United States: Exploring impact of gas export

It is being said that the boom in the US natural gas exports comes at the expense of domestic households. It has also become a major point of contention in the heated debate over the Biden administration’s decision to halt permitting for new gas export terminals.

Proponents of the exports argue these overseas sales keep prices down for the domestic consumers by calming global markets and incentivizing US oil and gas companies to produce more fuel. 

Reportedly, US natural gas prices hit a 40-month low last week at just US$1.91 per mmBtu as the combined effect of mild weather, strongly rebounding production and sizable inventories continue to weigh on prices.

August Pfluger told The Hill that despite nearly a decade of gas exports, we have had a competitive advantage worldwide while prices have remained very, very low inside the US.”

Pfluger, who represents the Permian Basin, one of the major sources of gas being exported, sponsored a bill approved by the House on Thursday that would strip the president of the authority to approve or disapprove new gas exports.

Proponents hope the measure, which is unlikely to advance in the Democrat-controlled Senate, would open the floodgates for both terminal construction and liquefied natural gas (LNG) exports.

Export opponents, on the other hand, contend that they make the US gas supply — and the prices Americans pay for the fuel — less stable by tying them to the increasingly tumultuous world beyond the country’s borders. 

“Whether it’s a coal crisis in China, a cold snap in Asia, unrest in the Middle East, a pipeline explosion in Europe — anytime global gas markets sneeze, we’re going to catch a cold,” said Clark Williams-Derry of the Institute for Energy Economics and Financial Analysis.

Williams-Derry argued that the gas companies’ price gouged American consumers by tying the US to global gas markets — and thereby to the surging prices that, for example, accompanied the Russian invasion of Ukraine.

As formerly cheap US gas supplies went to suddenly gas-starved — and wealthy — European countries since 2022, total US spending on gas surged by around US$120 billion dollars, or about US$975 per American household, he wrote.

“We’ve already dug ourselves into the crazy hole,” he said. “And now we’re going to be exporting 25% or more of our gas.”

The buildout in export terminals has forced US consumers into competition with entire countries, said Paul Cicio, president of the Industrial Energy Consumers of America (IECA), a diverse trade group of factories and manufacturers united in their demand for cheap domestic gas.

According to IECA, Williams-Derry has underestimated the cost of gas exports to American households. In testimony to Congress last week, it argued that gas exports had driven up prices in 2022 alone by the equivalent of US$137 billion — and fueled inflation throughout the entire economy. 

IECA has been vehemently opposed to oil and gas exports since well before the first gas terminal was completed in 2016 in the United States. 

Before such terminals were built, Cicio said, gas producers sold to utilities or companies — while now they have the opportunity to sell to entire countries, or at least to major state-owned companies. One paused project has signed deals with Germany and China’s state-owned gas company.

“It doesn’t matter if it’s the middle of winter here — peak demand, inventories are low, prices are high — those countries will buy it away, drive up the price of gas and electricity,” Cicio said.

Since the war in Ukraine began, the IECA has argued for what it calls a “safety valve” — a congressional or administrative rule that would limit exports if the gas supplies are low in the country.

But export proponents, including oil and gas companies and congressional lawmakers who represent key gas-producing areas, contend that unlimited exports are in the public interest — and that restricting them would negatively impact American prices.

While many export terminals — those that have already received their Department of Energy permits — would still be built whatever the Biden administration decides regarding new permits, Pfluger, the Texas congressman, argued that the announcement of a coming pause would send dangerous ripples through the industry.

“When you signal to the industry that there could be some political instability or turbulence, then that leads to more volatility in the price than anything else,” Pfluger said.

By suggesting that gas exports would be bottlenecked and even decline, he said, the administration was signaling drillers and pipeline builders to begin slowing down as well — thereby driving up prices.

“These projects don’t happen overnight,” Pfluger said. “You can’t turn them on and off like a light switch.”

Supporters of unlimited exports argue that if gas producers in regions like the Texas Permian or the Marcellus Shale of Pennsylvania don’t have ready access to foreign markets, they won’t produce as much gas for Americans either.

Benjamin Leibowicz, who teaches energy policy and mathematics at the University of Texas at Austin, pushed back on the idea that that exports lead to cheaper domestic prices, however, saying it doesn’t make sense in the short term.

“If there are more gas consumers and higher demand, that translates to higher prices,” he told The Hill — though he emphasized that he, too, thought this would spur more drilling.

Gas export terminals open American gas production to a globe full of potential consumers, most of them live in regions where gas is far more expensive than it is in the US. 

In both Europe and Asia, for example, gas prices in December were nearly about five times what they were in the US 

That represents an opportunity for American gas producers who would like to get more money for their fuel. 

But it also puts American consumers accustomed to paying US$2.50 per unit of gas in competition with Europeans willing to pay US$11.5, or East Asians willing to pay US$13. 

As early as 2009 — seven years before the first tanker of LNG set sail from the Gulf Coast to Europe — economists predicted a “strengthening relationship” between European and American gas prices if LNG trade picked up. 

That’s essentially what happened, the U.S. Energy Information Agency concluded in 2023. The agency found that higher LNG exports decreased domestic supplies of natural gas, “increasing domestic natural gas prices.”

That finding, in addition to climate concerns, was a major reason why Democrats called on the administration to halt the expansion of gas exports — or at least, that expansion’s long tail.

“I’m just seeing record profits for LNG, but I don’t see the benefits coming into Americans in my community,” Catherine Cortez Masto told David Turk, deputy secretary of the Energy Department, in a hearing last week.

State of Pakistan Economy

The State Bank of Pakistan (SBP) has released its Annual Report on the State of Pakistan’s Economy for the fiscal year 2022-23. According to the report, Pakistan’s economy faced multiple challenges during the year under review, as longstanding structural weaknesses exacerbated the impact of successive domestic and global supply shocks of unprecedented nature.

The country’s macroeconomic situation had begun to deteriorate since the second half of FY22 in the aftermath of the Russia-Ukraine conflict, elevated global commodity prices and an unplanned fiscal expansion. The situation worsened during FY23 owing to floods, delay in the completion of the 9th review of the IMF’s Extended Fund Facility (EFF) program, continuing domestic uncertainty, and tightening global financial conditions.

Particularly, the devastating monsoon floods significantly dented economic activity, fueled inflationary pressures, increased stress on external account and widened fiscal imbalance because of spending on relief efforts. Similarly, the uncertain global economic and financial conditions, softening – but still elevated – global commodity prices, higher debt servicing and reduced external inflows had implications for various sectors of the economy.

