Ukraine Latest: Shelling Hits Grounds of Biggest Nuclear Plant

(Bloomberg) -- Ukraine’s nuclear power authority said it disconnected a generator at Europe’s biggest nuclear power plant from the electrical grid after the facility’s grounds came under Russian shelling. Ukrainian President Volodymyr Zelenskiy called for “sanctions against the entire Russian nuclear sector” for creating a threat at the power plant.

The top diplomats from Russia and the US said they’re willing to pursue talks on a prisoner exchange involving WNBA star Brittney Griner and another jailed American after Griner was jailed on drug charges that Washington denounced as “unacceptable.”

A week after Ukraine and Russia reached an agreement for safe transit of grain vessels, three more ships left Ukrainian Black Sea ports early Friday, carrying corn bound for Ireland, the UK and Turkey. Russian President Vladimir Putin hosts Turkish leader Recep Tayyip Erdogan for talks in Sochi as Turkey pushes for a mediating role to try to help end the war. 

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Key Developments

• Ukraine Blasts Watchdog Claim That Its Army Endangers Civilians
• US, Russia Ready to Talk on Prisoner Swap After Griner Convicted
• The US-Led Drive to Isolate Russia and China Is Falling Short
• Three More Grain Ships to Sail From Ukraine, Minister Says 
• Erdogan Eyes Mediator Role With Putin After Ukraine Grain Deal
• As Ukraine War Distracts World, 900,000 May Die in West Africa

On the Ground

Well into the conflict’s sixth month, Ukraine is likely seizing the strategic initiative and forcing Russia to reallocate forces and re-prioritize efforts in response to Kyiv’s counteroffensive operations, the Institute for the Study of War said. Ukraine’s forces conducted a series of localized counterattacks between Izyum and Slovyansk and regained positions in a number of settlements. Russia is conducting an offensive operation in the Bakhmut and Avdiyivka area in Donetsk. Ukraine’s general staff reported. The Zaporizhzhia region was shelled overnight, according to local authorities. Explosions were also heard in southern port of Mykolaiv, Kharkiv in the north, and in the Dnipropetrovsk region.

(All times CET)

Moody’s Cuts Czech, Slovak Outlooks on Russian Energy Risk (11:28 p.m.)

Slovakia and the Czech Republic had their credit outlooks reduced by Moody’s Investors Service, which cited the nations’ dependence on energy from Russia in shifting its view.

The credit assessor on Friday lowered its outlook for both eastern European countries to negative from stable, while affirming their respective ratings.

The Czech Republic is currently graded Aa3, the third-highest investment-grade score, while Slovakia is two levels lower at A2. Moody’s underscored the potential recessionary risks for the two economies should there be prolonged or permanent gas-supply interruptions from Russia.

Ukraine Disconnects a Nuclear Plant Generator After Shelling (7:14 p.m.)

Ukraine’s national nuclear power operator said it disconnected one of three generators that were operating at the Zaporizhzhya nuclear power plant, Europe’s largest, after Russian projectiles landed nearby.

Energoatom said on its Telegram channel that a high-voltage power line was damaged. The Ukrainian Foreign Ministry said that Russia has resorted to “numerous provocations” at the plant.

Rafael Grossi, head of the International Atomic Energy Agency, said this week that the plant, occupied by Russian forces since early in Moscow’s invasion, is “completely out of control” and that “every principle of nuclear safety has been violated.” 

Ukraine Seeks to Unblock Metals Exports by Sea (5:48 p.m.)

The government in Kyiv is seeking to restart the export by sea of metals and iron ore that Russian forces have prevented by blocking and occupying the nation’s ports, Deputy Finance Minister Oleksandr Kava said in televised remarks. The exports would have to follow a different system than that agreed under the deal that has opened the way for grain shipments, Kava said.

Ukraine Gets Loan From Italy to Pay Teachers (5:36 p.m.)

Ukraine will receive a 15-year, 200 million euro loan from the Italian government with a zero interest rate that will be used to pay teachers’ salaries, according to Finance Ministry.

Ukraine Shores Up Reserves, Helped by Devaluation (5:30 p.m.)

Ukraine’s currency reserves held steady last month, marking a halt to a plunge as the central bank devalued the hryvnia in an attempt to rescue an economy battered by Russia’s invasion. 

The bank’s stockpile of foreign currencies and gold slipped 1.8% in July to $22.4 billion, according to preliminary data released in Kyiv. The reserves had plunged as much as $2 billion a month since April as policy makers propped up government financing with heavy bond purchasing and market intervention to support the hryvnia. 

Sanctions on Russia Are Mistake, Lula Adviser Says (4:30 p.m.)

US-led sanctions on Russia are a political mistake that increases the risk of a nuclear war, a top foreign policy adviser to Brazilian presidential front-runner Luiz Inacio Lula da Silva said.

Celso Amorim, who led Brazil’s Foreign Ministry during Lula’s two terms in office, warned of the dangers of isolating an economy “as big and strategic” as Russia’s, explaining why the leftist former president wouldn’t endorse such diplomatic positions if elected in October. 

“For the first time since the Cuban missile crisis we see articles about the risk of nuclear weapons published on a weekly basis,” he said in an interview. “It’s irresponsible not to seek peace.”

Kremlin Escalates Estonian Row Over Soviet-Era Tank (4:25 p.m.)

Russia escalated a dispute over the removal of a Soviet-era memorial in neighboring Estonia, compounding tensions in a European Union member state that has fiercely condemned the invasion of Ukraine.

Putin’s chief spokesman on Friday called the plans to remove a World War II tank in the eastern Estonian city of Narva, which sits on the border with Russia, a “war against history.” Earlier, Estonia’s president reinforced a pledge to remove communist-era memorials, saying Putin’s invasion had disgraced memories of the Soviet Union’s victory over Nazi Germany.

