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Ukraine Latest: Gazprom Reassures Buyers; Croatia Oil Ban Delay

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Gazprom has written to its European clients, seeking to reassure them that they can keep paying for gas without breaching sanctions. Croatia may join Hungary, Slovakia and the Czech Republic in requesting more time to comply with a proposed European Union embargo on Russian oil imports. 

NATO Secretary General Jens Stoltenberg has called on the West to supply more modern weapons to Ukraine, saying much of its equipment dates back to the Soviet era. 

Chelsea FC, owned by sanctioned Russian billionaire Roman Abramovich, will be sold to a group backed by U.S. investors for $5.25 billion. Group of Seven leaders plan to discuss potential new penalties against Russia on Sunday, a day before Russian President Vladimir Putin is expected to a address a military parade in Moscow. 

President Volodymyr Zelenskiy says that helping to rebuild Ukraine is “an investment in the stability of the whole of Central and Eastern Europe.” He made the comments in a speech by video link to the International Donors’ Conference for Ukraine, held in Warsaw. (Audio translation from source)Source: Bloomberg

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Gazprom Reassures Clients on Gas Payment Uncertainty (1:36 p.m.)

Gazprom PJSC has written to its European clients in a bid to reassure them that they can keep paying for gas without breaching sanctions, the latest indication that Russia may be trying to find a way to keep gas flowing. 

Gazprom told clients that a new order published by the Kremlin on May 4 “clarifies the procedure” set out in the initial decree on ruble payments. The letter, seen by Bloomberg News, says there’ll be transparency for cash flows from the foreign buyers and excludes the possibility of any “third party” being involved in the settlements. The procedure as set out appears to exclude Russia’s sanctioned central bank.

It’s not clear if the new order will be enough to assuage the concerns of the European Union, which has said that setting up accounts in rubles and dealing with the central bank would breach sanctions.

Croatia Will Also Explore Russian Oil Ban Delay (1:27 p.m.) 

Croatia is considering asking for an exemption to the European Union’s planned embargo on Russian oil, primarily to protect production in its biggest refinery in Rijeka, run by INA Industrija Nafte d.d., according to a state official.

The EU so far has plans to offer Hungary, Slovakia and the Czech Republic as much as two additional years to comply with a ban it hopes to put into place at year-end. Hungarian Prime Minister Viktor Orban has been especially vocal on the potential damage to his nation’s economy if a ban happens too quickly. 

EU Revises Russia Oil Ban Plan to Give Hungary More Time 

Putin May Lay Out Next Move in Monday Speech (12:46 p.m.)

President Vladimir Putin may divulge his next steps in the invasion of Ukraine on Monday when he is due to speak at Russia’s May 9 Victory Day parade marking the anniversary of Nazi Germany’s surrender in 1945.  

Breakaway Ukrainian Regions Get Russian Mobile Prefixes (12:18 p.m.)

Residents of the breakaway Ukrainian regions of Donetsk and Luhansk will get Russian international mobile phone prefixes, state news service RIA Novosti reported Saturday.

The new +7 numbers will be linked to existing Ukrainian +380 numbers without the need to change the SIM card, RIA Novosti cited officials as saying.

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The Russian numbers will allow people to access banking and government services and social media accounts in Russia, they said.

Russia Still Can’t Shake Default Risk (11:30 a.m.)

Russia narrowly avoided a debt default last week, but markets are still priced like it’s on the brink. Bonds are stuck at distressed levels and five-year credit default swaps put an 87% chance of a default. Those odds are lower than in April, but still elevated.

“Russia will likely default eventually,” said Elena Daly, founder of EM Conseil, a Paris-based advisory firm specializing in sovereign debt management. 

More Civilians Evacuated from Azovstal, Interfax Says (11:21 a.m.) 

Another 50 people have been evacuated from the Azovstal steel plant in Mariupol, Interfax reported, citing DPR territorial defense headquarters.

On Friday, President Volodymyr Zelenskiy said diplomatic efforts are under way to free Ukrainian fighters still holding out at the Azovstal complex, which has been under heavy Russian bombardment. 

“Influential mediators are involved. Influential states,” Zelenskiy said in his nightly video address.  

Jill Biden, in Bucharest, Fears Growing Refugee Crisis (10:25 a.m.)

U.S. first lady Jill Biden was at the U.S. embassy in Bucharest early Saturday, as part of a four-day trip to Eastern Europe. She received a briefing on the humanitarian situation created by some 7,000 refugees arriving from Ukraine each day. 

“I think this is really unfortunately just the beginning,” Biden said. Nearly 900,000 refugees have come into Romania since Russia’s invasion of Ukraine, though many have continued on to other countries, a UNICEF official told Biden. 

