World

UKRAINE UPDATE: 17 APRIL 2024

Putin urges Iran to avoid ‘catastrophic’ Middle East conflict; Republicans baulk at Johnson’s aid plan

Putin urges Iran to avoid ‘catastrophic’ Middle East conflict; Republicans baulk at Johnson’s aid plan
From left: Iranian President Ebrahim Raisi. (Photo: EPA-EFE / Daniel Irungu) | Russian President Vladimir Putin. (Photo: EPA-EFE / Sergie Savostyanov / Sputnik / Kremlin Pool)

Russian President Vladimir Putin warned of the risk of a ‘catastrophic’ escalation in the Middle East as he urged restraint in a phone call with his Iranian counterpart, Ebrahim Raisi.

US House Speaker Mike Johnson’s job was in new peril after a second Republican said he would join an effort to depose the Republican leader following his proposal to fund aid to Ukraine and Israel.

A Czech-led initiative to obtain ammunition for Ukraine may deliver a total of 1.5 million artillery shells within a year, which could help Kyiv overcome a worsening shortage of firepower, Prime Minister Petr Fiala said during a visit to the US.

Putin urges Iran’s Raisi to avoid ‘catastrophic’ conflict

Russian President Vladimir Putin warned of the risk of a “catastrophic” escalation in the Middle East as he urged restraint in a phone call with his Iranian counterpart, Ebrahim Raisi.

Putin “expressed hope that all parties will show reasonable restraint and will not allow a new round of confrontation, fraught with catastrophic consequences for the entire region”, according to a Kremlin statement published on Tuesday. 

Raisi said Iran had no interest in a further escalation of tensions following its “limited” weekend attack on Israel in response to a strike on its diplomatic mission in Syria, according to the Kremlin statement.

Speaker Johnson’s Ukraine, Israel plan spurs new ouster threat

US House Speaker Mike Johnson’s job was in new peril after a second Republican said he would join an effort to depose the Republican leader following his proposal to fund aid to Ukraine and Israel.

Kentucky Republican Thomas Massie said he told colleagues in a closed-door meeting that he supported hardliner Marjorie Taylor Greene’s move to oust Johnson from the speakership.

Massie, a critic of both Israel and Ukraine aid, confirmed to reporters as he left the meeting that he made the overthrow threat and called on the Speaker to resign.

“I am not resigning,” Johnson retorted, brushing aside the threat in comments to reporters. “I am not concerned about this. I am doing my job.”  

Greene, a Georgia Republican, said on Monday night she hadn’t decided whether to proceed with an overthrow attempt. 

It only takes a simple majority of House members present and voting to remove a Speaker. Because of recent departures from the House — and a razor-thin majority — just three Republicans joining unified Democrats could oust Johnson. 

Moderate Republicans emerging from the party meeting on Tuesday condemned Massie’s move while several hardliners in the Freedom Caucus said they wouldn’t join the ouster effort.

“I wouldn’t put the country through that,” said ultraconservative Ralph Norman.

The fractious Republican majority plunged into a bitter, weeks-long succession battle in October after a rump group deposed Johnson’s predecessor, Kevin McCarthy.

At least one Democrat, Jared Moskowitz, said on Tuesday that he would vote to protect Johnson.  

Johnson announced plans late on Monday to hold separate votes this week on new aid to Israel and Ukraine, in an attempt to assemble fragile coalitions to speed weaponry to both besieged allies. 

The move could end a monthslong Republican blockade on help for Kyiv while also responding quickly to Iran’s missile and drone attack in Israel over the weekend.  

Czech plan may bring 1.5m artillery shells to Ukraine, says premier

A Czech-led initiative to obtain ammunition for Ukraine may deliver 1.5 million artillery shells within a year, which could help Kyiv overcome a worsening shortage of firepower, Prime Minister Petr Fiala said during a visit to the US.

The plan, in which the Czech Republic is acting as a mediator in procuring the shells from outside the European Union, has already secured 500,000 shells, according to the text of Fiala’s speech posted on the government’s website on Tuesday. About 20 countries including Germany, the Netherlands, Canada, and Poland, had joined the initiative, he said. 

“We believe that more deliveries will follow,” Fiala said at the Hudson Institute in Washington. “There is no reason, why we cannot deliver one million more in the next 12 months.” 

Ukraine is struggling with dwindling artillery supplies and air defence as Russia has intensified ground operations and airstrikes, including bombardments of its neighbour’s energy infrastructure. 

The acute shortage of ammunition and manpower along the 1,200km front is stoking fears that Kyiv’s military effort is nearing a breaking point. Ukraine has one for every 10 Russian artillery shells and won’t win the war unless the US Congress approves a $60-billion aid package, President Volodymyr Zelensky told PBS NewsHour. 

Latvia readies first shipment for Kyiv under plan for million drones

Latvia is preparing to make its first shipment of drones to Ukraine as a coalition of countries aim to provide a million unmanned aerial vehicles to Kyiv. 

“The drones are ready, the kind that our Ukrainian colleagues have asked for,” Prime Minister Evika Silina said after a government meeting in Riga on Tuesday. The craft would be delivered “in the near future”, she said.

A Latvia-led group of about 14 countries aims to supply the million drones by 24 February 2025, the anniversary of Russia’s invasion of Ukraine. The three Baltic nations have been some of the most vociferous critics of the Kremlin’s war. 

