Russia/Ukraine War Update - June 30th, 2022

*** MILITARY SITUATION ***

Mid-June has seen the Russian Armed Forces maintain their operational momentum and make important gains in the Donbas while the Ukrainian Armed Forces continue to press their counteroffensive in the Kherson Oblast.

Kharkiv OD.
The situation here remains tenuous for both sides as heavy losses, coupled with priority of effort to the Izium-Lysychansk area have reduced the combat capacity & capability of units operating in Kharkiv. The RAF will continue attempts to advance closer to Kharkiv.

 

Ternova-Rubizhne AO.
This area is the most critical portion of the Kharkiv OD for Russian & Ukrainian forces. Opposing force ratios will likely remain at 1:1 for quite some time. The RAF will likely continue their effort to regain control of Staryi Saltiv & the T2104 Hwy.

Severodonetsk-Donetsk OD.
The tactical situation in the Popasna Salient & south of Lysychansk has deteriorated for the UAF. Russian forces have managed to advance north toward Lysychansk along the Siverskyi Donets. These successes have forced the UAF to abandon Severodoentsk.

The UAF is in the process of consolidating and establishing new defensive positions in Lysychansk, but Russian forces are attempting to press their advantage along the T1303 Hwy and seize the heights in southern Lysychansk before the UAF fortify them. If the RAF can keep the UAF units in Lysychansk off balance and threaten their encirclement it is likely the Ukrainian General Staff will opt to withdraw from Luhansk to establish a new defensive line on the heights running along the west side of the T0513 Hwy. NW of Slovyansk Russian forces have been making slow but steady advances on a broad front roughly from Sosnove to Kuruika. Although UAF defensive positions are holding against successive assaults, pressure from the east could weaken this line.

Zaporizhzhia OD.
Activity in the OD generally remains localized attacks to improve tactical positioning, however the UAF has conducted a sizeable counterattack south of Vuledar that has liberated several towns and shifted the line of contact at least 10km further south. / Partisan activity in this OD is steadily increasing with attacks common in Melitopol targeting Russian occupation administrators. Partisan activity is also targeting Russian supply convoys (rail & road) moving equipment through Melitopol to the Vasylivka & Polohy areas.

Odesa-Kherson OD.
The Ukrainian counteroffensive into northern Kherson has made gradual success over the last couple of weeks. Around Kherson City, the RAF has been pushed back from its first line of defenses, with the area between Blahodatne & Kyselivka heavily contested. The UAF retains a window of opportunity in Kherson to seize key points that will make the RAFs long term defense of Kherson problematic. These gains must be made before Russian EW, close air, & indirect fire support prevent a further penetration of secondary RAF defenses.

Black Sea OTMO.
The Russian blockade of Odesa continues but is coming under increased UAF air & UCAV pressure. Improved UAF strike capabilities threaten to degrade the Russian Black Seas Fleet ability to interdict shipping in and out of Odesa.

*** ECONOMIC & POLITICAL ***

-Alina Lipp, an independent German journalist and blogger is facing a criminal probe at home over her “endorsement” of Russia’s “illegal aggressive war” against Ukraine. Lipp has told Russian media she only does what any journalist would do – document what is happening around her. If found guilty, she could face a fine or up to three years behind bars. On Saturday, RT DE interviewed Lipp about her professional work and the ongoing investigation. The journalist contended that she is “doing interviews with people in Donetsk and merely translating them into German.” “I am simply filming everything I see around,” Lipp added. She inquired rhetorically “what is it that’s illegal in that, or dangerous?” The journalist insisted that none of her materials had been staged, and that there is no one telling her what to cover. The probe was originally launched by the German public prosecutor’s office in Luneburg following multiple complaints, which have been filed since February. However, the prosecutor’s office in Gottingen, which specializes in internet hate crimes, has reportedly since taken over Lipp’s case.  

-Trade through Lithuania to the Russian exclave of Kaliningrad could return to normal within days, two sources familiar with the matter said, as European officials edge towards a compromise deal with the Baltic state to defuse a row with Moscow. Kaliningrad, which is bordered by European Union states and relies on railways and roads through Lithuania for most goods, has been cut off from some freight transport from mainland Russia since June 17 under sanctions imposed by Brussels. European officials are in talks about exempting the territory from sanctions, which have hit industrial goods such as steel so far, paving the way for a deal in early July if EU member Lithuania drops its reservations, said the people, who declined to be named because the discussions are private.

