Russian forces “lost” nine combat aircraft in Crimea and one more in the Zaporizhzhia region, Ukrainian President Volodymyr Zelenskiy said Wednesday in his nightly video address.

His comments came after a blaze in Crimea that Russian state media said resulted in one fatality. Russia’s Defense Ministry said munitions had exploded and the fire was not caused by an incoming strike; some defense analysts said it had the hallmarks of a Ukrainian attack.

Russian oil output is set to fall about 20% by the beginning of next year as a European Union import ban comes into force, according to the International Energy Agency.

Key developments

  • Russia Lost Nine Aircraft in Crimea Base Blasts, Zelenskiy Says
  • IEA Sees Russia Oil Output Down 20% When EU Ban Takes Effect
  • Russia Resumes Oil Flows to Central Europe as Fee Is Paid
  • Russian Inflation Heads for Post-Invasion Low as Shocks Fade
  • Crimea Blast Puts Putin’s Prestige on the Line: Balance of Power
  • How Ukraine’s Loss Might Be Poland’s Gain: New Economy Daily

On the ground

Ukrainian forces said they damaged a bridge near the Kakhovska hydro power station in the Kherson region as they continue to target key Russian logistics links. Fighting continued in eastern and southern Ukraine, with Russian forces mounting ground attacks to the southeast of Siversk and around Bakhmut, as well as to the north and southwest of Donetsk, according to the latest report from the Washington-based Institute for the Study of War . A number of Russian attacks in the east of the country were unsuccessful and their forces later withdrew, the Ukrainian general staff said.

(All times CET)

IEA Sees Russia Oil Output Down 20% (10:53 am)

Russia’s oil output is set to fall roughly 20% by the beginning of 2023 as an EU import ban comes into force, according to the International Energy Agency.

Gradual monthly declines will start as soon as this month as Russia cuts back refining, and will accelerate as the embargo takes effect, the IEA said in a market report. The agency expects to see close to 2 million barrels a day shut in by the beginning of 2023, despite a healthy recovery in production in recent months.

Latvian Lawmakers Label Russia ‘State Sponsor of Terror’ (10:50 am)

Latvia’s parliament has declared Russia a state sponsor of terrorism, calling on EU countries to suspend tourist visas to Russian and Belarusian citizens. Neighboring Lithuania also recognizes Russia as a terrorist state

“Russia has for many years supported and financed terrorist regimes and organizations in various ways,” Latvian lawmakers said in a declaration adopted on Thursday. They cited Moscow’s support for President Bashar al-Assad in Syria, the alleged poisoning of the Skripal family, and the downing of Malaysian Airlines flight MH17, allegedly by a Russian-made surface-to-air missile.

“Russia has now adopted similarly ruthless” tactics in Ukraine, Latvian lawmakers said in the statement.

Ukraine Corn Cargo Finds Buyers in Turkey, Egypt (9:58 am)

The vessel Razoni, carrying corn from Ukraine, is expected to unload its cargo in Turkey and Egypt after initially being stranded after losing its Lebanese buyer.

The ship is expected to unload 1,500 tons at the Turkish port of Mersin for a domestic buyer, and then about 24,500 tons in Egypt.

Zelenskiy Cites Loss of Ten Russian Combat Planes (8:45 am)

Russia lost nine combat planes in Crimea “in just one day,” Ukrainian President Volodymyr Zelenskiy said, the first official indication that a blast at an airbase on the Black Sea peninsula was a deliberate attack. Another plane was lost in the Zaporizhzhia region, he said.

Moscow’s forces “also suffer new losses of armored vehicles, warehouses with ammunition, logistics routes,” Zelenskiy said.

Russian officials have denied Ukrainian strikes caused explosions at the Saky airbase, some 200 kilometers (124 miles) from the nearest front lines. There’s been no response so far to Zelenskiy’s comment.

Wheat Boosted as Traders Weigh Slow Black Sea Shipments (8:31 am)

Wheat prices are rallying off the lowest levels since winter as traders assess the slow pace of Ukrainian and Russian shipments.

“More vessels carrying grain are leaving Ukrainian ports, but it’s not wheat,” Rabobank analysts said in a note. Estimates for Russia to export 40 million tons or more this season appear “increasingly ambitious amid insurance issues and an artificially inflated ruble.”

UK Says Russian Defense Exports Under Pressure (7:20 am)

“Exceptional demand” for its own forces fighting in Ukraine — as well as the impact of Western sanctions — means Moscow will struggle to fulfill some export orders for armored fighting vehicles, the UK said.

“Belarus has recently released details of a new domestically upgraded T-72B main battle tank,” the UK defense ministry said on Twitter. “Belarus probably developed this alternative solution in place of an MBT modification program previously contracted to Russian state-owned company UralVagonZavod.”

Zelenskiy Steps Up Contact With African Leaders (7 am)

Ukraine’s president has increased his contact with African leaders, at a time when the US and Russia are contending for influence there.

“Food security, cooperation in international organizations, economic ties are a range of issues that benefit both our state and African countries,” Volodymyr Zelenskiy said Wednesday in his nightly video address.

Zelenskiy said he spoke Wednesday with Ghana’s president, after speaking earlier in the week with the president of the Republic of Congo and recently with the leaders of Malawi and Guinea-Bissau.

UN Official Cites ‘Tremendous Interest’ in Ukraine Grain (8:42 pm)

A United Nations official working with the center overseeing Ukraine’s grain shipment corridors said there’s “tremendous interest” from shipowners.

Shipowners were waiting for operating procedures to be released and now that they are published, “we’re expecting to see a big uptick in applications for transit,” Frederick Kenney said in a virtual briefing from Istanbul.

Ukraine Suggests Russian Smokers Caused Crimean Blast (6 pm)

Ukraine’s defense minister deflected questions about the massive fire at an airbase in Crimea, suggesting it was caused by Russian soldiers smoking there.

“It’s a dangerous place, they shouldn’t smoke there,” Oleksiy Reznikov said in response to questions at a news conference in Copenhagen, declining to answer whether Ukrainians were involved in the incident.

A number of Ukrainian officials have posted memes or comments on social media about Russia’s explanation of safety issues leading to the blast, including jokes about the dangers of smoking near explosives.

Ukraine Wins Bondholder Approval to Freeze Debt Payments (5:30 pm)

Ukraine won approval for a debt-payment freeze from the holders of its international bonds, gaining some budget relief in the wake of Russia’s invasion.

Investors representing around 75% of $19.6 billion worth of Ukraine’s foreign bonds agreed to defer coupon and principal payments until 2024, the Finance Ministry in Kyiv said on Wednesday.

Russian Oil Flows Resume to Central Europe (3:40 pm)

Russia resumed oil flows towards Ukraine through a pipeline to central Europe after Hungary’s sole refiner stepped in to resolve a problem over the payment of a transit fee.

The flows toward the southern leg of the Druzhba link are going as planned, Transneft PJSC spokesman Igor Dyomin told Bloomberg.

Ukraine Hopes to End ‘Active’ War Phase Before Cold (3:35 pm)

The Ukrainian president’s chief of staff says it is critical to finish the active phase of the war before cold weather sets in, Interfax reports.

The risk of Russian attacks on power and heat infrastructure remains, Andriy Yermak said in an interview with the news agency. Russia’s army continues its attacks on infrastructure and Ukraine seeks to “take maximum steps to finish the active phase of the war by the end of August.”

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