Biden asked about the mindset of the refugees and whether they hope to integrate into Romania or return to Ukraine, according to pool reports.   

Kremlin Says 11 Russian Cargo Ship Crew Released by Ukraine (9:42 a.m.)

Eleven crew from the Russian cargo ship Avangard have been released by Ukraine, Tatiana Moskalkova, the Kremlin’s human rights ombudswoman, said on her Telegram channel. 

The Avangard had been in Izmail, in Ukraine’s Danube River delta, for repairs since December. Its crew members were detained at the start of Russia’s “operation” in Ukraine, she said, adding that 60 crew from seven Russian vessels are still in detention. 

It’s unclear if the releases are related to a prisoner swap announced Friday by Ukraine.

Zelenskiy Fleece Sells for $110,000 at Fundraiser (9:10 a.m.)

A khaki fleece jacket worn by Ukrainian President Volodymyr Zelenskiy sold at a fundraising auction at London’s Tate Modern gallery for 90,000 pounds ($110,000), the Telegraph reported. 

Zelenskiy wore the jacket as he walked the streets of Kyiv while Russian troops were close to the capital in the early weeks of the war. 

U.K. Prime Minister Boris Johnson attended Thursday’s “Brave Ukraine” event. He termed the 50,000-pound opening price for the jacket “a snip” and urged buyers to “dig deep” for it and other items on offer, which included a guided tour of Kyiv by Mayor Vitali Klitschko, a former world heavyweight boxing champion. 

Boris Johnson, left, walks with Volodymyr Zelenskiy in Kyiv, on April 9.Source: Ukrainian Presidency

U.K. Says Sanctions Crimp Russian Access to Key Components (8:37 a.m.) 

As fighting in Ukraine takes “a heavy toll on some of Russia’s most capable units and most advanced capabilities,” the impact of Western sanctions will be more evident, the U.K. military said. 

“It will be particularly challenging to replace modernized and advanced equipment due to sanctions restricting Russia’s access to critical microelectronic components,” the U.K. said in an intelligence update. 

Moscow has about 100 T-90M battle tanks in service, with upgraded armor and weaponry; at least one has been destroyed in Ukraine, the U.K. said.   

A Russian T-90M tank (front) drives toward Moscow’s Red Square for a rehearsal of Russia’s Victory Day military parade, on May 4, 2022. Photographer: KIRILL KUDRYAVTSEV/AFP

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Stoltenberg Calls for More Weapons to Ukraine (4 a.m.)

NATO Secretary General Jens Stoltenberg has called on the West to supply more modern weapons to Ukraine. 

“In the long run, Ukraine cannot carry out its defence only with weapons that date back to the era of the Soviet Union, but it must switch to modern Western weapons,” Stoltenberg told Welt am Sonntag. “The West should intensify its deliveries” as Ukraine must prepare for “a long war,” he said.

Boehly-Clearlake in $5.25 Billion Deal for Chelsea (3:42 a.m.)

A group led by former Guggenheim Partners President Todd Boehly and Clearlake Capital has reached a deal to buy Chelsea FC for 4.25 billion pounds ($5.25 billion) that will mark the 10th Premier League team to be fully or partly backed by U.S. investment.

The sale still requires approval from the British government, which sanctioned the club’s current owner, Russian billionaire Roman Abramovich after the invasion of Ukraine. The sale proceeds will be deposited into a frozen U.K. bank account with the intention to donate 100% of them to charitable causes as confirmed by Abramovich. 

A group of U.S. investors has reached a deal to buy Chelsea FC for $5.25 billion.  (Photo by Jose Coelho – Pool/Getty Images)

UN Warns of Spiraling Global Hunger Crisis (3:00 a.m.)

The United Nations World Food Programme called for the re-opening of ports in the Odesa area so that grain being produced in Ukraine can flow freely. 

“Ukraine’s grain silos are full. At the same time, 44 million people around the world are marching towards starvation. We have to open up these ports so that food can move in and out of Ukraine,” WFP Executive Director David Beasley said in a statement. 

With ports blocked because of the war, millions of tonnes of grain are sitting in silos in Odesa and other Ukrainian ports on the Black Sea. More grain is stranded on ships unable to move because of the conflict.

U.S. to Give Ukraine $150 Million More in Military Aid (11:01 p.m.)

Biden announced the latest installment of U.S. military aid to Ukraine. It’s $150 million in artillery rounds, radars, jamming equipment and spare parts.

