YEREVAN, Armenia — Azerbaijan has agreed to reopen the only highway linking Armenia to the breakaway region of Nagorno-Karabakh provided local leaders accept aid from Azerbaijan as well, a senior Azerbaijani official told POLITICO on Saturday.
The news comes after authorities in the ethnic Armenian-controlled exclave — inside Azerbaijan’s internationally recognized borders — announced earlier in the day that it would accept humanitarian shipments from the Russian Red Cross via an alternative road from Aghdam, inside Azerbaijani government-held territory.
According to Hikmet Hajiyev, foreign policy adviser to Azerbaijani President Ilham Aliyev, “Azerbaijan expressed its consent as a goodwill gesture to ensure simultaneous opening” of the so-called Lachin Corridor for ICRC cargo. The road connects the mountainous territory to Armenia. The acceptance, he said, would pave the way for a separate deal to allow passage from Armenia. “In the Lachin checkpoint, Azerbaijan’s customs and border regime must be observed,” he said.
For close to two months, aid organizations including the Red Cross have said they have been unable to transport supplies of food and fuel into Nagorno-Karabakh, despite a 2020 ceasefire agreement between the two sides guaranteeing free use of the road under the supervision of Russian peacekeepers. With essential provisions running low, local Armenians say a humanitarian crisis is already unfolding and the former chief prosecutor of the International Criminal Court, Luis Moreno Ocampo, last month issued a report warning that a “genocide” was under way.
Both the U.S. and the EU have urged Azerbaijan to reopen the Lachin Corridor. The South Caucasus country denies it is orchestrating a blockade, and has insisted the Karabakh Armenians must accept humanitarian supplies from inside Azerbaijan.
Arayik Harutyunyan, the former de facto president of the unrecognized Nagorno-Karabakh Republic, told POLITICO in July that he would refuse to accept the supplies despite a deteriorating humanitarian situation because “Azerbaijan created this crisis and cannot be the solution to it.”
Harutyunyan, who resigned last month amid the ongoing crisis, was due to be replaced on Saturday in a presidential election. However, according to Hajiyev, the “sham elections” are a “serious setback and counterproductive” for the situation.
Instead, he reiterated a call from the Azerbaijani government for the Karabakh Armenians to lay down their arms and accept being governed as part of Azerbaijan. “It is the only way to a lasting peace where Armenian and Azerbaijani residents of Karabakh can live and coexist,” he said.
Hajiyev later clarified in a statement on social media that the Lachin Corridor would not be opened immediately, but under the terms of a deal allowing indefinite access for Azerbaijani aid from Aghdam.
Kim Jong Un will visit Russia “in the coming days,” the Kremlin announced Monday following speculation about an upcoming visit by the North Korean leader.
Kim’s visit will take place “at the invitation of Russian President Vladimir Putin,” the statement said.
The first Russian lunar mission in nearly half a century ended with a bang.
The Luna-25, which left earth on August 10, crash-landed on the moon nine days later after an incident involving the pre-landing maneuvers malfunctioned, Russian space agency Roscosmos said late Saturday on its Telegram channel.
According to Roscosmos, the last communication with the spacecraft was at 2:57 p.m. Moscow time (13:57 CEST) on Saturday. Efforts after that to get back in contact with the craft did not produce any results, the agency said.
A specially formed commission will now look at why the Luna craft malfunctioned, Roscosmos said.
Russia’s Luna-25 mission was sent to scope out the lunar south pole, where scientists believe there is a plentiful supply of water locked in ice in the perpetual shade of mountain ridges. Firming up water reserves is a critical requirement for supporting life on the moon with breathable oxygen, drinking water and even rocket fuel, which would then help space-faring nations further explore the cosmos from any lunar outpost in the future.
Other countries are also eyeing the moon’s southern region. The U.S. plans to send a mission to the south pole later this decade as part of its Artemis program supported by Canada and European countries.
More immediately, India’s Chandrayaan-3 mission is scheduled to land on the lunar surface on August 23 to explore the south pole. An earlier Indian mission crashed in 2019.
Diesel, kerosene and other fuels refined from Russian crude are flooding into Europe, prompting Kyiv to call for tightening sanctions against Moscow.
In an interview with POLITICO, Oleg Ustenko, an economic adviser to Ukrainian President Volodymyr Zelenskyy, appealed for the EU, as well as the U.K. and the U.S., to close the “loophole” that allows third countries like India, China and Turkey to refine crude bought from Moscow’s state energy firms into petrol, diesel and other products before selling them on without restrictions.
In December, the G7 agreed to set a price cap of $60 a barrel on Russian crude, meaning sales below that price are allowed. The idea was to squeeze Moscow financially while allowing oil markets to continue functioning.
The result has been that countries like India are buying up cheap Russian crude and then refining it — which earns local companies the refining margin — before selling it to other countries.
Indian imports of Russian crude hit a high of 69 million barrels in May, an almost tenfold increase from the same period in 2021 prior to Russia’s invasion of Ukraine — and more than twice as much as the 31 million it bought in May last year.
Volumes have since fallen to around 50 million barrels in July, but remain well above pre-war levels.
As a result, Indian exports of fuel products to the EU have skyrocketed. In June, it exported 5.1 million barrels of diesel and 3.2 million barrels of jet fuel to the bloc, up from just 1.68 million barrels and 0.51 million barrels respectively in June 2021.
Ustenko singled out India, given that “before the invasion, they were buying Russian oil but the level of their imports was very marginal, only around 1 percent of their imported oil. Now it’s on the level of almost 40 percent, which is a really dramatic change.”
For New Delhi, it’s just good business.
In an interview with CNBC last week, India’s Minister of Petroleum and Natural Gas Hardeep Singh Puri acknowledged his country’s privately owned refineries were snapping up Russian crude at rates well below the market price. “If there’s a 30 percent discount, the Russians are putting a ribbon around it and sending it to us free. That’s what it means.”
It’s also having a negative impact on Russia’s bottom line.
Russia’s energy export revenues have virtually halved in the first six months of this year, while the ruble has hit historic lows in recent weeks as sanctions begin to undermine the fundamentals of the Russian economy.
But as the war takes its toll on Ukraine, Kyiv wants to turn the screws even further.
Policymakers should support “a ban for all refined products going to G7 countries” if they’ve been produced using Russian oil, even if they were refined elsewhere, Ustenko said.
Ustenko added Kyiv wants to build support among G7 nations to bring the price cap down to just $30 a barrel. Poland and the Baltic countries pushed for a lower price last year, but countries like Greece — whose oil tankers transport a lot of Russian crude — balked.
These steps, Ustenko said: “Would be a huge signal to producers that it’s now completely illegal to touch Russian oil and to supply the regime with the blood money they are using to buy weapons and commit war crimes in Ukraine.”
However, the idea is unlikely to find much support, at least at the moment.
According to Maximillian Hess, a fellow at the Foreign Policy Research Institute and author of a new book on Russia sanctions, the refining of Russian crude by third countries isn’t so much a failure of the measures as it is the intended feature.
“Part of the West’s strategy, as the U.S. has said repeatedly, is to keep Russian oil flowing,” he said, while ensuring Moscow earns less for its exports and doesn’t earn the premiums that come from selling refined fuel rather than crude.
“There’s certainly appetite among some members of the G7 for a $30 price cap, but there may be some challenges introducing a ban on refined fuels,” he added.
Despite war and sanctions, Vladimir Putin is trying to haul Russia back into the space race.
In the early hours of Friday morning, state space agency Roscosmos launched the country’s first lunar mission in nearly half a century as an ambitious play in the scramble to build a base on the moon.
“If they pull it off, it will be a massive technological and scientific achievement,” said Tim Marshall, author of “The Future of Geography” on the geopolitics of space. He argues a successful Russian landing, and fruitful year of research, would mark a big step forward in plans to build a moon base with China by the 2030s.
Russia’s Luna-25 mission is being dispatched to scope out the lunar south pole, where scientists believe there’s a plentiful supply of water locked in ice in the perpetual shade of mountain ridges. Firming up water reserves is a critical requirement for supporting life on the moon with breathable oxygen, drinking water and even rocket fuel, which would then help space-faring nations further explore the cosmos from any lunar outpost in the future.
“The first goal is to find the water, to confirm that it is there … to study its abundance,” said Olga Zakutnyaya, from the Space Research Institute at the Russian Academy of Sciences in Moscow, of Luna-25’s main aim.
But simply successfully landing a spacecraft on the rocky lunar south pole — which would be a first in itself — would also prove to Beijing that Moscow still has something to offer when it comes to cutting-edge aerospace technology. The two countries have already pledged to work together to build a moon base by the 2030s, but Beijing is the clear leader these days.
“Putin knows that Russia is the junior partner in the China relationship, including in the space relationship,” said Marshall, arguing that the Luna-25 mission could help rebalance the scales.
On the other side of the geopolitical divide, the United States is planning to send astronauts to the south pole later this decade as part of its Artemis program supported by Canada and European countries.
And, despite the competition, NASA doesn’t seem worried about Moscow’s mission.
“I don’t think that a lot of people at this point would say that Russia is actually ready to be landing cosmonauts on the moon in the timeframe that we’re talking about,” NASA Administrator Bill Nelson said during a panel on Tuesday in response to Luna-25.