The confluence of these developments substantially weakened Pakistan’s macroeconomic performance during FY23. The real GDP growth fell to the third-lowest level since FY52, whereas average National CPI inflation spiked to a multi-decade high. While the current account deficit narrowed considerably, limited foreign inflows kept pressures on the external account leading to a decline foreign exchange reserves. Meanwhile, reflecting the unsustainable fiscal policy stance of the past many years, a sharp increase in interest payments, persistently large energy subsidies and lower-than-targeted tax collection contributed to less than envisaged fiscal consolidation during FY23.

The report notes that Pakistan’s economic performance in FY23 highlights the importance of addressing perennial structural impediments that pose serious risks to country’s macroeconomic stability. Foremost among these are inadequate and slow tax policy reforms that have constricted the resource envelope, even for meeting current expenditures. On the other hand, inefficiencies in public sector enterprises (PSEs) led to a permanent drain on fiscal resources. These have squeezed

space for development spending required to enhance the economy’s productive capacity. The anemic investment in physical and human capital as well as R&D has impeded development of a technology-intensive manufacturing base and the next level value-added exports. Moreover, stagnant crop yields and lack of attention to development of food supply chain and to address food market imperfections have led to sustained reliance on imported food commodities. These trends underpin the unsustainable current account balance, which has increased the country’s vulnerability to global supply shocks.

The report indicates that this situation requires initiation of broad ranging reforms to address various sectoral imbalances to ensure availability of resources for economic growth and development.

Specifically, expediting tax policy reforms and speedy implementation of governance reforms in PSEs is instrumental to create fiscal space for public investment in human and physical capital.

Furthermore, there is also a need to create a conducive environment to support foreign direct investment in exportable sectors, and to encourage technology transfers. Similarly, agriculture sector reforms are required to alleviate import reliance and for achieving price stability. There is a need to expedite these reforms to achieve a high and sustainable economic growth required to absorb the new entrants in labor market, improve social welfare and raise the general standard of living in the country.

In this context, the availability of factual information on key macroeconomic variables, markets, businesses, and individual welfare are important ingredients for evidence-based policy making. This report includes a special chapter on the need to streamline the state of Pakistan’s National Statistical System (NSS) and identifies some suggestions for NSS reforms.

The report highlights that Pakistan’s economic situation has started to show some early signs of improvement. The country was able to secure a US$3.0 billion Stand-By Arrangement (SBA) from IMF, towards the end of FY23, which helped in alleviating near-term risks to external sector. The high

frequency indicators are suggesting bottoming out of economic activity from July 2023. The withdrawal of guidance on import prioritization, alongside gradual ease in foreign exchange position, is expected to somewhat ameliorate supply chain situation and lift growth in LSM as well as exports. Moreover, an expected rebound in cotton and rice production will support agriculture growth in FY24. Reflecting these considerations, the SBP expects real GDP growth in the range of 2–3 percent in FY24.

The lagged impact of monetary tightening, and other contractionary measures, is expected to keep domestic demand in check. Furthermore, the prospects of improvement in supply situation on account of likely increase in production of important crops and imports is expected to bring down inflation in the range of 20–22.0 percent in FY24. Slightly improved global and domestic growth prospects are expected to bolster foreign exchange earnings from exports of goods and services.

Although import volumes are likely to increase, lower commodity prices may prevent a significant expansion in imports bill during FY24. Accounting for these factors, SBP projects the current account deficit to fall in the range of 0.5–1.5 percent of GDP in FY24.

European energy crisis may be back soon

According to the Financial Trend Forecaster, European natural gas prices soared almost 40% on the risk of a global liquefied natural gas shortage. European wholesale power prices remain below the record highs of the energy crisis but have steadily climbed as the volatility in the international commodity spectrum underscores the fragility of the European energy system.

Unfortunately, the European Union bureaucrats declared the end of the energy crisis as if it were the result of decisive policy action, but the reality is that the energy problem in the EU was only diminished by purely external factors: a very mild winter and the decline in global commodity prices due to the central bank rate hikes. Thus, the energy crisis remains, and the problems of security of supply and affordability of the system persist.

The European Union’s dependency on Russian gas has not been solved; it has only been disguised by a massive increase in dependency on coal (lignite) in the case of Germany and expensive liquefied natural gas imported from the rest of the world.

At the end of 2022, Germany’s energy mix was the clearest example of its energy policy failure. Hard coal and lignite accounted for 31.2%, natural gas 13.8%, and mineral oil 0.8%, with nuclear at 6.0%. After almost 200 billion euros in renewable subsidies, Germany needs more coal and imported natural gas.

What did the government decide after facing the mistake of shutting down almost all its nuclear fleet? Double down and continue with the process of closing the remaining ones. No wonder Germany is in recession. Its industrial model requires abundant and affordable energy, and the different governments have made the cost of energy uncompetitive.

Same is the problem with Spain, the government decided to implement an “Iberian exception” that eliminates the cost of gas from the wholesale power price only to charge it back to consumers as a surcharge in the bill. The result is Spain has the fifth highest electricity bill in Europe, which sent hundreds of millions of euros to France and Portugal that purchased the subsidized energy while the Spanish consumer paid the bill to natural gas producers, and its imports of Russian liquefied natural gas (LNG) soared, but the government tried to convince citizens that LNG from Novatek is not Russian gas because it is not a pipeline Gazprom supply, even when the supplier is a leading Russian energy multinational.

Even worse, the consumers have not seen the improvement in commodities in their bills. If we look at the latest reported Eurostat figures of household electricity prices, these increased in all but two EU Member States in the second half of 2022, compared with the second half of 2021, just as commodities slumped in international markets.

The average for the EU stands at 252 euros per MWh and 261 euros per MWh for the euro area. This is 20% to 30% higher than the average residential electricity rate in the United States, according to data from Energy Sage.

The European energy crisis was not solved. It was disguised thanks to a mild winter and the slowdown in coal and gas imports from China. European governments continue to place all their bets on a misguided energy transition that ignores security of supply and competitiveness and will make the EU depend on China for rare earths and metals as well as the US and OPEC for commodities.

The European Union should have abandoned ideological decisions and allowed technology, competition, and industry to provide the optimal solution that delivers a competitive and secure supply of energy.

Deciding to forbid the development of domestic resources and focus on intermittent and volatile sources of energy before the battery technology is fully operational is an enormous mistake that condemns the European Union to suffer higher costs and lower growth. Environmental policies must be considered from a global perspective.

The EU accounts for less than 10% of global emissions but almost 100% of the cost. It needs to focus on competitiveness, security of supply, and respect for the environment from an industrial perspective. Ignoring the importance of making the most of nuclear, hydroelectric, gas, and all other available sources is dangerous.

In China or the United States, affordability, security of supply, and competitiveness are the drivers of energy policy.