Urging Congress to approve supplemental spending, Biden said in a statement, “With today’s announcement, my administration has nearly exhausted funding that can be used to send security assistance through drawdown authorities for Ukraine.”

Italy Holds Superyacht, Cites Links to Top Russians (10:43 p.m.)

Italian authorities ordered the superyacht Scheherazade held in a Tuscan port, saying it’s linked to top figures in the Russian government that are under European Union sanctions.

Investigations by Italy’s Finance Police led officials to detain the yacht at its dock at the Marina di Carrara port, the Finance Ministry in Rome said in a statement. Its owner has significant links “with prominent elements of the Russian government and with other subjects” included under European Union restrictive measures after Russia’s invasion of Ukraine, according to the statement, which didn’t identify any of the people.

The multi-million-dollar superyacht Scheherazade, docked at the Tuscan port of Marina di Carrara, Tuscany, on May 6, 2022.Source: AFP

U.S. Replenishing Stocks of Javelin, Stinger Missiles, Pentagon Says (10:00 p.m.)

As the U.S. sends “unprecedented” amounts of munitions to Ukraine, a Pentagon contract with Lockheed Martin Corp. to replenish Defense Department stocks of Javelin anti-tank missiles is imminent, acquisition chief William LaPlante told reporters.

He said the Pentagon also plans to announce a contract this month to stock up on Stinger anti-aircraft missiles, made by Raytheon Technologies Corp. The Pentagon hasn’t purchased Stingers in 18 years.

So far, the Defense Department has issued contracts for $136 million out of $300 million in supplies for Ukraine, LaPlante said. Those include orders for 300 original Switchblade drones and 10 anti-armor Switchblades, military-grade binoculars and packaged meals.

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UN Security Council Endorses Peace Efforts (9:25 p.m.)

The United Nations Security Council — at a stalemate for months over the Ukraine war — issued a rare statement of support for Secretary-General Antonio Guterres’s efforts to broker a peaceful solution.

The move by the council — where Russia holds veto power — comes after Guterres visited Turkey, Russia and Ukraine last week to press for an opening of humanitarian corridors and an end to the war.

The statement didn’t mention a “war” or “invasion” or use Russia’s term, “special military operation.” It expressed “deep concern regarding the maintenance of peace and security of Ukraine” and noted that “all member states have undertaken, under the Charter of the United Nations, the obligation to settle their international disputes by peaceful means.”  

Russia Says it Evacuated Civilians at Azovstal (9:12 p.m.)

Russia evacuated another 50 civilians, including 11 children, from the Azovstal plant in Mariupol, the Russian defense ministry said. All of the civilians were handed over to representatives of the United Nations and International Committee of the Red Cross. 

Hundreds of civilians have been evacuated from Mariupol and the steel facility in the past week, traveling in the first instance north via bus to Zaporizhzhia. Some are now being relocated to Bukovel in Ukraine’s southwest, closer to Romania, the Ukrainian Red Cross said Friday. 

Danube Port Output Quadruples on Black Sea, Azov Blockage (6:55 p.m.)

Cargo turnover in Ukraine’s three Danube River ports quadrupled the past two months to help compensate for blocked shipments due to closed ports on the Black Sea and Sea of Azov, deputy Infrastructure Minister Yuriy Vaskov said in Kyiv. The ports along the Danube handled 850,000 tons of cargo in April, including 450,000 tons of agriculture goods.

That total is equal to about 10% of the current demand for shipping, and the government said it aims to bring that up to 1 million tons per month. Before the war, 90% of Ukraine’s total cargo shipping turnover went through ports that are now blocked or destroyed. 

G-7 Leaders to Discuss Russia Sanctions on Sunday (2:52 p.m.)

Group of Seven leaders will discuss potential new sanctions against Russia over its war in Ukraine on Sunday, according to people familiar with the plan. The call will give the countries the opportunity to coordinate — and potentially finalize — any new measures, said one of the people.

Zelenskiy was invited to join the call, the people said.

Von der Leyen Says Oil Sanctions Plan May Take ‘Some Days’ (9:57 a.m.)

European Commission President Ursula Von der Leyen said finding unity on the proposed ban on Russian oil imports among the EU’s 27 member states isn’t easy, and may take “some days” longer.  She told an audience in Germany on Friday that she’s confident a deal will be reached. 

The EU has proposed a revision to its planned Russia oil import ban that would give Hungary and Slovakia until the end of 2024 to comply, said people familiar with the matter. The Czech Republic would be granted an exemption until June 2024.  

European Commission President Ursula von der Leyen says the EU plans to ban Russian crude oil over the next six months. Extensions are proposed for Hungary, Slovakia and the Czech Republic. Source: Bloomberg

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