Pole race
Only three countries — the United States, China and the Soviet Union — have successfully landed spacecraft on the moon, and only the Americans have put boots on the lunar surface.
The likes of India, Japan and Israel have all tried and failed of late. In 2019, India’s Chandrayaan-2 mission crashed, while an earlier attempt by Israeli firms with Beresheet also failed that year. In April, Japanese start-up ipsace also saw its Hakuto-R Mission 1 crash.
Only three countries — the United States, China and the Soviet Union — have successfully landed spacecraft on the moon | Kirill Kudryavtsev/AFP via Getty Images
Trying again, India’s Chandrayaan-3 mission, which literally translates as “moon vehicle” in Sanskrit, is scheduled to reach the surface on August 23 to explore the south pole, around the same time that Luna-25 is planning to attempt to land nearby.
“The fact that both Russia and India are targeting to land in the same, albeit large, region of the moon highlights that certain areas are more valuable than others,” said Benjamin Silverstein, an analyst for the Carnegie Space Project at the Carnegie Endowment for International Peace.
While Roscosmos insists there’s no chance of collision, a lack of agreed regulations for who can do what on celestial bodies like the moon means countries are deciding their own rules of the road when planning missions.
First landers on the lunar south pole could work up their own preferred standards and expect newcomers to follow their lead rather than relying on the slow and laborious process of trying to fix agreed lunar governance norms, Silverstein said.
The U.S.-backed Artemis accords sets out Washington’s preferred principles for a fresh era of space exploration, and would controversially allow countries to claim exclusive access to certain commercial zones around, for example, a moon base next to icy or resource-rich deposits.
“The growth [of Artemis signatories] to 29 shows that without question it’s going to be the dominant space bloc of the century, but for the foreseeable future they will never get China, Russia or their allies on board,” said Marshall.
Even without the politics, landing a spacecraft on the mountainous terrain of the moon’s dark poles isn’t easy.
“The south pole has a lot of craters and is very rocky,” said Nico Dettmann, the European Space Agency’s lead on lunar exploration, adding that a target accuracy of within 100 to 200 meters is required to be certain of a soft landing.
Current thruster and mapping technology, such as that deployed on Luna-25, will only be able to home in on a location between 15 and 30 kilometers from the target point, he said. “These space technology developments take time.”
Luna-25 had been set to include demonstrator navigation camera systems from the ESA as part of a cooperation deal, but that’s been scrapped due to Russia’s invasion of Ukraine, along with a separate mission to Mars dubbed ExoMars.
This article was updated to reflect that Russia had launched the lunar mission.
Russian ports and ships on the Black Sea — including tankers carrying millions of barrels of oil to Europe — could justifiably be attacked by the Ukrainian military as part of efforts to weaken Moscow’s war machine, a senior Kyiv official warned Monday in the wake of two recent attacks on Russian vessels.
“Everything the Russians are moving back and forth on the Black Sea are our valid military targets,” Oleg Ustenko, an economic adviser to Ukrainian President Volodymyr Zelenskyy, told POLITICO, saying the move was retaliation for Russia withdrawing from the U.N.-brokered Black Sea grain deal and unleashing a series of missile attacks on agricultural stores and ports.
“This story started with Russia blocking the grain corridor, threatening to attack our vessels, destroying our ports,” Ustenko said. “Our maritime infrastructure is under constant attack.”
Over the weekend, Ukraine declared the waters around Russia’s Black Sea ports a “war risk area” from August 23 “until further notice.” The zone includes major Russian ports like Novorossiysk, Anapa, Gelendzhik, Tuapse, Sochi and Taman.
That’s causing insurance rates for ships to skyrocket and could imperil one of Russia’s main export routes for oil and oil products — key in ensuring the Kremlin has enough cash to keep waging war against Ukraine.
“This story started with Russia blocking the grain corridor, threatening to attack our vessels, destroying our ports,” Ustenko said | Yasin Akgul/AFP via Getty Images
“After this weekend, the Black Sea feels like a more dangerous place for international shipping, and it was already very dangerous,” said Byron McKinney, director with S&P Global Market Intelligence. “Many vessels simply don’t go to the area. Insurance is pretty much nonexistent. Where there are insurance rates they’re very high and that’s only going to increase.”
On Saturday, Russia’s federal maritime agency, Rosmorrechflot, reported that a Russian tanker, the Sig, had been hit in an apparent strike by Ukrainian forces while sailing close to Ukraine’s occupied Crimean peninsula.
“The tanker received a hit on its engine room, close to the waterline on the starboard side, presumably as a result of an attack by a sea drone,” officials said.
Ukraine’s defense ministry said that as long as Russians “terrorize peaceful Ukrainian cities and destroy grain condemning hundreds of millions to starvation,” there would be “no more safe waters or peaceful harbors for you in the Black and Azov Seas.”
Crude crisis
Last month, Russia shipped almost 59 million barrels of crude oil, a third of its overall exports, from the strategic Black Sea port of Novorossiysk, according to intelligence firm Kpler. Of that, 32 million barrels went to EU countries. The port also handles other fuels like diesel, gasoil and naphtha in addition to grain destined for the global market.
Novorossiysk is also where the Caspian Pipeline Consortium oil conduit terminates, bringing up to 1.3 million barrels a day of oil from Kazakhstan — from where it is shipped on to world markets.
Last month, Russia shipped almost 59 million barrels of crude oil | Francois Lo Presti/AFP via Getty Images
Novorossiysk is also home to a major naval base of the Black Sea Fleet. Last week, a Ukrainian sea drone hit and damaged a Russian military landing vessel, the Olenegorsky Gornyak.
The proximity of Moscow’s military to trade ports could increase the risk to civilian vessels, warned Alexis Ellender, a commodities analyst with Kpler.
“Those operating on the shipping markets are saying they obviously don’t expect Ukraine to attack commercial shipping, but there’s a risk that installations or ships get caught in the crossfire and there’s a lot of trade that moves through Russia’s Black Sea ports,” he said. “There’s a lot of Greek ships working on these trades and while some owners are reluctant to carry Russian cargo, there’s a whole international mix there.”
Shipping forecast
The growing risk the conflict poses to busy international waterways will mean tough decisions for the shipping industry, and for traders tempted to keep buying cheap Russian oil under the terms of a $60 per barrel price cap set last year by the G7.
“You’ve still got Greek and Turkish tankers operating around that zone though, working with Russian oil within the price cap restrictions, and there were quite a few foreign-owned vessels in and around the vicinity of the drone attack in Novorossiysk,” said McKinney. “The most interesting question to come out of this is whether they will be deterred in the future if their multimillion dollar assets are now at risk from a stray missile or whatever it may be.”
The International Chamber of Shipping, which represents shipowners and operators, declined to comment on whether the latest flareups in the Black Sea would deter its members from doing business there.
But, for Ustenko, Western companies should already be realizing there can be no more business as usual with Russia.
“From a legal and moral perspective, it’s completely unjustifiable for these vessels to continue to deliver Russian oil,” he said. “Now that’s supported from the economic point of view as well since the risk is extremely high. Under these circumstances, the prices of insurance are going to jump significantly, making these deliveries unprofitable. Your vessel and your crew is going to be under huge risk.”
“The big companies selling insurance, doing financing, are they prepared to continue this kind of work when they see these pictures coming from the Black Sea?” Ustenko asked. “This is the right moment for even those still trying to close their eyes and pretend nothing has really happened for them to realize — no way.”
KYIV — An overnight naval drone attack against a Russian tanker in the Black Sea signals a potential new front in the Ukraine war, with Kyiv delivering its strongest message to date that it is willing to target Moscow’s all-important shipments of oil and fuel.
The battle for supremacy in the Black Sea is ramping up fast, with massive implications for global energy and food security. The attack on the tanker off Crimea came only a day after another Ukrainian marine drone — a flat, arrowhead-shaped vessel packed with explosives — targeted a Russian naval base near the port of Novorossiysk, badly damaging a warship.
“The tanker was damaged in the Kerch Strait during an attack by the Ukrainian Armed Forces,” Russia’s state-run TASS news agency reported on Saturday. “The crew is safe, the Maritime Rescue Center informed us. The engine room was damaged. Two tugboats arrived at the scene of an emergency with a tanker in the Kerch Strait, the question of the towing vessel is being resolved,” it said.
Russia’s Federal Marine and River Transport Agency reported it was a SIG oil and chemical tanker — a ship whose owner, St. Petersburg-based company Transpetrochart, was sanctioned by the U.S. in 2019 for supplying jet fuel for Russian forces in Syria.
Tensions are rising in the Black Sea after Russia last month announced it was withdrawing from the U.N.-brokered Black Sea Grain Initiative and started attacking Ukrainian ports on the Black Sea coast and on the Danube River with missiles, destroying tens of thousands of tons of Ukrainian grain.
After those attacks and the blockade, Ukrainian officials issued a statement in July that Russian vessels will be no longer safe in the Black Sea. Kyiv’s defense ministry said in a statement that such vessels “may be considered by Ukraine as carrying military cargo with all the corresponding risks” from midnight Friday.
On Saturday, Kyiv announced a “war risk area” around Russian ports on the Black Sea, specifically citing the ports of Novorossiysk, Anapa, Gelendzhik, Tuapse, Sochi and Taman. The declaration will be in effect from August 23 “until further notice,” it said.
