6 Highlights From This Week

1. Lavrov proclaims expansion of Russia’s territorial ambitions in Ukraine, Putin has Odesa in his sights: "Now, the geography is different. And it is not only [the Donbas] but also the Kherson region, the Zaporizhzhia region and a number of other territories, and the process continues, and it continues consequently and persistently," Lavrov said. Western officials told FP they believe that Putin will likely launch another major offensive in Ukraine early next year to seize the country’s southwestern coast and cut off Ukraine from the sea. 
2. Milley sees a slow Russian offensive in eastern Ukraine: “For 90 days, the Russian advances have amounted to maybe six to 10 miles... [which] is not very much,” Chairman of the U.S. Joint Chiefs of Staff Army Gen. Mark Milley said after attending a Ukraine Defense Contact Group along with U.S. Defense Secretary Lloyd Austin. Austin said he believes the war has entered a “critical phase,” while Milley sees “a grinding war of attrition” continuing. Meanwhile, Ukraine is gearing up for its own offensive to regain territory along its southern coast, according to WSJ.
3. Burns believes Putin attacked Ukraine while he could: Putin “had convinced himself strategically that the window was closing for his ability to control Ukraine,” CIA director William Burns told the Aspen Security Forum on July 20. “He is convinced that his destiny as Russia’s leader is to restore [it] as a great power. He believes the key to doing that is to recreate a sphere of influence in Russia’s neighborhood,” Burns said of the Russian leader. “Putin’s bet is that he can succeed in the grinding war of attrition,” he said.
4. Zelensky fires prosecutor, security chief over wide-spread treason: Ukrainian President Volodymyr Zelensky ousted on July 17  the head of Ukraine’s state security service (SBU), Ivan Bakanov, and the country’s chief prosecutor, Iryna Venediktova, on the grounds that 60 staff belonging to the two law enforcement agencies had “remained in the occupied territory and are working [with Russia] against our state.” In total, 651 criminal proceedings had been opened for “treason and collaboration activities,” Zelensky was quoted by FT as saying. Alleged traitors include the senior officer of the SBU’s Kherson branch, Ihor Sadokhin, who reportedly provided information to Russian forces heading north from Crimea on the locations of Ukrainian mines and helped coordinate a flight path for the enemy’s aircraft, according to Politico.
5. Moscow and Kyiv clinch a grain exports deal that would save lives around the world: Russia and Ukraine signed separate agreements on July 22 with Turkey and the U.N. clearing the way for exporting millions of tons of desperately needed Ukrainian grain via the Black Sea—as well as Russian grain and fertilizer, according to the AP. The deal, if implemented,  would enable Ukraine to export 22 million tons of grain and other products in what would be “nothing short of lifesaving” for the population of poor nations, according to the Red Cross.
6. Russian officials slash prediction of GDP decline in 2022 by half: Russian officials said the economy is likely to contract between 4% and 6% this year, having forecast in April a decline in output of between 8% and 10%. But it said the contraction will extend into next year, when GDP could fall by as much as 4%, according WSJ.

 

I. U.S. and Russian priorities for the bilateral agenda

Nuclear security and safety:

• Ukraine's atomic energy agency accused Russia of using the Zaporizhzhia nuclear plant to store weapons and shell the surrounding regions of Nikopol and Dnipro that were hit on Saturday. Russians have stationed 500 troops at the Zaporizhzhia nuclear power plant and heavy weapons within the perimeter—in breach of international energy conventions—and are using the reactor blocks to protect against retaliatory fire. (FT, 07.22.22, MT/AFP, 07.16.22)
• Russia has decommissioned the world’s largest nuclear ballistic missile submarine, The Dmitry Donskoy. (MT/AFP, 07.20.22)

North Korea’s nuclear and missile programs:

• North Korea could send builders to eastern Ukraine’s separatist regions to aid in their “reconstruction” after they have been devastated by months of war, Russia’s Ambassador to Pyongyang said. (MT/AFP, 07.19.22)
• Russia has no information indicating that North Korea might be preparing for a nuclear test, the Russian Ambassador in Pyongyang said. (Interfax, 07.20.22)

Iran and its nuclear program:

• A senior adviser to Iranian Supreme Leader Ayatollah Ali Khamenei says the country is capable of making a nuclear weapon but a decision whether to do so has not yet been made. Kamal Kharrazi's comments to Al-Jazeera TV on July 17 came after U.S. President Joe Biden vowed on a trip to Israel and Saudi Arabia that Washington would prevent Iran from "acquiring a nuclear weapon." (RFE/RL, 07.18.22)
• Russian President Vladimir Putin met with Khamenei and Iranian President Ebrahim Raisi in Tehran, and then with Turkish President Recep Tayyip Erdogan. Khamenei said the West did not want Russia to be strong, describing the United States as "cunning" and NATO as "dangerous.” "As regards Ukraine, if you did not take the initiative, the other side would have initiated the war," Khamenei said. (WP, 07.20.22)
• The White House said it gathered intelligence that Russian officials recently visited an airfield in Iran twice to examine drones they are considering acquiring for the Kremlin's war in Ukraine. (WP, 07.16.22)
  • “Russians and Iranians [who are discussing deliveries of Iranian UAV’s to be used by Russia in Ukraine] need each other right now ... [but] they don’t trust each other, given that they’re energy rivals and historical competitors ... there are limits to the ways in which they are going to be able to help each other,” CIA Director William Burns told the Aspen Security Forum July 20. (Aspen Security Forum, transcribed by RM, 07.21.22)

Humanitarian impact of the Ukraine conflict:

• The U.K. expressed its “deep concern” at reports on July 15 that British aid worker Paul Urey has died in captivity in the Donetsk People’s Republic and summoned the Russian ambassador for talks. (FT, 07.15.22)
• There are four filtration centers in Mariupol occupied by Russian troops and its environs, according to the mayor of the city, Vadym Boychenko. According to the official, more than 10,000 people are being held in the centers, primarily civil servants and municipal workers. Boychenko said that there are no doctors there, so the prisoners do not receive medical care. (Meduza, 07.19.22)
• In February, American nuclear physicist John Spor, received a predawn call from a senior U.S. military officer urging him to immediately leave the Ukrainian city of Mariupol. Spor's escape from behind enemy lines represents a handful of the most dangerous cases of rescued Americans to have emerged so far. (WSJ, 07.19.22)
• Russia and Ukraine signed separate agreements on July 22 with Turkey and the U.N. clearing the way for exporting millions of tons of desperately needed Ukrainian grain via the Black Sea—as well as Russian grain and fertilizer, according to the AP. The deal, if implemented,  would enable Ukraine to export 22 million tons of grain and other products in what would be “nothing short of lifesaving” for the population of poor nations, according to the Red Cross. (AP, 07.22.22) 
  • Ukraine’s farmers will plant up to two-thirds less wheat later this year if the country’s main export route (the Black Sea) is still blocked. Although only 75% of Ukraine’s arable land was sown this year, the government expects the total arable harvest to be 10% larger than forecast a few months ago, at 60 million tons, thanks to good growing conditions. (FT, 07.21.22, FT, 07.19.22)
• Human Rights Watch says both Russia and Ukraine must avoid placing military bases in civilian areas during combat operations without relocating the residents first. (RFE/RL, 07.21.22)
• Ihor Terekhov, the mayor of Kharkiv, said one of the most densely populated areas of Ukraine's second-largest city was being shelled, while the regional governor said two people had been killed and 19 wounded. Russian forces also bombarded a residential area of Nikopol, a city south of Zaporizhzhia, killing at least two civilians and wounding nine others overnight, including several children. Russia denies targeting civilians. (RFE/RL, 07.22.22)
• The Office of the U.N. High Commissioner for Human Rights reports that from Feb. 24 to July 17 there have been 6,687 civilian casualties (3,002 killed and 3,685 injured) in the Donetsk and Luhansk regions. Of those, 1,160 casualties (236 killed and 924 injured) on territory controlled by Russian armed forces and affiliated armed groups. (OHCHR, 07.18.22)

Military and security aspects of the Ukraine conflict and their impacts:

• Russian Defense Minister Sergei Shoigu inspected the positions of the East group of Russian forces in Ukraine on July 18. During the inspection, Shoigu called for prioritizing the destruction of Ukraine’s long-range rocket and artillery weapons from which "residential areas in the Donbas are being shelled.” On July 16 Shoigu inspected the South and Center groups of forces, ordering them to target the long-range missiles and artillery recently supplied by Western countries. For the first time, the Russian Defense Ministry has named the commander of the Zapad grouping of forces in Ukraine: Andrei Sychevoi. (thetimeshub.in, 07.20.22, Meduza, 07.18.22, WSJ, 07.18.22, RFE/RL, 07.16.22)
• New data from the Kiel Institute for the World Economy shows the U.S. has delivered 2.4 billion euros worth of weapons to Ukraine, compared to Germany’s 290 million euros and France’s 290 million euros. Taken as a whole, the West is providing Ukraine “just enough” weaponry “to survive, not enough to regain territory,” said Ulrich Speck, a German foreign-policy analyst. “What countries send and how slowly they send it tells us a lot about the war aims of Western countries,” he added. (NYT, 07.15.22)
• Russia is using private military contractor Wagner to beef up its frontline forces in its invasion of Ukraine, British military intelligence said on July 18. (RFE/RL, 07.18.22)
• Ukrainian President Volodymyr Zelensky said 1,028 settlements in Ukraine had been liberated from Russian forces, and another 2,621 are still under Russian control. (RFE/RL, 07.19.22)
• U.S. Chairman of the Joint Chiefs of Staff Army Gen. Mark A. Milley said: “[F]or 90 days, the Russian advances have amounted to maybe six to 10 miles, something of that range. It's not very much. It's very intense, a lot of violence, tens of thousands of artillery rounds every 24-hour period, lots of casualties on both sides, lots of destruction … But in terms of actual ground gain, very, very little by the Russians, relative to all of Ukraine. … The Ukrainians are making the Russians pay for every inch of territory that they gain. … [A]dvances are measured in literally hundreds of meters … some days, you might get a kilometer or two out of the Russians, but not much more than that.” (Defense.gov, 07.20.22)
• Milley said: “[U]nless there's a breakthrough, it'll probably continue as a grinding war of attrition for a period of time until both sides see an alternative way out of this, perhaps through negotiation or something like that.” (Defense.gov, 07.20.22)
• U.S. Defense Secretary Lloyd Austin said: “You know, this is a critical phase of the conflict.” (Defense.gov, 07.20.22)
• Milley said: “[I]n the Russian-occupied areas, you have significant resistance behind Russian lines, so to speak.” (Defense.gov, 07.20.22)
• British Foreign Secretary Liz Truss, one of the final two candidates to take over as prime minister after the departure of Boris Johnson, says she does not support sending British soldiers to Ukraine to help fight against Russia. (RFE/RL, 07.21.22)
• MI6 chief Richard Moore said Russia was “about to run out of steam” in Ukraine, giving the country’s military a chance to strike back in the conflict he described as a “strategic failure” for Putin. “The Russians will increasingly find it difficult to supply manpower and material over the next few weeks. They will have to pause in some way and that will give the Ukrainians opportunities to strike back,” he said. (FT, 07.21.22)
• Gen. Charles Brown Jr., chief of staff of the U.S. Air Force, said July 20 that the Biden administration is discussing how to reinforce Ukraine's jet fighter fleet, including with new planes. Speaking at the Aspen Security Forum, he said additional jets for the Ukrainians could come from a range of different allies. "There's a number of different platforms that could go to Ukraine. … It'll be something non-Russian. I could probably tell you that," Brown said. "But I can't tell you exactly what it's going to be." (WSJ, 07.21.22)
  • Milley said: “On the flight training, yes, we—as you know we look at all kinds of options to present to the secretary and the president. And there's been no decisions on any of that, but we do examine a wide variety of options, to include pilot training.” (Defense.gov, 07.20.22)

• Zelensky proposed removing the head of Ukraine’s state security service Ivan Bakanov and the country’s chief prosecutor Iryna Venediktova on July 17 over allowing alleged treachery and collaboration by scores of their officials with Russian forces in occupied territories, according to FT. Announcing the sackings, Zelensky said more than 60 staff belonging to the two agencies had “remained in the occupied territory and are working against our state,” FT reported. In total, 651 criminal proceedings had been opened for “treason and collaboration activities." Zelensky said the fired officials hadn't been aggressive enough in pursuing pro-Russia sympathizers and suggested there were many more Ukrainians who were also disloyal, according to WP. Ukraine's parliament approved Zelensky’s proposal to fire Venediktova and Bakanov, according to RFE/RL. (RM, 07.22.22)
  • Ukrainian officials say Moscow established a network of agents inside the 28,000-strong SBU that it wanted to exploit to aid the seizure of major cities once war began, according to WSJ.
  • Figures in Ukraine's military and political establishments have raised questions as to how, in the first days of the war, Russian forces managed to speed across a bridge into the city of Kherson that was believed to be mined in an effort to bar the Russians' access, according to WSJ.