In Europe, it is a misguided view of “not in my backyard” that is making the continent more dependent on others, not less. Subsidies are delaying the necessary development of intermittent and volatile energy sources because policymakers reject the importance of creative destruction and competition as driving forces of progress. Interventionism is not delivering better or cheaper energy; it is making the European Union lose in the technology and energy security race.

Goldman sees US shutdown over spending “more likely than not”

The United States government looks "more likely than not" to shut down later this year due to political differences on spending that could temporarily hit economic growth, Goldman Sachs analysts said in a research note.

The Goldman economics analysts said prior shutdowns - which occur if Congress fails to pass annual spending bills - have stemmed either from disagreement on the level or distribution of spending, or a dispute over other issues that one party wants to address in spending legislation.

"At the moment, both types of risks are in play," Goldman said in the note.

A broad government shutdown stands to directly reduce growth by around 0.15 percentage points for each week it lasts, while the reduction could be 0.2 percentage points a week when including a modest impact in the private sector, according to Goldman.

However, the analysts said, in the quarter following the government reopening, growth would rise by the same amount.

Markets have not had strong reactions to three past shutdowns, in 1995-96, 2013, and 2018-19, according to the note.

Equity markets were flat or up at the end of those shutdowns, though in each instance equity prices were lower at some point in the days following the start of the shutdown than when it began, the analysts wrote, while the 10-year Treasury yield declined more consistently after the start of the shutdowns.

The Goldman analysts said a shutdown is not a foregone conclusion, pointing to support for a temporary extension after the end of the fiscal year on September 30, 2023.

They also noted that compared to the severe macroeconomic impact of a failure to raise the US debt limit, the less dramatic economic effect of a shutdown also makes it more likely that Congress fails to act in time.

Bleak outlook for food grain shipment from Ukraine

Russia’s exit from the Black Sea grain export deal last month dampened outlook to keep Ukrainian supplies flowing.  

The issue at present is global access to food and affordability at a time when inflation shows few signs of letting up. 

Food supply risks are multiplying again, with extreme weather and India’s rice export restrictions adding to the concerns.

According to data released Friday, the United Nations’ global food index rose for the first time in three months in July. The rice index reached its highest nominal level since 2011.

Ukraine has redirected some crop exports by rail, road and river through its European neighbors, but those volumes are causing tensions.

Poland, Slovakia and Hungary, along with Bulgaria and Romania, have banned purchases of Ukrainian grain after declining prices spurred protests from local farmers.

A key route to ship Ukrainian grain is the Danube, though that’s expensive and lacks capacity. The Kremlin has also escalated assaults on grain infrastructure in Ukraine, including attacking Danube ports. It also fired missiles that damaged equipment at a cargo terminal in the Odesa region.

The options for farmers who made Ukraine a global breadbasket are narrowing as the economics of their business deteriorates. They have limited storage space as this year’s harvest piles up. Major farm companies are curbing winter crop plantings.

Decisions taken over the next few weeks in Ukraine — for wheat, barley and rapeseed — will have repercussions for the 2024 harvest. That will hit both Kyiv’s precious wartime revenues, and global supplies of key food staples.

Meanwhile, more than 90 countries joined the US in signing a joint communiqué condemning the weaponization of food, according to US Secretary of State Antony Blinken. Leading a UN debate on efforts to combat global hunger, he zeroed in on Russia for disrupting the flow of food with its war on Ukraine and the grain deal exit.

Another sign of Russia using food as a political tool is that it may offer cheaper grain exports to countries that have not imposed sanctions. The government could get the power to lower duties on commodities exports including grain and fertilizers to “friendly” countries, Prime Minister Mikhail Mishustin said this week. 

Diplomatic efforts are still underway to persuade Russia to return to talks on the export deal from countries including South Africa, which has adopted a non-aligned stance toward the war.  

Russia hits Ukrainian grain storage for 4th day

According to Reuters, Russia pounded Ukrainian food export facilities for the fourth day in a row on Friday and practiced seizing ships in the Black Sea in an escalation of what Western leaders say is an attempt to wriggle out of sanctions by threatening a global food crisis.

The direct attacks on Ukraine's grain, a key part of the global food chain, followed a vow by Kyiv to defy Russia's naval blockade on its grain export ports following Moscow's withdrawal this week from an UN-brokered safe sea corridor agreement.

"Unfortunately, the grain terminals of an agricultural enterprise in Odesa region were hit. The enemy destroyed 100 tons of peas and 20 tons of barley," regional governor Oleh Kiper said on the Telegram messaging app.

Photographs released by the emergencies ministry showed a fire burning among crumpled metal buildings that appeared to be storehouses, and a badly damaged fire-fighting vehicle. Two people were injured, he said, while officials reported seven people killed in Russian air strikes elsewhere in Ukraine.

Moscow has described the attacks as revenge for a Ukrainian strike on a Russian-built bridge to Crimea - the Ukrainian Black Sea peninsula seized by Moscow in 2014.

Russia has said it would deem all ships heading for Ukrainian waters to be potentially carrying weapons, in what Washington called a signal it might attack civilian shipping. Kyiv responded by issuing a similar warning about ships headed to Russia.

The attacks on grain export infrastructure and perceived threat to shipping drove up prices of benchmark Chicago wheat futures on Friday towards their biggest weekly gain since the February 2022 invasion, as traders worried about supply.

The UN Security Council was due to meet later over the "humanitarian consequences" of Russia's withdrawal from the safe corridor deal, which aid groups say is vital to fend off hunger in poor countries.

Turkish President Tayyip Erdogan, the deal's sponsor alongside the UN, said he hoped planned talks with Russian President Vladimir Putin could lead to the restoration of the initiative.

The end of the deal could lead to rising global food prices, scarcity in some regions and potentially new waves of migration, Erdogan told reporters on a flight back from a trip to Gulf countries and northern Cyprus.

The West should listen to some of Russia's demands, he said. "We are aware that President Putin also has certain expectations from Western countries, and it is crucial for these countries to take action in this regard."

Moscow says it will not participate in the year-old grain deal without better terms for its own food and fertilizer sales.

Western leaders have accused Russia of seeking to loosen sanctions imposed over its invasion of Ukraine, which already exempt exports of Russian food. Russian grain has moved freely through the Black Sea to market throughout the conflict and traders say Russia is pouring wheat onto the market.

High utilization driving VLCC rate volatility

According to argus Longer voyages and limited vessel availability have increased volatility this year in very large crude carrier (VLCC) chartering costs.

Daily time-charter equivalent (TCE) earnings for the vessels, which carry around 2 million barrel oil, mostly on routes to China, have fluctuated considerably this year because of stretched supply.

More vessels on long-haul voyages from the Atlantic to east Asia has increased the time VLCCs have spent carrying oil this year and limited the availability of the vessels, meaning small regional changes in vessel supply have had outsized effects on freight levels.

