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Ukraine Latest: Russia Now Controls Sievierodonetsk, Mayor Says

(Bloomberg) -- Russia started the fifth month of its invasion with what Ukraine’s army called a “massive bombardment,” including in far western areas some 800 miles from the Donbas front. The key eastern city of Sievierodonetsk -- largely in ruins after weeks of bombardment -- is now fully under Russian control, its mayor said.

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Russian missiles were launched from Belarusian airspace for the first time, in what Ukraine said was a move to pull the Minsk regime fully into Vladimir Putin’s war. Belarusian President Alexander Lukashenko met with Putin in St. Petersburg on Saturday and was offered Iskander-M portable missile systems.

President Joe Biden departed Washington for the Group of Seven summit that starts in Bavaria on Sunday. Germany is expected to propose reversing a G-7 commitment to end certain fossil fuel financing as a response to the energy crisis triggered by the Ukraine war.

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

Key Developments

  • G-7 Negotiators Put Russia Oil Price Cap on Agenda for Leaders

  • Germany Pushes for G-7 Reversal on Fossil Fuels in Climate Blow

  • Italy’s Divided Loyalties Exposed by War in Ukraine

  • Ukraine to Retreat From Key City as Russian Push Gains Traction

  • Ukraine Budget Lifeline at Risk as Biggest Bond Buyer Gets Antsy

  • Crop Prices Recover as Traders Reel From Crash to Pre-War Levels

On the Ground

Missile attacks on Ukraine’s north and west overnight were the heaviest in months, including strikes launched from Belarusian airspace according to Ukrainian intelligence officials. Russia used six planes to fire cruise missiles from near the town of Mozyr, targeting the Kyiv, Chernihiv and Sumy regions. Sievierodonetsk in Ukraine’s east “is now under the full occupation of Russia,” the city’s mayor said. Ukraine is “likely reconfiguring for a defense of the Sievierodonetsk-Lysychansk sector,” according to the UK defense ministry said. Russia said separatist fighters took full control of the Sievierodonetsk chemical plant, the last Ukrainian holdout in the city, AP reported.

(All times CET)

G-7 Leaders to Discuss Russian Oil Price Cap (12:46 a.m.)

Group of Seven talks on a possible price cap on Russian oil advanced enough for leaders to discuss the topic at their summit starting Sunday in Germany, according to people familiar with the matter.

While there’s no agreed proposal, aides reached an understanding that the seven heads of state and government should have a formal discussion. The plan would be for each participating country to set a price cap with the goal of limiting the Kremlin’s revenue and helping rein in energy prices.

Russia Has Control of Devastated Eastern City (7:48 p.m.)

Moscow’s troops are now in full control of the key eastern city of Sievierodonetsk, where Ukrainian troops made a days-long controlled withdrawal this week, local officials and the Russian defense ministry said.

Russia has moved in to occupy the city and three nearby villages, said Luhansk regional governor Serhiy Haiday. The city, which was an administrative center, is 90% ruined, he said.

Sievierodonetsk had a pre-war population of about 100,000. It’s been under bombardment for weeks and was the scene of heavy street fighting as well. Street battles have been reported in neighboring Lysychansk.

US to Join G-7 in Ban on New Russian Gold Imports (7:25 p.m.)

US President Joe Biden and fellow G-7 Seven leaders will agree to announce a ban on new gold imports from Russia, the latest sanctions in response to the Russian invasion of Ukraine.

The move would mark a total severance between Russia and the world’s top two trading centers, London and New York.

US to Join G-7 in Ban on New Russian Gold Imports

Russia Will Transfer Iskander-M Missile Systems to Belarus (6:25 p.m.)

President Vladimir Putin met with Belarus counterpart Alexander Lukashenko in Saint Petersburg, hours after Russia used Belarusian airspace to fire missiles at Ukraine.

Putin said Moscow would transfer Iskander-M missile systems to the Minsk government within months, according to Interfax. The systems can use both ballistic and cruise missiles in nuclear and conventional versions. Putin also said the Belarusian army’s Su-25 jets could be retrofitted, if necessary, in Russia and Belarusian pilots trained there was well.

Lukashenko said he’s concerned about training flights by the US and NATO and asked Putin to help refit of Belarusian planes to be able to carry nuclear warheads, Interfax reported.

Russia Says It Killed ‘Up to 80’ Polish Fighters (12:30 p.m.)

“Precision strikes” on a zinc factory in Kostyantynivka in Ukraine’s Donetsk region killed as many as 80 “Polish mercenaries” and destroyed combat vehicles and rocket launchers, Russian Defense Ministry spokesman Igor Konashenkov said in a briefing.

The claim couldn’t be independently verified, and the ministry didn’t say when the strikes took place. Poland hasn’t commented. Moscow typically describes foreign volunteers fighting alongside Ukrainian troops as mercenaries.

Stoltenberg Talks With Erdogan on Finland, Sweden Applications. (12:20 p.m.)