• • Serhiy Kryvoruchko, head of Kherson’s SBU directorate, is alleged to have ordered his officers to evacuate the city against the president’s orders, according to  FT.
  • Col. Ihor Sadokhin, head of the Kherson SBU office’s Anti-Terrorist Center, allegedly provided information to Russian forces heading north from Crimea on the locations of Ukrainian mines and helped coordinate a flight path for the enemy’s aircraft, according to Politico.
  • Local officials in Kherson switched sides, and explosives were removed from bridges around the city, an opposition member of Parliament said, according to NYT.
  • Ukrainian authorities charged three senior officials from the SBU’s Kherson region with treason last month after Russian forces swept through the territory, meeting little resistance, according to FT.
  • Russian sympathizers are reporting the locations of Ukrainian targets like garrisons or ammunition depots, Ukraine’s officials say. One official said collaborators had removed explosives from bridges, allowing Russian troops to cross, according to NYT.
  • Priests have sheltered Russian officers and informed on Ukrainian activists in Russian-occupied areas, according to NYT.
• The head of Britain’s armed forces, Adm. Tony Radakin, said Russia has lost some 50,000 killed or wounded soldiers in its invasion of Ukraine and nearly 1,700 tanks have been destroyed. (RFE/RL, 07.18.22)
• “The Russians have retreated to a more comfortable way of war in a sense by using their advantages in long-range firepower ... the Russians are able to make very slow progress in those areas ... but the Ukrainians’ will remains quite strong. … Putin’s bet is that he can succeed in the grinding war of attrition,” Burns told the Aspen Security Forum in reference to Russian and Ukrainian casualties. (Aspen Security Forum, transcribed by RM, 07.21.22)
• A senior U.S. defense official said on July 22 that Washington believes Russia is sustaining hundreds of casualties every day in its war in Ukraine and has lost thousands of lieutenants and captains since the start of the invasion. In addition, hundreds of colonels and many Russian generals had been killed as well, Reuters quoted the officials as saying. (RFE/RL, 07.22.22)
• In the Zaporizhzhia region, the exchange of bodies of the dead military between Russia and Ukraine took place according to the formula "45 to 45." (Meduza, 07.19.22)
• Since February, at least 1,793 military personnel from 22 regions of Russia have refused to participate in the war with Ukraine, according to the calculations of the Verstka publication. (Meduza, 07.22.22)
  • At least 300 soldiers from a single unit in Russia’s North Caucasus refused deployment to Ukraine in the first month of the war, The Moscow Times’ Russian service has reported. The men from the republic of Dagestan were deployed in the pro-Russian separatist region of Donbas in eastern Ukraine, according to activists cited by MT Russian. (MT/AFP, 07.19.22)
  • Russian contract soldiers who refused to continue fighting in Ukraine say their military commanders aren’t allowing them to return home and are using threats and intimidation to force them back to the battlefield. A group of servicemen of the 11th Guards Air Assault Brigade—a military unit from the Siberian republic of Buryatia deployed in Ukraine since the early days of Russia’s invasion—put in their resignations earlier this month. (MT/AFP, 07.21.22)
• “It’s always a range and you know there is no perfect number. I think the latest estimates from the U.S. intelligence community would be something in the vicinity of 15,000 killed and, maybe three times that wounded... the Ukrainians have suffered as well, probably, a little less than that,” Burns told the Aspen Security Forum. (Aspen Security Forum, transcribed by RM, 07.21.22)
• Earlier this week, the Pentagon said it would provide Ukraine with four additional high-mobility artillery rocket systems in the latest weapons package. (RFE/RL, 07.22.22)
• Ukrainian forces have been successfully repelling repeated Russian assaults on the Vuhlehirsk power plant while Moscow continued to relentlessly shell the cities of Kramatorsk and Siversk, British military intelligence said July 22. The Ukrainian military said July 22 that the main efforts of the Russian army in the eastern Donetsk region are concentrated in the Kramatorsk and Bakhmut directions. (RFE/RL, 07.22.22)
• Ukraine has “significant potential” to advance its forces on the battlefield and needs to increase the intensity of its attacks on Russian forces, Zelensky said in his nightly address on July 21. (RFE/RL, 07.22.22)
• Zelensky noted that several members of the U.S. Senate have proposed a resolution recognizing Russia's aggression against Ukraine as genocide. He said it was the first result of the visit of his wife, Olena Zelenska, to Washington this week. “Russia is destroying our people,” Zelenska said in an address to Congress on July 20, one day after meeting with Jill Biden at the White House. (RFE/RL, 07.22.22, NYT, 07.20.22)
• Ukraine is gearing up for a broader counteroffensive to regain territory along its southern coast that was seized by Russia in the early days of the invasion. As part of preparations this week, Ukrainian forces struck a strategic bridge linking Russian-occupied Kherson with other Russian-held areas in the south. (WSJ, 07.22.22)
• The Biden administration has so far held off on approving a Ukrainian request for long-range armed drones, concerned that the aircraft and its highly-sensitive technology could wind up in Russian hands if Ukrainian forces are overwhelmed. (WSJ, 07.22.22)
• Western officials believe that Russia will likely begin another major offensive in Ukraine early next year, including a possible effort to advance on the blockaded strategic port city of Odesa, in an effort to seize the country’s southwestern coast and cut off Ukraine from the sea. (FP, 07.22.22)
• Major Combat Operations Statistical Model, mcosm, developed by engineers at the Naval Postgraduate School in Monterey, California. mcosm runs algorithms based on data about 96 battles and military campaigns fought between the closing year of the first world war and the present day. When fed information about Russia’s initial push to seize Kyiv and subjugate Ukraine, which began on Feb. 24, the model predicted, on a scale of one to seven, “operational success” scores for the attacker and defender, respectively, of two and five. (The Economist, 07.20.22)
• Milley says Russia hasn't destroyed any of the HIMARS artillery the U.S. has given to Ukraine. His statement contradicted several claims by Russian officials and media outlets that Russia has destroyed some of the prized weapons. (Business Insider, 07.22.22)