The number of laden vessels has stayed considerably above the number of vessels in ballast, while TCE earnings on the key Bonny to Ningbo route for a scrubber-fitted VLCC have fluctuated by as much as US$80,000/day.

VLCCs loaded more crude west of the Suez Canal in April this year than at any time since January 2021, according to data from Vortexa. Voyages from Bonny in Nigeria to Ningbo, China are around 34 days, as compared to less than 20 days for Ras Tanura in Saudi Arabia to Ningbo, meaning more vessels were occupied for longer, reducing availability. Voyages from the US Gulf or Brazil to China take around 53 and 38 days, respectively.

Interest from Asian buyers in Atlantic basin cargoes increased because of favourable pricing and Saudi production cuts hitting demand for ships in the Mideast Gulf.

The availability of VLCCs has also been impacted by changes in trade flows stemming from the Russia-Ukraine conflict. More VLCCs are occupied on Atlantic voyages because of increased flows of US Gulf, Brazilian and West African oil to Europe to replace sanctioned Russian grades.

Historically these trades were mostly done by smaller Suezmax vessels. Some VLCCs going into the so-called dark fleet involved in transporting Russian oil has also probably meant fewer VLCCs for mainstream trades. Switching between Russian and non-Russian can also contribute to volatility in freight levels as the apparent supply of vessels can change quickly.

Despite a recent downward trend, VLCC earnings are likely to stay high and volatile with the Saudi cuts extended into August and very few new VLCCs joining the global fleet.

Six new VLCCs are on order for delivery this year, three are on order for 2025, 10 for 2026, and just two for 2027, according to data from shipbroker Braemar.

Higher newbuilding prices, full shipyards and uncertainty over future fuels and environmental regulations has kept new tanker orders low, although higher earnings are beginning to encourage a rise in ordering.

 

Putin's effort to stop grain exports from Ukraine termed disturbing by US lawmaker

Michael McCaul in a Thursday interview called Russian President Vladimir Putin’s effort to stop grain exports from flowing out of Ukraine disturbing, warning of possible implications for North Africa, Europe and the United States.

During an appearance on NewsNation, McCaul told Chief White House Correspondent Blake Burman he’s worried about a possible scenario where war escalation could happen between Russia and NATO member countries that border the Black Sea. 

The White House on Wednesday warned that Russia is preparing for possible attacks on civilian shipping vessels in the Black Sea, noting that Russian military forces have laid additional sea mines that border Ukrainian ports. 

“Oh, sure. We’ve been worried about that scenario, since the inception of the Russian invasion into Ukraine,” McCaul told Burman.  

“This is very, I think, disturbing on Putin’s part to shut off […] grain from the Black Sea into the White Sea, because this could cause a famine in Northern Africa and it could also raise prices not only in Europe, but the United States. I think it’s highly irresponsible what he’s doing, but he’s desperate now.”

McCaul also said Turkey has tried to negotiate with Putin on a solution, noting that Russia’s withdrawing from the Black Sea Grain Initiative will affect the global food market. 

“It affects the entire global food market. And again, I think the region that will get hit the hardest will be Northern Africa. It could set them off into a famine. I’ve met with the World Food Program,” McCaul added. “You know David Beasley was the head of that, he negotiated the deal with Putin. I hope we can make some progress, but the fact is, we will feel this here in the United States.”

McCaul’s remarks come days after Russia paused its participation in the Black Sea Grain Initiative, with Kremlin spokesperson Dmitry Peskov saying in a statement that it would suspend its part in the deal unless its demands are met to get its own food and fertilizer out to the world. 

“When the part of the Black Sea deal related to Russia is implemented, Russia will immediately return to the implementation of the deal,” Peskov said.

The deal, brokered last year by the United Nations and Turkey, became necessary after Russia invaded and blockaded Ukraine’s ports.

Wheat commodity futures have risen about 12% since Russia announced it would suspend the Black Sea Grain Initiative, which allowed Ukraine to export wheat from its southern ports via the Bosporus. Ukraine was one of the world’s largest wheat exporters before the Russian invasion.

Russia has also continued to attack Ukrainian port infrastructure and cities with missiles and drones, damaging the ability to export wheat if the deal were to resume. Those strikes have destroyed 60,000 tons of grain, Ukrainian President Volodymyr Zelensky said Wednesday.

“This attack proves that their target is not only Ukraine and not only the lives of our people. About a million tons of food is stored in the ports attacked today,” Zelensky argued. “This is the volume that should have been delivered to consumer countries in Africa and Asia long ago.”

Secretary of State Antony Blinken predicted the rising prices while criticizing the Russian move Monday.

“So the result of Russia’s action today — weaponizing food, using it as a tool, as a weapon in its war against Ukraine — will be to make food harder to come by in places that desperately need it, and have prices rise,” Blinken said. “We’re already seeing the market react to this as prices are going up.”

 

Russia strikes Ukraine grain storage facility

According to Western media, Russian missile attacks on Ukraine’s Black Sea coast have destroyed 60,000 tons of grain and damaged storage infrastructure. Agriculture Minister Mykola Solskyi said a considerable amount of export infrastructure was out of operation.

Lately, Russia pulled out of an international grain deal in place since last summer, guaranteeing safe passage for exports across the Black Sea. The Kremlin argued its demands for Russian exports had not been honored.

Within hours of its withdrawal from the grain deal on Monday, Russia struck the southern port cities of Odesa and Mykolaiv in the early hours of Tuesday. It was followed by more strikes overnight into Wednesday, targeting grain terminals and port infrastructure in Odesa and further down the Black Sea coast in Chornomorsk, two of the three ports that were included in the export deal.

Odesa military spokesman Serhiy Bratchuk called it a “truly massive attack”.

Ukrainian President Volodymyr Zelensky said each missile strike was a blow not just to Ukraine but to “everyone in the world striving for a normal and safe life”.

Ukraine’s reconstruction ministry published a series of photos showing damage to silos and other grain facilities.

Russian war commentators said the damage proved that Kyiv was unable to shoot down the majority of Russian missiles and drones.

Officials said the coordinated attack involved Kalibr cruise missiles, Onyx supersonic and Kh-22 anti-ship missiles as well as kamikaze drones, fired from the Black Sea, Crimea and southern Russia.

Although 37 Russian missiles and drones were shot down, a number did penetrate Ukrainian defenses, they said.

Russia had called its initial attack on Odesa a mass revenge strike for an attack on the Russian-built bridge over the Kerch strait linking occupied Crimea to Russia. Seaborne drones were blamed for Monday’s bridge strike that knocked out a section of bridge and killed a Russian couple.