The NATO chief said he agreed with Turkey’s leader to continue talks in the coming week about Ankara’s concerns about the two Nordic nations joining the military alliance.

Turkish President Recep Tayyip Erdogan also held a phone call with Swedish Prime Minister Magdelena Andersson, his office said.

Read more: Erdogan Is Hung Up on the Power One Kurdish Woman Has in Sweden

Germany Wants G-7 Fossil Fuels Reversal (10:20 a.m.)

Berlin is pushing for G-7 nations to walk back a commitment that would halt the financing of overseas fossil fuel projects by the end of the year.

A draft text shared with Bloomberg would see the G-7 “acknowledge that publicly supported investment in the gas sector is necessary as a temporary response to the current energy crisis.”

Read more: Putin Is Pushing Germany’s Economy to the Breaking Point

Russia Launches Widespread Missile Attacks (8:42 a.m.)

Overnight missile attacks increased significantly as Moscow entered the fifth month of what it’s termed a “special operation.”

Among the areas targeted was the massive combat training center in Yavoriv, northwest of Lviv and close to the Polish border, the head of the Lviv region said.

Zhytomyr, an important rail hub west of Kyiv, and Chernihiv in Ukraine’s north were struck with missiles launched from Belarusian territory, Ukraine’s military said. Around 30 missiles were fired at military infrastructure around Zhytomyr, killing at least one soldier and injuring another; 20 missiles were fired at the Chernihiv region, regional head Vitaliy Bunechnko said on his Telegram channel.

Zelenskiy Pledges Solidarity at Georgian Pro-EU Rally (8:30 a.m.)

Ukraine’s president addressed a pro-European rally in Tbilisi on Friday, a day after Ukraine won the European Union’s candidacy status. Tens of thousands of people assembled in the Georgian capital.

“We will never give up, because Donbas and Crimea are our land, just as Abkhazia and South Ossetia are your land,” Zelenskiy said in a reference to breakaway areas of Georgia also occupied by Russia. “And even if someone wants to forget about it, if someone wants to erase it, we will definitely remind them of it. We will stand by you!”

Georgia has been offered a road map for EU candidacy status that’s subject to carrying out a series of reforms that would tackle corruption and boost judicial independence.

Wimbledon CEO Says Russian Player Ban Is For This Year Only (7 a.m.)

Wimbledon’s decision to ban players from Russia and Belarus may not last beyond this year, according to All England Lawns Tennis Club CEO Sally Bolton. In April, Wimbledon announced the ban, citing Russia’s “unjustified and unprecedented military aggression.”

The ban extends to several highly ranked players including world’s number one Daniil Medvedev.

“The decision we’ve made is for this year’s championships only,” Bolton told Bloomberg. “But we still believe it was the right decision for us to take. It’s impossible to call where we’ll be this time next year.”

Zelenskiy Tells NBC He’ll Fight for Release of US Vets (12:30 a.m.)

Zelenskiy said the two Americans who were captured while fighting in Ukraine are heroes and he will fight for their release, according to an interview with NBC News.

The families of veterans Alexander Drueke and Andy Huynh reported them missing this month. Some 20,000 people from around the world have responded to Kyiv’s call to join the International Legion of Ukraine’s effort against Russian forces, the Ukrainian government said in March.

Russian President Vladimir Putin’s spokesman has said this week the two men could face the death penalty, adding that the Geneva Conventions likely don’t apply as Moscow doesn’t consider them part of Kyiv’s national army.

US Hits Three More Russian Airlines With Penalties (7:53 p.m.)

The US issued orders suspending three Russian airlines -- including the discount arm of state-owned Aeroflot -- from receiving US parts and services for their planes.

Aeroflot unit Pobeda, Nordwind Airlines and S7 Airlines -- the biggest carrier after Aeroflot -- are the latest companies to receive enforcement actions from the Commerce Department for violation of US export controls imposed over Russia’s invasion of Ukraine.

Friday’s actions raise the number of Russian airlines that are now cut off from the parts, components, and maintenance services they need to sustain operations to eight, Assistant Secretary of Commerce for Export Enforcement Matthew Axelrod said in a statement.

Poland Gets EU450 Million Loan to Finance Refugee Aide (5:20 p.m.)

A loan provided by the Council of Europe Development Bank will be used to finance aid to Ukrainian refugees, Poland’s Finance Ministry said in a statement.

It’s the largest loan ever approved by the lending arm of the Council of Europe, a multinational human-rights organization, the bank said in a separate statement.

Ukraine’s Biggest Bond Buyer is Getting Antsy (3:43 p.m.)

Ukraine’s war-battered budget is coming under more strain as the central bank increasingly raises the alarm about the limits of its ability to provide cash through sovereign debt buying.

The economic fallout from Russia’s invasion, which just reached the four-month mark, has brought budget funding for everything from pensions to military operations to breaking point.

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