Ukraine Latest: Putin Demands Safety Guarantee for Russian Ships

(Bloomberg) — Russian President Vladimir Putin demanded a guarantee from Ukraine on the safety of Russian vessels in the Black Sea grain corridor. The Kremlin suspended the landmark export route after claiming, without evidence, that a drone strike against its naval fleet may have come from a grain ship that’s part of the United Nations initiative.

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Wheat prices soared after Russia said that shipments will become “much riskier” without its participation, even as ships loaded with grain began to leave Ukraine. Ukraine said Russia hit two tugboats pulling a grain barge outside the corridor. The UN and Turkey worked to salvage the agreement to keep seaborne exports flowing.

A fresh round of Russian missile strikes hit power and water infrastructure across Ukraine.

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

Key Developments

Russia Says ‘Unacceptable’ to Move Grain Ships Via Corridor
Russian Missile Strikes Cut Ukrainian Power, Water Supplies
Wheat Surges as Russia Warns on Ship Safety After Ditching Deal
Russia Is Mostly Failing in Race to Find New Oil Markets
Ukraine Sees ‘First Signs’ of Price Stability as War Grinds On

On the Ground

Russian missiles targeted the capital, Kyiv, including essential civilian infrastructure, leaving parts of the city without water and electricity. Explosions were also reported in regions including Kharkiv, Zaporizhzhia, Kremenchuk and Vinnytsia. Russia’s military struck the Dnipropetrovsk region with artillery and drones overnight, hitting residential buildings and other facilities as well as energy infrastructure, local authorities said on Telegram. Ukraine, however, said it had shot down 45 of 55 Russian missiles targeting the country’s energy facilities. Russian forces began preparations to remove artillery from the Dnipro River’s right bank in the Kherson region, Ukraine’s southern operational command said on Facebook.

(All times CET)

Putin Demands Guarantee Against Attacks in Grain Corridor (10:30 p.m.)

Russian President Vladimir Putin said Monday his country has not pulled out of the grain agreement as he demanded assurances from Ukraine on the safety of Russian vessels. Russia has accused Ukraine, without evidence, of using the so-called Black Sea corridor to attack its navy ships.

“Ukraine must guarantee, that there are no threats for civilian ships and Russian vessels,” Putin said at a press briefing in the Black Sea resort of Sochi. He said that drones had traveled partly through the corridor in assaults on the Russian fleet.

“They created a threat both to our ships, which are supposed to ensure the safety of grain export, and to civilian ships that are engaged in this,” he said, calling the grain deal disruption a suspension.

The Russian leader also said that recent Russian strikes on Ukraine territory could have been more severe, and that he would wait for Ukraine to change its position and resume peace negotiations.

Four Russian Copters Shot Down, Zelenskiy Says (10:30 p.m.)

Ukrainian President Volodymyr Zelenskiy said four Russian attack helicopters had been shot down, and underscored an earlier government report that Russia missed most of its targets in a large-scale missile attack on Monday. Ukraine’s air-defense troops, he said, shot down 45 out of 55 launched cruise missiles.

“Of course, we will reinforce our anti-missile troops further,” Zelenskiy said in his nightly address. “But even now to achieve ten hits terrorists have to spend at least four times as many missiles. Results of Russia’s drone attacks, including those supplied by their allies from Iran are even worse.”

Zelenskiy Reaffirms Commitment to Grain Deal (8:32 p.m.)

Ukraine’s President Volodymyr Zelenskiy said in a tweet that he reaffirmed his government’s commitment to the grain shipment deal to UN Secretary-General Antonio Guterres and informed him “about the consequence of the missile terror & nuclear blackmail” by Russia.

Russia Says No Ship Assured of Safety Along Grain Corridor (7:54 p.m.)

Ships must not use the UN grain corridor, and no vessel is guaranteed safety there without further clarification from Ukraine, Russia’s Defense Ministry said.

It said ship movements along the corridor are unacceptable because Ukraine’s leaders and the command of its armed forces are using it to conduct military operations against the Russian Federation, Russia’s military said in an emailed statement. “There can be no question of guaranteeing the safety of any object on this route until the Ukrainian side accepts additional obligations not to use it for military purposes,” the Russians said.