Russian-installed officials also shut a 12km (7.5 mile) section of the Tavrida motorway that links the cities of Simferopol and Sevastopol in southern Crimea to the bridge over the Kerch strait. Construction of the road by Russia’s occupation authorities began in 2017.

 

Black Sea Grain Initiative ends, what next?

The handymax bulk carrier, TQ Samsun, left Odessa on Sunday morning. It was the last ship – at least for the moment – to carry Ukraine grain exports across the Baltic Sea, through the Bosphorus, and then onto heavily reliant world markets.

The 43,775 dwt bulk carrier, built in 1996 and flying the Turkish flag, is carrying the last cargo in the Black Sea Grain Initiative which expired on Sunday. The deal was brokered by the United Nations (UN) and Turkey and signed in July 2022, enabling essential grain cargoes to be exported by Ukraine to world markets.  

Following Russia’s invasion of Ukraine in February last year, a large number of ships were trapped and an estimated 20 million tons grain exports were blocked. However, after the deal was struck in July, more than 30 million tons of grain were estimated to have been exported, a lifeline for many countries – including some of the world’s poorest nations – which rely heavily on grain for basic foodstuffs.

The Initiative allowed grain ships to transit the Black Sea via a corridor three nautical miles wide and 310 miles long to the Bosphorus. Ukraine was allowed to export grain from the ports of Odessa, Chornomorsk, and Yuzhny/Pivdeeyi.

Without a resumption of the deal, millions of people will be hit by a food crisis. Many face outright famine. Grain is a staple food in many African and Middle Eastern countries where, as in most regions, people are already facing the impact of record global food price inflation. The UN has estimated that 44 million people in 38 countries face emergency levels of hunger.

President Putin has held off renewing the Black Sea arrangement, which is supposed to be extended for 120 days at a time. However, in March and May, Russia agreed only to 60-day extensions and it is the May deal that has now ended. Putin wants Western sanctions to be eased so that the country can resume its own exports of grain and fertilizers.

Although there are no specific sanctions on Russia’s agricultural exports, Western sanctions effectively limit Russia’s access to international finance, shipping capacity, and insurance, thereby limiting the country’s exports indirectly. 

US dollar dominance diminishing

The US dollar grip as the dominant global currency is loosening, said top economist of credit rating agency S&P Global on Tuesday.

Aggressive US sanctions such as last year's freezing of hundreds of billions of US dollar's worth of Russia's reserves has seen a flurry of countries start to do some trade in currencies other than dollar as well as repatriate gold reserves.

The dollar "doesn't have quite the pull it used to," Paul Gruenwald, S&P's chief economist, said at a conference hosted by the ratings firm in London.

"There's a fragmentation around the edges".

Gruenwald pointed to a number of examples where countries were now circumventing the dollar, "We've got other things happening outside of the dollar world".

He cited the rise in trade done in China's yuan and the cheap financing offered by China-headquartered development banks such as the Asia Infrastructure Investment Bank and the New Development Bank, formerly known as the BRICs bank.

"The US dollar will continue to be a leading world currency, but it will no longer be the dominant world currency," Gruenwald said.

US dollar sank to a two-month low against its major peers on Wednesday in the lead-up to a key US inflation reading, while sterling scaled a 15-month top on expectations the Bank of England (BoE) has further to go in raising rates.

US inflation data is due later on Wednesday, with expectations core consumer prices rose 5% on an annual basis in June. The figures should also provide further clarity on the Federal Reserve's progress in its fight against inflation.

Ahead of the release, the US dollar fell to a two-month low against a basket of currencies, extending its losses from the start of the week after Fed officials said the central bank was nearing the end of its current monetary policy tightening cycle.

 

Why is US Media Blind to American War Atrocities?

Today I am obliged to share this text excerpted from Norman Solomon’s new book, War Made Invisible: How America Hides the Human Toll of Its Military Machine. On the first day of March 2022, visitors to the New York Times homepage saw a headline across the top of their screens in huge capital letters: ROCKET BARRAGE KILLS CIVILIANS.

It was the kind of breaking news banner headline that could have referred to countless US missile attacks and other military assaults during the previous two decades, telling of civilian deaths in Afghanistan, Pakistan, Iraq, Syria, and elsewhere.

But those wars on terror, killings did not qualify for huge banner headlines. What stirred the Times to quickly publish one about civilian deaths was—as reported on the front page of its print edition, “A deadly Russian rocket assault on Kharkiv, Ukraine’s second-largest city that raised new alarms about how far the Kremlin was willing to go to subjugate its smaller neighbor.”

During the months that followed, the New York Times was among thousands of American outlets devoting the kind of news coverage to Russia’s war in Ukraine that would have been unthinkable while reporting on US warfare.

Early in April, 40 days after the Russian invasion began a jarring headline in all capitals—“HORROR GROWS OVER SLAUGHTER IN UKRAINE”—spanned the top of the front page of the Times print edition.

During April, 14 stories on the newspaper’s front page were primarily about civilian deaths as a result of the Russian invasion, all of which appeared at the top of the page, researchers found Fairness and Accuracy in reporting.

During a comparable period—after the US invaded Iraq—the Times published only one story about civilian deaths at the hands of the US military on the front page.

By any consistent standard, the horrors that the US military had brought to so many civilians since the autumn of 2001 were no less terrible for the victims than what Russia is doing in Ukraine.

But the US media coverage has been vastly more immediate, graphic, extensive, and outraged about Russia’s slaughter than America’s slaughter.

On the rare occasions when a major US news outlet provided in-depth reporting of civilian deaths caused by American forces, the pieces were usually retrospective, appearing long after the fact—postmortems with little political impact and scant follow-up, hardly making a peep in media echo chambers.

No matter how sophisticated its high-tech weaponry, the large-scale Russian warfare in Ukraine is barbaric. That the same could also be said about American warfare in Afghanistan and Iraq was a truth nearly taboo to utter in US mass media.

Both the United States and Russia had brazenly flouted international law, crossing borders and persisting with massive lethal force.

Coherent principles would condemn and illuminate each instance. But, despite press freedoms in the United States, very few big-name journalists and their imitators in the profession have been willing to break ranks with the gist of Washington’s official war narratives, which are, at bottom, not much more nuanced than assuming that America’s exemplary national character has been mobilized to defeat the unmitigated evil of the foe.

Nationalism masquerading as journalism covers war in darkness and light, telling us for whom the bell tolls. And so, when Russia invaded Ukraine and proceeded to terrorize, kill, and maim, the US media were all hands on deck with empathetic, poignant reporting via TV, radio, print, and online outlets.

But when American missiles and gravity bombs hit population centers over the previous two decades, the human tragedies rarely got anything more than short shrift in the US media.

