zelensky’s chief of staff, who met US officials last week, said a halt to financing raises the spectre of handing Putin a victory that would change the map of Europe.  

Kyiv plans to cover its budget deficit, amounting to around one-fifth of economic output, primarily with more than $40-billion in external financing next year. The Ukrainian finance chief said last month that more than two-thirds of that funding hadn’t yet been confirmed.  

“If the shortage of foreign aid inflows becomes larger than several billion US dollars, the authorities will only have unpleasant options to choose from,” said Olena Bilan, chief economist at Kyiv-based investment bank Dragon Capital.  

Policymakers have expressed a degree of confidence that, looking past the infighting in Washington and Brussels, international donors will come through with the funds in the end. The IMF’s executive board on Monday approved a disbursement of $900-million in aid.

But the flagging support — and the shifted focus to the Israel-Hamas conflict — has become a sobering reality in Ukraine. Newly committed aid to Ukraine dropped to the lowest level since Russia invaded in February 2022 — down by almost 90% between August and October from the year-ago period to €2.11-billion, according to data tracked by the Kiel Institute for the World Economy released last week. DM