ECONOMY

Ukraine Latest: Japan to Phase Out Russian Oil; Crude Swings

Japanese Prime Minister Fumio Kishida plans to gradually phase out imports of Russian oil as he joined other Group of Seven leaders in stepping up pressure on President Vladimir Putin by pledging to halt crude imports from his country.

Oil fluctuated in trading to start the week with investors weighing the impact of the move by the bloc. Crude has had a tempestuous year as Russia’s invasion of its neighbor Ukraine has upended global commodity markets.

Ukrainian President Volodymyr Zelenskiy marked a day of remembrance for the defeat of Nazi Germany, a day before Putin is expected to address a military parade in Moscow and may lay out the next steps of his war. U.S. first lady Jill Biden finishes her trip to the region after crossing into Ukraine to meet Zelenskiy’s wife — Olena Zelenska. 

Address by the President of Ukraine on the Day of Remembrance and Reconciliation.Source: President of Ukraine

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

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  • U.S. Bans Accounting Services to Russia in New Sanctions Package
  • Ukraine’s Tiny Neighbor Suffers Economic Fallout From the War
  • Hungary Continues to Block EU Oil Sanctions on Russia
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Oil Swings as Traders Weigh G-7 Crude Ban (5:16 a.m.)

Oil fluctuated as investors weighed a pledge by the Group of Seven to ban imports of Russian crude against a cut in official prices by Saudi Arabia and the impact of China’s energy-sapping lockdowns.

West Texas Intermediate traded near $110 a barrel after earlier losing as much as 1.7%. The U.S. and the U.K. have already moved to ban imports of Russian fuel in response to the assault, but the weekend pledge by the G-7 will increase the pressure on Moscow further. 

Read more: Oil Swings as Traders Weigh Up G-7 Crude Ban, Saudi Price Cuts

Jill Biden to Meet President of Slovakia (2:32 a.m.)

Jill Biden finishes her trip to the region with a meeting Monday with Slovakian President Zuzana Caputova before returning to Washington, her office said in a statement.

The U.S. first lady earlier crossed into western Ukraine for an unannounced visit and met Ukrainian counterpart Olena Zelenska. Zelenska hasn’t appeared in public since Feb. 24, the day of Russia’s invasion, a U.S. official said. 

“I wanted to come in Mother’s Day. I thought it was important to show the Ukrainian people that this war has to stop and this war has been brutal and that the people of the United States stand with the people of Ukraine,” Biden said. Speaking in Ukrainian, Zelenska praised Biden for her courage.  

Read more: Jill Biden Meets Zelenskiy’s Wife in Unannounced Ukraine Visit

US First lady Jill Biden (L) offers flowers to Ukraine President wife Olena Zelenska, outside of School 6, a public school that has taken in displaced students in Uzhhorod on May 8, 2022, during an unannounced visit of Jill Biden to Ukraine on the sidelines of an official trip in nearby Slovakia. (Photo by Susan Walsh / POOL / AFP) (Photo by SUSAN WALSH/POOL/AFP via Getty Images)Source: AFP

U.S. Bans Accounting Services to Russia (1:39 a.m.)

The U.S. banned American accounting and consulting firms from working with Russia and imposed its first sanctions on Gazprombank as part of a package of new penalties targeted at Moscow. 

The latest penalties also include new export controls on industrial goods, limits on three of Russia’s top state-controlled television stations and additional visa restrictions, according to a White House statement. The U.S. and its allies are pushing to expand sanctions ahead of Russia’s May 9 Victory Day military parade marking the end of World War II in Europe.

Read more: U.S. Bans Accounting Services to Russia in Added Sanctions

Japan Takes ‘Difficult’ Decision on Russia Oil (12:48 a.m.)

Japanese Prime Minister Fumio Kishida told fellow Group of Seven leaders that his government had taken the “extremely difficult” decision to ban imports of Russian oil. 

The impact of the ban is likely to be limited, as the world’s third-largest economy imported only 3.6% of its crude oil from Russia in March, compared to 10.8% of its coal and 8.8% of its gas in 2021. Still, the move threatens to add to surging gasoline costs that have stoked inflationary fears ahead of an upper house of parliament election two months away. 