At the same time the Defense Ministry said that it didn’t pull out of the grain deal but suspended it until the situation with drone strikes against its naval fleet is clarified.

Ukraine Says It Shot Down Most of Russia’s Missiles (7:50 p.m.)

Ukraine shot down 45 of 55 Russian missiles targeting the country’s energy facilities, including hydro power plants, on Monday, its military staff said. The rest hit energy infrastructure in Kyiv, Poltava, Zaporizhzhia, Kharkiv, Cherkasy, Chernivtsi and other regions. One rocket fell in neighboring Moldova after it was downed by Ukraine’s anti-missile troops, Ukraine said.

Ukraine also said that Russia, running short of troops, is pulling mercenary forces out of Mali to deploy them in Ukraine.

Russia Hit Tugboats East of UN-Agreed Grain Corridor (6:42 p.m.)

Russian shelling hit two civilian tugboats near Ochakiv on the northern Black Sea coast towing a barge with grain, the Ukrainian military’s southern command said on Facebook.

The attack set the vessels on fire, killing two crew members and wounding one, while another one went missing, according to the statement.

The incident took place near the Ochakiv port in the Mykolaiv region on the northern Black Sea coast, which is to the east of a UN-agreed corridor that had been used for food exports, according to the post.

Power Restored to Kyiv Customers After Russian Missile Attack (6:40 p.m.)

Ukraine’s private power company DTEK restored electricity connections to customers and water supply facilities in the country’s capital, according to a statement on the company’s Facebook account.

While all clients in Kyiv have been connected to a temporary supply scheme, some had to remain without power in order to help the energy system, DTEK said.

Ukrainian Cabinet Cuts GDP Growth Forecast (6:11 p.m.)

Ukraine’s cabinet slashed its economic growth forecast to 3.2% from 4.6% for next year, Prime Minister Denys Shmyhal said on Telegram.

The cabinet also now sees 2023 inflation at 28%, compared with 30% expected before, he said. The next year’s budget deficit will exceed 20% of gross domestic product InteeIMF, Shmyhal said.

Russia Warns It May Move to Control Black Sea Ship Passage (6:07 p.m.)

Russia will be forced to take its own measures to control ships passing without its approval in the Black Sea, Russia’s permanent representative to the United Nations, Vasily Nebenzya, said at a meeting of the UN Security Council, according to the Russian Tass newswire.

“Given the existing facts of abuse of the humanitarian corridor and the fact that the Black Sea remains a war zone, we cannot allow the passage of ships without our inspection, and we will be forced to take independent measures to control” dry-cargo ships, he said.

The “Black Sea Initiative,” the deal between Russia, Turkey and Ukraine, which was signed in July, shouldn’t be carried out without Russia, he said.

Turkey Urges Restoration of Grain Shipments (5:28 p.m.)

Turkish Defense Minister Hulusi Akar said that he discussed the halt of grain shipments in a call with his Russian counterpart.

“The continuation of the grain initiative, which makes a great contribution to the solution of the global food crisis and shows that all problems can be solved with cooperation and dialogue, is of great importance,” he said, urging that it be “separated from the conflict conditions.”

Electricity Cut Off in Lviv After Russian Strikes (5:22 p.m.)

Electricity cutoffs started at 5 p.m. in the Lviv region in western Ukraine and would last three to four hours, regional governor Maksym Kozytskyi said on Telegram.

Lithuania Denounces Russian Missile Strikes on Ukraine Infrastructure (5:10 p.m.)

Lithuanian President Gitanas Nauseda called Russia’s attack on Ukraine’s civilian infrastructure “further evidence of grave war crimes” in a statement after meeting Greek Prime Minister Kyriakos Mitsotakis.

“We must continue military, political and humanitarian support to Ukraine and help it to counter Russia’s barbaric military aggression,” he said. “We must continue the policy of sanctions against Russia and Belarus and prepare a new package of targeted and effective sanctions. We also have to reinforce defense capabilities in NATO’s eastern flank.”

Belarus to Open Joint Military Training Centers With Russia (4:50 p.m.)

Belarus plans to create joint military training centers with Russia, the state-owned news agency Belta reported, citing a decree signed by the President Alexander Lukashenko. The country’s defense ministry is tasked with holding talks with Russia on setting up the centers and signing an agreement.