The extreme differences in the quantity and tone of coverage reflected—and reinforced—the agendas of war makers based in Washington.

Norman Solomon is the national director of RootsAction.org and executive director of the Institute for Public Accuracy. His latest book, War Made Invisible: How America Hides the Human Toll of Its Military Machine, is published by The New Press

 

US dollar dominance eroding fast

The end of the dominance of the United States dollar is nigh as the Chinese yuan rises and the rest of the world sees the peril of the West's failed attempt to bring Russia to its knees over Ukraine, one of Moscow's most powerful bankers told Reuters.

Andrei Kostin, the CEO of state-controlled VTB, Russia's second largest bank, said the crisis was ushering in sweeping changes to the world economy, undermining globalization just as China was taking on the mantle of a top global economic power.

Asked if he thought the world was in a new Cold War, Kostin said that it was now a hot war that was more dangerous than the Cold War.

The United States and the European Union, he said, would lose from moves to freeze hundreds of billions of dollars of Russian sovereign assets as many countries were moving to settling payments outside the US currency and the euro while China was moving towards a removal of currency restrictions.

"The long historical era of the dominance of the American dollar is coming to an end," Kostin, told Reuters on the 59th floor of the gleaming VTB skyscraper overlooking southern Moscow. "I think that the time has come when China will gradually remove currency restrictions."

"China understands that they will not become world economic power Number one if they keep their yuan as a non-convertible currency," Kostin said, adding that it was dangerous for China to keep reserves invested in US sovereign bonds.

The US dollar has been dominant since the early 20th Century when it overtook the pound sterling as the global reserve currency, though JPMorgan said this month that signs of de-dollarization are unfolding in the global economy.

China's spectacular economic growth over past 40 years, fallout from the war in Ukraine and wrangling over the US debt ceiling has put the dollar's status under fresh scrutiny.

A former diplomat who served in Australia and Britain and went into banking just after the Soviet Union collapsed, Kostin is one of Moscow's most powerful and experienced bankers, having served previously as head of Vneshekombank, known now as VEB.

After President Vladimir Putin sent troops into Ukraine in February last year, the West unfurled what it said were the toughest sanctions ever imposed in an attempt to weaken the Russian economy and punish Putin for the war.

Kostin was sanctioned by the United States in 2018 over what it called Russia's malign activity around the world. After the war, he was sanctioned by the EU and by Britain which called him "a close associate of Putin".

He said the sanctions were unfair and a political decision that would backfire on the West, quipping that he had read interesting articles about the laundering of drug money through major Western banks.

"We have already entered into a hot war," Kostin said of the crisis with Ukraine. "It is not cold when there are so many Western weapons and a lot of Western services and military advisers involved. The situation is worse than in the Cold War, it is very difficult and alarming."

Kostin said VTB would see a profit of 400 billion roubles (US$4.9 billion) in 2023 after a bumper first five months of the year and a record loss last year.

Russia's economy, he said, would not be broken by the West. The International Monetary Fund in April raised its 2023 Russian GDP forecast to growth of 0.7% from 0.3%, but lowered its 2024 forecast to 1.3% from 2.1%.

"Sanctions are bad, and we suffer from them, of course. But the economy has adapted," he said. "At the same time, we expect that sanctions will intensify, they will be tightened, some windows will be closed, but we will also find other opportunities."

Asked if Russia's economy would remain a free economy, Kostin said: "I very much hope so."

(US$1 = 82.0000 roubles)

 

War being waged against Russia, says Putin

President Vladimir Putin on Tuesday said a real war was again being waged against Russia as he invoked the Soviet Union's victory in World War II to say the West was trying to destroy his country.

In a speech on Red Square as part of Russia's Victory Day celebrations, Putin said Russia wanted to see a peaceful future, and said the entire country was behind what Russia calls the special military operation in Ukraine.

Putin said that Russians were united in a sacred fight with the West over Ukraine but the strains of war were evident at one of the most pared back anniversaries of the victory over Nazi Germany in decades.

Putin has repeatedly likened the war in Ukraine - which he casts as a defensive move against a West which wants to carve up Russia - to the challenge Moscow faced when Adolf Hitler invaded the Soviet Union in 1941.

"The decisive battles for the fate of our Motherland have always become patriotic, all-national and sacred," Putin told veterans and soldiers assembled on Red Square for the annual Victory Day parade.

Putin hailed Russian forces in Ukraine as heroes who were fighting for the country's future against a West which, he said, had forgotten the decisive role played by the Soviet Union in defeating Nazi Germany.

Cheers rang out across Red Square, with a gun salute and the Russian national anthem, though with a much curtailed show of military hardware - and no aviation. A single tank took part - a T-34, a type used in World War Two.

The Soviet Union had lost 27 million people in World War II, including many millions in Ukraine, but eventually pushed Nazi forces back to Berlin, where Hitler committed suicide and the red Soviet Victory Banner was raised over the Reichstag in 1945.

Putin signs decree to take over Russian assets of two foreign firms

President Vladimir Putin on Tuesday signed a decree establishing temporary control of the Russian assets of two foreign energy firms, signaling Moscow could take similar action against other companies, if need be.

The decree - outlining possible retaliation if Russian assets abroad are seized - showed Moscow had already taken action against Uniper Russian division and the assets of Finland's Fortum Oyj.

The decree said Russia needed to take urgent measures to respond to unspecified actions from the United States and others it said were unfriendly and contrary to international law.

The shares in the two entities have been placed in the temporary control of Rosimushchestvo, the federal government property agency, the decree said.

In February, US Treasury Secretary Janet Yellen said Russia should bear the costs of damage caused by its war on Ukraine, adding though there were significant legal obstacles to confiscating major frozen Russian assets.

The CEO of state-owned bank Bank VTB PAO had on Monday said Russia should consider taking over and managing the assets of foreign companies such as Fortum, only returning them when sanctions are lifted.

Rosimushchestvo said more foreign firms could find their assets under temporary Russian control, TASS reported. The agency would ensure the assets were run in accordance with their importance for the economy.

"The decree does not concern ownership issues and does not deprive owners of their assets. External management is temporary in nature and means the original owner no longer has the right to make management decisions," TASS cited the agency as saying.

Last October European Council President Charles Michel said the EU was looking at using Russian assets frozen nunder sanctions against Moscow towards rebuilding Ukraine.

Asset sales by investors from unfriendly countries - as Moscow terms those that imposed sanctions against Russia following its invasion of Ukraine - require approval from a government commission and, in some cases, the president.

In February, Uniper valued its majority stake in Russian division Unipro at a symbolic one euro to reflect the likely chance a planned sale to a Russian buyer would fall through. Fortum had already warned shareholders there was a risk its Russian assets could be expropriated.

