The Washington Post - USA (2022-05-25)

A12 EZ SU THE WASHINGTON POST.WEDNESDAY, MAY 25 , 2022

War in Ukraine

Russian blockade p oses threat to global security, experts warn

halted civil maritime traffic, “en-
trapping Ukrainian agricultural
exports and jeopardizing global
food supplies,” according to a U.S.
official, who spoke on the condi-
tion of anonymity to describe the
intelligence.
“The impact of Russia’s actions
cannot be understated as
Ukraine’s seaborne exports are
vital to global food security,” the
official stated. “Ukraine provides
about 10 percent of the world’s
wheat exports, and the vast ma-
jority of those exports — approxi-
mately 95 percent in 2020 —
departed via Black Sea ports.”
In recent days, world leaders
have warned that Russia’s block-
ade poses one of the most dire
threats to global stability since the
war began. Ukraine is a global
food basket. The country is the
world’s largest exporter of sun-
flower oil, the fourth-largest ex-
porter of corn and the fifth-largest
exporter of wheat.
Speaking Tuesday at the World
Economic Forum in Davos, Swit-
zerland, European Commission
President Ursula von der Leyen
said 20 million tons of wheat are
struck in Ukraine. Russia has
deliberately bombed Ukrainian
grain warehouses and is “hoard-
ing its own food exports as a form
of blackmail,” she said, “holding
back supplies to increase global
prices, or trading wheat in ex-
change for political support. This
is using hunger and grain to wield
power.”
Politically fragile countries are
especially vulnerable, von der
Leyen said, noting that bread
prices in Lebanon have increased
by 70 percent and food shipments
from Odessa to Somalia have
stopped because of Russia’s ac-
tions.
Secretary of State Antony
Blinken echoed the grim assess-
ment last week in remarks at the
United Nations, calling Russia’s
blockade “a deliberate effort” to
destabilize the world’s food sup-
ply.
Since Russia issued a warning
to mariners in February that sig-
nificant areas of the Black Sea
were closed to commercial traffic,
“the Russian military has repeat-
edly blocked safe passage to and
from Ukraine by closing the
Kerch Strait, tightening its con-
trol over the Sea of Azov, station-
ing warships off Ukrainian ports.
And Russia has struck Ukrainian
ports multiple times,” Blinken
said.
“The food supply for millions of
Ukrainians — and millions more
around the world — has quite
literally been held hostage by the
Russian military,” he said.
For weeks, Ukrainian President
Volodymyr Zelensky has called on
Western powers to break the
blockade. In his remarks to the
Davos forum, Zelensky said Rus-
sian forces were blocking Ukraine
from exporting 22 million tons of
grain, sunflower and other foods,

UKRAINE FROM A

which were “rotting” in Ukraine. “If we do not export [grain] in the coming months, if there are no political agreements with Russia through intermediaries — there will be famine, there will be a catastrophe, there will be a deficit, there will be a high price,” Zel- ensky warned. But Western powers have few options for ending the Russian blockade. The United States has no vessels in the Black Sea, Gen. Mark A. Milley, chairman of the Joint Chiefs of Staff, told reporters at a news conference Monday at the Pentagon. The Biden administration has steadfastly resisted any direct military involvement in the war. Ukraine has focused on pre- venting an amphibious assault by Russian forces into key coastal cities and areas, which could help Russia to solidify its control in the east of the country, where Mos- cow has concentrated its energy after failing to capture the capital, Kyiv, and other key cities in central Ukraine. “Right now it’s a bit of a stale- mate [in the Black Sea region] between the Ukrainians wanting to make sure that there’s not any sort of amphibious landing against Odessa,” a key strategic port, Milley said. The area has become “a no-go-zone for commercial shipping,” he said. The Ukrainian military has notched some notable successes against the Russian navy, sinking the Black Sea flagship Moskva, with some assistance from intelligence provided by the United