‘Completely legal’
Marine Traffic, an online maritime tracking site, has the latest position of the SIG tanker fixed near the Kerch Strait “at anchor.”
Russia’s Marine and River Transport Agency reported all 11 crew members on board were safe and that the tanker was struck in the engine room near the waterline on the starboard side, presumably as a result of an attack by a marine drone. By morning, the water pouring to the engine room has been staunched, and the vessel was afloat, Russian official said.
Ukraine almost never directly takes responsibility for these kinds of attacks. However, Vasyl Malyuk, head of the Security Service of Ukraine, or SBU, has previously claimed responsibility for the attacks on the Crimean bridge and hinted that there will be more similar attacks soon.
“Anything that happens with the ships of the Russian Federation or the Crimean Bridge is an absolutely logical and effective step in relation to the enemy. Moreover, such special operations are conducted in the territorial waters of Ukraine and are completely legal,” Malyuk said in a statement on Saturday.
“So, if the Russians want that to stop, they should leave the territorial waters of Ukraine and our land. And the sooner they do it, the better it will be for them. Because we will one hundred percent defeat the enemy in this war.”
Waters near Russian-occupied Crimea and the Kerch Strait are Ukrainian territorial waters, according to international maritime law.
“Since 1991, Russia has systematically used the territorial waters of Ukraine to organize armed aggressions: against the Georgian people and against the people of Syria,” the Ukrainian Defense Ministry said in a social media post on Saturday.
“Today, they terrorize peaceful Ukrainian cities and destroy grain, condemning hundreds of millions to starvation. It’s time to say to the Russian killers, ‘It’s enough.’ There are no more safe waters or peaceful harbors for you in the Black and Azov Seas,” the ministry said.
Four days after re-opening the strategic Crimea bridge that links Russia to the occupied Ukrainian peninsula, Moscow was forced to close it again due to another attack.
A drone assault on an ammunition depot in the Krasnogvardeysky district has caused residents within a 5 kilometer radius of the area to be evacuated, and for rail traffic to be suspended on the Kerch bridge into Crimea. Social media reports suggested that an oil depot had been struck in Oktyabr’skiy, south of the town of Krasnogvardeysky and close to an airfield.
The attack was more than 200 kilometers from the bridge, but Sergei Aksyonov, the Russian-installed governor of occupied Crimea, said on Telegram that train traffic will be suspended “to minimize risk.” The main rail line from the bridge travels through Crimea and eventually branches around to Krasnogvardeysky, a small town roughly in the center of the Russian occupied territory.
Earlier, Aksyonov reported on an attempted drone raid on infrastructure in the same district, Russian state-owned media TASS reported. POLITICO has been unable to verify these reports.
The Kerch bridge, completed in 2018, four years after Russian President Vladimir Putin’s illegal occupation of Crimea, is a critical land route into the peninsula, re-supplying Moscow’s forces fighting in southern Ukraine with troops, weapons and fuel.
Its closure on Saturday is the second in a week, after the bridge was struck by two drones on Monday, killing two civilians and collapsing part of the roadway structure. One lane was re-opened and the rail line continued to operate.
The bridge was also the target of an attack during Ukraine’s counteroffensive last October.
Ukrainian President Volodymyr Zelenskyy told the Aspen security conference in the U.S. on Friday that the Kerch bridge was a military target, according to a Reuters report. “This is the route used to feed the war with ammunition and this is being done on a daily basis. And it militarizes the Crimean peninsula,” Zelenskyy said.
“For us, this is understandably an enemy facility built outside international laws and all applicable norms. So, understandably, this is a target for us. And a target that is bringing war, not peace, has to be neutralized,” the Ukrainian leader said, in comments relayed through an interpreter.
No one has yet come forward to take responsibility for this week’s attacks.
Kyiv is unlikely to renew a gas transit deal that allows Russia’s Gazprom to export natural gas to the EU using pipelines running across Ukraine, Energy Minister German Galushchenko told POLITICO.
The 2019 transit deals runs until the end of 2024 and allows Gazprom to export more than 40 million cubic meters of gas a year via Ukraine, which earns Kyiv about $7 billion.
“I believe, by the winter of 2024, Europe will not need Russian gas at all,” Galushchenko said in a telephone interview. “If now profits from Russian gas pay for Russia’s war of aggression against Ukraine and Gazprom’s private army, the only thing they should pay for in the future shall be reparations.”
He added that the war means “bilateral negotiations are impossible.”
The land route across Ukraine is one of only two pipeline links between Russia and the West. It still accounts for around 5 percent of the bloc’s gas imports, but that’s only a third of the prewar level.
It’s not only Ukraine that’s casting doubt on the future of gas transit.
Gazprom chief Alexei Miller warned last week his company will stop exports if Ukraine doesn’t drop its efforts to seize Russian state assets to enforce a $5 billion award for the energy infrastructure Moscow illegally expropriated when it annexed Crimea in 2014. Gazprom and Ukraine’s Naftogaz are also at loggerheads over a dispute on transit fees.
“If Naftogaz continues such unfair actions, it cannot be ruled out that the Russian Federation will impose sanctions. Then, any relations between Russian companies and Naftogaz will be simply impossible,” Miller said, according to the TASS news agency.
Despite the bombs, missiles and drones wreaking havoc on Ukrainian energy infrastructure, the web of pipelines has kept pumping gas to the EU — where it ends up mainly in Austria, Slovakia, Italy and Hungary.
Russian pipeline gas is not subject to sanctions but the European Commission has plans to end the bloc’s reliance on Moscow’s fossil fuels by 2027.
However, there is growing criticism the EU countries still using Russian gas aren’t moving fast enough to diversify. Austria’s Russian gas imports are back to prewar levels. Hungary gets around 4.5 billion cubic meters a year. In April, its government signed a deal with Gazprom to secure additional volumes.
Kyiv ending the gas deal could cause problems for those countries.
“If Ukrainian transit stops, Gazprom pipeline gas deliveries to EU countries could drop to between 10 and 16 billion cubic meters (45 to 73 percent of current levels),” said a June analysis by Columbia University’s Center on Global Energy Policy. That could leave Europe with a shortfall in 2025 before additional liquefied natural gas capacity from the U.S. and Qatar comes online.
“For Europe as a whole, it’s pretty manageable. But for some countries at the end of the pipeline, Austria, Hungary and so on, the picture is a bit different,” said Georg Zachmann, senior fellow at economic think tank Bruegel. “We’d have to see a reshuffle of physical capacities, physical flows. That might come with additional cost for them.”
It would represent a much more permanent potential break with Moscow.
“Keeping the thing alive means there’s maybe a chance in the future to go back to that. But if the flows are stopped there’s a risk it’s going to be completely dismantled, and the privilege these countries had in the past of getting access to cheap Siberian gas is going to be gone forever,” Zachmann said.
Ukraine’s long-term goal is to boost its own gas production to meet EU demand, Oleksiy Chernyshov, CEO of Naftogaz, told POLITICO in May.
The Russian Navy is increasing the number of trained dolphins it uses to protect its main military base in the Black Sea, according to intelligence reports.
The animals are guarding the entry to the port of Sevastopol, in Russian-occupied Crimea, and are likely intended to “counter enemy divers,” British military intelligence said Friday.
In recent weeks, “imagery shows a near doubling of floating mammal pens in the harbor which highly likely contain bottle-nosed dolphins,” the report says.
Trained animals have been used for decades by the military or intelligence agencies to carry out specific missions. A Beluga whale which has made several appearances off the Scandinavian coast in recent years is for instance believed to be a spy trained by the Russian army.
Russia’s Black Sea fleet has been targeted by several drone attacks since the start of the Kremlin’s full-scale invasion of Ukraine in February 2022.
In April, Russian ships stationed in Sevastopol were hit by an attack carried out with “three unmanned high-speed boats,” and a fuel depot in the same city was hit by a drone strike a few days later — prompting Moscow to announce a tightening of security measures at the Sevastopol naval base last month.
Ukraine has been accused by Russia of being responsible for these attacks, but has avoided taking responsibility for them.
Russia illegally annexed the Crimean peninsula in 2014.
As gear reviews go, it was a glowing one: In a 60-second video clip posted on Telegram, a masked sniper sporting the death’s-head insignia of the Wagner mercenary army sings the praises of the Russian-made Orsis T-5000 rifle.
“The equipment comes very well recommended,” the soldier, pictured in the charred interior of a building, tells a war reporter from the Zvezda TV channel run by the Russian Ministry of Defense.
Pulling out the clip of the weapon at his side, he continues: “It uses Western .338 caliber ammunition. It works very well. It can penetrate light cover if the enemy is behind it. And, in the open, it can strike the enemy at a range of up to 1,500 meters.”
Filings obtained by POLITICO indicate that Promtekhnologiya and another Russian firm called Tetis have acquired hundreds of thousands of rounds made by Hornady, a U.S. company that trademarks its wares as “Accurate. Deadly. Dependable.” Hornady, founded in 1949, sums up its philosophy with the phrase: “Ten bullets through one hole.”
