Russia/Ukraine War Update - May 21st, 2022

*** MILITARY SITUATION ***

Russian forces are focusing on digging in and reinforcing defensive positions in Kharkiv and along the Southern Axis in preparation for Ukrainian counteroffensives, while the majority of active offensive operations remain confined to Izyum-Donetsk City arc and especially the Popasna-Severodonetsk area.

The Ukrainian General Staff reported that Russian forces are creating secondary defensive lines on the Southern Axis, indicating that the Russian grouping in this area may be preparing for a major Ukrainian counter-offensive and a protracted conflict.[i] Russian forces reportedly are holding defensive positions north of Kharkiv City following the success of the Ukrainian counteroffensive since May 5 and have conducted limited spoiling attacks either to give Russian forces time to complete their redeployment back to Russia in good order or to allow reinforcements to arrive to defend territory in Kharkiv Oblast. Significant Russian offensive operations are confined to the area of Severodonetsk. Russian troops have made marginal gains to the north, west, and south of the city, especially around Popasna, in order to attempt to take control of Severodonetsk.

-Russian forces may have made marginal gains to the north, west, and south of Popasna in order to continue their offensive on Severodonetsk from the south.

-Russian troops reportedly regained certain positions taken by the Ukrainian counteroffensive north of Kharkiv City.

-Russian forces are likely preparing for a major Ukrainian counteroffensive and protracted conflict on the Southern Axis.

-Intense fighting has been reported around the Ukrainian city of Severodonetsk as Russian forces appear to be stepping up an offensive to encircle its Ukrainian defenders.

-Senior Russian officials have proposed a new law that would eliminate age limits for military contract soldiers, in another sign the country is facing a shortage of infantry to continue its offensive in Ukraine. Currently, Russians aged 18-40 and foreigners aged 18-30 can enter into a first contract with the army.

*** ECONOMIC & POLITICAL ***

-The US ambassador to Poland revealed on Thursday that there are 12,600 of America’s military personnel in the EU member state at the moment, the largest number in history. As NATO conducts massive exercises on Ukraine’s doorstep, Poland and the Baltic states have asked for even more troops, according to documents leaked to the press earlier.

-Warsaw is ready to build permanent military installations to house “light infantry units” of the US-led NATO bloc, Polish Prime Minister Mateusz Morawiecki said on Thursday. The PM urged further NATO military buildup in Eastern Europe amid the ongoing Russian offensive in Ukraine.

-Russia’s defence minister, Sergei Shoigu, warned that Moscow is forming 12 new units in its western military district in response to Finland and Sweden’s Nato bid. Russian gas giant Gazprom’s exporting arm, Gazprom Export, has confirmed it will suspend gas sales for Finnish state-owned gas wholesaler, Gasum, starting from Saturday.

-The last group of Ukrainian soldiers holed up in the smashed Azovstal steel works has surrendered, Russia’s defence ministry said late on Friday, marking an end to the three-month siege of the defenders’ last stronghold in Mariupol. “Underground structures of Azovstal where militants were hiding are now under full control of Russian armed forces,” the ministry said in a statement, adding that in total 2,439 Ukrainian fighters have surrendered. The Kremlin’s spokesperson, Dmitry Peskov, said the combatants would be treated in line with international norms for prisoners of war, though several senior Russian politicians demanded this week they be put on trial and one even called for their execution. Earlier this week, the International Committee of the Red Cross (ICRC) said it had registered “hundreds of Ukrainian prisoners of war” from the Azovstal plant and asked for immediate access to them.

-Since Monday, the national average for a gallon of regular gasoline has increased by 10 cents to $4.58. According to new data from the Energy Information Administration (EIA), total domestic gasoline stocks decreased by 4.8 million bbl to 220.2 million bbl last week. On the other hand, gasoline demand increased from 8.7 million b/d to 9 million b/d. Tighter supply and increased demand have pushed pump prices higher. This supply/demand dynamic, combined with volatile crude prices, will likely continue to keep upward pressure on pump prices.

-The Chinese Communist Party (CCP), seeking to insulate the country’s top brass from Western sanctions like those imposed on Russia over the Ukraine conflict, has allegedly issued a directive discouraging senior officials from buying assets abroad. The new policy will block promotions for CCP elites who have significant overseas holdings, the Wall Street Journal reported on Thursday, citing unidentified people familiar with the matter. The restriction will apply not only to assets owned directly and indirectly by high party officials themselves, but also those held by their wives and children.

-US vice president Kamala Harris had a phone call with France president Emmanuel Macron about how to support Ukraine amid Russia’s invasion, among other issues.

-A Bosnia Serb nationalist leader has said that Bosnia cannot join EU sanctions against Russia in order to stay neutrality, reports Reuters.

