(Bloomberg) — Hungarian Prime Minister Viktor Orban said there was no consensus among European Union leaders on banning Russian oil but signaled he was ready to agree if the bloc guarantees his country still receives the fuel via a pipeline and other measures in case that avenue is disrupted.
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It comes as French President Emmanuel Macron dampened expectations of a quick deal on stopping Russian oil imports. “I remain very cautious because there are new demands from Hungary,” Macron told Bloomberg on his way into the EU summit. “We will try to move forward.”
Leaders are being pushed to at least give political backing to an agreement on oil, an official said, with formal approval of sanctions at a later date. Hungary remains the key holdout.
(See RSAN on the Bloomberg Terminal for the Russian Sanctions Dashboard.)
Key Developments
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Russia Comes Up With a New Bond-Payment Plan to Avoid Default
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Pimco Fund Added to Russia Swap Exposure in Weeks Before War
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Rosneft Plans to Pay Record-High Annual Dividend on Oil’s Rally
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Europe Faces an Old Methane Hotspot in Rush to Exit Russian Gas
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Ukraine Faces a Dangerous New Adversary — Time: Balance of Power
All times CET:
Orban Sets Out Two Conditions for EU Oil Embargo (4:05 p.m.)
“There is no compromise at this moment at all,” the Hungarian prime minister said on arrival at the EU summit in Brussels. “There is no agreement at all.”
While he said a European Commission proposal to impose an embargo on Russian crude purchases was no longer an “atom bomb” hurled at the Hungarian economy, he echoed the sentiments of other EU leaders that a deal wouldn’t be clinched at the meeting.
“In the next round we can discuss investments and timeline for us to do without Russian oil via pipelines but we don’t needs to discuss that today,” he said. “If I get my guarantees today then we’re safe.”
Russia Suffers Heavy Ground Force Losses Since War Started (4:01 p.m)
Russia has likely lost around one third of the ground combat forces it committed on Feb. 24, according to a senior NATO official. Still, its troops are slowly and incrementally gaining territory in the east and the limited terrain captured is militarily important to press a sustained offensive, the official told reporters.
Russian commanders are trying to redistribute forces swiftly, often without adequate preparation, deploying more green soldiers and combat-fatigued soldiers from other battles to form reconstituted units, the official said.
Moscow also appears to be mobilizing Soviet-era T-62 battle tanks from storage, which are likely to be vulnerable to anti-tank weapons. That shows its shortage of modern combat equipment, the official said.
Russian LNG Plant Halts Loading Ex-Gazprom Tankers (3:55 p.m.)
The operator of Russia’s Sakhalin-2 liquefied natural gas plant stopped supplying the fuel to a former Gazprom PJSC trading unit seized by Germany, according to people with knowledge of the matter.
Sakhalin Energy isn’t loading LNG vessels for Gazprom Marketing & Trading Ltd. due to sanctions imposed by Moscow, said the people, who asked not to be identified discussing sensitive matters.
The Sakhalin-2 plant on the Pacific coast mainly supplies customers in Japan, South Korea and China.
Macron ‘Very Cautious’ on Chances of Deal on Russian Oil Ban (3:27 p.m.)
The French president noted “new demands” from Hungary. European Commission President Ursula von der Leyen told reporters going into the meeting her “expectations are low that it will be solved in the next 48 hours,” but added she was confident “that thereafter there will be a possibility.”
German Heavy Weapons for Kyiv Still Pending (3 p.m.)
The ruling coalition and the main opposition conservatives sealed a deal on enshrining a 100 billion-euro ($107 billion) fund to boost military spending in the constitution amid continued criticism over delays in supplying Ukraine with promised heavy weapons.
Germany announced plans to supply heavy weaponry a month ago. But so far, none of the seven armored howitzers and an initial 15 Gepard armored vehicles have been delivered. Defense Minister Christine Lambrecht said Monday that Ukrainian soldiers need to undergo a 40-day training program to use the howitzers, while the vehicles aren’t yet in condition to be sent.
Pimco Fund Added to Russia Swap Exposure Before War (2:56 p.m.)
Pacific Investment Management Co.’s largest fund increased its exposure to Russian default swaps by selling more than $100 million of protection to banks including Barclays Plc and JPMorgan & Chase Co.
Pimco’s Income Fund already had almost $1 billion of bets on Russia via credit-default swaps coming into the year, and added a net $106 million in the first quarter, according to documents filed this month with the Securities and Exchange Commission. The bulk of the new swaps were sold in January, with some added in February before the war began, according to a person with direct knowledge of the matter.
Brussels Seeks Political Deal on Russian Oil Ban (2:22 p.m.)
The embargo would cover seaborne oil, which makes up two thirds of the bloc’s oil imports from Russia, according to an official who spoke on condition of anonymity to discuss the negotiations.
