Russia Strikes After Zelenskiy’s European Aid Call

(Bloomberg) — Russia launched its biggest barrage of missile attacks so far this year against Ukraine after President Volodymyr Zelenskiy completed a visit to European capitals, where he sought more weapons to fend off Vladimir Putin’s invasion.

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Romania pushed back against a claim by Ukraine’s top commander that two Russian cruise missiles had crossed into the NATO member’s air space, while Moldova summoned Russia’s ambassador after the projectiles passed over its territory.

Wheat gained on the attacks targeting Ukrainian infrastructure, while crude prices moved higher after Russia announced that it will cut oil production by 500,000 barrels a day next month.

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

Key Developments

  • Wheat Rises as Russia Launches Fresh Missile Attacks on Ukraine

  • OPEC+ Won’t Boost Oil Supply as Russia Cuts, Delegates Say

  • Romania Says No Russian Missile Crossed Airspace After Kyiv Claims

  • Bank of Russia Tilts Hawkish, With Rate Hike More Likely in 2023

  • Russia Retaliates for Sanctions by Announcing Oil Output Cut

(All times CET)

Ukraine Nuclear Unit Shut Down After Russian Shelling (10:30 pm)

Instability in the Ukrainian electrical grid as a result of Russian shelling caused one of the Khmelnytskyi reactor units, located in western Ukraine, to shut down, according to the International Atomic Energy Agency.

All nuclear safety systems at the Khmelnytskyi plant worked as expected, the IAEA said on its website. The agency has representatives at all Ukrainian nuclear power plants.

Russia Launches Further Drone Attacks (8:30 pm)

Russia launched another wave of attacks by Iranian-made drones, targeting southern and central regions including Odesa and Mykolaiv, Ukrainian officials said.

Mykolaiv regional governor Vitaliy Kim said Ukrainian troops shot down three Shahed drones and the governor of Odesa said that air defenses shot down four of the aircraft that had attempted to attack energy infrastructure. Warning sirens were also heard in Kyiv.

Wagner Founder Sees 2-Year Effort to Control Donbas (8:15 pm)

Yevgeny Prigozhin, founder of the Russian military-contracting company Wagner that’s playing a key role in the fighting in Ukraine, said it will take Russian forces up to two years to take control of the Donetsk and Luhansk regions.

In a rare interview with a pro-Kremlin video blogger, Prigozhin was asked what he thinks is the goal of Putin’s war, and how long it will last. “Everybody has a different view of the special operation,” he said. “As far as I understand, we need to take the Donetsk and Luhansk republics, and in principle everybody will be satisfied with this.”

Prigozhin also said that Wagner has stopped recruiting prisoners to send to the front lines, although he added that the Defense Ministry is now hiring them.

Putin Says Russian GDP May Exceed Estimate for 2022 (7:10 pm)

Russia’s gross domestic product may have exceeded preliminary estimates in 2022, President Vladimir Putin said, according to the Tass news agency.

Putin did not specify which estimate he was referring to. Russia’s central bank said earlier on Friday that the economy likely shrank 2.5% last year. It also raised its forecast for GDP in 2023, predicting a range somewhere between a 1% contraction and growth of 1%.

Wheat Rises After Russian Attacks (5:02 pm)

Chicago wheat futures soared more than 4%, the biggest intraday gain since October, amid Russia’s attacks.

Ukraine has continued to ship grain throughout the war, although damage to infrastructure can slow logistics. The commodity markets largely erased the risk premiums since Russia invaded Ukraine a year ago, but may need to reinstate at least a portion of that risk, Arlan Suderman, chief commodity economist at StoneX, said in a report.

Zelenskiy Calls for Russian Athletes to Be Banned (5:44 pm)

Addressing sports ministers of partner countries, the Ukrainian leader reiterated his country’s position that Russian athletes should be banned from international competitions.

Zelenskiy said 228 Ukrainian athletes had been killed in the war, while many Russian athletes held military ranks or were associated with army clubs. It would be “only a matter of time” before Putin’s government would make them convey war propaganda, he said.

World Bank to Grant Ukraine $50 Mln for Transport Project (3:26 pm)

The World Bank announced a new $50 million project to restore Ukraine’s transport network to support humanitarian relief, as well as to increase import and export corridors’ capacity.

Direct damage to Ukraine’s transport network totals more than $29.9 billion, the Washington-based lender said in a statement.

Moldova Names New Prime Minister Amid Security Risks (2:59 pm)

Moldovan President Maia Sandu appointed Dorin Recean, 48, a former interior minister and senior aide as premier, saying “the new government needs to increase the country’s level of security.”

The nation of 2.6 million, wedged between Ukraine and Romania, has come under intense pressure since the start of Russia’s invasion. Russian cruise missiles launched as part of the Kremlin’s biggest attack this year passed through Moldova’s airspace Friday.

Zelenskiy Condemns Latest Missile Attack (1:48 pm)

Zelenskiy condemned the latest Russian missile launch, saying that “unfortunately, there are victims”.

The Ukrainian leader, who visited Brussels, Paris and London this week, said in a statement on his website that the missiles had passed through the airspace of Moldova and Romania, adding that this represented a “challenge to NATO”.