States. But those strikes have been insufficient to reopen Ukrainian ports. The European Commission has proposed exporting Ukraine’s wheat and other grains by rail, road or by river. But it’s unclear how allied forces could protect those shipments from Russian assault. Denmark plans to send Har- poon anti-ship missiles and a launcher to Ukraine, which could help pierce the blockade and get food exports flowing again. But it may take months to train Ukraini- an military personnel on how to use the weapons and integrate them into the country’s coastal defenses, according to military experts. “Even before Russia’s full-scale invasion of Ukraine, 2022 was forecast to be the most food-inse- cure year on record globally, making supply from Ukraine even more critical,” Michael Carpenter, the U.S. ambassador to the Or- ganization for Security and Coop- eration in Europe, said in remarks last week in Vienna. Carpenter cited Ukrainian government reports that Russian forces had stolen 400,000 tons of Ukrainian wheat, as well as farm equipment, which was shipped back to Russian territory. He said Russian forces had also destroyed roads, railways and rail stations needed to transport products for export, in addition to its blockade of seaports. “As a result of Russia’s aggres- sion, global food shortages are increasing and food prices are rising, exacerbating suffering and

hardship for millions of vulnerable people across the globe,” Car- penter said, noting a World Food Program estimate that the war could drive 47 million additional people worldwide “into acute food insecurity.” Commercial satellite imagery appears to confirm some of Car- penter’s and the Ukrainian government’s allegations. Photos tak- en last week and published by Maxar Technologies showed Rus- sian ships loading grain at Sevas- topol, a port in Russian-occupied Crimea. Russian officials have denied they are attempting to cut off Ukrainian exports and blamed Western sanctions for disruptions to global food supplies. “These bans destroyed in a day, long-term, convenient, comfort- able transport and logistics chains,” Russian Foreign Minister Sergei Lavrov said in remarks in Oman earlier this month. Offering no evidence to support his claims, Lavrov accused Ukrainian authorities of refusing to let “dozens of vessels leave their ports, including those that deliver wheat to various parts of the world. They have even closed their ports by mining the exit ways, making it impossible for these vessels to leave.” The Middle East Institute, a nonpartisan think tank in Wash- ington, accused Russia last week of violating an international agreement that allows Turkey to regulate transit of warships during times of war through the Turkish Straits, which connects the Black and Aegean seas.

Turkey triggered the Montreux Convention four days after Russia invaded Ukraine, which prevent- ed Russia from bringing more warships to the Black Sea, but Moscow circumvented the agreement by using merchant vessels — which are not prohibited from the waterways — to supply its military operations in Ukraine, the institute found, citing an analysis of naval traffic. The report also accused Russia of stealing Ukrainian grain “on an industrial scale” and using the profits to fund its war. “It is absurd that Russia has been allowed to weaponize commercial trade by illegally blockad- ing the Odessa and Chornomorsk harbors, while also profiting from the sale of stolen Ukrainian grain, exported from an occupied Ukrai- nian port,” the report’s authors wrote. As the war entered its fourth month, there was little sign that the Zelensky administration or the Ukrainian people were prepared to negotiate an end that resulted in loss of Ukrainian territory. A poll by the Kyiv International Institute of Sociology found that 82 percent of Ukrainians are not prepared to give up any land, even if it means the war continues. Only 10 percent said they be- lieved that giving up land was worth ending the conflict. Eight percent were undecided.

Andrew Jeong in Seoul and Karen DeYoung, Karoun Demirjian and Timothy Bella in Washington contributed to this report.

OBTAINED BY THE WASHINGTON POST A map based on declassified intelligence and released by the U.S. government shows Russian naval operations in the Black Sea this year.

BY CHICO HARLAN AND STEFANO PITRELLI

rome — European energy com-
panies appear to have bent to
Russian President Vladimir Pu-
tin’s demand that they purchase
natural gas using an elaborate
new payment system, a conces-
sion that avoids more gas shut-
offs and also gives Putin a public
relations victory while continu-
ing to fund his war effort in
Ukraine.
The system, which involves the
creation of two accounts at Gaz-
prombank, enables Europe to say
it is technically paying for natural
gas in euros, while Russia can say
it is receiving payment in rubles
— a requirement Putin imposed
on “unfriendly” nations.
Putin’s insistence on rubles
may be more about forcing Euro-
pean countries to scramble at his
behest than about shoring up his
country’s currency, some econo-
mists and energy experts suspect.
European Union countries have
been touchy about the notion
they might violate their sanctions
on Russia, and questions about
the arrangement tested Euro-
pean unity, leading to weeks of
chaos and contradictory guid-
ance from Brussels. It also got
countries talking about how
much they still need Russian gas,
even as they debate a Russian oil
embargo.
In the short term, they are
willing to jump through some