COVID CASES USA 7-DAY AVG
103,467 MAY 19 2022
30,149 MAY 19 2021

-Austria’s oil and gas conglomerate OMV said on Friday that it had opened an account with Gazprombank to pay for Russian gas imports, insisting that the scheme does not violate the current EU embargo against Moscow. Austria imports some 80% of its gas from Russia.

-Precisely a week after Russia cut electricity supplies to Finland over non-payment (in rubles), Moscow has made its first explicitly retaliatory move over its Nordic neighbor's application to NATO with an announcement to cut off natural gas. Finland's state-owned gas wholesaler Gasum has announced natural gas imports from Russia will stop Saturday, saying in a statement, "On the afternoon of Friday May 20, Gazprom Export informed Gasum that natural gas supplies to Finland under Gasum’s supply contract will be cut on Saturday May 21, 2022 at 07.00." Company CEO Mika Wiljanen stressed to the public it is adequately prepared “and provided that there will be no disruptions in the gas transmission network, we will be able to supply all our customers with gas in the coming months.”

-President Joe Biden is resisting demands from Kiev to supply long-range rocket launchers to the Ukrainian military, Politico reported, suggesting the White House is concerned the weapons could be used for strikes inside Russia. Ukrainian officials have requested increasingly advanced weaponry from Washington in recent months – even before Moscow’s invasion commenced earlier this year – and are currently urging the US government to send M270 Multiple Launch Rocket Systems (MLRS), among other hardware. While Biden was reportedly willing to consider the request during a trip to Germany last month, where dozens of countries met to discuss aid for Ukraine, a congressional staffer told Politico the plan is not moving forward. "There was momentum on it at Ramstein, but that seems to have cooled," they said, adding that "There’s definitely a frustration building" among officials in Kiev over a perceived reluctance to send heavier arms. The staffer did not offer a reason for the change of heart, but according to three other sources cited by the outlet, Kiev believes the White House is "holding back over worries the weapon could be used to launch strikes inside Russia, thereby expanding and prolonging the conflict."

-The White House is working to put advanced anti-ship missiles in the hands of Ukrainian fighters to help defeat Russia’s naval blockade, officials said, amid concerns more powerful weapons that could sink Russian warships would intensify the conflict. Ukraine has made no secret it wants more advanced U.S. capabilities beyond its current inventory of artillery, Javelin and Stinger missiles, and other arms. Kyiv’s list, for example, includes missiles that could push the Russian navy away from its Black Sea ports, allowing the restart of shipments of grain and other agricultural products worldwide. Current and former U.S. officials and congressional sources have cited roadblocks to sending longer range, more powerful weapons to Ukraine that include lengthy training requirements, difficulties maintaining equipment, or concerns U.S. weaponry could be captured by Russian forces, in addition to the fear of escalation. But three U.S. officials and two congressional sources said two types of powerful anti-ship missiles, the Harpoon made by Boeing and the Naval Strike Missile made by Kongsberg and Raytheon Technologies were in active consideration for either direct shipment to Ukraine, or through a transfer from a European ally that has the missiles.

-Russia's defense ministry has now revised the numbers of Ukrainian fighters to have emerged from the besieged Azovstal steel plant in Mariupol upward to more than 1,700 soldiers that have left the plant. A new Reuters headline has stressed that there's ongoing "silence from Kyiv" as the surrender is on a much larger than expected scale: Moscow said on Thursday that 1,730 Ukrainian fighters had surrendered in Mariupol over three days, including 771 in the past 24 hours, claiming a surrender on a far bigger scale than Kyiv has acknowledged since ordering its garrison to stand down. Statements from early in the week by Ukrainian officials, including President Zelensky, attempted to downplay this as "surrender" - avoiding the word altogether and instead stressing the end of the "combat mission" and that its Azov fighters were "evacuated". Russian-backed separatists in control of the area, Denis Pushilin, has recently said many of Azov's top commanders still remain inside the huge, cavernous steelworks facility.

-A national gas station chain is reprogramming its pumps in Washington state to accommodate the possibility of $10-a-gallon gasoline. A spokesperson for '76' gas stations confirmed that the national chain has begun reconfiguring its pumps to 'make room' for the possibility of double-digit prices, The Post Millennial reported.

-Moody’s on Friday cut Ukraine’s debt rating for the second time in three months and lowered the outlook to negative due to the growing risk the Russian invasion will affect the nation’s debt sustainability. The ratings agency cut the grade a notch to Caa3, after lowering it two notches from B3 in early March, saying the country could face “a more protracted military conflict than Moody’s initially expected” following the invasion in late February. That “increases the likelihood of a debt restructuring and losses being imposed on private-sector creditors,” the statement said.onsi