Ukraine Assesses Damage From Russian Strikes (4:45 p.m.)

Russian missiles and drones damaged infrastructure in 10 Ukrainian regions and hundreds of locations are without power in seven of them, Prime Minister Denys Shmyhal said on Telegram. The strikes left more than 80% of Kyiv residents without running water and 350,000 apartments lost electricity supply, Mayor Vitali Klitschko said on Telegram. By evening, 40% still had no water supply and 270,000 apartments remained without electricity, he said.

Russia Plans to Raise Diesel Exports Ahead of EU Ban (1:20 p.m.)

Russia’s diesel exports via its key Baltic and Black Sea ports are set to reach a seven-month high in November as Europe grapples with a fuel shortage ahead of a full ban on such purchases early next year.

EU Grain Corridors Have Carried 29 Million Tons of Goods (1:10 p.m.)

More than 14 million tons of agricultural products have been exported to Ukraine via the so-called solidarity lanes between May and Oct. 20, European Commission spokesman Stefan De Keersmaecker told reporters in Brussels. Over the same period, 15 million tons of non-agricultural products such as steel, oil and humanitarian products were exported.

Latvia Detains 37 After Removing Soviet Monuments (1:03 p.m.)

Police detained 37 people after authorities began taking down an obelisk honoring the Soviet military in Latvia’s second-biggest city of Daugavpils.

The city, near the eastern border with Belarus, is nearly half ethnic Russian. Latvia removed a tall Soviet obelisk in the capital Riga in August and plans to take down all Soviet monuments across the country.

Ukraine’s DTEK Depleted Stockpiles to Fix Power Lines (12:52 p.m.)

Ukraine’s largest private power company DTEK is running low on inventories of spare parts to fix power infrastructure damaged by Russian shelling.

“We have already used up the stockpiles of equipment which we had in our depots after the first two waves of attacks since Oct. 10,” Dmytro Sakharuk, executive director of DTEK, said on TV.

DTEK was able to buy some equipment in the market but needs to purchase millions of dollars worth of spare parts as procurement problems are mounting amid soaring prices, he said. Preliminary estimate of damage to DTEK from Russian attacks is estimated in millions of dollars, according to Sakharuk.

Poland Sees Reverse in Flow of Ukrainian Refugees 12:50 p.m.)

This month’s massive Russian attacks on Ukrainian infrastructure may trigger a new wave of refugees to Poland, Wojciech Kononczuk, deputy head of Polish Center for Eastern Studies said on Twitter.

Polish border guard data show that October is on track to be the first month since April when number of Ukrainians moving to Poland was higher than those traveling back to Ukraine.

Turkey to Talk to Russia About Grains Corridor (12:29 p.m.)

Turkish Defense Minister Hulusi Akar said he will discuss Russia’s withdrawal from the Ukraine grain corridor deal in a phone call with his Russian counterpart Sergei Shoigu later on Monday.

“The suspension of this initiative is neither to the benefit of Russia nor Ukraine,” a Turkish Defense Ministry statement said. “We are continuing to hold talks with Ukrainian and Russian defense ministers.”

Kremlin Says Grain Shipments Without Russia ‘Much Riskier’ (12:38 p.m.)

Kremlin spokesman Dmitry Peskov said grain shipments from Ukraine’s Black Sea ports become “much riskier” after Russia suspended participation in a deal to protect them, but he declined to comment on what conditions Moscow is setting out for rejoining the pact.

“In circumstances where Russia is talking about the impossibility of ensuring the security of shipping in these areas, of course such a deal is hardly implementable,” he told a conference call. “It takes on a different character, much riskier and more dangerous.”

He said diplomatic consultations are underway with Turkey and the UN on the future of the pact.

Russia Hit Infrastructure in 10 Regions of Ukraine (11:26 a.m.)

Russia’s missile and drone attacks on Monday damaged 18, mainly energy, facilities in 10 regions of Ukraine, Prime Minister Denys Shmyhal said on Telegram.

“They are not targeting military facilities, but critical civilian infrastructure,” he said, adding that “hundreds of locations have had power cut off in seven Ukrainian regions.”

Ukraine has 25 regions, including Crimea, which was annexed by Russia in 2014.

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