Ukraine Latest: US Focuses on Ending Iran Weapons Flow to Russia

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(Bloomberg) —

President Volodymyr Zelenskiy called the $60 per barrel price cap on Russian crude a sign of weakness toward Moscow. The cap agreed on by European Union countries is higher than the price at which Russian oil has been trading recently, and the Kremlin said it’s preparing a workaround in any case.

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A “wealthy Russian businessman” was arrested in London this week on suspicion of money laundering, the UK National Crime Agency said. The man and two others were released on bail. 

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The US will concentrate on Iranian weapons supplies to Russia rather than on stalled talks to revive an international nuclear deal, the Biden administration’s top Iran envoy said in an interview. 

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

Key Developments

On the Ground

Russian troops continue to try to press near Avdiivka and Bakhmut in Ukraine’s Donetsk region, according to Kyiv-based Military Staff. In past 24 hours Russia delivered 10 missile and 16 air strikes and shelled Ukraine’s troops more than 30 times from rocket-launch systems. Ukraine’s air forces responded with 25 strikes on Russia’s military targets, claiming to have downed a Sukhoi Su-25 jet aircraft. The information couldn’t be verified. Russia’s troops shelled the Nikopol district in the central Dnipropetrovsk region, the Kupyansk district in north-eastern Kharkiv region and the Mykolayiv and Zaporizhzhia regions in the south and south-east over the past day. Ukrainian forces reportedly reached the east, or left, bank of the Dnipro River across from Kherson City, ISW said, which may set the groundwork for future offensive operations into occupied Kherson Oblast. 

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(All times CET)

US Focused on Thwarting Iran Weapons Aid to Russia (9 a.m.)

The US will concentrate on Iranian weapons supplies to Russia and on supporting protesters in the country, rather than on stalled talks to revive an international nuclear deal, the Biden administration’s top Iran envoy said.

“Iran is not interested in a deal and we’re focused on other things,” US Special Envoy for Iran Robert Malley said in an interview on Saturday. 

His comments came as top Russian and Iranian defense officials reportedly met for talks in Tehran. 

Read more: US Focus on Iran Is Thwarting Weapons Aid to Russia

Finland Says Russian Nuclear Threat Pushed it Toward NATO (9:01 a.m.)

Nuclear rhetoric by Russia that followed its invasion in Ukraine in February was a key factor behind Finland’s decision to seek NATO membership, the country’s foreign minister said. 

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Pekka Haavisto told Japan’s Kyodo that “security realities in Europe have changed” because of Russia’s war against its neighbor. 

Finland, which shares a 1,340-kilometer (830-mile) border with Russia, is hopeful that “during the spring everything will be settled” on its NATO bid, with signoffs from Hungary and Turkey, the remaining holdouts. 

Kyiv Still Facing Emergency Blackouts (8:30 a.m.) 

Residents of Ukraine’s capital are still enduring emergency blackouts, as the nation struggles to deal with consequences two months of Russian missile attacks on its energy infrastructure, including especially heavy bombardment in late November. 

Instead of scheduled several-hour power cutoffs seen recently, the city will face irregular power outages on Sunday, according to local energy company DTEK. 

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Top Iranian, Russian Defense Officials Meet, US Think Tank Says (8:10 a.m.)

Iranian Armed Forces General Staff Chief Mohammad Bagheri reportedly met with Russian Deputy Defense Minister Alexander Fomin in Tehran on Saturday, said the Institute for the Study of War. 

The US-based military analysts said the pair discussed unspecified military cooperation, citing readouts from Iranian state media. 

Bagheri is responsible for Iran’s military policy and strategic guidance, ISW said. 

Internal Support for Russia’s War is Falling, UK Says (8 a.m.)

Recent polling suggests that Russian public support for what the Kremlin calls its “special military operation” in Ukraine is “falling significantly,” the UK defense ministry said. 

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The UK cited an independent Russian media outlet that claimed access to data collected by Russia’s government for internal use. That indicated 55% of Russians favor peace talks with Ukraine, with only 25% claiming to support continuing the conflict.