Russia tries to force Ukrainians to abandon second-biggest city

Ukrainian and Western officials see Russia’s escalated bombardment of Ukraine’s No 2 city as a way to force the evacuation of civilians, they said.

Kharkiv, a northeastern city less than an hour’s drive from the Russian border, has been hit with an escalating barrage of missiles, drones and heavy guided bombs over the past month. The assault has battered power-generation infrastructure and left swathes of residential buildings in ruins. 

The city — whose pre-war population was about 1.5 million — has come under regular attack since Russia’s invasion began in 2022. But the Kremlin’s latest action looks like a coordinated effort to cut off supplies and create conditions that make the city uninhabitable, the officials said on condition of anonymity. 

The siege of Kharkiv is one of the main thrusts of Russia’s military operation, which has exploited Ukraine’s dwindling artillery supplies and air defence as well as a disadvantage in manpower. Putin’s troops are also mounting a sustained attack on Ukraine’s energy system nationwide and making some advances across parts of the front line as Western officials fear Kyiv’s military may be nearing a breaking point. 

Russian forces tried and failed to capture Kharkiv in the first weeks of the war, a victory for the city’s mostly Russian-speaking population, which from the beginning had defied Putin’s justification for the invasion — that Ukrainians and Russians are one people. 

But more than two years since Putin ordered the invasion, living conditions in the city are increasingly perilous. The damage is extensive enough, and the attacks so unrelenting, that authorities will struggle to restore capacity before the cold sets in next winter, if indeed many locals are still there.    

Traders are already gaming new sanctions on Russian metal

It took less than a day after the UK and US banned future sales of Russian aluminium, copper and nickel on the London Metal Exchange (LME) before traders had zeroed in on a way to make money off the convoluted new rules. 

The opportunity lies in massive piles of Russian metal already sitting in the exchange’s global warehouse network. And the LME might not like what they’ve got planned.

The bottom line of the sanctions is simple: no Russian material produced after 12 April may be delivered to the LME. The idea is that the restriction will drive down demand and prices for Russian supplies, but its miners can still sell to non-US and -UK buyers outside of the LME, where the vast majority of the global trade in metals happens anyway. Prices initially spiked on the news, but quickly fell back in a sign that markets aren’t expecting major disruptions. 

Now, as the dust settles, the growing buzz in the metals world is how the new rules, combined with a series of quirks in the LME’s contract structure and global warehouse system, have thrown up an opportunity for a complex but lucrative trade. Multiple traders and brokers have described the play in conversations this week, while LME Chief Executive Officer Matthew Chamberlain fielded questions about it in a call with market participants on Sunday. 

For the metals world, it’s the latest episode in a rich history of traders seeking to exploit loopholes to profit from giant stocks of aluminium on the LME, which can generate hundreds of millions of dollars a year in storage and handling fees.

The sanctions, and the way that the LME has decided to implement them, have created a new multitiered market of metal categories, with varying restrictions attached to each. While the exchange can no longer accept delivery of “new” Russian supplies, the UK has actually relaxed earlier rules to allow UK buyers to accept Russian metal that was already in the LME system when the rules were announced. 

This category of metal — the LME calls it “Type 1” — is what many in the market are now focusing on. 

The growing percentage of Russian stocks in LME warehouses has been a controversial subject since the invasion of Ukraine, and the share had increased further in recent months — to more than 90% for aluminium — after UK buyers were blocked in December from taking delivery of Russian metal, making the supplies even less attractive for everyone else.

But UK nationals and companies are only allowed to accept Russian supplies that were already in the LME system before 13 April — the permission doesn’t extend to any metal registered after that date, or “Type 2.”

Crucially: once Type 1 metal leaves the system, it loses its special status. If it’s re-registered, it becomes categorised as Type 2, and faces the same restrictions. 

So, here’s the play: 

First, traders are rushing to withdraw the large volumes of (Type 1) Russian metal already stored on the LME.

Then, after selling it (now, as Type 2) back on to the LME, they can cut a deal with the warehouse to share the rent from future owners. For warehouses, the rent share deals are a way to incentivise traders to deliver to their facilities, rather than a competitor’s.

The trade is complicated, but the idea is simple: they’re ultimately betting that the metal could sit there for months on end if UK nationals can’t withdraw it, and many Western industrial consumers don’t want it. Previously the metal might have been attractive to buyers in China, but in the coming months that market is likely to be stuffed with newly produced Russian metal. 

And for every day the metal sits there, the trader receives a sliver of the warehouse’s profit on it. DM

Gallery

Comments - Please in order to comment.

  • Paddy Ross says:

    I don’t know how the Republicans in the US House of Representatives who are blocking aid to Ukraine can sleep at night. Their myopic inward looking attitude is leading to more and deaths in Ukraine every day.
    MAGA, my foot!

    • Middle aged Mike says:

      I imagine that some of their constituents don’t see value in sending 10s or even 100s of billions of dollars in military aid to foreign countries when the people close by who have a great deal more to lose don’t seem as inclined to do so. Europe has been freeloading for years as far as their military preparedness is concerned and while I don’t agree with the idea of letting Ukraine fall I do understand why some yanks might be tired of their tax leaving the country in such vast amounts.

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