The findings add to a growing body of evidence that supplies of lethal and nonlethal military equipment are still reaching Russia despite the West’s imposition of unprecedented sanctions in response to President Vladimir Putin’s invasion of Ukraine last year. The exigencies of war have exposed Russia’s lack of capacity to manufacture high-end sniper rounds, say defense experts, and that is fueling a flourishing black market for Western ammunition.
Information on the procurement of such gear is hiding in plain sight: Details of deals — importers, suppliers and product descriptions — can be found online by anyone with access to the Russian internet and a grasp of international customs classification codes.
Anything but bulletproof
In a “declaration of conformity” filed with a Russian government registry and dated August 12, 2022, Promtekhnologiya stated that it planned to sourcea batch of 102,200 Hornady lead bullets for the assembly of “hunting cartridges” used in “civilian weapons with a rifled barrel.” The specifications — .338 Lapua Magnum bullets weighing 285 grains — match those of a product in the Hornady catalog.
A second declaration bearing the same date is for a batch of “uncapped cartridge cases for assembling civilian firearms cartridges” made by Hornady with the same .338 Lapua Magnum specification.
The description is misleading: The .338 Lapua Magnum isn’t a “hunting cartridge;” it’s a high-powered, long-range projectile that was developed by Western militaries in the 1980s and used by their snipers in Iraq and Afghanistan.
Reached by POLITICO, Steve Hornady, CEO of the family company based in Grand Island, Nebraska, denied selling ammunition to Russia in wartime.
“The instant Russia invaded Ukraine, we were done,” Hornady said in a brief telephone call.
Hornady declined at first to elaborate and, when asked to review the evidence, requested that it be sent by fax or courier as he did not use email. He eventually responded after POLITICO sent written requests for comment with supporting documentation by courier.
“We categorically are NOT exporting anything to Russia and have not had an export permit for Russia since 2014,” he replied. “We do not support any sale of our product to any Russian son-of-a-bitch and if we can find out how they acquire, if in fact they do, we will take all steps available to stop it.”
Hornady added that he had contacted the U.S. authorities following POLITICO’s inquiry. He pointed out that current U.S. law required that customers must obtain permission from the Department of Commerce to re-export articles made in the United States. “To the best of our knowledge, none of our customers violate that law,” he said.
Wagner chief Yevgeny Prigozhin, asked which ammunition his troops used, told POLITICO they had “a huge amount of NATO-issue ammunition left over from the Ukrainian army.” In a sarcastic voice message sent to a POLITICO journalist, the Russian warlord also asked for help procuring F-35 combat jets and U.S.-made sniper rifles, machine guns and grenade launchers.
Promtekhnologiya denied filing any customs declarations to import ammunition; said it had no relationship with Hornady; and that it had the capacity to manufacture its own ammunition. The company also said in emailed comments to POLITICO that the Orsis rifle and the ammunition the company makes are intended for “hunting and sporting” purposes and are freely available on the civilian market.
Both Promtekhnologiya and Alexander Zinovyev, listed as the company’s general director in the filings, have been sanctioned by Ukraine, which cites evidence that its Orsis rifles “have been used in Russian military operations in Eastern Ukraine.”
Promtekhnologiya is also in Washington’s sights: “We take any allegation of sanctions violation or evasion seriously and are committed to ensuring that sanctions are fully enforced,” a spokesperson for the National Security Council said in response to a request for comment from POLITICO.
“We have taken steps to hold Russia accountable for its war in Ukraine and have imposed an unprecedented sanctions regime to disrupt Russia’s ability to access funds and weapons that fuel Putin’s war machine. That includes sanctioning companies like Promtekhnologiya.”
Criminal, or wilful, violations of U.S. sanctions can trigger penalties of up to $1 million per violation, as well as up to 20 years’ imprisonment for individuals. Civil penalties can run to the higher of either twice the value of the underlying transaction or around $350,000 per violation.
Describing military-grade ammunition as for hunting or sporting use, as the filings do, amounts to a thinly veiled ruse to evade targeted “smart” sanctions aimed at starving the Russian military of the means to fight the war, said defense analyst Maria Shagina.
“Strictly speaking, smart sanctions are not supposed to target anything civilian to avoid humanitarian collateral damage,” said Shagina, a research fellow at the U.K.-based International Institute for Strategic Studies. “But the targets in authoritarian countries will really exploit this.”
Steve Hornady, CEO of the family company based in Grand Island, Nebraska, denied selling ammunition to Russia in wartime | Leon Neal/Getty Images
Russia reloaded
Another Russian buyer of Hornady ammunition is a company called Tetis, which has disclosed two shipments since Russia’s full-scale invasionof Ukraine beganon February 24, 2022. The most recent was in April for more than 300,000 “units” comprising a wide range of products that checked out with the Hornady catalog.
The main owners of Tetis, Alexander Levandovsky and Sergey Senchenko — who each own stakes of 41.1 percent — have links to the Russian military.
Both were previously listed as shareholders in another company called Kampo, which according to company filings holds licenses to make weapons and military equipment and has done business with the Ministry of Defense and the Special Flight Detachment that operates Putin’s presidential plane.
Although Tetis doesn’t offer Hornady ammo on its website, it does advertise itself as an international distributor for RCBS, a U.S. maker of reloading equipment. This is used to assemble cases, primer, propellants and projectiles into cartridges that can then be fired — as seen in this video posted by a Russian gun enthusiast.
A database check revealed that the most recent declaration of conformity filed by Tetis for RCBS, for electronic weighing scales, predated Russia’s full-scale invasion on February 24 of last year by just over a month.
Russia’s trade bureaucracy allows local firms to vouch for the goods they are importing by filing declarations of conformity, such as those that mention the Hornady products. This means that the supplier listed on the form may not be aware of specific shipments that could have been handled by an intermediary.
Tetis did not respond to an emailed request for comment.
Matt Rice, a spokesman for RCBS owner Vista Outdoor, said Tetis was no longer an international distributor for RCBS. “Following Russia’s invasion of Ukraine, our business made the decision to end all sales of goods with the country,” Rice said in an email, adding that RCBS would remove the listing for Tetis from its website.
Doing the rounds
Hornady ammunition or its components are freely available in Russia, along with other high-end foreign military gear.
Take the “Sniper Shop” on Telegram, an encrypted messaging app that is popular in Russia: It features a current offer for a full range of Hornady products, with the seller inviting buyers to visit a showroom in Sokolniki, a Moscow district, and offering delivery throughout Russia by courier or post. Contacted by POLITICO, the poster confirmed the Hornady ammo was in stock but declined to comment further on how it was sourced.
Then there is “Anton,” who advertises products from Hornady and RCBS on his profile. He also touts gear from Nightforce, maker of thermal optical sights; Lapua, which helped design the eponymous .338 ammo; MDT, a maker of chassis systems, magazines and accessories for rifles; and precision gunsmith AREA 419. All are American with the exception of Lapua, which is based in Finland and owned by a Norwegian company called Nammo.
Western high-end foreign military gear seems to be freely available in Russia | Leon Neal/Getty Images
“Anton” posted an offer for Hornady cartridges last October 24. Contacted via Telegram to ask whether he was still stocking Hornady, he replied: “We don’t do ammunition.”
POLITICO has, in the course of its research, also found declarations from several other Russian companies for ammunition made in Germany, Finland and Turkey.
The thriving black market reflects a structural deficit in Russia’s war economy. Its military-industrial complex can produce good small arms, like the Orsis rifle, but lacks the capacity to churn out the amount of ammunition needed by an army fighting a war across a front stretching hundreds of miles.
“Despite the quality of the rifles produced, a successful hit directly depends on the components used in the cartridges, and they, unfortunately, are imported,” a correspondent lamented in a post on a Russian military news site a few months into the war. Gunpowder produced in Russia lacks stability, the correspondent added, saying this is “unacceptable in the framework of high-precision shooting.”
The continuing access to specialized rifle cartridges made in the West, such as the .338 Lapua Magnum, by a sanctioned Russian small arms manufacturer like Orsis maker Promtekhnologiya is “egregious,” said Gary Somerville, a research fellow at the Royal United Services Institute (RUSI), a British defense think tank.
“At present, there is only one manufacturer of this cartridge in Russia,” he added. “Preventing the shipment of these types of ammunition from Western countries to Russia is an easy win for those seeking to constrain Russia’s ability to wage war in Ukraine.”
Balkan route
It’s not just ammunition from the U.S. that is reaching the battlefront around Bakhmut in eastern Ukraine, recently captured by Prigozhin’s mercenaries after a bloody, months-long battle.
There also appear to be cartridges from the European Union, which has imposed no fewer than 10 rounds of sanctions against Russia in a so-far inconclusive attempt to starve Putin’s war machine of the means to fight on.
Promtekhnologiya has filed four declarations since October covering shipments of 460,000 units described as “Orsis hunting cartridges” — most are of the .338 Lapua Magnum type. These identify a Slovenian company called Valerian as the supplier.
The first of the filings, dated October 13, 2022, includes an air waybill number whose first three digits — 262 — indicate that the shipper was Ural Airlines, a Russian carrier. It was not immediately possible to trace the route of the flight, however.
Valerian was founded on the eve of Russia’s invasion of Ukraine with paid-in capital of €7,500 by Gašper Heybal, who previously worked for U.S. military outfitter Voodoo Tactical. On its home page, Valerian says: “Our goal is to equip you for your mission, whatever it might be, and wherever you are going.”