hoops to avoid an energy crisis. But that also means sending money to Russia even as they condemn the Kremlin-launched war, sanction oligarchs and supply weapons to Ukraine. Russia had already used strict capital controls and a massive interest rate hike to stabilize the ruble. With Europe now signaling that it will use the payment system as bills come due this week, the currency is strengthening all the more. Under the new billing system, gas payments will continue to be invoiced and sent in euros. The noteworthy change is that Russia will then take the money from the European energy company’s euro account, convert the euros into rubles, transfer the money into a special ruble account also belong- ing to the energy company, and then take the money once and for all. “This is a transaction where everybody saves face,” said Ales- sandro Lanza, a professor at Rome’s LUISS University and a former economist at Eni, Italy’s major energy company. A broad European refusal to adjust its payment terms to Gaz- prom, the Russian state-owned energy giant, would have pushed prices even higher for consumers and potentially led to rationing measures across the bloc. Two European Union members — Po- land and Bulgaria — had their supplies cut in late April by Gaz- prom after refusing to go along with the new system, in what Poland’s prime minister called a “direct attack.” Finland this week was subject to a similar cutoff, as retaliation for its NATO applica- tion.

But most European countries have appeared to go a different route, moving away from rhetoric about refusing to be blackmailed and making peace with an arrangement based on the techni- calities. “Timely payment for the received gas deliveries from Russia is ensured,” said a statement from OMV, the Austrian oil and gas company. Along the way, many European policymakers have been confused about the arrangement — both the fine points and whether Rus- sia might stand to gain anything meaningful. As such, the Euro- pean Union’s own guidance on how countries should proceed has been vague. As recently as last week, Eric Mamer, the European Commis- sion’s chief spokesman, said opening an account for rubles would constitute a breach of sanctions. A day later, Paolo Gentiloni, Europe’s economic minister, seemed to give the new payment scheme an all-clear. Paying in rubles would constitute a sanctions violation. “But this is not what is happening,” he said. In recent interviews, Italian officials familiar with the deal said they believe there are clear reasons the new arrangement does not breach European sanctions. While Europe has prohibited all transactions with Russia’s central bank, the conversion process does not involve the central bank — something Eni has received assurances of in writing, according to one person familiar with the deal who spoke on the condition of anonymity because they were not authorized to speak

about it publicly. That person said that even if a European company were to pay directly in rubles, it would not violate sanctions. “The ruble itself is not sanc- tioned,” the person said. In theory, a strengthening currency gives Russians more buying power abroad — a big advantage in normal times. But that advantage is diminished because Rus- sians have become so isolated amid the war from the global financial system. While Eni said directly that it was opening an account for the ruble conversion, OMV said more vaguely that it was opening a “conversion account.” The company would not comment when asked if the account was for rubles. Uniper, a Germany-based energy company, said in a statement: “We opened the necessary account at Gazprom bank in Rus- sia ... but will continue to pay in euros in line with the new payment mechanism.” Alexander Novak, Russia’s dep- uty prime minister, said last week that “about half” of Gazprom’s 54 foreign clients have opened ruble accounts. An account of Novak’s comments from the Tass news agency did not say how many of those 54 were from countries considered adversarial. Roberto Perotti, an economist at Bocconi University in Milan, said there appears to be only “political value” in forcing Euro- pean companies to open a ruble account, with Putin proving that he can set the terms with E.U. nations. Russia, he said, could have ended up with an identical bottom line by accepting the euros and converting them on the

exchange market. But such a transaction would have gotten scant public attention. Without immediate and sharp cuts to its energy supply, Europe has bought itself some time to ramp up its storage for peak demand periods next winter. There is still a chance that the Kremlin could retaliate. The draft conclusions compiled for an up- coming European Council sum- mit suggest countries will agree to prepare for the possibility of “major supply disruptions.” That would mean bolstering procure- ment from other non-E.U. countries and also creating deals to share supplies within the bloc. Europe has tried to wean its dependence on Russian fossil f uels, first with an embargo of coal. A more ambitious plan to phase out oil imports, while sup- ported by most E.U. nations, has so far been held up by countries that remain dependent on Rus- sian oil, most notably Hungary. Gas is the most significant question looming for the conti- nent because 40 percent of the gas burned in Europe comes from Russia. The European Union has said it is committed to reducing Russian gas by two-thirds by the end of the year, but it has not followed the United States in creating an outright ban on imports. At least in the short term, said Alessandro Pozzi, an equities analyst at Mediobanca who follows the energy industry, “Europe will likely have to continue paying Putin for his gas.”

