Ukraine Latest: US Says Russia Seeks Munitions From North Korea

(Bloomberg) -- Russia wants to buy millions of rockets and artillery shells from North Korea to use in its war against Ukraine, a sign that Western sanctions on its military and economy are starting to bite, US officials said.

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The United Nations atomic watchdog agency called for the establishment of a security zone around a Russian-controlled nuclear plant in Ukraine after reporting damage at the facility, warning that fighting poses a “constant threat” to safety.

Russian President Vladimir Putin’s top economic policy official confirmed that the government prepared an internal report that the country may face a deeper recession than publicly acknowledged, Tass reported, after Bloomberg published the estimates.

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

Key Developments

  • Biden Team Sees Easing Pump Price as Payoff From Russia Oil Cap

  • Ukraine’s Premier Wants War to End Soon as Time Favors Russia

  • Russia Privately Warns of Deep and Prolonged Economic Damage

  • Gazprom to Shift Gas Sales to China to Rubles, Yuan From Euro

  • EU Ministers May Set Price Cap on Russian Gas, Spain Says

  • Gazprom Starts Producing LNG at Plant Near Nord Stream Pipeline

On the Ground

The Ukrainian counteroffensive is making progress and has degraded logistics and administrative capabilities in southern Russian-occupied areas, the Institute for the Study of War said. But the limited scale and goals of the Ukrainian push are becoming clearer. Russia conducted air strikes throughout the south and east, according to Ukraine’s General Staff. Russian rockets struck an oil depot in the Dnipropetrovsk region, destroying large fuel stockpiles, the head of the Kryvyi Rih military administration said. The Zaporizhzhia nuclear power plant remained cut off from the Ukrainian grid after losing its last direct connection due to a fire on Monday following shelling.

(All times CET)

US Says Russia Seeks ‘Millions of Rounds’ From North Korea (10:20 p.m.)

Russia wants to buy millions of rockets and artillery shells from North Korea to use in its war against Ukraine, a sign that Western sanctions on its military and economy are starting to bite, US officials said Tuesday.

The decision to buy the munitions indicates that Russia “continues to suffer from severe supply shortages in Ukraine due in part to export controls and sanctions,” State Department deputy spokesman Vedant Patel told reporters.

“Our sense is that it could include literally millions of rounds,” John Kirby, spokesman for the National Security Council, said. But he said there are no indications that purchases from North Korea have been completed.

UK’s Truss Made Her First Call as Premier to Zelenskiy (10:11 p.m.)

Ukraine’s President Volodymyr Zelenskiy said he spoke with new UK Prime Minister Liz Truss, inviting her to visit his country and calling for further pressure on Russia.

A British readout of the conversation said that “in her first call with a counterpart since becoming Prime Minister, she reiterated to the Ukrainian leader that he had her full backing, and Ukraine could depend on the UK’s assistance for the long term.”

Ukraine Counterattack Unfolds Slowly, With Limited Aims (7:51 p.m.)

One week into Ukraine’s counteroffensive, the operation’s limited scale and goals in the south are becoming clearer, together with Russia’s response as the two sides head toward a long and difficult winter.

After several days of confusion and a deliberate lockdown on information, Ukrainian officials have confirmed the recapture of at least two villages, pushing back against a growing Russian narrative of failure. And on Monday, the deputy head of the military-civilian administration in Russian-occupied Kherson said the province was postponing a planned referendum on joining Russia, citing security reasons.

The Ukrainian advance has been no faster than Russia’s widely panned drive to seize the eastern Donbas region. But the circumstances of the two campaigns are so different that what counts for failure in the Donbas may be success in Kherson, according to Jack Watling, senior research fellow for land warfare at the Royal United Services Institute, a UK think tank.

US Says a Sponsor of Terrorism Designation for Russia Wouldn’t Work (7:01 p.m.)

A sponsor of terrorism designation of Russia “could have unintended consequences to Ukraine, and the world,” White House Press Secretary Karine Jean-Pierre told reporters, saying that the move could hinder humanitarian assistance efforts in Ukraine.

“It would also undercut our unprecedented multilateral condition that has been so effective to holding Putin accountable and could also undermine our ability to support Ukraine at the negotiation table,” Jean-Pierre said.

Some US lawmakers have urged the terrorism designation, but President Joe Biden responded “no” Monday night to a shouted question about whether Russia should receive it.

Nuclear Monitors Demand Security Zone Around Ukraine Plant (4:40 p.m.)

Monitors from the International Atomic Energy Agency demanded the establishment of a security zone around the Zaporizhzhia Nuclear Power Plant, saying the UN agency remains “gravely concerned” over shelling at the facility.

In a 52-page report published Tuesday, days after an agency mission to inspect damage at the plant, the IAEA said that although the violence “has not yet triggered a nuclear emergency, it continues to represent a constant threat to nuclear safety and security.”

Hungary Says Support for Renewing Russia Sanctions Is Conditional: RFE (3:26 p.m.)

Hungary is making its support for renewing EU sanctions against Russia conditional, RFE/RL reported, which cited diplomats familiar with matter. Hungary wants three billionaires close to Putin -- Alisher Usmanov, Petr Aven and Victor Rashnikov -- removed from a visa ban and asset freeze imposed in response to Russia’s invasion of Ukraine. Hungary is also asking for an exemption for “humanitarian organizations” with business ties to Russian banks, it said.

Russians to Face Higher Fees, Stricter Rules for EU Visas (3:19 p.m.)

The European Union issued proposals making it more expensive and more difficult for Russian tourists to travel to the 27-member bloc, a week after EU foreign ministers gave political backing for suspending a 2007 visa-facilitation agreement.

“Russian citizens should not have easy access to the EU,” Commissioner Ylva Johansson, in charge of home affairs, told reporters Tuesday. “At the moment, there is no basis for trust, no basis for a privileged relation between EU and Russia.”

Putin Aims for Victory in Global Cultural Battle (2:28 p.m.)

The Russian president sought to position Russia as the defender of traditional social and family values against the liberal West in a new Kremlin decree that warned “the battle for cultural supremacy is growing on the world stage.”

Amid a sweeping crackdown on political dissent after Putin ordered the invasion of Ukraine, and years of Kremlin restrictions on sexual minorities, the decree calls for the country’s foreign policy to counter what it terms a campaign to discredit Russia and its goals. It claims Russia is increasingly seen abroad as the guardian of tradition against “the aggressive imposition of neoliberal views by a number of states.”

Gazprom to Shift Gas Sales to China to Rubles, Yuan From Euro (1:37 p.m.)

Gazprom PJSC said it will shift its contract to supply gas to China to rubles and yuan from euros, as the Kremlin steps up efforts to move trade out of countries it considers “unfriendly” amid US and European sanctions.

The state-run gas giant signed an additional agreement to its existing contract with China National Petroleum Corp. on the issue Tuesday, Gazprom said in a statement. Payment will be made 50% in rubles and 50% in yuan, effective immediately, according to a person familiar with the plans who spoke on condition of anonymity to discuss matters that aren’t yet public.

Russia Purchasing Rockets, Artillery From North Korea, US Says (1:13 p.m.)

Russia is in the process of buying millions of rockets and artillery shells from North Korea to be deployed in its campaign against Ukraine, according to a US official. The purchases by the defense ministry in Moscow illustrate the several supply shortages faced by the Russian military, in part because of export controls and sanctions, the official said on condition of anonymity. The purchases were first reported by the New York Times.

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