In online posts over the past decade — including on a Facebook Group called EU Guns with a declared mission of “easier transfer of weapons between European gun owners” — Heybal has done little to dispel the impression that he is an active small arms dealer.
Bakhmut was recently captured by Prigozhin’s mercenaries, the Wagner mercenary group| Olga Maltseva/AFP via Getty Images
The telephone number Heybal shared publicly in those posts is the same as the one for Valerian, which is registered at an address in a village around 40 minutes’ drive southeast of the Slovenian capital Ljubljana.
Reached at that number, Heybal denied that Valerian had shipped ammunition to Russia: “We don’t sell any … firearms or ammunition, and also there is an embargo on Russia,” said Heybal.
In a follow-up email on the declarations of conformity, Heybal said: “Firstly, we must stress that we do not know, nor do we understand how the name of our company, Valerian d.o.o., appears on the document.”
“Secondly, Valerian is not listed there as a supplier but as the producer, and this is not possible, as we do not produce ammunition. That being said, it still makes absolutely no sense to us as to how our name could appear on it. We are glad you brought this to our attention so we can figure out what is going on.”
A Slovenian diplomat said that, while Valerian had never applied for authorization to export weapons or ammunition to Russia, it had shipped “individual parts” to Kyrgyzstan.
The Central Asian state is one of the countries that the EU has in mind as it discusses an 11th round of measures targeting third countries that are suspected of helping Russia evade sanctions.
“The competent services in the Republic of Slovenia have already initiated the appropriate procedures to investigate the facts concerning the company,” the diplomat told POLITICO, adding that they would verify the possible diversion of goods to the Russian Federation. “Slovenia is firmly committed to supporting Ukraine, we have been supportive of all sanctions packages and especially this anti-circumvention one.”
An official at the European Commission deflected a request for comment, saying the bloc’s member countries were responsible for implementing sanctions. “As this seems like a very specific case, these allegations need to be investigated further by the competent authorities,” the official said.
Sergey Panov reported from Spain, Sarah Anne Aarup from Brussels and Douglas Busvine from Berlin. Additional reporting by Steven Overly in Washington.
Sergey Panov, Sarah Anne Aarup and Douglas Busvine
KYIV — Ukraine’s capital Kyiv came under fresh Russian attacks Monday after facing heavy missile and drone attacks over the weekend.
The attacks Monday morning mark the first daytime assault over the capital in months. Russia launched up to 40 cruise missiles over Ukraine from strategic bombers stationed in the Caspian Sea, according to Ukraine’s air defense forces.
The nation’s air defense forces reported shooting down most of theRussianweapons, including 37 missiles and 30 drones in five hours.
Kyiv Mayor Vitaly Klitschko reported about 40 enemy targets being shot down over Kyiv alone overnight. Monday morning’s attacks came at a time when Kyiv’s streets were full of people going to work and schools. Debris hit busy roads in the capital’s downtown and residential districts, Klitschko said in a Telegram statement. The attacks came a day after another major Russian bombardment just as Kyiv was marking the anniversary of its official founding 1,541 years ago.
“Another difficult night for the capital. But, thanks to the professionalism of our defenders, as a result of the air attack of the barbarians in Kyiv, there was no damage or destruction of infrastructural and other facilities, apartment buildings. There are no victims or dead,” Klitschko said.
Local authorities in Ukraine’s western Khmelnytskiy region reported Russians successfully hitting a military facility there.
“At the moment, work on localization of fires in fuel and lubricant warehouses and storage of combat material assets is ongoing. Five aircraft were damaged, as well as as a landing strip,” Khmelnytska Regional Military Administration reported.
Russia has launched 16 air attacks on Kyiv this month, but the latest assault signals a change in tactic.
“This was already the 16th attack on the capital since the beginning of the month. In this way, the enemy changed tactics — after long, exclusively nocturnal attacks, he struck a peaceful city during the day, when most of the residents were at work and on the streets. Russians clearly demonstrate that they are aiming at the destruction of the civilian population,” Kyiv Region Military Administration said in a statement.
The EU’s joint presidents flew to last year’s U.N. climate talks in Egypt aboard a private jet, according to data seen by POLITICO that revealed heavy use of private flights by European Council President Charles Michel.
The flight data, received through a freedom of information request, shows that Michel traveled on commercial planes on just 18 of the 112 missions undertaken between the beginning of his term in 2019 and December 2022.
He used chartered air taxis on some 72 trips, around 64 percent of the total, including to the COP27 talks in Egypt last November and to the COP26 summit in Glasgow in 2021. Michel invited Commission President Ursula von der Leyen on the flight to Egypt.
The EU presidents’ choice of transportation to the climate talks highlights a long-standing dilemma for global leaders: how to practice what they preach on greenhouse gas emissions while also facing a demanding travel schedule that makes private aviation a tempting option — even a necessary evil.
When Michel, a former Belgian prime minister, arrived in the resort town of Sharm El-Sheikh, he delivered a sober message to the gathered climate dignitaries: “We have a climatic gun to our head. We are living on borrowed time,” he said, before adding: “We are, and will remain, champions of climate action.”
According to the NGO Transport & Environment, a private jet can emit 2 tons of planet-cooking CO2 per hour. That means during the five-hour return flight to Sharm El-Sheikh, Michel and von der Leyen’s jet may have emitted roughly 20 tons of CO2 — the average EU citizen emits around 7 tons over the course of a year.
Most COP27 delegates — including the EU’s Green Deal chief Frans Timmermans, according to a Commission official — took commercial flights normally packed with sun-seeking tourists.
The decision to travel to Egypt by private jet was made after no commercial flights were available to return Michel to Brussels in time for duties at the European Parliament, his spokesperson Barend Leyts told POLITICO.
Staff also explored the option of flying aboard Belgian Prime Minister Alexander De Croo’s plane, but it was scheduled to return before Michel’s work at COP27 would be completed.
Unlike many national governments, the EU does not own planes to transport its leaders. Hiring a private jet was “the only suitable option in the circumstances,” said Leyts. “Given that the president of the Commission was also invited to the COP27, we proposed to share a flight.”
Leyts stressed that the flight complied with internal Council rules, which dictate that officials should fly commercial when possible.
A spokesperson from the Commission confirmed that the famously hostile pair had shared the cabin to Sharm El-Sheikh, noting that reaching the destination by commercial flight was difficult due to the high volume of traffic and von der Leyen’s packed schedule.
“The fact that both presidents traveled together, with their teams, shows that they did what was possible to optimize the travel arrangements and reduce the associated carbon footprint,” added the Commission’s spokesperson.
The Commission previously told POLITICO that von der Leyen’s use of chartered trips is limited to “exceptional circumstances,” such as for security reasons or if a commercial flight isn’t available or doesn’t fit with diary commitments. The institution has previously declined POLITICO’s request to share detailed information on the modes of transportation used by the Commission chief for her foreign trips.
As part of its climate goals, the EU is looking to tighten its rules on staff travel to encourage greener modes of transport and bring down the institution’s emissions.
The Commission is aiming to achieve climate neutrality by 2030 by switching to “sustainable business travel,” favoring greener travel options and encouraging employees to cycle, walk or take public transport to work.
Leyts said Michel’s staff enquired about the possibility of using sustainable aviation fuel, but were “regrettably” told that neither Brussels nor Sharm El-Sheikh airports had provision.
Since 2021, Michel has offset the emissions of his flights through a scheme that funds a Brazilian ceramics factory to switch its fuel from illegal timber to agricultural and industrial waste products, according to Leyts. Since 2022, that has applied to all of his flights.
The Hungarian parliament ratified Finland’s NATO membership on Monday, putting Helsinki one step closer to joining the alliance but leaving Sweden waiting in the wings.
Members of Hungary’s parliament voted by a margin of 182 to 6 in favor of Finnish accession.
Helsinki now only needs the Turkish parliament’s approval — expected soon — to become a NATO member.
Hungary’s move comes after repeated delays and political U-turns.
Hungarian officials spent months telling counterparts they had no objections and their parliament was simply busy with other business.
Budapest then changed its narrative last month, with Hungarian Prime Minister Viktor Orbán — who has an iron grip over his ruling Fidesz party — arguing the point that some of his legislators had qualms regarding criticism of the state of Hungarian democracy.
Finland and Sweden have been at the forefront of safeguarding democratic standards in Hungary, speaking out on the matter long before many of their counterparts.
But earlier this month — just as Turkish President Recep Tayyip Erdoğan announced that he will support Finland’s NATO membership — the Fidesz position flipped again, with its parliamentary group chair then announcing support for Helsinki’s bid.
Turkey’s parliament is expected to ratify Finnish membership soon. But it is keeping Sweden in limbo, as Turkish officials say they want to see the country implement new anti-terror policies before giving Ankara’s green light.
Following in Turkey’s footsteps, Hungary is now also delaying a decision on Sweden indefinitely — prompting criticism from Orbán’s critics.
Attila Ara-Kovács, a member of the European Parliament from Hungary’s opposition Democratic Coalition, said that Orbán’s moves are part of a strategy to fuel anti-Western attitudes at home.