 

Ukraine grain saga

From restrictions on Ukrainian grain going to Eastern Europe to costly English breakfasts and drought problems, here’s a snapshot of key food stories from around the world compiled by Agnieszka de Sousa in London for Bloomberg.

The latest chapter of the Ukrainian grain saga in Eastern Europe returned to Brussels. The European Union will look to prohibit the domestic sale of Ukraine’s grain in five member states, only allowing transit to other destinations. That follows unilateral bans by Poland, Hungary, Slovakia and Bulgaria on imports of Ukraine’s produce on fears the supplies are hurting their own markets.

That effectively means Ukrainian exporters face losing sales in those countries. For example, 7% of Ukraine’s corn and wheat exports have gone to Poland this season, according to UkrAgroConsult. Some 7% of its corn shipments have also gone to Hungary.

It’s not the only setback Ukraine’s agriculture sector has faced this week. Its Black Sea exports were again disrupted after inspections of ships under a safe-passage corridor were halted for two days — after a similar stoppage the previous week. Kyiv has blamed the disruption to the grain-export deal — which has been crucial for bringing down global food-commodity costs from records reached after Russia’s invasion — on Moscow. 

While the shipping resumption is good news for both Ukraine and developing nations that import its grain, it highlights uncertainty over the initiative that Russia has repeatedly threatened to quit.

As Muslims around the world sat down for the final days of Ramadan, soaring food prices mean things aren’t what they used to be. Take this downtown Casablanca cafe, where hungry people would flock at sunset for the iftar meal. But with Moroccan prices at the highest since 1984, most of the seats now remain empty.

The average year-on-year food inflation between March and December 2022 was 29% in the Middle East and North Africa region, the World Bank said. Muslims comprise a quarter of the world’s population and food inflation during Ramadan affects a broad swath of the Middle East, Africa and Asia.

Riccardo Fabiani, North Africa project director for the International Crisis Group think tank, said, “It’s a special time of the year, which makes people more sensitive about the issue. The legitimacy of local governments is at risk, protests could intensify and, in general, the fear is that something could break in terms of public order and stability.”

A dry spell is currently wilting crops and delaying plantings in some of Europe’s top produce growers, risking a further run-up in food inflation. Southern Europe is a heavyweight in fruit and vegetables, and the bad weather follows a drought that withered rice paddies and olive groves last year. 

Observation satellites are being deployed to help farmers, utilities and supply chains adjust to persistently hotter and drier weather.

 

 

The World Beyond Ukraine

“Ukraine has united the world,” declared Ukrainian President Volodymyr Zelensky in a speech on the first anniversary of the start of the war with Russia. The war may have united the West, but it has left the world divided. And that rift will only widen if Western countries fail to address its root causes.

The traditional transatlantic alliance of European and North American countries has mobilized in unprecedented fashion for a protracted conflict in Ukraine. It has offered extensive humanitarian support for people inside Ukraine and for Ukrainian refugees. And it is preparing for what will be a massive rebuilding job after the war. But outside Europe and North America, the defense of Ukraine is not on top of agenda.

Few governments endorse the brazen Russian invasion, yet many remain unpersuaded by the West’s insistence that the struggle for freedom and democracy in Ukraine is also theirs.

As French President Emmanuel Macron said at the Munich Security Conference in February, “I am struck by how we have lost the trust of the global South.” He is right. Western conviction about the war and its importance is matched elsewhere by skepticism at best and outright disdain at worst.

The gap between the West and the rest goes beyond the rights and wrongs of the war. Instead, it is the product of deep frustration—anger, in truth—about the Western-led mismanagement of globalization since the end of the Cold War.

The concerted Western response to the Russian invasion of Ukraine has thrown into sharp relief the occasions when the West violated its own rules or when it was conspicuously missing in action in tackling global problems.

Such arguments can seem beside the point in light of the daily brutality meted out by Russian forces in Ukraine. But Western leaders should address them, not dismiss them. The gulf in perspectives is dangerous for a world facing enormous global risks. And it threatens the renewal of a rules-based order that reflects a new, multipolar balance of power in the world.

The Russian invasion has produced remarkable unity and action from the liberal democratic world. Western countries have coordinated an extensive slate of economic sanctions targeting Russia. European states have increasingly aligned their climate policies on decarbonization with national security-related commitments to end their dependence on Russian oil and gas.

Western governments have rallied to support Ukraine with enormous shipments of military aid. Finland and Sweden aim to be soon admitted to NATO.

Europe has adopted a welcoming policy toward the eight million Ukrainian refugees within its borders.

All these efforts have been advocated by a US administration that has been sure-footed in partnering with European allies and others.

The squabbles over Afghanistan and the AUKUS security partnership (a 2021 deal struck by Australia, the United Kingdom, and the United States that irked France) seem a long time ago.

Many in the West have been surprised at this turn of events. Clearly, so was the Kremlin, which imagined that its invasion would not provoke a strong and determined Western response. The West’s unity and commitment are not matched elsewhere.

At the beginning of the war, the UN General Assembly voted 141 to 5, with 47 absences or abstentions, to condemn the Russian invasion. But that result flattered to deceive.

“Most non-European countries that voted to deplore Russia’s aggression last March did not follow up with sanctions. Doing the right thing at the UN can be an alibi for not doing much about the war in the real world.”

In a series of UN votes since the war started, around 40 countries representing nearly 50% of the world’s population have regularly abstained or voted against motions condemning the Russian invasion.

Fifty-eight countries abstained from a vote, in April 2022, to expel Russia from the UN Human Rights Council. According to the Economist Intelligence Unit, two-thirds of the world’s population lives in countries that are officially neutral or supportive of Russia. These countries do not form some kind of axis of autocracy; they include several notable democracies, such as Brazil, India, Indonesia, and South Africa.

Much of the fence-sitting is not driven by disagreements over the conflict in Ukraine but is instead a symptom of a wider syndrome, anger at perceived Western double standards and frustration at stalled reform efforts in the international system.

The distinguished Indian diplomat Shivshankar Menon put the point sharply in Foreign Affairs earlier this year when he wrote, “Alienated and resentful, many developing countries see the war in Ukraine and the West’s rivalry with China as distracting from urgent issues such as debt, climate change, and the effects of the pandemic.”

Courtesy: Foreign Affairs

 

China not to supply weapons to any party in Ukraine war

China won't sell weapons to either side in the war in Ukraine, the country's foreign minister said Friday, responding to Western concerns that Beijing could provide military assistance to Russia.

China has maintained that it is neutral in the conflict, while backing Russia politically, rhetorically and economically at a time when Western nations have imposed punishing sanctions and sought to isolate Moscow for its invasion of its neighbor.

