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Ukraine Latest: India to Resist Anti-US Views at BRICS Summit

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(Bloomberg) -- India is expected to resist an anticipated push from Chinese President Xi Jinping to use this year’s BRICS summit of emerging market powers, which includes Russia, as a platform to highlight his efforts to build an alternative to the US-led global order, Indian officials with knowledge of the matter said.

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The US criticized China’s stepped-up purchases of Russian oil as a worrying sign of collaboration between the countries. President Joe Biden, asked about comments made by UK Prime Minister Boris Johnson, said he isn’t concerned about Ukraine “fatigue” among world leaders.

China’s premier visited a wheat farm for a trip that likely signaled Beijing’s worries about rising food prices. A close ally of President Vladimir Putin threatened retaliation in an escalating standoff with the European Union after Lithuania blocked the transit of sanctioned goods to Russia’s Baltic territory of Kaliningrad.

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

Key Developments

  • India to Resist Anti-US Messaging at BRICS Summit With Xi, Putin

  • Germany’s Ukraine Support Ranges From Howitzers to Sleeping Bags

  • Ukrainians Should Own More Guns After War Ends, Law Chief Says

  • Ukraine Poised to Get Backing of EU States on Membership Path

  • Putin Ally Vows Russian Response to EU Kaliningrad Sanctions

  • India to Resist Anti-US Messaging at BRICS Summit With Xi, Putin

The Latest on the Ground

Fighting continues in the eastern Ukrainian city of Sievierodonetsk as Russia bombarded the nearby city of Lysychansk in attempts to seize the last pocket of the Luhansk region controlled by Ukrainian forces, according to regional governor Serhiy Haiday. The Russian offensive continued in neighboring Donetsk as troops advanced toward the town of Bakhmut, according to Ukraine’s military. The military also reported heavy fighting in the southern region of Kherson. In the north, Russian forces intensified the shelling commercial and residential buildings in Kharkiv, the country’s second-largest city. Putin’s government recently replaced the commander of the Russian Airborne force and may purge other leaders it sees as not getting the job done in Ukraine, the Institute for the Study of War reported.

(All times CET)

China Premier’s Trip to Shows Inflation Worries (4:55 a.m.)

Chinese Premier Li Keqiang visited a wheat farm in a province neighboring the capital, underscoring his government’s lingering worries about food security and inflation.

Earlier this month, President Xi reviewed efforts to boost domestic grain production in Sichuan province, as Russia’s war destabilizes global food security. China is one of the world’s biggest wheat importers, leaving it particularly exposed to the effects of Putin’s invasion of Ukraine, a major shipper of grains such as barley, corn and wheat.

Read more: China Premier’s Trip to Wheat Farm Shows Food, Inflation Worries

India to Resist Anti-US Messaging at BRICS (1:15 a.m.)

Indian negotiators will look to ensure any joint statement out of the summit is neutral and prevent attempts by China and Russia to use the summit to score a propaganda victory against the US and its allies, according to Indian officials with knowledge of the matter. India’s government will also seek to delay China’s effort to expand the BRICS grouping by pushing the organization to decide on criteria for adding new members, they said.

The virtual event, which Beijing is hosting this week, is set to bring together Xi, Russian President Putin, Indian Prime Minister Narendra Modi, South Africa’s Cyril Ramaphosa and Brazil’s Jair Bolsonaro.

Read more: India to Resist Anti-US Messaging at BRICS Summit With Xi, Putin

Dubai Attracts Traders of Russian Commodities (1:00 a.m.)

Traders of Russian commodities are rushing to set up businesses in Dubai as Switzerland makes it increasingly challenging for them to deal with Moscow. Russia’s three largest oil producers are in the process of evaluating Dubai for trading operations, and several other firms have already relocated there.

Switzerland has for decades been home to middlemen helping to match Russian producers with buyers all over the world. Now, a ratcheting up of sanctions is prompting a migration to the emirate in the Persian Gulf.

Read more: Dubai Becomes New Switzerland for Traders of Russian Commodities

Biden Pushes Back on Idea of Ukraine Fatigue (11:01 p.m.)

Biden pushed back against comments from Prime Minister Boris Johnson, who said there is a “risk of growing fatigue” around the conflict in Ukraine because of other global pressures such as inflation. The US leader said he doesn’t have such fears.

“I’m not afraid,” Biden said at the White House. “But what I do think is there at some point, this is going to be a bit of a waiting game -- what the Russians can sustain and what Europe is going to be prepared to sustain.”

US Slams China’s Purchases of Russian Oil (8:02 p.m.)

China’s purchases of Russian oil are “another example of growing collaboration” between the countries as the West tries to enact sanctions on Moscow, a spokesman for the US National Security Council said.

“I think this is just a piece of China’s willingness to continue to go along with Russia,” NSC Spokesman John Kirby told reporters at the White House. “We have, as we said at the outset, called on China to be a responsible power here and to join the rest of the world in condemning what Russia has done in Ukraine and enforcing sanctions against Russia for it.”