The government’s aim is “further inciting anti-Western and anti-NATO sentiment within Hungary, especially among Orbán’s fanatical supporters — and besides, of course, to serve Russian interests,” he said.
“This has its consequences,” Ara-Kovács said, adding that “support for the EU and NATO in the country is significantly and constantly decreasing.”
A recent Eurobarometer poll found that 39 percent of Hungarians view the EU positively. A NATO report, published last week, shows that 77 percent of Hungarians would vote to stay in the alliance — compared to 89 percent in Poland and 84 percent in Romania.
But Hungarian officials are adding the spin that they do support Sweden’s NATO membership.
The Swedish government “constantly questioning the state of Hungarian democracy” is “insulting our voters, MPs and the country as a whole,” said Balázs Orbán, the Hungarian prime minister’s political director (no relation to the prime minister).
It is “up to the Swedes to make sure that Hungarian MPs’ concerns are addressed,” he tweeted on Sunday. “Our goal,” he added, “is to support Sweden’s NATO accession with a parliamentary majority as broad as possible.”
European Commission President Ursula von der Leyen has declared Europe’s dependence on Russian oil and gas “history.”
But others, from senior Ukrainian officials to MEPs and industry insiders, say that chapter of history is still being written.
Significant quantities of Russian hydrocarbons, particularly oil, are still flowing around sanctions and into the European market, they say, earning payments that fund Vladimir Putin’s war machine.
“I had a friend in New York in the 1990s who complained cockroaches would get into his apartment through any available hole — that’s what Russia is doing with its energy,” Oleg Ustenko, economic adviser to Ukrainian President Volodymyr Zelenskyy, told POLITICO. “We have to fix these holes to stop Russia receiving this blood money they are using to finance the military machine that is destroying our country and killing our people.”
Crude oil is notoriously difficult to track on global markets. It can easily be mixed or blended with other shipments in transit countries, effectively creating a larger batch of oil whose origins can’t be determined. The refining process, necessary for any practical application, also removes all traces of the feedstock’s origin.
A complex network of shipping companies, carrying the flags of inscrutable offshore jurisdictions, adds a further layer of mystery; some have been accused of helping Russia to hide the origin of its crude exports using a variety of different means.
“Unlike pipeline gas, the oil market is global. Swap and netting systems, and mixing varieties are common practice,” said Mikhail Khodorkovsky, a prominent exiled critic of Putin and the former CEO of oil and gas giant Yukos.
“The result of the embargo is a significant increase in Russian transportation costs, a significant redistribution of income in favor of intermediaries, and some additional discount due to the narrowing of the buyers’ market.”
Crude workarounds?
The EU has largely banned Russian fossil fuels since the invasion of Ukraine in February 2022, with exceptions for limited quantities of pipeline crude oil, pipeline gas, liquefied natural gas (LNG), and oil products.
But large volumes of Russian crude oil — a bigger source of revenue than gas — are still being shipped onto global markets, leading some experts to suspect they are finding their way to Europe’s market through the back door.
“Since the introduction of sanctions, the volumes of crude oil Russia is exporting have remained more or less steady,” said Saad Rahim, chief economist at global commodities trading firm Trafigura. “It’s possible that Russian oil is still being sold on to the EU and Western nations via middlemen.”
Crude oil is notoriously difficult to track on global markets | Image via iStock
One potential route into Europe is through Azerbaijan, which borders Russia and is the starting point of the Baku-Tbilisi-Ceyhan (BTC) pipeline, operated by BP. The port of Ceyhan, in Turkey, is a major supply hub from which crude oil is shipped to Europe; it also receives large quantities from Iraq through the Kirkuk-Ceyhan pipeline.
François Bellamy, a French MEP and member of the European Parliament’s Committee on Industry, Research and Energy, aired suspicions about this route in a recent question to the Commission. Data show that Azerbaijan exported 242,000 barrels a day more than it produced between April and July last year, he said — a large margin over domestic production, which stood at 648,000 barrels a day last month and is in long-term decline, according to ministry figures.
“How can a country diminish its production and increase its exports at the same time? There is something completely inconsistent in the figures and this inconsistency creates suspicions that sanctions are being circumvented,” Bellamy said.
A spokesperson for the Commission said it is working to crack down on loopholes in sanctions regimes and has appointed the EU’s former ambassador to the U.S., David O’Sullivan, as a special envoy tasked with tackling circumvention. The official also pointed out that data cited by Bellamy on Azerbaijani oil transactions, the most recent publicly available, “happened before the sanctions entered into force so there is no question of evasion of sanctions there.”
“Azerbaijan does not export Russian oil to the EU via the BTC pipeline,” said Aykhan Hajizada, spokesperson for the country’s foreign ministry, adding that while “Azerbaijan continues to use all non-sanctioned oil regardless of source,” it “remains committed to conducting its supply and trading operations with the utmost care and diligence, in line with relevant laws and regulations.”
BP has previously been forced to deny that the BTC pipeline carries Russian oil, and data seen by POLITICO for crude shipments from Ceyhan shows a recent dip in the volume of exports to the EU, from around 3 million tons per month (about 700,000 barrels per day) in early 2022 to around 2 million tons a month this year.
Slick operations
At the same time, though, Turkey doubled its direct imports of Russian oil last year and has refused to impose sanctions on Russian crude despite simultaneously offering military and humanitarian support to Ukraine.
Finland’s Centre for Research on Energy and Clean Air (CREA) warned late last year that “a new route for Russian oil to the EU is emerging through Turkey, a growing destination for Russian crude oil,” where it is refined into oil products that are not subject to sanctions and sold on.
“We have enough evidence that some international companies are buying refinery products made from Russian oil and selling them on to Europe,” said Ustenko, the Zelenskyy adviser. “It’s completely legal, but completely immoral. Just because it’s allowed doesn’t mean we don’t need to do anything about it.”
On Monday, British NGO Global Witness released a report that found Russian oil has consistently been sold at prices far exceeding the $60 cap imposed by G7 countries in December last year.
“The fact Russian oil continues to flow round the world is a feature, not a bug, of Western sanctions,” said Mai Rosner, a campaigner who worked on the report. “Governments offered the fossil fuel industry a wide-open back door, and commodity traders and big oil companies are exploiting these loopholes to continue business as usual.”
MUNICH — China is trying to drive a fresh wedge between Europe and the United States as Russia’s invasion of Ukraine trudges past its one-year mark.
Such was the motif of China’s newly promoted foreign policy chief Wang Yi when he broke the news at the Munich Security Conference on Saturday that President Xi Jinping would soon present a “peace proposal” to resolve what Beijing calls a conflict — not a war — between Moscow and Kyiv. And he pointedly urged his European audience to get on board and shun the Americans.
In a major speech, Wang appealed specifically to the European leaders gathered in the room.
“We need to think calmly, especially our friends in Europe, about what efforts should be made to stop the warfare; what framework should there be to bring lasting peace to Europe; what role should Europe play to manifest its strategic autonomy,” said Wang, who will continue his Europe tour with a stop in Moscow.
In contrast, Wang launched a vociferous attack on “weak” Washington’s “near-hysterical” reaction to Chinese balloons over U.S. airspace, portraying the country as warmongering.
“Some forces might not want to see peace talks to materialize,” he said, widely interpreted as a reference to the U.S. “They don’t care about the life and death of Ukrainians, [nor] the harms on Europe. They might have strategic goals larger than Ukraine itself. This warfare must not continue.”
Yet at the conference, Europe showed no signs of distancing itself from the U.S. nor pulling back on military support for Ukraine. The once-hesitant German Chancellor Olaf Scholz urged Europe to give Ukraine even more modern tanks. And French President Emmanuel Macron shot down the idea of immediate peace talks with the Kremlin.
And, predictably, there was widespread skepticism that China’s idea of “peace” will match that of Europe.
“China has not been able to condemn the invasion,” NATO Secretary-General Jens Stoltenberg told a group of reporters. Beijing’s peace plan, he added, “is quite vague.” Peace, the NATO chief emphasized, is only possible if Russia respects Ukraine’s sovereignty.
Europe watches with caution
Wang’s overtures illustrate the delicate dance China has been trying to pull off since the war began.
Keen to ensure Russia is not weakened in the long run, Beijing has offered Vladimir Putin much-needed diplomatic support, while steering clear of any direct military assistance that would attract Western sanctions against its economic and trade relations with the world.
Ukrainian Foreign Minister Dmitro Kuleba is expected to hold a bilateral meeting with Wang while in Munich | Johannes Simon/Getty Images
“We will put forward China’s position on the political settlement on the Ukraine crisis, and stay firm on the side of peace and dialogue,” Wang said. “We do not add fuel to the fire, and we are against reaping benefit from this crisis.”
According to Italy’s Foreign Minister Antonio Tajani, who met Wang earlier this week, Xi will make his “peace proposal” on the first anniversary of the war, which is Friday.
Ukrainian Foreign Minister Dmitro Kuleba is expected to hold a bilateral meeting with Wang while in Munich. He said he hoped to have a “frank” conversation with the Beijing envoy.
“We believe that compliance with the principle of territorial integrity is China’s fundamental interest in the international arena,” Kuleba told journalists in Munich. “And that commitment to the observance and protection of this principle is a driving force for China, greater than other arguments offered by Ukraine, the United States, or any other country.”