US, Russia Say They’re Willing to Discuss Griner Prisoner Swap (3:06 p.m.)

US Secretary of State Antony Blinken and Russian Foreign Minister Sergei Lavrov said they’re willing to pursue talks on a prisoner exchange involving Griner, even as the diplomats didn’t meet Friday at an ASEAN summit in Cambodia.

“There is a special channel agreed upon by the presidents,” Lavrov told a news conference, a day after a Moscow court sentenced Griner to nine years on drug charges. “Whatever is said publicly, that channel is still open.”

The US is seeking a deal involving Griner and former US Marine Paul Whelan, who was jailed in Russia in 2020 on spying charges he denies. Washington has made a “substantial proposal that Russia should engage with us on,” said Blinken. “What Foreign Minister Lavrov said this morning and said publicly is that they are prepared to engage through channels we’ve established to do just that and we’ll be pursuing.”

Read more: ‘Unacceptable’ Griner Sentence Has Biden in Bind With Russia 

Russia Expels 14 Bulgarian Diplomats in Tit-for-Tat Move (2:04 p.m.)

Russia declared 14 employees of Bulgarian embassy and consulates as personae non grata, responding to the earlier expulsion of 70 Russian diplomats, the Foreign Ministry in Moscow said in a statement.

It also blamed the government in Bulgaria, once a close ally, of taking counterproductive actions. Bulgaria expelled a record number of diplomats after Russia invaded Ukraine.

Lavrov Says Russia Ready to Discuss Prisoner Swap (11:30 a.m.)

Sergei Lavrov said the Kremlin is “ready to discuss” prisoner swaps with the US, a day after WNBA basketball player Brittney Griner was convicted in Moscow of drug smuggling and sentenced to nine years in prison.

Russia’s foreign minister spoke from Cambodia, where he attended a meeting with ASEAN peers. US Secretary of State Antony Blinken is also at the gathering.

Lavrov said any talks should be “within the framework of the channel that has been agreed by the presidents” of the two nations, Agence France Press reported. “Despite certain public declarations, it is still functional.” 

‘Unacceptable’ Griner Sentence Has Biden in Bind With Russia 

Finland May Limit Tourist Visas for Russia: Euronews (11:09 a.m.)

Foreign minister Pekka Haavisto said the Finnish government has approved a plan to limit the number of visas it issues to Russians, the TV network Euronews reported. 

Haavisto says ministers on Thursday approved a proposal to restrict appointments available to Russians at Finnish diplomatic missions in Russia. That would reduce the number of visas granted. 

Helsinki has come under pressure to close a perceived sanctions “loophole” which allows thousands of Russians to come to the EU via car or bus through Finnish border crossings, Euronews reported. 

Russian Stocks Touch 2017 Closing Low (9:57 a.m.)

Russia’s equity benchmark touched the lowest closing level since October 2017 on Friday as most of its energy stocks dropped amid intensifying signs that a global economic slowdown is damping demand for crude oil.

The index slumps as much as 3%, down for a fifth day and touching the lowest closing level since October 2017.  

Kyiv Protests Amnesty Report on Endangering Civilians (9:46 a.m.)

Amnesty International said Ukraine’s military has endangered civilians “by establishing bases and operating weapons systems in populated residential areas, including in schools and hospitals.” The report drew a sharp rebuke from Kyiv. The head of the rights group’s Ukrainian operation said her office wasn’t involved in the preparation of the document and made “repeated objections” to the content. 

Thursday’s report said that Ukraine’s actions “in no way justify Russia’s indiscriminate attacks, which have killed and injured countless civilians,” but added that “being in a defensive position does not exempt the Ukrainian military from respecting international humanitarian law.” 

President Volodymyr Zelenskiy said late Thursday that criticism of his military’s defense aids Russian “terrorists.” He didn’t mention Amnesty by name. Defense Minister Oleksii Reznikov said on Facebook that the human rights organization was “losing its mind,” by indirectly equating Russia’s aggression and Ukraine’s self-defense. 

Three More Grain Ships Sail From Ukraine (7:30 a.m.)

Three more grain vessels left Ukraine’s Black Sea ports early Friday as the country tries to ramp up exports of food that have been blocked since the start of Russia’s invasion almost half a year earlier.

Navi Star, Rojen and Polarnet are carrying corn for Ireland, the UK and Turkey, respectively. Another ship, the Fulmar S, is waiting for inspection in Istanbul before it leaves for Ukraine’s Chornomorsk port to load grain, Turkish media reported.  

Efforts are under way to send more vessels through a safe corridor in the Black Sea to ship grain, unlocking millions of tons of crops piling up in the country and boosting global food supplies. 

Oil Suffers Deep Weekly Loss, Shedding Wartime Gains (7:20 a.m.)

Oil headed for a punishing weekly loss on increasing evidence that a global economic slowdown is spurring demand destruction, with prices collapsing to the lowest level in six months as key time spreads contract.

The sell-off, which has wiped out gains triggered by Russia’s invasion of Ukraine, will ease the inflationary pressures coursing through the global economy that have spurred central banks including the Federal Reserve to hike rates.

US-Led Drive to Isolate Russia, China Falling Short (6:37 a.m.)

Comprising nations that account for some 85% of global economic output, the G-20 is supposed to be more reflective of the world. Yet only half its number has joined the international sanctions imposed on fellow member Russia over its invasion of Ukraine. 

It’s an uncomfortable reality confronting Secretary of State Antony Blinken during his extended tour of Southeast Asia and Africa: Much of the world isn’t ready to follow US and European efforts to isolate President Vladimir Putin’s Russia.

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