Ukraine Latest: US Warns China Against Helping Putin’s Military

Ukrainian President Volodymyr Zelenskiy may postpone a government shakeup replacing the defense chief as the government braces for a Russian offensive. No decisions will be made this week, according to a parliamentary official.

(Bloomberg) — Ukrainian President Volodymyr Zelenskiy may postpone a government shakeup replacing the defense chief as the government braces for a Russian offensive. No decisions will be made this week, according to a parliamentary official.

Russia’s budget deficit grew in January, driven by higher spending and sinking energy revenues as a result of a price cap imposed by Ukraine’s allies. 

The US is watching closely to make sure that China’s rhetorical, political and economic support for Russia doesn’t cross the line into open violation of US sanctions against aiding President Vladimir Putin’s military in Ukraine, the State Department said.

(See RSAN on the Bloomberg Terminal for the Russian Sanctions Dashboard.)  

Key Developments

  • Ukraine Defense Chief’s Removal on Hold Amid Security Risks
  • US Plans 200% Tariff on Russia Aluminum as Soon as This Week
  • Latvia Probes Citizenship of Russian Tycoon Aven Under New Law
  • Russia’s Deficit Hits $25 Billion as Energy Income Slumps
  • Russia Sends More Oil by Sea, But Kremlin’s War Chest Pressured
  • Ukraine Crop Exports Miss Target as Russia Slow-Walks Checks

On the Ground 

Russia delivered 12 aviation strikes, five missile strikes and 36 rocket salvo attacks in the past 24-hour period, Ukraine’s General Staff said on Facebook. Civilian facilities including residential areas were hit in Kherson region. Ukrainian ground forces used engineering barriers and the natural landscape to stop a Russian offensive in Bakhmut, the Ukrainian Military media center said citing Oleksandr Syrskiy, the commander of the Ground Forces of Ukraine.

(All times CET)

US Warns China Over Sanctions-Busting Aid to Russia (9:36 p.m.)

The US is watching closely to make sure that China’s political and economic support for Russia doesn’t cross the line into support for Putin’s military in Ukraine, State Department spokesman Ned Price said.

The message to China “has been very simple: We’re watching very closely,” Price said. “There would be costs and consequences if we were to see a systematic effort to help Russia bypass the sanctions.”

The Treasury has sanctioned a Chinese firm for providing satellite imagery that the US said helped Russian mercenaries with the Wagner Group conduct combat operations in Ukraine. US officials also have confronted Chinese officials over non-lethal aid to Russia, Bloomberg News reported last month. 

Russia Racks Up $25 Billion Budget Gap (4:45 p.m.)

Russia’s tax revenues from oil and gas plunged 46% in January as the price cap on oil exports imposed by the US and its allies over the Kremlin’s invasion of Ukraine hit hard.

Combined with a 59% increase in spending amid the war, the drop pushed the deficit to 1.76 trillion rubles ($25 billion), the Finance Ministry said, the worst start to the year since at least 1998. 

Russia’s Lavrov in Africa Yet Again (3 p.m.)

Russian Foreign Minister Sergei Lavrov returned to Africa for the second time in 10 days as he focuses on the region amid a scarcity of international contacts since the invasion of Ukraine. Lavrov was expected to start a two-day visit to Mali after holding talks in OPEC member Iraq. He’s also traveling to Sudan and Mauritania this week, according to media reports.

Russia’s Lavrov In Africa Yet Again to Ease Diplomatic Isolation

Zelenskiy Withdraws Appearance at Italian Song Festival (2:30 p.m.)

The Ukrainian leader won’t appear with a video message at Italy’s main song festival, which opens Tuesday in Sanremo. He will instead send a letter, which will be read by the show’s presenter.

Zelenskiy’s planned address had drawn heavy criticism in Italy — a country where media often report Russian propaganda as fact — including from deputy prime minister Matteo Salvini, a long-time Putin admirer. Zelenskiy regularly addresses popular cultural events, including music and film festivals, around the world to remind the public about Russia’s invasion.

Italy’s Divided Loyalties Are Being Exposed by War in Ukraine

Ukraine Grain Flows Slow as Russia Slow-Walks Checks (1:15 p.m.)

Ukrainian traders and authorities said that Russia is purposefully slowing the pace of a landmark deal to reopen some Ukrainian ports for vital food exports by pushing the bounds of an inspection mandate and limiting personnel.

The agreement included a requirement that joint teams from Ukraine, Russia, the United Nations and Turkey inspect each ship to prevent unauthorized cargo or passengers from moving in and out. One Ukrainian ship inspector said he’s seen his Russian counterparts repeatedly slow the flow of his country’s grain with laborious checks that include scrutinizing fuel gauges and crews’ personal belongings. Moscow has blamed the backlog on Ukrainian companies. 

Ukraine Crop Deal Misses Target as Russia Slow-Walks Ship Checks

Ukraine Defense Chief’s Removal on Hold Amid Security Risks (12:25 p.m.)

A day after a senior lawmaker in Zelenskiy’s party announced that Defense Minister Oleksii Reznikov will be replaced by Ukraine’s head of military intelligence, a parliamentary official said no decisions on staff changes will be made this week. 

The delay is due to “risks to the system as a whole” ahead of a key meeting on weapons deliveries this week and military preparations, Mariana Bezuhla, the deputy chair of the Ukrainian parliament’s defense and intelligence committee, said in a statement on Facebook. 

The back-and-forth casts uncertainty over the fate of Reznikov, who has been forced to defend his ministry against charges that officials had been skimming funds off military food supplies. The minister and his staff have denied the accusations. 

Norway Proposes $7.3 Billion in Aid to Ukraine (12:05 p.m.)

Norway’s government proposed to spend 75 billion kroner ($7.3 billion) on helping Ukraine, spread out in equal amounts over five years, Prime Minister Jonas Gahr Store said.

The program involves both civilian and military support with the funds to be used flexibly in line with Ukraine’s needs, the prime minister said in a statement to Bloomberg. The next step is to “seek broad political agreement” in parliament, said the premier who oversees a minority cabinet.

NATO Can’t Rule Out Being Russian Military Target, Estonia Says (11:15 a.m.)

The Estonian Defense Ministry warned in a new paper that “Putin has not lost sight of the bigger objectives,” and that the notion that Russia’s invasion of Ukraine is a complete failure is a common “myth.”

In fact, the size of the territory that Russia currently occupies in Ukraine is larger than 30 European countries, the report argued. “Russia has long-term hostile strategic goals and its imperialistic war has strong support among the Russian society,” the report said. “NATO cannot rule out becoming Russia’s military target.”

The invasion of Ukraine is not simply Putin’s war but Russia’s, according to the report, as 71% of Russia’s population supports the war.

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