Punitive measures related to Ukraine and their impact globally:

• U.S. Treasury Secretary Janet Yellen said on July 16 that progress was made on a potential cap on Russian oil prices in talks on the sidelines of the summit of the G20 finance ministers. (RFE/RL, 07.16.22)
  • Yellen personally pitched the idea of price caps on Russian oils to officials in the Chinese and Indian governments, who were noncommittal, according to a Treasury official. In internal analyses, Treasury staff found such a move could cause the price of oil to soar past $150 per barrel and keep rising, two people said. (WP, 07.18.22)
  • The United States hopes to see a global price cap on Russian oil introduced by December, U.S. Deputy Treasury Secretary Wally Adeyemo said on July 20. (Reuters, 07.21.22)
  • Russia will stop supplying oil to the world market if a price ceiling is introduced on it, Russian Deputy Prime Minister Alexander Novak said. (Meduza, 07.20.22)
• Four of Russia's highest-profile oligarchs, Roman Abramovich, Alisher Usmanov, Mikhail Fridman and Petr Aven, are seeking to reverse a bevy of EU sanctions against them, alleging in an EU court that their rights have been infringed by the measures. (WSJ, 07.16.22)
• Oleg Ustenko, economic adviser to Zelensky, wrote to bankers including JPMorgan Chase’s Jamie Dimon and HSBC’s Noel Quinn, asking them to stop financing companies that trade Russian oil and sell shares in state-backed oil and gas groups Gazprom and Rosneft. (FT, 07.16.22)
• Fast fashion giant Hennes & Mauritz AB said it would exit Russia, citing the operational challenges and unpredictable future in the country, becoming the latest Western company to withdraw completely as the war in Ukraine continues. (WSJ, 07.18.22)
• A court in Moscow has ordered Google to pay a fine of 21.77 billion rubles ($373 million) over information distributed about Russia's unprovoked invasion of Ukraine on its YouTube video-sharing platform. (RFE/RL, 07.18.22).
• Russia must work to overcome “colossal” high-tech problems caused by Western sanctions imposed on Moscow over its invasion of Ukraine, Putin said July 18. "This is a huge challenge for our country," Putin said, accusing Western countries of deliberately blocking access to high-tech products for Russia. “Realizing the colossal amount of difficulties we are facing, we will look for new solutions in an energetic and efficient manner," he said at a meeting of the Presidential Council for Strategic Development and National Projects. (MT/AFP, 07.18.22)
• IMF predicted that unless liquid natural gas was shared and prices were artificially held down, any Russian action to stop supplying Europe would trigger economic contractions of more than 5% over the next year in the Czech Republic, Hungary, Slovakia and Italy. (FT, 07.19.22)
• Zelensky has dismissed the EU’s seventh round of sanctions against Russia as inadequate. (RFE/RL, 07.21.22)
• The 27 EU ambassadors have approved the seventh package of sanctions for Russia’s military invasion of Ukraine, which will include a boycott of Russian largest lender Sber (Sberbank), a gold embargo and sanctions against another 57 individuals and legal entities.  The EU will sanction First Deputy Director of the FSB Sergei Korolev, a potential successor to the current head of the FSB, Alexander Bortnikov. Russia's commissioner for children's rights Maria Lvova-Belova is also on the list, as are Moscow Mayor Sergei Sobyani, First Deputy Prime Minister Andrey Belousov and other officials including the heads of occupied Ukrainian territories, including the mayors of Mariupol and Kherson. The Russian bikers club Night Wolves is also on the list. (BNE, 07.21.22)