EU foreign policy chief Josep Borrell met Wang later on Saturday and called on him to “use [China’s] closeness to convince Russia to engage in real peace efforts. Borrell expressed hope that Wang’s visit to Moscow could be used to convince Russia to stop its brutal war,” according to an EU official familiar with the talks, adding the EU chief told Wang Russia conducted “gross violation of the letter and spirit of the U.N. Charter.”
Many in Munich were wary of the upcoming Chinese plan.
German Foreign Minister Annalena Baerbock welcomed China’s effort to use its influence to foster peace but told reporters she had “talked intensively” with Wang during a bilateral meeting on Friday about “what a just peace means: not rewarding the attacker, the aggressor, but standing up for international law and for those who have been attacked.”
“A just peace,” she added, “presupposes that the party that has violated territorial integrity — meaning Russia — withdraws its troops from the occupied country.”
One reason for Europe’s concerns is the Chinese peace plan could undermine an effort at the United Nations to rally support for a resolution condemning Russia’s invasion of Ukraine, which will be on the U.N.’s General Assembly agenda next week, according to three European officials and diplomats.
Taiwan issue stokes up US-China tension
If China was keen to talk about peace in Ukraine, it’s more reluctant to do so in a case closer to home.
When Wolfgang Ischinger, the veteran German diplomat behind the conference, asked Wang if he could reassure the audience Beijing was not planning an imminent military escalation against Taiwan, the Chinese envoy was non-committal.
Nato Secretary-General Jens Stoltenberg said “what is happening in Europe today could happen in east Asia tomorrow” | Johannes Simon/Getty Images
“Let me assure the audience that Taiwan is part of Chinese territory. It has never been a country and it will never be a country in the future,” Wang said.
The worry over Taiwan resonated in a speech from NATO Secretary-General Jens Stoltenberg, who said “what is happening in Europe today could happen in Asia tomorrow.” Reminding the audience of the painful experience of relying on Russia’s energy supply, he said: “We should not make the same mistakes with China and other authoritarian regimes.”
But China’s most forceful attack was reserved for the U.S. Calling its decision to shoot down Chinese and other balloons “absurd” and “near-hysterical,” Wang said: “It does not show the U.S. is strong; on the contrary, it shows it is weak.
Wang also amplified the message in other bilateral meetings, including one with Pakistani Foreign Minister Bilawal Bhutto Zardari. “U.S. bias and ignorance against China has reached a ridiculous level,” he said. “The U.S. … has to stop this kind of absurd nonsense out of domestic political needs.”
It remains unclear if Wang will hold a meeting with U.S. Secretary of State Antony Blinken while in Germany, as has been discussed.
Hans von der Burchard and Lili Bayer reported from Munich, and Stuart Lau reported from Brussels.
This article was updated to include details of the meeting between Wang and Borrell.
CORRECTION: Jens Stoltenberg’s reference to Asia has been updated.
Washington is trying to “demonize Russia” and “fuel the Ukrainian crisis” by accusing Moscow of crimes against humanity, Russian Ambassador to the U.S. Anatoly Antonov said on Sunday.
U.S. Vice President Kamala Harris announced Saturday that Washington has formally determined that Russia is committing crimes against humanity in Ukraine, in an address at the Munich Security Conference in Germany.
In a message on the social media network Telegram, Antonov said: “We consider such insinuations as an attempt, unprecedented in terms of its cynicism, to demonize Russia in the course of a hybrid war, unleashed against us. There is no doubt that the purpose of such attacks is to justify Washington’s own actions to fuel the Ukrainian crisis,” he said.
Harris had said Russia is responsible for a “widespread and systematic attack” against Ukraine’s civilian population, committing war crimes — as the administration formally concluded last March — and illegal acts against non-combatants. She cited evidence of execution-style killings, rape, torture and forceful deportations.
Europe, the world’s largest economic bloc, enjoyed stable trade surpluses for a decade but the war in Ukraine and the ensuing energy crisis have tipped the Continent into a spiraling external deficit unseen since the launch of the euro.
The terms-of-trade shock maxed out in August, the latest month for which trade figures are available. And, even though energy prices have since eased, European leaders are still scrambling to shore up supplies of affordable oil and gas to replace lost Russian deliveries. A harsh winter looms.
A breakdown of the trade figures shows that the EU’s manufacturing trade surplus has nearly halved this year.
Can Europe bounce back? Or will its industrial base become hollowed out as industry moves offshore? And will the eurozone, and the EU more broadly, end up being saddled with the chronic external deficits that have long plagued the United States and, more recently, destabilized Britain? POLITICO breaks it down for you:
What’s going on?
The eurozone’s negative trade balance with the rest of the world in August stood at €50.9 billion, the highest deficit ever recorded, compared to a €2.8 billion surplus a year ago, according to the latest Eurostat numbers.
The trade deficit for the EU as a whole spiraled to €64.7 billion.
The eurozone’s current account balance — the balance of all trade in goods and services as well as international transfers of capital, such as remittances — hit a €26.32 billion deficit in August, largely driven by the trade deficit in goods, the European Central Bank reported.
Is that a bad thing?
A trade deficit occurs when a country or trading bloc’s imports exceed its exports. A trade surplus is the opposite. Trade deficits are not per se good or bad, although many countries seek a trade surplus, including by setting up tariffs and quotas to artificially boost their trade balance, a practice known as mercantilism.
Is it temporary?
The trade deficit is largely driven by high energy prices, which in August hit a record €350 per megawatt hour. Prices have come down from their peak, trading at around €150/MWh, but they are still a multiple of where they were a year ago.
“Markets have gone from pricing this energy crisis as being temporary, they are now pricing it to be a much longer-term story, albeit not as elevated as it was in August,” said Kristoffer Kjær Lomholt, chief FX analyst at Danske Bank.
“We think that it is a kind of a more long-term thing that is going to weigh on the currencies of economies that are energy importers, where the eurozone, of course, stands out to a very large extent,” he added.
Others believe that the shift, being largely energy related, could resolve itself over time, said Sam Lowe, who covers trade policy at Flint Global.
An EU official also pointed to EU-Russia trade. “The peak in energy prices has made the value of our imports from Russia increase substantially (while the volume of those imports from Russia decreased), and our exports have spiralled down because of sanctions (export controls),” the official said.
Will the EU be less competitive if energy prices remain high?
A negative trade balance and consequently a weaker currency makes imports more expensive. “Net importers will have to pay more for goods and services,” said Lomholt.
On the other hand, a weaker euro could fuel exports, said Matthias Krämer, head of external economic policy at German industry federation BDI. “If the euro currency was a little bit weaker, it could also make Europe’s position on global markets better by making exports cheaper,” he said.
But there’s another way of looking at this. Lowe argued the sustained large eurozone trade surplus was itself problematic, in that it was a function of intra-EU demand being lower than it should be. “Being overly dependent on external demand also leaves the EU quite vulnerable to both external shocks, and political coercion.”
What does that mean for the euro?
“We expect the euro to decline further in coming months as part of this adjustment,” said Robin Brooks, chief economist at the Institute of International Finance.
A negative trade balance or current account deficit puts downward pressure on the value of free-floating currencies, which move with demand of goods: less demand for a country’s exports means less demand for its currency, which in turn lowers its value relative to others. Conversely, strong foreign demand for goods strengthens a country’s currency.
“Foreign investors need to be compensated via a real depreciation of the exchange rate, and generally higher real interest rates,” said Lomholt at Danske Bank.
The Danish lender has recently downgraded its forecast for the € to $ exchange rate to $0.93 in 12 months from virtual parity now, driven in part by the energy price shock. “We have for some time been arguing that €/$ looked overvalued and not undervalued … And just given the additional push to the energy crisis that we got during summer, we saw a case that the euro/dollar [exchange rate] should actually hit even lower,” he said.
Is business freaking out?
A bit.
“The data are not so surprising considering the high energy prices, but they are worrying”, said Luisa Santos, responsible for international relations at BusinessEurope. She called on the EU to try to bring energy prices down and to boost exports by opening new market opportunities via more trade agreements.
Germany, the bloc’s export powerhouse, increased its exports by 14 percent in the first eight months of the year but imports have surged by more than 27 percent, according to national trade figures.
“We’re not performing in a segment which is highly influenced by a cost driven competition,” said Krämer at the German industry federation. “But if this situation will last longer of course some parts of our industry will be more and more under pressure.”
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KYIV — The Kerch bridge in Crimea was partially destroyed by an explosion Saturday morning, in a strategic and symbolic blow to Russian President Vladimir Putin and his campaign against Ukraine.
The damage to the bridge, which comes as Ukrainian advances continue to reclaim occupied territories from Moscow’s forces, endangers a crucial route for Russian military supplies to support its forces in southern Ukraine.
Two spans of the road portion of the bridge collapsed as a result of “an accident,” according to Sergei Aksyonov, the Russia-installed head of the Crimea administration. “Fuel tanks have also caught fire,” Aksyonov said in a post on social media.
Russia’s National Anti-Terrorist Committee said that a truck was blown up on the bridge, according to Russian media. As a result of the blast, “a partial collapse” of two spans occurred, it said. Russia’s Investigative Committee said three people were killed in the explosion, according to media reports.