Separately, ISW cited a poll suggesting Russians lean toward ending the war, while still broadly backing the actions of their troops. The Levada Center found 41% favored continued military operations in Ukraine against 53% who said Moscow should begin peace negotiations. The poll was taken in November and published Dec. 2. 

Zelenskiy Calls Oil-Price Cap ‘Weak’ (7:47 p.m.)

Ukraine’s president called the emerging $60 per barrel price cap on Russian oil a “weak position,” saying it’s “completely comfortable” for Russia’s budget. Volodymyr Zelenskiy had repeatedly called for a much lower price cap. 

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“You wouldn’t call it a big decision to set such a limit for Russian prices, which is quite comfortable for the budget of a terrorist state,” Zelenskiy said in his nightly video address. 

“This money will be spent for further destabilization of those countries that are trying now to avoid serious decisions.”

Lukashenko, Russian Defense Chief Meet in Minsk (5:30 p.m.) 

Belarus President Alexander Lukashenko met with Russia’s Defense Minister Sergei Shoigu in Minsk, the state-owned Belta news agency reported. The pair spoke about preparation and combat coordination of the units of both countries. 

Before the meeting, Shoigu and his Belarus counterpart Viktor Khrenin signed a protocol on amendments to the agreement between Russia and Belarus on joint provision of regional security, as well as discussed bilateral military cooperation, according to Belta. No further details were provided.  

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Microsoft Warns of Rising Russian Cyber Attacks (5 p.m.) 

Moscow will intensify its efforts to pressure the sources of Ukraine’s military and political support, domestic and foreign, by using cyber attacks, according to Microsoft Corp.  

In a post on the company’s “On the Issues” blog, Clint Watts, general manager of Microsoft’s digital threat analysis center, urged customers to prepare for more Russian cyber intervention over the winter, including the type of ransomware attacks recently seen in Poland. 

Wealthy Russian Arrested in London Over Money Laundering (3:10 p.m.)

A “wealthy Russian businessman” was arrested in London this week on suspicion of offenses including money laundering, conspiracy to defraud the Home Office, and conspiracy to commit perjury.

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The 58-year-old, who wasn’t identified, was detained on Thursday at his “multi-million-pound residence” in the capital by officers from the National Crime Agency’s Combatting Kleptocracy Cell, the NCA said.

Kremlin Says Russia Won’t Accept $60 Price Cap (3:02 p.m.)  

Russia will not accept the $60 per barrel price cap for its crude oil agreed upon by the European Union, the state news agency Tass reported, citing Kremlin spokesman Dmitry Peskov.

It was the Kremlin’s first reaction after European diplomats decided on the threshold on Russian oil Friday evening following lengthy negotiations. Peskov said Russia is preparing workarounds. 

Read more: Russia Won’t Accept $60 Price Cap on Its Oil, Kremlin Says 

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Estonia Buying Advanced US Rocket Systems (12 p.m.)

Estonia, which shares a 300-km (186-mile) border with Russia, will buy six High Mobility Artillery Rocket Systems from the US worth about $200 million, its defense department said.  It’s Estonia’s largest ever arms procurement project. 

The HIMARS deal was signed on Friday and includes ammunition and rockets as well as training on the Lockheed Martin Corp. system. Deliveries are expected to start in 2024. The rockets have ranges of 70km to 300km. 

“The operational capabilities of the new multiple rocket launchers are compatible with those of the US and other allies,” said Magnus-Valdemar Saar, director general of Estonian Centre for Defense Investments. Lithuania and Latvia are also expected to buy HIMARs systems, Estonia said.

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Ukrainian Troops Begin EU Training in Poland (7 a.m.) 

Ukrainian soldiers have been receiving training near Brzeg, in southwestern Poland, since late November on de-mining techniques and how to defuse booby traps. They’re part of the first contingent of 1,100 troops being trained in different locations across the continent.

The EU is trying to mount the ambitious €106.7 million ($112 million) mission, aimed at training 15,000 Ukrainian soldiers, on top of significant weapons deliveries to Ukraine, economy-crushing sanctions on Russia and billions of euros to bolster Kyiv’s finances.

Read more: Ukrainian Troops Begin EU Training as Bloc Expands Military Role