Read more: Japan’s Kishida Says Phasing Out Russian Oil to Take Time

U.K. Sets Third Round of Russia Sanctions (11:30 p.m.) 

The U.K. announced a third round of trade sanctions against Russia and Belarus, taking to more than 4 billion pounds ($4.9 billion) the value of products subject to full or partial import and export bans.

New import tariffs will cover 1.4 billion pounds in goods, including platinum and palladium. Russia is a leading producer of both metals and is “highly dependent” on the U.K. as a buyer of its exports, the U.K. government said in a statement.

Zelenskiy Calls on G-7 to Keep Up Arms Supplies (10:45 p.m.)

President Volodymyr Zelenskiy thanked G-7 countries for supplying weapons and said they need to keep up supplies so Ukraine can defeat Russia, according to an account of his comments to Group of Seven leaders on Sunday provided by his office.

Deliveries of multiple-rocket launchers, for instance, would have saved many lives, he told the G-7.

WATCH: Ukrainian President Volodymyr Zelenskiy addressed the Group of Seven, calling for sustained support in the face of the Russian invasion and beyond. Source: Bloomberg

Trudeau Pledges More Military Aid in Kyiv Visit (10:02 p.m.)

Prime Minister Justin Trudeau visited Kyiv and said Canada will provide an additional $50 million in military support, including drone cameras, satellite imagery, small arms and artillery ammunition, his office said in a statement. 

Canada will also continue to help with demining operations, Trudeau told reporters in the Ukrainian capital, where he also reopened the Canadian Embassy during his previously unannounced trip.

Mariupol Steel Plant Defenders Call for Rescue (9:19 p.m.)

If Russia’s President Vladimir Putin hoped to mark Victory Day by celebrating the capture or surrender of Mariupol’s last Ukrainian defenders, a Zoom appearance by their commanders suggests he’ll have to wait.

In an online press conference on Sunday, an intelligence officer of the Azov regiment holed up in the southeastern port city’s massive Azovstal steel factory said surrender would amount to suicide. He said they had enough food and weapons to hold out a while yet.

Describing their increasingly grim, and likely ultimately hopeless, circumstances, Illia Samoilenko also made clear his bitterness with the Ukrainian government in Kyiv. It had, he said, failed in its defense of southern Ukraine, where Russia made much faster progress than in the north, and had abandoned Mariupol’s garrison to its fate.

Lockheed Seeks to Double Javelin Missile Output (8:03 p.m.)

Lockheed Martin Corp. is working to almost double its production capacity for Javelin missiles to 4,000 a year and achieving that goal will require the supply chain to “crank up,” the defense contractor’s top executive said.

The Ukrainian army has used Lockheed’s missiles to great effect in destroying Russian tanks and armaments, and the company is ramping up production to ensure the U.S. military’s supplies aren’t depleted. Right now Lockheed can build about 2,100 Javelins a year, Chief Executive Officer Jim Taiclet said Sunday on CBS’s “Face the Nation.”

G-7 Leaders Commit to Russia Oil Import Ban (6:30 p.m.)

Leaders of the Group of Seven most industrialized countries pledged to ban the import of Russian oil in response to President Vladimir Putin’s war in Ukraine.  

The heads of the leading economies made the commitment after holding a video call with Ukraine President Volodymyr Zelenskiy on Sunday, the eve of Russia’s May 9 Victory Day, which commemorates Russia’s victory over Nazi Germany in World War II. The date has become a touchstone of the Kremlin’s campaign to whip up public support for the invasion. 

The leaders will “commit to phase out our dependency on Russian energy, including by phasing out or banning the import of Russian oil,” the G-7 said in the statement. 

WATCH: Leaders of the Group of Seven countries pledged to ban the import of Russian oil in response to President Vladimir Putin’s war in Ukraine. Source: Bloomberg

Germany’s Scholz Sets Limits on Ukraine Policy (6:00 p.m.)

Chancellor Olaf Scholz outlined limits on Germany’s efforts to help Ukraine in a televised address. While Germany will continue to supply heavy weapons to help Ukraine defend against Russia, Europe’s biggest economy won’t sacrifice its security or affluence, he said.

U.S. Diplomats in Kyiv Ahead of Embassy Reopening (5:15 p.m.)