Emily Rauhala and Quentin Ariès in Brussels, Loveday Morris in Berlin and Rick Noack in Paris contributed to this report.

Europe concedes to Putin’s demands on gas payment system

Setup allows Russia to say it i s enforcing new ruble requirement

BY ANDREW JEONG

Denmark’s plan to send Har- poon anti-ship missiles and a launcher to Ukraine would pro- vide Kyiv with an advanced weapon that can poke a hole in Russia’s naval blockade, potentially allowing for the resump- tion of grain exports via the Black Sea. But it may take months for the Ukrainian military to be trained to use the weapons and to integrate them into the country’s coastal defense systems, military experts said, indicating that the missiles will not be an instant game changer. The United States developed Harpoon missiles during the Cold War. They are highly versa- tile and can be fired from surface ships, submarines, aircraft and land-based launch vehicles. U.S. Defense Secretary Lloyd Austin did not specify what vari- ant Copenhagen had offered to send, but a 2013 guide to the missile system by manufacturer Boeing states that coastal defense systems use the land-based option. Austin praised Denmark for the Harpoon contribution after a Ukraine Defense Contact Group meeting on Monday. Copenha- gen has not publicly commented on the arms shipment, and the Danish Defense Ministry did not immediately respond to a re- quest for comment. The Harpoons — which can cost upward of $1 million per unit — are precision-guided ar- maments that require GPS coor- dinates to strike. Kyiv could use intelligence provided by NATO assets for targeting, said Alexey Muraviev, an expert on the Rus- sian military at Australia’s Cur- tin University. There is precedent for such assistance. Washington provided Kyiv with maritime intelligence that helped it sink the Russian Black Sea Fleet flagship, Moskva, in April, which created “more than a huge problem” for Moscow, he said. Malcolm Nance, a Navy vet- eran and former MSNBC analyst who volunteered to fight in Ukraine’s military last month, said on Twitter that Ukraine could use its Turkish-designed Bayraktar TB2 drones to support targeting. Some experts suggested that Russia might see such moves as escalation by NATO, but Nance played down that risk. “What are they gonna do. Invade Ukraine?” he wrote. One obstacle for Ukraine is the difficulty of integrating the U.S.-designed missiles into its coastal defense systems, which are built with Soviet technology, said Muraviev. He said it could take months before the Harpoons were de- ployed against the Kremlin’s Black Sea Fleet. The Harpoons have been com- pared to Javelins, antitank weapons that Ukrainian troops have used to great effect against Rus- sia. They are also part of the arsenal of Taiwan, the self-gov- erning East Asian island that has a contract to buy hundreds of millions of dollars’ worth of the weapons from Boeing. Some par- allels have been drawn between Russia’s invasion of Ukraine and the threat that Taiwan faces from China, its much larger, nuclear- armed neighbor. If Kyiv’s forces are properly trained and the missiles are correctly integrated into its plat- forms, the Harpoons may force Russian ships to stay away from Ukrainian coastlines. That could mean a boost in the fight against global hunger: Ukraine was one of the world’s largest exporters of wheat and corn in 2020, and a weakening of the Russian blockade could increase the world’s food supply and bring down prices. But Muraviev warned that Russia was likely to react to Ukrainian use of Harpoons, per- haps by intensifying efforts to take Odessa, a major Black Sea port that is still under Ukrainian control. That would force Ukraine’s fighters farther inland and away from Russian ships. Moscow may also rely more on its submarines because the Har- poons are designed primarily to hit surface ships, he said.

Denmark offers

to send missiles

to fight Russia’s

naval blockade

It could take months for training on the weapons and their integration

The Washington Post - USA (2022-05-25)

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