  • Notably, the sanctions package also softens previous sanctions on the aviation industry. “In order to safeguard the technical industrial standard setting process of the International Civil Aviation Organisation (ICAO), Decision (CFSP) 2022/1271 allows the sharing of technical assistance with Russia in relation to aviation goods and technology in this specific framework,” the document reads. (BNE, 07.21.22, RFE/RL, 07.19.22)
• Britain has decided to introduce a ban on importing Russian coal in August and on importing oil at the end of December, the U.K. government reported July 21. (Interfax, 07.21.22)
• The international executive director of the American tobacco company Philip Morris, Jacek Olczak, said the manufacturer plans to completely leave the Russian market before the end of this year. (Media Zone, 07.22.22)

Ukraine-related negotiations:

• See Humanitarian impact of the Ukraine conflict section for negotiations on the export of Ukraine’s grain via the Black Sea.
• Russia and Ukraine still have a chance to resume peace talks, the Kremlin said July 21, contradicting earlier comments by Moscow’s top diplomat Sergei Lavrov. “Neither the president nor the minister have ever said the door to negotiations is closed,” Peskov said. (MT/AFP, 07.21.22)

Great Power rivalry/new Cold War/NATO-Russia relations:

• Lavrov says the geographical objectives of Russia's "special military operation" in Ukraine are no longer limited to the eastern Donetsk and Luhansk regions. "Now, the geography is different. And it is not only [the territories controlled by Russia-backed separatists in the Donbas] but also the Kherson region, the Zaporizhzhia region and a number of other territories, and the process continues, and it continues consequently and persistently," Lavrov said on July 20. Lavrov warned that Russia could go further still in what he called “an ongoing process” if the West continued to supply Ukraine with advanced weaponry. (RFE/RL, 07.20.22, FT, 07.20.22)
• John Kirby, spokesman for the National Security Council, told a White House news briefing that the Russians plan to organize "sham referenda" in the areas it has seized, possibly as early as September, and are preparing to establish the ruble as the default currency and force residents to apply for citizenship. (RFE/RL, 07.19.22)
  • The Kremlin’s goal is to conduct these referendums by Sept. 15, Bloomberg cited two unnamed sources as saying. (MT/AFP, 07.21.22)
  • Leonid Slutsky, chairman of the State Duma Committee on International Affairs, and a member of Russia's negotiating team in previous peace talks with Ukraine, has suggested Sept. 11 as a likely date for referendums. (WP, 07.21.22)
• “He [Putin] is convinced that his destiny as Russia’s leader is to restore [it] as a great power. He believes the key to doing that is to recreate a sphere of influence in Russia’s neighborhood. He doesn’t believe you can do that without controlling Ukraine and its choices and so that’s what has produced this horrible war,” Burns told the Aspen Security Forum.  (Aspen Security Forum, transcribed by RM, 07.21.22)
• Half of all Russian spies operating under diplomatic cover around Europe have been expelled since the start of the Kremlin’s war in Ukraine, Mi6’s Moore said at the Aspen Security Forum. (MT/AFP, 07.22.22)