Qin Gang is the highest-level Chinese official to make such an explicit statement about arms sales to Russia. He added that China would also regulate the export of items with dual civilian and military use.

"Regarding the export of military items, China adopts a prudent and responsible attitude," Qin said at a news conference alongside visiting German counterpart Annalena Baerbock. "China will not provide weapons to relevant parties of the conflict, and manage and control the exports of dual-use items in accordance with laws and regulations."

The minister also reiterated China's willingness to help find a peaceful resolution to the conflict.

At the same news conference, Qin also blamed Taiwan's government for heightened regional tensions after Beijing held large-scale military drills in an attempt to intimidate the island it claims as its own territory.

In February, Secretary of State Antony Blinken said the U.S. had intelligence suggesting China was considering providing arms and ammunition to Russia — and warned that such involvement in the Kremlin's war effort would be a "serious problem."

In recent days, European leaders have issued similar warnings, even as they visited China, and the European Union's foreign policy chief lashed out at Beijing, saying its support of Russia during the invasion was "a blatant violation" of its United Nations commitments.

In her remarks, Baerbock also referred to China's role as a permanent member of the U.N. Security Council, saying it bore a special responsibility for helping end the conflict.

"But I have to wonder why the Chinese positioning so far does not include a call for the aggressor, Russia, to stop the war," she said. "We all know that President (Vladimir) Putin would have the opportunity to do so at any time, and the people in Ukraine would like nothing more than to finally be able to live in peace again."

A visit to Moscow last month by Chinese leader Xi Jinping underscored how Beijing is increasingly becoming the senior partner in the relationship as it provides Russia with an economic lifeline and political cover. China announced Friday that Defense Minister Gen. Li Shangfu would visit Russia next week for meetings with counterpart Sergei Shoigu and other military officials.

On both Ukraine and Taiwan, Qin articulated well-worn defenses of Chinese policies that underscore Beijing's rejection of criticisms from the West, particularly the U.S. Under the ardently nationalist Xi, China has sharpened its rhetoric, particularly on the issue of Taiwan, which split from mainland China amid civil war in 1949.

Tensions around the island rose significantly after China deployed warships and fighter planes near Taiwan last weekend in retaliation for a meeting between U.S. House Speaker Kevin McCarthy and the island's president, Tsai Ing-wen.

China insists that self-governing Taiwan submit to its rule, either peacefully or by force, and Qin said the pursuit of independence by Taiwan's government and its foreign supporters — a veiled reference to chief ally the United States — were the reason for the tensions.

Baerbock warned that a conflict in the Taiwan Strait, through which much of the world's international trade passes, would bring global disaster.

"We therefore view the increasing tensions in the Taiwan Strait with great concern," she said. "Conflicts must be resolved peacefully. A unilateral change of the status quo would not be acceptable to us as Europeans."

Apparently rejecting Baerbock's concerns, Qin said Taiwan was "China's internal affair."

"Taiwan independence and peace cannot co-exist," he said.

 

Ukraine asks Pentagon for fighter jets

Ukrainian Prime Minister Denys Shmyhal on Wednesday directly appealed to Defense Secretary Lloyd Austin for US fighter jets and longer-range missiles in its fight against Russia, echoing the country’s repeated calls for modern weaponry.

“We will win this war,” Shmyhal said at the top of a meeting between the two at the Pentagon. “But to achieve it faster and with fewer casualties, Ukraine still needs intensive military support — more air defense systems that minimize the impact of Russian airstrikes, more heavy artillery, mortars and ammunition for them. We also ask you for reconsider the possibility of providing Ukraine with longer range missiles.” 

Austin, while not commenting on the request, committed to investing in the US defense industrial base to further ramp up production for weapons sent to Ukraine. 

Ukraine since the start of Russia’s invasion a little more than a year ago has pressed the United States and NATO for advanced fighter jets to protect the country’s skies. 

While some NATO states including Slovakia and Poland have agreed to send Soviet-era MiG-29 fighter jets to Ukraine, Western countries have so far held off on sending the more advanced F-15 and F-16 fighters Kyiv is asking for.  

The Biden administration has not been swayed by Slovakia and Poland’s pledges to send its own jets, saying that the choice is a “sovereign decision.” 

Kyiv has also asked for longer-range missile systems in the fight, though the US government has held off on supplying such weapons over concerns Ukraine may use them to strike targets within Russia, which is against US policy.  

At Wednesday’s gathering, which marked the second Pentagon meeting between Austin and Shmyhal, the Ukrainian official thanked Washington for its significant military support, including sending Abrams tanks and Bradley and Stryker infantry fighting vehicles, according to a readout of the meet up. 

But he also asked Austin for more heavy equipment and aircraft.  

“In modern warfare, air superiority is crucial,” Shmyhal said. “That is why Ukraine is initiating the building of a new, so-called fighter jet coalition. And we are inviting the United States to become its most important participant. America can once again demonstrate its leadership by providing Ukraine with F-15 or F-16 aircraft.” 

Austin, in turn, thanked Ukraine for making sure US lethal aid already provided is accounted for. 

 

Ukraine furious over Russian UN Security Council presidency

Russia, whose leader is accused of war crimes, assumed charge of the United Nations Security Council on Saturday causing fury in Ukraine, with President Volodymyr Zelenskiy calling it an absurd and destructive move.

The last time Russia held the rotating presidency of the body responsible for maintaining peace and combating acts of international aggression was in February 2022 when Moscow troops launched a full-scale invasion of Ukraine.

The United States on Thursday urged Russia to conduct itself professionally when it assumes the role, saying there was no means to block Moscow from the post.

In March, the International Criminal Court (ICC) - an international justice body not associated with the UN - issued an arrest warrant for President Vladimir Putin and his commissioner for children rights, accusing them of the war crime of illegally deporting hundreds of children from Ukraine.

Ukraine's Foreign Minister Dmytro Kuleba called Russia's presidency of the Security Council a "slap in the face to the international community." Zelenskiy said it was time for a general overhaul of global institutions, including the Security Council.

"Reform is obviously necessary to prevent a terrorist state - and any other state that wants to be a terrorist - from destroying the peace," he said.

Some 400 days into the war, which has killed thousands, destroyed Ukrainian cities and set millions of civilians to flight, Russia continues to take over parts of the country, pressing on with its assault in the east.

Earlier, Zelenskiy advisor Andriy Yermak also hit out at Iran, which Kyiv and its allies accuse of supplying Russia with arms. Tehran denies it is giving weapons to Russia.

"It is very telling that on the holiday of one terror state – Iran - another terror state – Russia – begins to preside over the UN Security Council," Yermak wrote on Twitter, referring to Iran's Islamic Republic Day holiday.