China snapped up a record quantity of Russian crude last month, lifting purchases to $7.47 billion -- about $1 billion more than April and double the amount of a year ago.

India Leaning on Oil Companies to Buy Cheap Russian Oil, Journal Reports (5:34 p.m.)

Indian oil companies have come under pressure from government officials to purchase discounted Russian oil, the Wall Street Journal reported, citing industry executives. Officials in recent weeks have strongly encouraged industry to seek ways to keep up purchases, it said.

The newspaper cited an unidentified official as saying the government wasn’t giving directives to companies.

Germany Says Putin Mounting ‘Economic Attack’ Using Gas (5:15 p.m.)

German Economy Minister Robert Habeck accused Putin of mounting an “economic attack” on Europe by cutting supplies of gas through a key pipeline.

“What we have seen over the past week is another dimension,” Habeck, who is also the vice chancellor, said in a speech to an industry lobby conference in Berlin. “The pattern is always the same,” he added. “Reduce the volume to push prices up and spark a debate in Europe and in Germany about misery and fear.”

Ukrainians Should Own More Guns After War, Law Chief Says (5 p.m.)

Ukrainian Interior Minister Denys Monastyrsky is championing a loosening of gun restrictions as Russia’s attack on the country shifts sentiment toward more openness on civilian possession of firearms. The war showed that “tens of thousands” of guns, including assault weapons, that have been distributed by the government for national defense were proof that Ukrainian citizens can “handle arms.”

“This is the reason for me to believe that one can allow buying and storing handguns, meaning pistols, at home,” Monastyrsky told Bloomberg News in an interview.

Ukrainians Should Own More Guns After War Ends, Law Chief Says

Draghi Vows to Defend Ukraine Despite Splintering Coalition (4:07 p.m.)

Italy’s biggest party is set to splinter over the country’s support for Ukraine, just as Prime Minister Mario Draghi defended in parliament his government’s stance on the conflict.

Foreign Minister Luigi Di Maio may soon quit the Five Star Movement and set up a new parliamentary group of his own, in a clash with party leader Giuseppe Conte, according to people familiar with the issue who declined to be named on a confidential matter. Di Maio is siding with Draghi in moving ahead with military support, while Conte prefers focusing on peace talks to end the conflict.

Europe Still Imports Huge Volumes of Russian Diesel as War Rages (3:09 p.m.)

Almost four months after the invasion of Ukraine began, European nations are still importing huge quantities of Russian fuel.

So far this month, the continent has received close to 14 million barrels of diesel-type fuel from countries that used to be part of the Soviet Union, according to Vortexa Ltd. data compiled by Bloomberg. That’s a relatively limited drop-off from pre-war levels earlier this year and the vast majority, if not all, of that fuel originated in Russia.

Europe Still Imports Huge Volumes of Russian Diesel as War Rages

US Attorney General Makes Unannounced Visit (2:59 p.m.)

Attorney General Merrick Garland made the trip to Ukraine on Monday as the US and other countries seek to help the country document abuses by Russian forces.

Garland planned to meet with Ukraine’s prosecutor general, Iryna Venediktova, to discuss US and international efforts to help identify, apprehend and prosecute individuals involved in war crimes and other atrocities in Ukraine, according to a Justice Department official.

Putin’s Security Chief Vows Response to EU Kaliningrad Sanctions (2:48 p.m.)

The secretary of Russia’s Security Council, Nikolai Patrushev, said the Kremlin “will certainly respond to such hostile actions” and appropriate measures will be taken soon, after the government in Vilnius halted sanctioned goods to Kaliningrad, an exclave wedged between Poland and Lithuania that belongs to Moscow.

“Their consequences will have a serious negative impact on the population of Lithuania,” the Putin ally said in comments from Kaliningrad shown on state TV.

Russia Eyes New Rules on State’s Gold, Gem Sales Amid War (1:17 p.m.)

Russia’s government and parliament are seeking to change rules on the sales and management of the state’s precious metal and gem stockpiles amid the war with Ukraine.

The Finance Ministry proposed this week to put a portion of the country’s gold and gems into a special reserve that can be accessed in times of war, according to the government documents website. If the proposal passes, the Putin will have more leeway to decide what to do with the reserves.

Tallinn Says Russian War Games Simulate Attack on Estonia (1:00 p.m.)

Estonia’s Defense Ministry said Russia’s attack simulation against the country is meant as a provocation days ahead of next week’s NATO summit in Madrid. It didn’t provide details on the location of the exercises.

Earlier, the Foreign Ministry in Tallinn summoned the Kremlin’s ambassador to Tallinn, saying that a Russian military helicopter flew into its airspace on June 18 in the first such instance since the February invasion of Ukraine.

Scholz Pledges Unlimited Weapons Supplies (12:18 p.m.)

Germany will supply Ukraine with weapons for as long as necessary to help it defend itself against Russia’s invasion, Chancellor Olaf Scholz said.