Charge d’Affaires Kristina Kvien led a team of U.S. diplomats that traveled to Kyiv for ceremonies to mark the anniversary of the Allied victory over Nazi Germany in World War II.

U.S. Secretary of State Antony Blinken told Ukrainian Foreign Minister Dmytro Kuleba the diplomats were there “to conduct diplomatic engagement in advance of the planned resumption of Embassy Kyiv operations,” State Department spokesman Ned Price said.  

The U.S. initially moved its diplomats to the western Ukrainian city of Lviv in the days leading up to Russia’s invasion, then operated from Poland. Diplomats last month started making day trips into Lviv. 

Russian Infrastructure Official Visits Mariupol (4:30 p.m.)

Russian Deputy Prime Minister Marat Khusnullin, whose portfolio includes construction, visited occupied areas of Ukraine including the recently captured city of Mariupol, according to a statement posted to his Telegram channel. 

Khusnullin, who was sanctioned by the European Union in February for his role in undermining Ukrainian sovereignty, said Russia would help the seized territories rebuild and provide humanitarian support. 

Vitol Says It’ll Get Harder to Trade Russian Oil From Mid-May (2:30 p.m.)

Commodity firms will find it much harder to buy and sell Russian oil from the middle of this month, according to the world’s biggest independent crude trader, as Europe tightens sanctions on Moscow. 

Russia’s exports of crude and oil products have probably dropped by about 1 million barrels a day from 7.5 million before the attack in late February, Mike Muller, head of Asia at Vitol Group, said Sunday. They could fall further after May 15, he said, because many trading houses interpret EU regulations as prohibiting them from dealing with Russian state energy companies beyond then. “There will be a “different reality.”

U2’s Bono, the Edge Perform in Kyiv Metro (2:26 p.m.)

Bono and the Edge, members of Irish rock band U2, performed in a Kyiv metro station on Sunday at the invitation of Ukrainian President Volodymyr Zelenskiy in a “show of solidarity with the Ukrainian people,” the band said on Twitter.  

In a video posted by Ukrainian politician Serhiy Leshchenko, the pair were seen with Taras Topolia, frontman of the local band Antytila, performing the Ben E. King standard, “Stand by Me.”

Bono, Irish singer-songwriter, activist, and the lead vocalist of the rock band U2, and guitarist ‘The Edge,’ perform at a subway station in Kyiv. Photographer: SERGEI SUPINSKY/AFP

Hungary Blocking EU Oil Sanctions Against Russia (2:16 p.m.)

Hungary continued to block a European Union proposal that would ban Russian oil imports, holding an EU sanctions plan, according to people familiar with the talks. 

A closed-door meeting of the EU’s 27 ambassadors ended on Sunday without agreement and talks are expected to resume in the days ahead, said the people. 

Zelenskiy Says Some Countries Try to Buy Stolen Grain (10:15 a.m.)

President Volodymyr Zelenskiy says some countries are attempting to buy grain taken from Ukraine by Russia. 

“I don’t want to name specific countries who behind our backs are making deals to buy our grain from Russia,” Zelenskiy told Fox News. “If they will do it, of course we’ll tell.” 

Combine harvesters pump freshly harvested wheat grain into a truck during a harvest in Chernihiv, Ukraine, in 2017.Photographer: Vincent Mundy/Bloomberg

Zelenskiy Marks May 8 Day of Remembrance in Video (8:44 a.m.) 

Volodymyr Zelenskiy released a 15-minute video to mark Ukraine’s Day of Remembrance and Reconciliation. The black-and-white footage shows the president speaking in front of a bombed-out apartment building in Borodyanka, northwest of Kyiv.

He mused on the post-World War II vow of “never again,” saying that decades later, “darkness returned” to Ukraine “in a different uniform, under different slogans, but for the same purpose.”   

Official Says Many Feared Dead in School Shelter Bombing (6:45 a.m)

As many as 60 people may have died in a Russian strike on a school in Bilohorivka, a village in the Luhansk area, regional head Serhiy Haiday said on Telegram. 

Russian forces on Saturday bombed a school building where most residents of the village had been sheltering, he said earlier. About 30 people were rescued from within the rubble and two were found dead. The final number of victims will be known once the debris is cleared, Haiday said.

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