Romania’s government earlier Friday denied a claim by the Ukrainian military that a Russian missile had crossed into its airspace. The Moldovan Foreign Ministry summoned Russia’s ambassador over the incident.

Ukraine Says It Downed 61 Cruise Missiles (1:22 pm)

Russia launched 71 cruise missiles, as many as 35 S-300 missiles and seven drones, Valeriy Zaluzhnyi, commander-in-chief of Ukraine’s armed forces, said Friday on Telegram. Cruise missiles were fired from strategic bombers and from ships in the Black Sea. Ukrainian forces shot down 61 cruise missiles and five drones, he said.

Prime Minister Denys Shmyhal had said earlier on Telegram that high-voltage infrastructure in the country’s western, central and eastern regions had been damaged, causing interruptions with power supply.

Romania Says ‘Aerial Target’ Was Never In Its Airspace (12:30 pm)

Romania’s defense ministry said it detected an “aerial target, most likely a cruise missile launched from a Russian warship in the Black Sea,” early Friday, but that the projectile did not cross into its airspace “at any time.” The missiles were never within 35 kilometers (22 miles) of the northeastern Romanian border, it said.

The “target” flew over Ukraine, then Moldova, “after which it reentered Ukrainian space without crossing into Romania’s airspace,” the NATO member said in a statement.

Romania said it rerouted two MiG jets to the north of the country to increase “reaction options,” but that once the situation was clarified the jets resumed their initial mission.

OPEC+ Won’t Boost Oil Supply as Russia Cuts (12:19 pm)

Russia’s partners in the OPEC+ oil coalition signaled they won’t boost output to fill in for cutbacks announced by Moscow.

The OPEC+ group led by Saudi Arabia will maintain output despite plans by the Kremlin to cut 500,000 barrels a day in retaliation for international sanctions, according to delegates who declined to be identified.

Read more: OPEC+ Won’t Boost Oil Supply as Russia Cuts, Delegates Say

Bank of Russia Moves to Hawkish Bias (12:06 pm)

Russia’s central bank kept interest rates unchanged but signaled it will consider hikes at its coming meetings should risks to inflation worsen.

Policy makers held their benchmark at 7.5%, in line with the forecasts of all economists surveyed by Bloomberg. But in a shift of tone, the central bank said in a statement accompanying the decision that higher borrowing costs could soon be in play.

Missile and Drone Attack Hits Energy Targets in Six Regions (11:40 am)

Friday’s missile and drone attack from Russia, the latest in over a dozen major barrages since early October, hit thermal and hydro generation facilities as well as high-voltage infrastructure in six regions, Ukraine’s energy minister said.

“Emergency outages have been introduced in many regions. The most difficult situation is in the Zaporizhzhia, Kharkiv and Khmelnytsky regions,” Herman Halushchenko said on Facebook. Air defense and advanced technical measures were helping to preserve the integrity of Ukraine’s energy system, he added.

Ukraine, NATO Member Starts Artillery Shell Production (11:30 am)

Ukrainian state-run Ukroboronprom has started making 120-mm artillery shells in cooperation with a NATO member country, the company said on its website. The NATO country was not identified.

Production will be partially located outside Ukraine. Ukroboronprom has been producing 82-mm shells using the capacities of a NATO member state — also not named — since December.

Moldova Calls in Russian Envoy Over Airspace Violation: TASS (11 am)

Moldova’s foreign ministry has summoned Russia’s ambassador after Friday’s incident in which Kyiv says Russian cruise missiles crossed parts of Moldovan and Romanian airspace before entering western Ukraine.

The missiles were part of a new barrage from Moscow that started overnight and continued into Friday morning, aimed at Ukrainian energy infrastructure and other targets.

Ukraine Vows to Meet Conditions for EU Membership Talks This Year (10:14 am)

“Enormous progress” by Ukraine was acknowledged by European leaders during Zelenskiy’s visit to Brussels on Thursday, Deputy Prime Minister Olha Stefanishyna told Bloomberg TV. It’s essential to start the negotiation process this year, and Ukraine’s government is delivering on all seven required crucial reforms, including judiciary and rule of law and the fight against corruption, Stefanishyna said.

On Thursday, European Commission President Ursula von der Leyen said that “more needs to be done” by Ukraine “but it is important to understand there is no rigid timeline. It is a merit-based process so it’s up to the candidate country how far and how fast they reach the goals that are being set.”

Emergency Power Cuts Amid Major Missile and Drone Attack (9 am)

Grid operator Ukrenergo implemented emergency electricity outages in several areas amid what it called the 14th mass Russian missile and drone attack on Ukraine’s energy system.

The company said on Facebook that high-voltage infrastructure as well as power plants and transmission stations had come under attack.

Scholz Asks European Leaders to Deliver Tanks (3:15 am)

German Chancellor Olaf Scholz has asked European leaders to deliver the Leopard 2 tanks, which will be needed to send two battalions to Ukraine by the end of March.

“I’ve used the opportunity to ask them for active assistance,” said Scholz early Friday morning after the EU Council meeting in Brussels. “My impression is: This will work. But it won’t be easy,” he added.

Germany will deliver 14 Leopard 2 tanks. For the creation of two full battalions, 80 battle tanks will be needed altogether.

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