“We will continue to support Ukraine, also with weapons, and for as long as Ukraine needs our support,” Scholz said in a speech in Berlin. The German leader, who has been criticized for not doing enough to help the government in Kyiv, also reiterated his support for Ukraine’s bid to be granted candidate status to join the European Union.

Rebuilding Ukraine May Cost $1.1 Trillion, EIB Head Says (12:06 p.m.)

Europe “will have to play the biggest role” in rebuilding Ukraine in an effort that could require 1 trillion euros in outside assistance, European Investment Bank chief Werner Hoyer said at a briefing in Frankfurt.

The estimate comes as EU leaders are scheduled to meet Thursday and Friday in Brussels to discuss Ukraine’s reconstruction plan and its bid for membership of the bloc. The EIB could play a central role in funneling money from the EU to the country.

Luxembourg Premier Visits Ukraine (11:45 a.m.)

Luxembourg Prime Minister Xavier Bettel arrived in Kyiv Tuesday, the latest in a string of European officials to visit Ukraine.

Germany’s Scholz, French President Emmanuel Macron and Italian Prime Minister Mario Draghi made a joint visit to Ukraine last week.

Ukraine Reinstalls Import Taxes To Shore Up Finances (10:48 a.m.)

Ukraine’s parliament approved a law to reimpose duties from July 1 on imported goods, including a value-added tax, after it scrapped them at the start of the war to tame inflation.

The move is intended to bolster the budget as Ukraine faces a growing deficit due to elevated military spending and revenues hobbled by the war and Russia’s blockade of Ukrainian exports.

Gas Row Could Embolden ECB Hawks (9:48 a.m.)

New restrictions on Russian gas supplies, targeting the biggest pipeline to Europe, have sent natural gas prices soaring and markets are now pricing delivery rates to remain close to 120 euros per megawatt-hour until next spring. This would deal a new upside shock to euro-area prices and may increase the probability that the European Central Bank will hike rates by 50 basis points in September.

Russian Sovereign Debt Swaps Payout in Turmoil (9:42 a.m.)

Sanctions over the Kremlin’s invasion of Ukraine have turned the payout mechanism for insurance on Russia’s sovereign debt into a painful legal conundrum.

The Credit Derivatives Determinations Committee, a panel of 13 banks and asset managers who regulate the credit derivative swap market, is into its third week of deliberations as the measures complicate traditional settlement routes.

At stake is a potential payment of $1.5 billion after the panel ruled Russia missed interest of just $1.9 million on a sovereign bond -- a failure-to-pay event.

Read more: Russia Swaps Payout in Turmoil as Sanctions Tear Up the Playbook

Switzerland Imports Russian Gold for First Time Since Invasion (9:35 a.m.)

Switzerland imported gold from Russia for the first time since the invasion of Ukraine, showing the industry’s stance toward the nation’s precious metals may be softening.

More than 3 tons of gold was shipped to Switzerland from Russia in May, according to data from the Swiss Federal Customs Administration.

Georgian Premier Says EU ‘Unfair’ on Candidate Status (8:47 a.m.)

Georgia considers it “unfair” for the EU not to grant candidacy status to the country after recommending it for Ukraine and Moldova, Prime Minister Irakli Garibashvili said in an interview at the Qatar Economic Forum with Bloomberg Editor-in-Chief John Micklethwait. The Caucasus nation “would be the first country to be granted the status” on the merits of complying with the EU’s requirements, and the bloc gave it to Ukraine and Moldova because of the situation created by Russia’s war, he said.

While Georgia supports Ukraine politically, it’s in a “very vulnerable” position and can’t impose national sanctions on Russia over the invasion, though it won’t let Russian companies use Georgian territory to bypass the international measures, he said.

Kremlin Says Captured US Veterans Could Face Death Penalty (5:15 a.m.)

Kremlin spokesman Dmitry Peskov told US broadcaster NBC he couldn’t guarantee the two Americans captured in Ukraine wouldn’t face capital punishment, saying they should be “held responsible for the crimes they have committed.”

In the interview that aired Monday, he said Alexander Drueke and Andy Huynh, whose families reported them missing last week, weren’t likely to be protected by the Geneva Conventions as prisoners of war. That’s because Moscow considers them “soldiers of fortune” not part of the Ukrainian army, he said, adding that there’d be a full investigation into their cases.

Some 20,000 people from around the world have responded to Kyiv’s call to join the International Legion of Ukraine’s effort against Russian forces, the Ukrainian government said in March. A court in the Russian-occupied Donetsk region previously sentenced two British fighters and a Moroccan to death.

Russian Editor’s Nobel Medal Sells for Record $103.5 Million (2:45 a.m.)

Dmitry Muratov, the Russian editor awarded a Nobel Peace Prize for championing freedom of speech, auctioned his medal Monday for $103.5 million, breaking the record for a Nobel.

The previous record was set in 2014, when James Watson sold his medal for discovering the structure of DNA for $4.76 million. Muratov will donate the money to help Ukrainian refugees.

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