According to videos and photos posted Saturday morning by eyewitnesses, several fuel tankers were on fire on the rail part of the bridge, while at least one road span had partially collapsed into the waters of the Kerch Strait, which connects the Black Sea and the Sea of Azov.
“As soon as the fire is extinguished, it will be possible to assess damage to the bridge and pillars, and it will be possible to talk about the timing of the restoration of traffic,” Aksyonov said.
The head of the Russian-installed regional parliament in Crimea, Vladimir Konstantinov, blamed the damage to the bridge on “Ukrainian vandals,” according to Russian media.
Kyiv hasn’t claim responsibility for the damage to the bridge, but Ukrainian officials celebrated the blast on social media. Referring to a flagship Russian vessel sunk by Kyiv earlier this year, Ukraine’s Ministry of Defense tweeted: “The guided missile cruiser Moskva and the Kerch Bridge – two notorious symbols of Russian power in Ukrainian Crimea – have gone down. What’s next in line, russkies?”
The Kerch bridge, which connects Crimea with the Russian mainland, was opened personally by Putin with much fanfare in 2018, after Moscow seized the peninsula from Ukraine in 2014. The construction of the bridge was slammed by both Kyiv and its Western backers as illegal at the time.
Since the start of the Kremlin’s war on Ukraine in late February, the bridge has been crucially important for the transfer of manpower, weapons and fuel to Russian units fighting Ukrainian troops in southern Ukraine.
Putin on Saturday ordered a government commission to investigate “the emergency on the Crimean bridge” and officials have been dispatched to the scene, Russian media reported, citing Kremlin spokesman Dmitry Peskov.
Crimea, the bridge, the beginning. Everything illegal must be destroyed, everything stolen must be returned to Ukraine, everything occupied by Russia must be expelled. pic.twitter.com/yUiSwOLlDP
According to Aksyonov, ferry service will start operating on Saturday in place of the damaged bridge.
Over the past months, Ukrainian officials have repeatedly declared Kyiv’s plans to target the Crimea bridge. In April, Oleksiy Danilov, secretary of the National Security and Defense Council, said in a radio interview that the bridge will “definitely” be hit, if Kyiv gets an opportunity. Kremlin spokesman Dmitry Peskov branded Danilov’s statement as “announcing a possible terrorist attack.”
After the partial collapse of the Kerch bridge Saturday morning, Mykhailo Podolyak, an adviser to Ukrainian President Volodymyr Zelenskyy’s office, said in a tweet that “everything illegal must be destroyed, everything stolen must be returned to Ukraine, everything occupied by Russia must be expelled.”
Zelenskyy, in an address Friday night, said Ukraine has taken back more than 2,400 square kilometers of its territory occupied by Russia. “This week alone, our soldiers liberated 776 square kilometers of territory in the east of our country and 29 settlements,” Zelenskyy said.
European far-right politicians just stormed to victory in Italy, after achieving historic results in France and Sweden.
“Everywhere in Europe, people aspire to take their destiny back into their own hands!” said Marine Le Pen, the leader of France’s far-right National Rally Party.
But if you think there is a new wave of right-wing radicalism sweeping Europe, you’d be wrong. Something else is going on.
Analysis by POLITICO’s Poll of Polls suggests far-right parties in the region on average did not increase their support by even one percentage point between the start of Russia’s invasion in Ukraine in February and today.
POLITICO looked at the median and average increase of all parties organized in right-wing European Parliament groups of Identity and Democracy, the European Conservatives and Reformists or unaffiliated parties with political far-right positions.
Overall, the results indicate that if an increase in support occurred for far-right parties, it happened several years ago.
The Sweden Democrats’ first surge happened after the 2014 election, when the party grew from around 10 percent to 20 percent, the same one-fifth share of the vote they received in this year’s election. The far-right Alternative for Germany AfD in Germany grew fast in 2015 and 2016 reaching 14 percent in POLITICO’s polling tracker. In Italy, the Northern League overtook Forza Italia for the first time in early 2015, and peaked in 2019 at 37 percent before starting a downward trend ending on 9 percent in last month’s election. In the Italian election, voters mostly switched between rival right-wing camps.
The far-right has moved from the fringes of politics into the mainstream, not only influencing the political center but also entering the arena of power.
“There is a normalization of far-right parties as an integral part of the political landscape,” said Cathrine Thorleifsson, who researches extremism at the University of Oslo. “They have been accepted by the electorate and also by other, conventional parties.”
Cooperation between the center-right and the extreme-right has become less taboo.
“The rise of far-right parties is only part of the story. The facilitating and mainstreaming of far-right parties as well as the adoption of far-right frames and positions by other parties is at least as important,” tweeted Cas Mudde, a leading scholar on the issue.
This may risk destabilizing Europe even more than winning a couple of percentage points in the polls.
Italy’s far-right firebrand Giorgia Meloni is a clear-cut example. While her party draws its origin from groups founded by former fascists, she’ll now lead the EU’s third-largest economy.
Leader of Italian far-right party “Fratelli d’Italia” (Brothers of Italy), Giorgia Meloni | Pitro Cruciatti/AFP via Getty Images
In Sweden, the center-right party has started coalition talks for a minority government which would have to draw on opposition support, most likely from the far-right Swedish Democrats. Far-right parties have also entered governments in Austria, Finland, Estonia and Italy. Other countries are likely to follow.
George Simion, the leader of Romania’s far-right party, Alliance for the Union of Romanians (AUR), celebrated Meloni’s win in Italy, saying his party is likely to follow in their footsteps.
Spain heads to the ballot box next year and socialist Prime Minister Pedro Sánchez may have a tough time winning re-election. The conservative People’s Party is between five and seven points ahead of the Spanish socialists in all the published polls, but it is unlikely to garner enough votes to secure a governing majority outright.
That means it may have to come to an agreement with far-right party Vox, whose leader, Santiago Abascal, is an ally of Meloni’s. While the People’s Party previously refused to govern with Vox, last spring its newly elected leader, Alberto Núnez-Feijóo, greenlit a coalition agreement with the ultranationalist group in Spain’s central Castilla y León region.
Tom Van Grieken, the right-wing Belgian politician, also pointed to Spain as the next likely example, especially because of the possible cooperation with the PP. “All over Europe, we see conservative parties who are considering breaking the cordon sanitaire,” he said, referring to the refusal of other parties to work with the far-right. “They are tired of compromising with their ideological counterparts, the parties at the left end of the spectrum.”
Chairman of Vlaams Belang party Tom Van Grieken | Stephanie Le Coqc/EFE via EPA
This didn’t happen overnight. The far-right worked hard to shrug off their extremist, neo-Nazi image.
“In some of the reporting on the Swedish Democrats, you’d think they’ll deport people on trains as soon as they’re in power. Come on, these parties have changed,” said one EU official with right-wing affiliations.
The far-right invested in “image adjustment and trying to tread carefully with some issues, while unashamedly catering to others,” said Nina Wiesehomeier, a political scientist at the IE University of Madrid. “This is particularly obvious in Italy right now, with Meloni sticking to the slogan of ‘God, homeland, family,’ as a continuation, while having tried to purge the party from more radical elements.”
In Belgium’s northern region of Flanders, the right-wing Vlaams Belang (Flemish Interest) explicitly dismisses the label “extreme-right.” Just like his counterparts in Italy, Sweden and France, Van Grieken, the party’s president, denounced the more extremist positions of his group’s founding fathers and moderated his political message to make voting for the far-right socially acceptable.
Overt racism is taboo. Instead, the rhetoric changes to criticizing an open-door migration policy. By carefully catering to centrist voters, the far-right aims for a bigger slice of the cake, while still riding on the anti-establishment discontent.
“There is a clear fault line between the winners of globalization and the nationalists,” Van Grieken told POLITICO. “This comes on top on the concerns about mass migration, whether it’s in Malmö, Rome or other European cities.”
Perfect storm
Now, the time is right to capitalize on that transformation.
As Europe is battling record inflation and Europeans fear exorbitant heating bills, governments warn about the political implications of a “winter of discontent.”
“It’s a massive drainage of European prosperity,” Belgian Prime Minister Alexander De Croo told POLITICO recently. “In the current situation, it’s hard to believe in progress, it’s very hard to make progress. So there’s a very pessimistic feeling.”
The current war in Ukraine is the latest in a succession of crises — in global finance, migration and the pandemic. Experts argue that this is key to understanding the rising support for the far-right.
“Such existential crises have a destabilizing effect and lead to fear,” said Carl Devos, a professor in political science at Ghent University. “Fear is the breeding ground for the far-right. People tend to translate that fear and outrage into radical voting behaviour.”
Migration and identity politics are less prominent in the media because of the Ukraine war and rising energy prices, but they’re still key issues in right-wing debate.
In Austria, the coalition parties fought over whether or not asylum seekers should receive climate bonuses. In the Netherlands, the death of a baby at the asylum center Ter Apel led to a renewed debate over the overcrowded migration centers.
The combination of those issues is likely to feed into more right-wing wins across the continent. “The far-right offers nationalist, protectionist solutions to the globalized crises, said Thorleifsson. “We see how the migration issue was momentarily off the agenda during the pandemic, but now it’s back.”
Aitor Hernández-Morales, Camille Gijs and Ana Fota contributed reporting.