Some temporary exceptions would be granted to several members that will take more time to resolve. It’s unclear whether Hungary — which has resisted supporting the ban citing its dependence on supplies from Moscow — is on board. All 27 members must agree on sanctions.
The package will include the exclusion of Russia’s largest bank, Sberbank, from the SWIFT international payment messaging network, plus a ban on three more Russian state-owned broadcasters, the official said.
Ukraine Starts First Rape Trial for Russian Soldier (2:04 p.m.)
The Prosecutor General of Ukraine says it has sent for a court trial the first case of an alleged wartime rape. The trial will be held in-absentia, as the accused Russian soldier is not in Ukraine’s custody.
Denmark’s Orsted Warns Russia May Cut Gas (1 p.m.)
Denmark could be the next country cut off from Russian natural gas as its biggest utility is refusing to cave in and make payments in rubles. Orsted A/S is preparing for Gazprom PJSC to cut off one of Denmark’s biggest sources of the fuel, the firm said in a statement, adding that it expects it will be able to secure alternate sources of supply in the European wholesale market. The payment deadline is Tuesday and the company said it will continue to pay in euros.
Daily power prices in Finland surged after Russia suspended energy exports to its western neighbor earlier this month. European nations are split over how to handle Moscow’s demand that all payments for the fuel should be made in the local currency, and utilities have responded to the challenge differently.
Rosneft Plans Record Dividend (11:45 a.m.)
Russian oil giant Rosneft PJSC promised record dividends on the back of soaring prices, but some foreign investors may struggle to access the payout.
The board recommended 23.63 rubles a share for the second half of 2021, bringing full-year dividends to an all-time high of 41.66 rubles. That follows an announcement last week by Gazprom, which proposed its highest ever payout after benefiting from a supply crunch in Europe. The decisions of both companies will see the Russian state gaining the most, as it’s the biggest shareholder. Many foreign investors could have difficulties obtaining the payout following restrictions imposed by President Vladimir Putin.
Crypto Exchange Buys Eurovision Mic to Fund Drones (11:15 a.m.)
A crypto-currency exchange bought this year’s Eurovision crystal mic trophy from Kalush Orchestra, the Ukrainian rap-folk band that won the competition, to help it raise funds for their country’s military.
Estonian crypto exchange WhiteBit bought the trophy for $900,000 in an auction held on Instagram over the weekend. Oleh Psiuk, Kalush Orchestra’s lead singer, also sold his signature pink hat for 11 million hryvnia ($374,000). The money will be spent on drone systems, according to the band.
Kherson Farmers ‘Start Grain Sales to Russia’ (11 a.m.)
Part of last year’s grain harvest is being shipped from the southern Kherson region to Russia, Tass reported, citing Kirill Stremousov, a representative of the occupation administration there. Ukrainian farmers and officials have accused Russia of confiscating and stealing grain from areas it has seized. Russia almost completely occupies Kherson and Stremousov is deputy head of the administration.
Separately, Taras Kachka, a deputy Ukrainian economy minister, called for warships to patrol the Black Sea to protect vessels carrying food exports from Russian attacks. His comments on Facebook followed reports of multiple Russian air strikes on a bridge in Zatoka between the Black Sea and the Bilhorod-Dnistrovskyi estuary, which is key for Ukrainian export shipments.
Ukraine’s exports have been limited to rail and road routes via neighboring EU nations since the war started, helping to keep grain prices near a record high.
Russian Advance in Sievierodonetsk Continues (9:30 a.m.)
Russian troops continue to advance toward the city center in Sievierodonetsk in the eastern Luhansk region, according to Serhiy Haiday, the local governor. “Battles are continuing, the situation is very difficult,” he said on his Telegram channel.
The city’s infrastructure has been ravaged, with 60% of residential buildings so severely damaged that they can no longer be repaired, Haiday said, adding that about 1 million of people in the occupied areas of Luhansk remain without a functioning water supply.
New French Foreign Minister Visits Kyiv (7:30 a.m.)
France’s new foreign affairs minister, Catherine Colonna, is visiting Kyiv on Monday, where she will meet Ukrainian counterpart Dmytro Kuleba and President Zelenskiy.
Colonna will underline France’s determination to reinforce its support for Ukraine, both humanitarian and financial, and in terms of supplying defense equipment, according to a statement from the foreign ministry. She will discuss the blockade of cereal and oil-seed exports from Ukraine in an effort to find concrete solutions as quickly as possible, the ministry said.
South Korea Conservatives Plan Ukraine Visit (5:44 a.m.)
Members of South Korean President Yoon Suk Yeol’s conservative People Power Party said they plan to visit Ukraine next month, as the government mulls sending more aid to Kyiv.
Yoon’s government may reach a deal with Canada that could include providing the North American country with as many as 100,000 artillery shells, which would then make their way to Ukraine, South Korean broadcaster SBS reported, citing an unidentified military source. Canada has been providing lethal weapons to Ukraine and recently requested South Korea to provide weapons to Ottawa, it said.
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