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Ukraine Latest: Zelenskiy Sees Gain in East; Austria Warns of Blackout

Bloomberg News
·4-min read

(Bloomberg) -- Ukraine’s economy may grow next year, and this year’s inflation may be less than expected, according to the head of the central bank, who cited the nation’s resilience in the face of Russia’s campaign to destroy energy infrastructure.

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Kyiv has seen a noticeable drop in enemy Air Force activity after a drone strike on a strategic-bomber base deep inside Russian territory on Monday, a military spokesman said. President Volodymyr Zelenskiy said Ukrainian troops are resisting Russia’s advances in intense fighting in the east and finding some opportunities to drive them out.

Russian Foreign Minister Sergei Lavrov said that Ukraine must comply with Moscow’s demands to surrender in full and concede sovereignty over annexed lands or face continued war. President Vladimir Putin also signed a decree banning the export of Russian oil and oil products to foreign buyers that adhere to a price cap on his country’s crude.

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

Key Developments

  • Putin Bans Selling Russian Oil to Price Cap Participants

  • Ukraine Resilience Helps Halt Economic Drop, Central Banker Says

  • Russia Says Ukraine Must Surrender Even as Putin’s Army Retreats

  • Germany Confident Key Refinery Will Be Fine Without Russian Oil

  • How to Understand Rising Serbia-Kosovo Tensions: QuickTake

On the Ground

Zelenskiy said in his overnight address that the most difficult areas of the front are near the towns of Bakhmut and Kreminna where Russia is pushing hard to make advances, and his office said he met with his commander in chief to discuss the situation. Russian forces, military equipment and weaponry are concentrated around Bakhmut, but efforts to encircle the town have been unsuccessful, Deputy Defense Minister Hanna Malyar said on television. Russia hit a maternity hospital in Kherson just after two babies were born, Zelenskiy deputy Kyrylo Tymoshenko said on Telegram, but no one was injured.

(All times Central European Time)

Putin Bans Selling Russian Oil to Price Cap Participants (6:06 p.m.)

Putin banned the export of oil and oil products to foreign buyers that adhere to price caps imposed over his invasion of Ukraine, according to a decree.

The market has been waiting for Moscow’s response to the a $60-per-barrel cap since Dec. 5. when the Group of Seven nations’ limit on Russian seaborne crude exports came into force.

The restriction on Russian crude exports will begin on Feb. 1, while the starting date for the ban on oil products will come later. Putin’s decree didn’t list countries where Russian oil and oil products cannot be sold. The vast majority of the countries that imposed the cap have already halted purchases, suggesting the initial impact of the step may be limited in scope.

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Kyiv Says Nuclear Plant Free Zone Should Exclude Russian Army (4:30 p.m.)

Ukraine’s position regarding the demilitarized zone at the Zaporizhzhia nuclear power plant remains the same: Russian troops and “Rosatom” should leave the station, Ukrainian Energy Minister Herman Halushchenko said during his meeting with G7 ambassadors on Tuesday.

“A fake management has been appointed there. They work without licenses and permits, Rosatom representatives are illegally staying at the plant,” Halushchenko said, adding that it’s also important to implement sanctions against Russia’s nuclear industry.

Ukraine Resilience Helps Halt Economic Drop, Pyshnyi Says (3:23 p.m.)

Ukrainians’ resilience is helping arrest a plunge in economic growth, and inflation is accelerating slower than expected, National Bank of Ukraine Governor Andriy Pyshnyi said in an interview.

Households and businesses have kept working and avoided spreading panic in the currency and banking markets, in a show of resistance as the war enters its 11th month. That may be enough for the economy to level off or grow slightly next year, after a contraction of more than 30% this year, Pyshnyi said.

Ukraine Says Almost 70 Iranian-Made Drones Downed in Past Two Weeks (2:06 p.m.)

Ukraine’s Air Defense shot down the single-use drones, which Russia used to attack Ukrainian infrastructure, spokesman Yuriy Ihnat said on television.

The Shahed-131 and Shahed-136 drones were part of a second shipment of 250 recently received by Russia, Ihnat said, without specifying where he got the information. Russia is also increasing its use of single-attack “Lancet” drones, mainly on the front lines, Ihnat said.

Ukraine Says Russian Air Force Activity Drops After Drone Strike (11:30 a.m.)

Ukraine has seen a significant decrease in Russian air force activity after a reported drone attack on the Engels strategic-bomber base in the Saratov region on Monday, Ukraine’s air defense force spokesman Yuriy Ihnat said on television.

Russia moved several of its planes from Engels to other air fields and even scaled back its tactical aviation operations around Ukraine, after strikes hundred of miles inside Russian territory, Ihnat said, without confirming Ukraine’s participation in the attacks.

Russia’s Defense Ministry said three military personnel were killed by the falling wreckage after a Ukrainian drone was shot down.

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