Ukraine Latest: Russia Rushes to Hold Hasty Annexation Votes

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(Bloomberg) -- Russia announced a hasty vote on annexing some regions of Ukraine that it’s still occupying despite losing ground in recent weeks, with the Luhansk and Donetsk regions aiming to hold a referendum as soon as this weekend and others saying they’ll follow soon.

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Russia should return occupied territory to Ukraine as part of a peace settlement, Turkish President Recep Tayyip Erdogan said in an interview with PBS in New York, adding that he had “very extensive discussions” with President Vladimir Putin last week in Uzbekistan. “He is actually showing me that he’s willing to end this as soon as possible,” he said.

Ukrainian Foreign Minister Dmytro Kuleba, who is also in New York for the United Nations General Assembly, earlier urged allies to send more weapons to help maintain the momentum of the country’s recent counteroffensive.

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

Key Developments

  • Russia Moves to Cement Grip on Occupied Ukraine, Ups Stakes

  • NATO’s Stoltenberg Decries ‘Sham’ Referendums in Ukraine

  • Senators Seek Secondary Sanctions on Russian Oil Purchases

  • Russian Oil Flows Dive, Hurting Putin’s War Chest

  • Berlin Has a Surprising Soft Spot for Its Soviet Memorials

  • Russia to Flood Asia With Fuels as Europe Ramps Up Sanctions

On the Ground

Ukrainian authorities in Kherson, Zaporizhzhia, Luhansk and other regions which have faced constant shelling urged local citizens to flee to safer places ahead of a difficult heating season. Many settlements in southern and eastern Ukraine are 80% destroyed to 80% there are low prospects of restoring gas, water, heat and power supplies. Infrastructure in more than 33 cities, towns and villages, including Kramatorsk, Zaporizhzhia and Mykolaiv, was damaged by Russian shelling over the past day, Ukraine’s General Staff said on Facebook.

(All times CET)

Qatar Willing to Help Stem Energy Shortfall, Minister Says (12:50 a.m.)

Qatar is willing to help ease the energy supply crunch exacerbated by Russia’s invasion of Ukraine, but wants to focus on long-term contracts, Foreign Minister Sheikh Mohammed bin Abdulrahman Al-Thani told Bloomberg Television on Tuesday.

The foreign minister, speaking on the sidelines of the United Nations General Assembly in New York, blamed underinvestment in energy infrastructure for what he termed “energy poverty,” but said the war in Ukraine had worsened the situation.

Top Prosecutor to Discuss War Crimes With Senators (12:40 a.m.)

Ukraine’s prosecutor general, Andriy Kostin, on Wednesday will brief US senators, including Majority Whip Dick Durbin, on reports of war crimes and crimes against humanity by Russian forces in Ukraine. Durbin, an Illinois Democrat, is co-chair of the Senate Ukraine Caucus.

Kostin met with Attorney General Merrick Garland on Tuesday, “to hold accountable individuals responsible for war crimes and other atrocities in the wake of Russia’s unprovoked and unjust invasion of Ukraine,” the Justice Department said in a statement.

IMF to Start Ukraine Mission in October, Prime Minister Says (8:55 p.m.)

Ukrainian Prime Minister Denys Shmyhal said the International Monetary Fund will begin its Ukraine mission in October.

Commenting on Telegram after a meeting with IMF Managing Director Kristalina Georgieva, Shmyhal said they discussed next steps in the “special” cooperation program with the IMF.

Macron Calls Putin’s Referendums a ‘Parody’ (8:15 p.m.)

French President Emmanuel Macron called Putin’s planned referendums “cynical, a parody” and “a provocation.”

But Macron, speaking to reporters in New York during the United Nations General Assembly session, said he’s agreed to talk to Putin about nuclear security in coming days and will also meet with the general director of the International Atomic Energy Agency.

Macron said France has made weapons deliveries to Ukraine “and we will make more.” He said Ukraine has requested French-built Caesar truck-mounted howitzers but didn’t say how France will respond.

Zelenskiy Says He Had Video Call With Goldman Sachs (7:25 p.m.)

President Zelenskiy said on Facebook that he had a “meaningful” video call with management investment banking giant Goldman Sachs Group Inc.

“I’ve emphasized that since the beginning of the full-scale invasion by Russia, Ukrainians have demonstrated unity in society and resilience on the battlefield. Our state institutions have also withstood,” Zelenskiy said. “That is why global business should demonstrate resilience in supporting the Ukrainian economy.”

Wheat Jumps as Russia Moves to Annex Regions; Corn Rises (7:20 p.m.)

Wheat futures in Chicago soared as tensions between Russia and Ukraine, key suppliers of the grain, escalate. Corn also climbed.

The contract for November delivery jumped as much as 5% Tuesday amid reports that Russia is moving to stage sham votes on annexing the regions of Ukraine its forces still control.

“Mounting tensions between Russia and Ukraine are rising export premiums for wheat and corn,” said Vinicius Ito, director at Marex North America in New York. Grain prices also reflect concerns that the Ukraine grain corridor agreement, which has allowed exports from the invaded nation, might be disrupted, Ito added.

Biden Aide Says Mass Graves in Izium May Be Worst Yet (6:53 p.m.)

President Joe Biden’s national security adviser, Jake Sullivan, said mass graves unearthed around Izium in Ukraine indicate that Russian atrocities there may be worse than those discovered in Bucha, outside Kyiv, earlier this year.

Sullivan said he had spoken with Andriy Yermak, chief of staff to Ukrainian President Voldymyr Zelenskiy. “He gave me a report on what Ukrainians are discovering around Izium, and he put it quite bluntly. He said this, in some ways, is worse than Bucha, and we will see more of these as we go, as Ukraine de-occupies towns that have previously been occupied by Russian armed forces,” Sullivan said.

