Ukraine Latest: EU Considers Buying Grain to Ease Border Glut

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(Bloomberg) -- A massive fire erupted at a fuel depot in Sevastopol on the Crimean peninsula after it was hit by a drone, the region’s Russia-appointed governor said. Social media images showed black smoke billowing into the sky.

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Ukraine’s defense chief said final preparations are underway for a counteroffensive that’s expected as an attempt to dislodge Russian forces from parts of Ukraine’s southeast. The comments followed a fresh wave of aerial assaults across Ukraine that killed at least 25 people.

Turkey’s president and the UN secretary-general spoke Friday about the Black Sea initiative for Ukraine’s grain exports, which is set to expire May 18 and faces threats from Russia that it will pull out of the deal.

Key Developments

  • Russia Strikes Across Ukraine as Kyiv Says New Offensive Nears

  • Bank of Russia Sees Economy Growing as Sanctions Shock Fades

  • Russian Oil Still Powering Europe’s Cars With Help of India

  • EU Allows Some Eastern Members to Ban Ukraine Grain

  • Russia Seeks to Reduce Fuel Subsidy for Refiners by $4.5 Billion

(All times CET)

EU May Buy Ukrainian Grain to Ease Border Glut (11:20 a.m.)

The European Union is considering buying Ukrainian grain stuck in bordering countries to ease a glut that’s raised tensions within the bloc, according to an European Commission official.

The EU on Friday reached a deal with Poland, Hungary, Slovakia, Bulgaria and Romania that will replace those countries’ ban on Ukrainian products with temporary restrictions. The Eastern European nations claimed excess grain piling up in their warehouses hurt local farmers by pushing down prices.

A direct grain purchase, which would be a first for the EU, could be expensive and needs to be carefully discussed within the commission, said the official, who declined to be identified because discussions are private and ongoing.

Read more: EU Allows Some Eastern Members to Ban Ukraine Grain Imports

Finance Minister Says Ukraine’s Needs Won’t Be Less in 2024 (8:40 a.m.)

Ukraine’s financing needs for 2024 will again be “huge,” finance minister Serhiy Marchenko said on the sidelines of an informal meeting of EU finance ministers and central bank governors outside Stockholm.

“Of course it depends on the military campaign but I think it could be no less than the existing amount of €18 billion” that the EU is providing this year, Marchenko said. At the same gathering, European Commission Vice President Valdis Dombrovskis said it was too soon to discuss 2024 but repeated a view that the EU should seize sanctioned Russian assets to help fund Ukraine’s reconstruction.

EU finance chiefs on Saturday are scheduled to discuss how to coordinate financial support to Ukraine in the longer-term, as well as considering Kyiv’s path toward closer integration with the EU economy and internal market.

Huge Crimean Fire Said to Follow Drone Hit on Fuel Depot (8:30 a.m.)

Fuel tanks caught fire in Sevastopol, Crimea, after a possible drone strike early Saturday morning, Tass reported, citing Moscow-installed governor Mikhail Razvozhaev. No injuries were reported and there is no danger to local population, he said.

Images posted on social media massive cloud of black smoke rising from the annexed peninsula’s largest city.

Erdogan, UN’s Guterres Spoke About Black Sea Grain Deal (8 a.m.)

Turkish President Recep Tayyip Erdogan and UN Secretary-General Antonio Guterres spoke by phone on Friday about the future of the Black Sea initiative, according to a readout from the UN.

The safe transit deal brokered by Turkey and the UN has allowed Ukraine to export millions of tons of grain from Black Sea ports since last summer. The initiative runs through mid-May but its future is imperiled by repeated Russian threats to pull out.

The pair “exchanged views on how to guarantee the improvement, expansion and extension of the Black Sea initiative” as well as how to better promote Russian “food and fertilizer” to the world market, according to the readout.

Attacks Hint at Change in Russian Tactics, UK Says (7 a.m.)

Friday’s widespread missile attacks, the first by Kremlin forces since early March “suggest a departure in Russia’s use of long-range strikes,” the UK defense ministry said. Fewer missiles were involved than over the winter, and it was unlikely that Russia was targeting Ukraine’s energy infrastructure.

“There is a realistic possibility that Russia was attempting to intercept Ukrainian reserve units and military supplies recently provided to Ukraine,” the UK said, adding that Russia “prioritizes perceived military necessity over preventing collateral damage, including civilian deaths.”

Most of the cruise missiles were shot down by Ukraine’s air defense but at least 25 civilians were killed, mostly after a multi-storey apartment building in Uman, south of Kyiv, was destroyed.

Friday’s Death Toll From Russian Missile Strikes Over Two Dozen (6:45 p.m.)

Russia unleashed a fresh wave of aerial strikes early Friday, killing at least 25 people and destroying several buildings. Explosions were heard in the capital, Kyiv, for the first time in more than a month.

In Uman, south of Kyiv, a missile slammed into apartment blocks, killing at least 23 people, including four children, and wounding at least 18. The toll may rise as rescue efforts continue. Separately, a woman and a child were killed in Dnipro.

The attacks involved Tu-95 strategic aircraft coming from the Caspian Sea region as well as drones, Ukrainian Commander-in-Chief Valeriy Zaluzhnyi said on Telegram. Ukraine’s air defenses destroyed 21 out of 23 Kh-101/Kh-555 cruise missiles as well as two drones, he said. Explosions were also heard in a number of regions including Kremenchuk, Dnipro, Mykolayiv, Poltava and Cherkasy, according to Ukrainian TV channel TSN.

Read more: Russia Launches Deadly Aerial Assault on Ukraine, Hits Kyiv

Ukraine Calls for End to Restrictions on Its Food Exports (6 p.m.)

Zelenskiy called for the removal of restrictions on Ukrainian food products by five EU members in a telephone call with European Council President Charles Michel.

“The artificial and illegal restriction of trade with the European Union is hitting Ukraine, resisting Russian aggression, both economically and politically,” Zelenskiy said. “I’m convinced that in the conditions of war with Russia, Ukraine as a candidate country and the European Union must always adhere to the provisions of the Association Agreement and the rules and regulations of the EU Single Market.”

Earlier, Poland, Slovakia, Hungary, Romania and Bulgaria agreed to restrictions on Ukrainian grain products as part of a deal with the bloc’s executive arm, replacing unilateral bans on imports in response to plummeting prices.

Russia Prepares to Connect Zaporizhzhia Plant to Its Grid (5:52 p.m.)

International Atomic Energy Agency monitors at Ukraine’s occupied Zaporizhzhia nuclear power plant said Russian engineers are preparing to connect the station to their electricity network.

Russia shipped a large transformer to Zaporizhzhia this week as part of a plan to repair damaged cables “linked to the currently Russian-controlled electrical grid,” the IAEA wrote in its weekly update. The agency chided Russian plant operators for delaying an inspection of repair work.

Zaporizhzhia is Europe’s biggest nuclear plant and has been subject to on-and-off attacks since Russian troops seized the facility during the first days of the war.

Russia Sees Economy Growing as Sanction Shock Fades (2:02 p.m.)

Russia’s central bank said the economy will recover this year, growing as much as 2% as the impact of sanctions imposed over the invasion of Ukraine fades.

Gross domestic product is likely to reach pre-war levels by the end of 2024, policymakers said. That’s far earlier than many economists had expected and reflects the more-limited impact of the restrictions the US and its allies have slapped on Russia.

Read more: Bank of Russia Keeps Hawkish Bias in Leaving Rates on Hold Again

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