-Russian president Vladimir Putin issued fresh warnings that Russia would respond in kind if Nato set up military infrastructure in Finland and Sweden after they joined the US-led alliance. If Sweden and Finland wanted to join Nato then they should “go ahead” Putin said. “But they must understand there was no threat before, while now, if military contingents and infrastructure are deployed there, we will have to respond in kind and create the same threats for the territories from which threats towards us are created.”

-Department of Energy estimate of Implied Crude Demand, there is just 27 days of supply left in the emergency oil reserve... a record low... "Congress has been irresponsibly selling the SPR down," said Bob McNally, who in the early 2000s oversaw the Energy Department's efforts to replenish the SPR under former President George W. Bush, adding that "draining the reserve leaves the country and the world more vulnerable to geopolitical shocks." This fall, it will launch a buyback process to repurchase 60 million barrels of oil, or one-third of the six-month 180-million-barrel emergency release.

-Britain will also commit an extra 1,000 troops and one of its two new aircraft carriers to the defence of Nato’s eastern flank. The forces will be earmarked for the defence of Estonia, where Britain already has about 1,700 personnel deployed, but they will be based in the UK, ready to fly out to defend the Baltic country if deemed necessary.

-Nato’s new strategic concept, Jens Stoltenberg has explained in Madrid, also looks at the environmental impact of the defence alliance. He said: “We cannot choose between having green militaries or strong militaries. They must be both. So we must maintain our operational effectiveness and readiness as we continue to adapt.”

-Speaking to journalists in Turkmenistan on Monday, Russian President Vladimir Putin responded to questions about several recent remarks from British Prime Minister Boris Johnson. During the latest G7 summit, the UK leader joked that his allies should take their clothes off for the photoshoot – to show that they are “tougher than Putin.” “I don't know how they wanted to undress, waist-high or not, but I think it would be a disgusting sight either way,” the Russian president quipped. “Everything should be harmoniously developed in a person, both the body and the soul. However, in order for everything to be harmonious, one has to abandon excessive drinking and break other bad habits, start exercising, take up a sport.”

-Fed Chair Powell said the job for policymakers is to find price stability even during the new forces of inflation and that a reversal of globalisation could mean lower growth in place, while he added the US economy is in strong shape and can withstand monetary policy moves. Powell added the aim is to have growth moderate and there is a risk that the Fed could go too far but it is not the largest risk as the biggest risk would be a failure to restore price stability.

-Switzerland is readying plans to address a possible shortage of natural gas this winter and said it could resort to rationing, according to Reuters.

-BoE incoming MPC member Dhingra said there is room for a very gradual approach and newer data suggests a slowdown may be much more imminent than previously thought.

-Japan’s government is to issue a power supply shortage warning for a fourth consecutive day on Thursday, according to a statement.

-Maersk (MAERSKB DC) said the situation in Shanghai is stabilising and in general, all ports in China are working well, while it sees demand from Asia to all major markets (incl. North America, Europe) remaining firm in the approaching peak season.

-Russia will reportedly look to export its gold supplies to other countries after a US ban, according to Tass citing sources. It was also reported that Russia’s Foreign Minister told the UN Secretary-General that Russia is committed to fulfilling its grain and fertiliser export obligations. Furthermore, the Russian Foreign Ministry said there are no contacts with Canada and Germany via diplomatic channels over Nord Stream 1 turbine issues, according to Reuters.

-Following agreements reached during the January official visit to Moscow by Seyyed Ebrahim Raisi, President of the Islamic Republic of Iran, to further develop and deepen bilateral relations between Iran and Russia, the countries have decided to jointly revive the North-South Transport Corridor. This decision has become particularly relevant against the background of the unlawful sanctions policy pursued by the United States and its Western allies against Russia and Iran, and Tehran’s and Moscow’s desire to establish trade routes that are not linked to the West. In order to implement this decision, Iranian authorities are seeking to revive the recently stalled International North-South Transport Corridor (INSTC) project, which traverses Russian and Iranian territory and the two countries’ waters to connect with Asian export markets. As the Islamic Republic News Agency (IRNA) reported on June 11, in order to implement the International North-South Transport Corridor, the Islamic Republic of Iran Shipping Lines (IRISL) has initiated the transit of cargo from Russia to India or to South Asia through the project, using just one consignment note for the entire transit route.

-Maria Zakharova, press secretary of Russia’s foreign ministry, has said that Russia does not rule out seizing western assets within its borders. Reuters quotes her saying Russia was prepared to “act accordingly” if the west decided to use Russia’s frozen state assets – chief among them being around $300bn of central bank foreign currency reserves. Zakharova, dismissed as a “comedy turn” by the UK defence secretary, Ben Wallace, earlier today, said the use of such funds “will be interpreted by us as an unlawful and defiantly unfriendly attack, giving us the right to take retaliatory actions to protect our interests”. “We should not forget about the foreign assets of western countries, businesses and citizens who are located on the territory of our country,” she said. If the west failed to adhere to the principles of democracy, an open economy, private property and judicial independence, then “we will recognise this and act accordingly”, Zakharova added.

