Ukraine Latest: G-7 May Put Russia Energy Price Cap On Agenda

(Bloomberg) -- Group of Seven officials are laying the groundwork for leaders to potentially discuss the introduction of a price cap on energy imports from Russia, in a bid to limit revenue for President Vladimir Putin and rein in prices, according to people familiar with the matter.

The European Commission accused Russia of using its energy supplies for “blackmail” as Moscow stepped up its squeeze on gas flows to the continent. 

Ukraine took a major step toward eventual membership of the European Union after the bloc’s executive body recommended the former Soviet republic be granted candidate status as it defends itself against Russia’s assault. 

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

Key Developments

• Ukraine Wins Initial EU Recommendation for Membership Path
• Russian Cuts Force Europe to Use Gas It Was Saving for Winter
• Enel Sells Russian Unit as Gas Standoff With Europe Intensifies
• European Gas Surges 60% This Week as Moscow’s Cuts Roil Markets
• More Than 100 EU Companies Still Operating in Russia, Study Says

(All times CET)

German Gas Flows to France Halted (3:11 p.m.)

Natural gas shipments from Germany to France have stopped as Russia’s supply squeeze deepens, testing the ability of countries to keep energy flowing across borders. 

France hasn’t received any gas from Germany since Wednesday, a statement Berlin confirmed, citing lower flows to central Europe. Both countries saw supplies dwindle after Russia curbed shipments through its biggest gas pipeline to the EU, prompting German Economy Minister Robert Habeck to accuse Moscow of trying to unsettle markets to push up prices.

Read more:

Italy May Trigger Emergency Gas Plan If Russian Curbs Last (2:40 p.m.)

If Gazprom PJSC doesn’t restore its gas supplies to Italy by mid-week, the government may initiate an emergency phase for its market, according to people familiar with the situation. That may pave the way for a greater output of the six coal plants that are already operational in Italy, but are due to be shut by 2025 to meet climate change goals. 

The contingency plan for natural gas emergencies may also involve requesting companies to voluntarily limit energy consumption, but wouldn’t affect industrial production, the people said. 

Read more: 

Kremlin Says Cyberattack Delays Putin Speech (1:54 p.m.)

Putin’s highly anticipated speech at the St. Petersburg International Economic Forum has been delayed by an hour because a cyberattack disrupted the system handling access badges to the venue, Kremlin spokesman Dmitry Peskov said.

He blamed a DDOS attack that started Thursday, without commenting on the possible source. “Problems arose with the distribution of badges and confirmation of access to the main plenary session,” Peskov told reporters. “We will fix it, but it will take time.”

A person at the forum said audience members were able to enter the main hall without difficulty. Putin is known for his tardiness to public events and his speech at Russia’s flagship economic forum is one of his first major public addresses since the Feb. 24 invasion of Ukraine.

Ukraine to Impose Visa Regime for Russian Citizens (1:35 p.m.)

The country will end unrestricted entry for Russians and will require visas from July 1, President Volodymyr Zelenskiy said on his Telegram channel. 

UK in Talks to Host Eurovision Instead of Ukraine Next Year (12:39 p.m.) 

The UK could host next year’s Eurovision song contest after the organizers decided that it wouldn’t be possible to hold it in Ukraine.

As winners of this year’s contest, Ukraine should host the show in 2023, but the European Broadcasting Union found that Ukraine’s public broadcaster wouldn’t be able to fulfill the “security and operational guarantees” needed to host the event due to the ongoing war in the country.

Ukraine Claims Strike on Russian Supply Vessel in Black Sea (12:22 p.m.) 

The Ukrainian military said it hit a Russian military vessel supplying Moscow’s forces off the Black Sea coast. Oleksiy Arestovych, a military adviser to the Ukrainian president, signaled that the tug carrying reinforcements, weapons and munitions had been hit by Harpoon anti-ship missiles, thanking allies for delivering such weapons.

Snake Island is a strategically placed point in the western part of the Black Sea. Russia seized the island, which occupies waters close to key shipping lanes, early in the war, and Ukraine has since mounted repeated attacks to prevent the resupplying of its forces.

Ukraine Wins Initial EU Recommendation for Membership Path (11:36 a.m.) 

The European Commission recommended that Ukraine be granted candidate status, a symbolic step on the long path to EU membership, according to two people familiar with the matter. The EU’s executive arm approved it Friday with conditions that Kyiv will have to meet in the future on the rule of law, justice and anti-corruption, the people said.  

The Commission’s move comes a day after a high-profile visit to Kyiv by German Chancellor Olaf Scholz, French President Emmanuel Macron and Italian Prime Minister Mario Draghi, who jointly endorsed Ukraine’s bid for candidacy status. The recommendation is a significant step for Ukraine, which has invested its political future in moving closer to Europe against the backdrop of Russia’s invasion. 

Ukraine Wins Initial EU Recommendation for Membership Path

European Gas Surges 60% This Week as Moscow’s Cuts Roil Markets (11:23 a.m.) 

European natural gas prices headed for the biggest weekly gain since Russia began its war on Ukraine as Moscow’s deep supply cuts reverberate across the region.

Benchmark futures rose as much as 8.4%, taking this week’s gain to about 60%. Italian energy giant Eni SpA will receive just half of what it requested from Gazprom PJSC on Friday, compared with about two-thirds the previous day. The cuts have hit some of the biggest consumers in a blow for a region that’s already struggling with surging inflation and meager growth. 

Austrian Regulator Backs Russian Explanation of Gas Flow Cuts (10 a.m.) 

Austria’s energy regulator said cuts in Russian gas flows were understandable and transparent, marking a sharp contrast with EU allies who have called the supply curbs politically motivated. Italian Prime Minister Mario Draghi called Moscow’s explanations lies.

“The reduction is temporary and technical in nature,” Alfons Haber, co-head of Austria’s E-Control told the public radio Oe1 Friday. “According to our knowledge, they are truly already working on repairing these faults and to restore gas delivery volumes.”

Austrian Regulator Backs Russian Explanation of Gas Flow Cuts

Zelenskiy Blames Russia for Driving Global Inflation (9:59 a.m.)

Russia is using its invasion of Ukraine to spur global inflation and cause another migration crisis in Europe, the Ukrainian president said. 

By disrupting supplies to Europe, blocking Ukrainian seaports and targeting agriculture infrastructure, Moscow is driving up prices and adding pressure on European nations, he said in a video address to a forum held in North Macedonia.

“Nowadays there is not a country in Europe that hasn’t suffered from at least one of many displays of Russia’s anti-European policy,” he said.

Fight for Control of Sievierodonetsk Continues (8:54 a.m.)

Russia continues to shell Sievierodonetsk in its push to capture the eastern Ukrainian city, one of the last strongholds in the Luhansk region as Moscow tightens its grip over Donbas, Ukraine’s military said. Kyiv-led troops drove back Russian forces in two towns on the front, Zolote and Bohorodychne. 

Russian forces also advanced toward Slovyansk, another key city in the Donetsk region, amid fierce fighting, the military said.

More stories like this are available on bloomberg.com

©2022 Bloomberg L.P.