Sullivan said the US will continue to seek to hold Russia accountable for alleged atrocities in Ukraine. Zelenskiy’s government and the Biden administration have accused Putin of committing war crimes in the invasion.

NATO’s Stoltenberg Decries ‘Sham’ Referendums in Ukraine (6:36 p.m.)

NATO Secretary General Jens Stoltenberg decried Russia’s plans for what he called “sham” referendums in occupied parts of Ukraine, warning Putin against further escalating the conflict.

“Such sham votes, referendums, do not have any legitimacy, and therefore they do not change the nature of the conflict,” Stoltenberg said in an interview Tuesday with Bloomberg Television on the sidelines of the United Nations General Assembly in New York. “This will only further worsen the situation, and therefore we need to provide more support to Ukraine.”

North Atlantic Treaty Organization allies and partner countries “have to support Ukraine for as long as it takes, because the alternative is much more dangerous for all of us,” Stoltenberg said. “We have to understand that this goes beyond Ukraine.”

Planned Russian Votes ‘Imperialistic Aggression,’ Scholz Says (5 p.m.)

German Chancellor Olaf Scholz said Russia’s plan to hold votes on annexing Ukrainian regions under its control is in clear breach of international law and cannot be accepted, reiterating a call for the Kremlin to withdraw its troops.

“It’s all just an effort at enforcing imperialistic aggression,” Scholz told reporters in New York, where he’s attending the UN General Assembly. “Ukraine has every right to defend the sovereignty and integrity of its own territory and its own democracy.”

EU Countries Warn Against Weakening Russian Coal Sanctions (4:55 p.m.)

A group of European Union nations pushed back against new guidance from the EU executive that they fear weakens sanctions and could allow countries to transport key Russian commodities such as coal globally.

Member states including Poland and the Baltic nations said that new sanctions guidance contained references to wood, some cement products and coal, the people said. Diplomats have asked the commission to further explain the proposed move, fearing it could go beyond the earlier food security commitments and effectively be watering down sanctions on those Russian commodities.

Read more: EU Guidance Weakens the Bloc’s Sanctions on Coal, Countries Warn

Germany to Nationalize Gas Giant Uniper (4:45 p.m.)

The German government is planning to inject about 8 billion euros ($8 billion) into gas giant Uniper SE, as the ruling coalition in Berlin moves to stave off a collapse of the country’s energy sector this winter.

Uniper confirmed on Tuesday it is in final discussions with the government over a package that would include an 8 billion-euro capital increase, subscribed entirely by the government. Berlin will also buy the shares of its main shareholder, Finland’s Fortum Oyj.

Read more: Germany to Nationalize Gas Giant Uniper in Historic Bailout

Ukrainian Calls Annexation Plans ‘Naive Blackmail’ (4 p.m.)

Russia’s annexation votes are an “asymmetrical response” to Ukraine’s counteroffensive and “naive blackmail,” the head of President Volodymyr Zelenskiy’s office, Andriy Yermak said on Twitter. “The enemy is afraid and resorts to manipulations. It won’t work.”

Russia to Hold Annexation Votes as Soon as This Weekend (3:45 p.m.)

The Russian forces occupying the Luhansk and Donetsk regions in Ukraine plan to hold a controversial referendum on joining Russia starting this weekend, Interfax quoted officials as saying.

Russian officials have already said they’d grant the regions’ requests to be annexed if they made them. For the Kremlin, the move would help reassure supporters there worried by its hurried retreat from other territories in the face of the Ukrainian advance in the last few weeks.

Read more: Russia Hurries to Annex Occupied Ukraine Amid Kyiv’s Gains

Finland Seeks Joint EU Stance on Russian Visas (3:30 p.m.)

Finland’s government asked the European Union to issue a recommendation for all Schengen countries on annulling or cancelling visas granted to Russian citizens. Finland also proposed that tourist visas should be made part of EU sanctions against Russia, in order to strengthen the unity of EU members.

The Nordic country is the only land crossing where Russians can enter the EU, after the Baltic nations and Poland began turning away most Russians seeking to enter the EU on visas for tourism, culture, sports and business.

Read more: Poland and Baltics Target Russia Visas, See ‘Serious Threat’

Shelling Ebbs Near Nuclear Plant (2:45 p.m.)

Ukraine sees decline in Russian shellings of areas near Zaporizhzhia nuclear plant after IAEA deployed its staff at the site, Petro Kotin, the head of Ukrainian “Energoatom” said in interview to “Inter” TV channel. There are 2 IAEA representatives at the station, he said. Ukraine also managed to resupply Zaporizhzhia nuclear plant with necessary materials, including diesel fuel, which can last for 10 days in case of need. Kotin also mentioned the situation in Pivdenno-Ukrainska NPP, to the north of Mykolaiv region, which was also hit this week. According to Kotin 3 lines and the hydraulic unit of the near-by HPP station were disconnected right after the strike of Russian “Iskander” rocket. But now all lines have been restored and now are connected to Ukrainian grid.

UK Says Russia Relocated Threatened Subs (12:30 p.m.)

The Kremlin has “almost certainly” relocated its Kilo class submarines from their base at Sevastopol in Crimea across the Black Sea to Novorossiysk in southern Russia after recent Ukrainian attacks, according to the latest intelligence update from the UK Ministry of Defence.

“This is highly likely due to the recent change in the local security threat level in the face of increased Ukrainian long-range strike capability,” the ministry said in a tweet. “Guaranteeing the Black Sea Fleet’s Crimea basing was likely one of Putin’s motivations for annexing the peninsula in 2014,” it added. “Base security has now been directly undermined by Russia’s continued aggression against Ukraine.”

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