-Ukraine’s president, Volodymyr Zelenskiy, has told Nato leaders in Madrid that it is “absolutely necessary” for countries to support Kyiv “with weapons, finances and political sanctions against Russia”

-Ukraine’s foreign minister Dmytro Kuleba praised Nato for its “clear-eyed stance” on Russia and for inviting Finland and Sweden to join the military alliance.

-Nato leaders have announced a new “strategic concept” in response to Russia’s war against Ukraine, describing Moscow as “the most significant and direct threat to allies’ security and stability”. Nato has invited Sweden and Finland to become members of the military alliance, according to a communique published by the Nato summit in Madrid. Leaders also pledged further help to Kyiv and agreed on a package of support aimed at modernising the country’s defence sector.

-The US will ramp up its forces and equipment across Europe in response to threats from Russia, including creating a new permanent army headquarters in Poland, President Joe Biden said. The US will increase the number of US destroyers based in Spain and send two additional F-35 squadrons to Britain while continuing to boost the number of US forces, air defences and other weapons in Poland, Romania, the Baltic states and other bases across Europe, he added.

-Syria has said it officially recognised the independence and sovereignty of the Russian-controlled territories of Luhansk and Donetsk in eastern Ukraine. The Syrian presidency affirmed its intention to build relations with the two self-proclaimed Donetsk People’s Republic and Luhansk People’s Republic.

-Britain’s prime minister, Boris Johnson, said he would most likely attend this year’s G20 summit even if Vladimir Putin decides to go. Johnson said he would be “absolutely amazed” if the Russian leader attended the November event in Bali in person, but that to boycott the summit would simply “leave the whole argument” to Russia and its allies.

-High hopes had been placed on the indirect talks set to be held in Qatar starting Tuesday between Iran and the United States, which involved the European Union mediating between the two; however after the second day the Iranian side is reporting that talks have already ended without an agreement or any breakthrough. "Indirect talks between the United States and Iran to revive a 2015 nuclear agreement have ended in Qatar without a result, Iran's semi-official Tasnim news agency reported on Wednesday," Reuters reports. Underscoring the importance of the Qatar-hosted talks as a restored nuclear deal still hangs from a thread, and is looking more unlikely than ever at this point, EU foreign policy chief Josep Borrell traveled to Doha to help mediate, after days prior meeting with Iranian officials in Tehran. Most crucially from the viewpoint of the West, lack of progress in these last ditch efforts further means there's no full-scale return of Iranian oil to international markets on the horizon.

-According to a report from CNN, White House officials are "losing confidence" that Ukraine will be able to retake all the territory Russia has captured since it invaded on February 24 as Russian forces continue to make gains in the eastern Donbas region. Unnamed US officials told CNN that President Biden’s advisors have started debating if and how the US should start convincing Ukrainian President Volodymyr Zelensky should change his definition of what "victory" will look like. Zelensky aide Podolyak explains that Ukraine is losing in the war. To get to parity with Russia they need 1,000 howitzers, 300 multiple-launch rocket systems, 500 tanks, 2,000 armored vehicles and 1,000 drones. This gives Ukraine a (small) chance. Otherwise they lose. Zelensky has repeatedly stated that Ukraine’s goal is to drive Russia out of all territory it has captured since it invaded. He also has said he wants to expel Russian forces from Crimea, a territory Moscow has controlled since 2014. But even as the US and NATO are sending more and more heavy weapons to Kyiv, the prospect of Ukraine being able to launch a sufficient counter-offensive does not seem realistic. Ukraine is taking heavy casualties, with officials admitting they are losing between 100 and 200 troops each day. The fact that Russia would have the upper hand in the Donbas was obvious from the start of the war. But after Russian forces withdrew from areas in the north near Kyiv and Chernihiv in early April, Western officials began pushing the narrative that Ukraine can win. But over the past month, the narrative has collapsed as Ukraine is clearly outgunned.

-White House officials are losing confidence that Ukraine will be able to take back all of the land it has lost to Russia and go back to pre-Feb 24 territorial lines, even with the heavier and more sophisticated weaponry the US and its allies plan to send. Since Russia invaded, the Biden administration has shown no interest in diplomacy as a potential solution, and the US’s allies have actively discouraged Ukraine from negotiating.