China-Russia: Allied or aligned?

• Moving shipping containers from China through Russia to the European Union became a vital part of Beijing's Belt and Road Initiative (BRI), but Moscow’s invasion of Ukraine and the Western sanctions that followed have forced China to search for alternatives. The main alternative is the roughly 6,500-kilometer network of roads, railroads, and ports stretching across Kazakhstan, the Caspian Sea, Azerbaijan, Georgia, Turkey and into Europe known as the Trans-Caspian International Transport Route (TITR). According to the TITR Association, cargo shipments across Central Asia and the Caucasus are expected to reach 3.2 million metric tons in 2022, a sixfold increase over the previous year. (RFE/RL, 07.18.22)
• “One of the reasons why it is so essential that we tough it out on Ukraine . . . and we help the Ukrainians to win or at least negotiate from a position of significant strength is because Xi Jinping is watching this like a hawk,” Mi6’s Moore said. (FT, 07.21.22)
• Imports of Russian oil to China in January-June increased by about 3.9% year-on-year and amounted to 41.3 million tons, China’s General Administration of Customs reported on July 20. According to the agency, the cost of energy purchased by China from Russia for six months increased by 1.5 times compared to the same period in 2021, to $28.15 billion. (TASS, 07.20.22)

Missile defense:

• No significant developments.

Nuclear arms:

• Belarusian President Alexander Lukashenko July 21 said Russia, Ukraine and the West must agree to halt the Ukraine conflict to avoid the "abyss of nuclear war" and insisted Kyiv should accept Moscow's demands. (MT/AFP, 07.21.22)

Counterterrorism:

• No significant developments.

Conflict in Syria:

• Damascus said July 20 that the Turkish president did not achieve his "goals" during the July 19 summit with Iran and Russia, referring to Ankara's efforts to rally support for a military operation in northern Syria. (France24, 07.20.22)
• Syria, a close ally of Russia, has announced it is formally breaking diplomatic ties with Ukraine in response to a similar move by Kyiv. (Al Jazeera, 07.20.22)
• A Russian air strike killed seven people, four of them children, in Syria's rebel-held Idlib region on July 22, a war monitor said. The Syrian Observatory for Human Rights said it confirmed the deaths "including four children who are siblings, two men and an unidentified person... as a result of Russian air strikes." (MT/AFP, 07.22.22)

Cyber security:

• The pro-Russian separatists in eastern Ukraine's Donbas claimed they have blocked Google, accusing it of promoting violence against Russians. (Hindustan Times, 07.22.22)
• Roskomnadzor unblocked the browser site for anonymous access to the Tor Internet browser, following the decision of the Saratov Regional Court. (Media Zone, 07.22.22)
• Ukraine has continued to block Russian efforts to penetrate its computer networks since Moscow invaded the country in February and has been sharing information with American authorities about previously unknown hacking techniques, U.S. Cyber Command said July 20. The United States and Ukraine jointly made public 20 new indicators of possible Russian intrusion into computer networks that use previously unknown forms of malware, the command said. (NYT, 07.21.22)

Energy exports from CIS:

• Canada has returned to Russia a repaired turbine for gas deliveries to Europe after weeks of uncertainty over sanctions and scaled-down supplies, Kommersant reported July 18. (MT, 07.18.22)
• Across Asia and the Caucasus, Russia is selling liquefied petroleum gas at $300 a ton, a third of the normal price of $900. It is selling diesel at $900 per ton compared with $1,200 for international prices. (WSJ, 07.16.22)
• The IEA has warned Europe must take immediate steps to reduce gas consumption ahead of the winter, urging governments to cap air conditioning use and start auctioning gas to industry or risk rationing during the coldest months. (FT, 07.18.22)
• The EU has signed a deal with Azerbaijan to double gas deliveries from the country to “at least” 20 billion cubic meters by 2027, up from 8.1 bcm last year. European Commission president Ursula von der Leyen said the EU had “to diversify away from Russia and to turn to more reliable, trustworthy suppliers” and described Azerbaijan as a “crucial energy partner.” (FT, 07.18.22)
• Mongolia expects Russia to begin construction of the “Power of Siberia 2” gas pipeline through its territory to China within two years, as Moscow moves to connect its Europe-supplying gasfields to Asia for the first time. (FT, 07.18.22)
• The National Iranian Oil Company of Iran and Russia’s Gazprom have signed a memorandum of understanding worth around $40 billion, according to the Iranian Oil Ministry's news service, SHANA. SHANA reported that Gazprom will offer its support to NIOC in the development of the Kish and North Pars offshore gas fields and also six oil fields. (RFE/RL, 07.19.22)
• The European Commission has proposed introducing a voluntary 15% cut in target gas usage for EU member states in case of a cutoff of Russian flows of the fuel to Europe. (RFE/RL, 07.20.22)
• Putin says Gazprom is ready to fulfil its obligations on gas exports. "Gazprom has fulfilled, is fulfilling, and will fulfill its obligations in full," Putin said. (RFE/RL, 07.20.22)
• The German government on July 20 accused Russia of using the absence of a turbine as an "excuse" to limit gas deliveries via the Nord Stream 1 key pipeline due to go back online this week. (MT/AFP, 07.20.22)
• "I think we should be very clear. Gazprom has proven to be a completely unreliable supplier," von der Leyen said July 20. "And behind Gazprom is, as we know, Putin. So it is not predictable what is going to happen." (WSJ, 07.20.22)
• Russia on July 21 resumed critical gas supplies to Europe through Germany, reopening the Nord Stream gas pipeline after a 10-day shutdown for maintenance, but the gas flow was expected to fall well short of full capacity. The head of Germany's network regulator, Klaus Mueller, said Gazprom had notified deliveries on July 21 of only about 30 % of the pipeline's capacity. (RFE/RL, 07.21.22)
• Problems with Russian gas supplies to Europe are caused by sanctions that create "technical difficulties," the Kremlin said July 21. Peskov said Western sanctions "do not allow the repair of equipment" critical for Nord Stream 1 to work at full capacity, including the "turbines at compressor stations." (MT/AFP, 07.21.22)
• A missing turbine that Moscow says has caused the Nord Stream 1 pipeline to pump less gas to Europe is stuck in transit in Germany because Russia has so far not given the go-ahead to transport it back, two people familiar with the matter said. (Reuters, 07.21.22)
• Putin and Saudi Arabia's Crown Prince Mohammed bin Salman spoke about the oil market in a telephone conversation on July 21, the Kremlin said. They stressed the importance of reinforcing cooperation in OPEC+, the Kremlin said in a statement. (MT/AFP, 07.22.22)
• Hungary’s foreign minister Péter Szijjártó has met Lavrov in Moscow to request additional gas supplies, in a rare visit by a high-level EU official to Russia since the country’s invasion of Ukraine. (FT, 07.21.22)
• The price of gas in Europe did not drop after the resumption of supplies through the Nord Stream pipeline, with prices steadily holding above $1,600 per 1,000 cubic meters for a week already. (Interfax, 07.22.22)

Climate change:

• No significant developments.

U.S.-Russian economic ties:

• No significant developments.

U.S.-Russian relations in general:

• Biden will sign an executive order on July 19 that will aim to deter countries from wrongfully detaining and punishing U.S. citizens abroad. The move comes against the backdrop of the arrest of several U.S. citizens in Russia. (RFE/RL, 07.19.22)
• Top U.S. national security officials warned on July 19 about the continuing threat of election interference from abroad, emphasizing that Russia could still seek to meddle or promote disinformation during the 2022 midterm races even as it wages war in Ukraine. ''I am quite confident the Russians can walk and chew gum,'' Christopher Wray, the FBI director, said during a cybersecurity conference. (NYT, 07.20.22)
• The United States has placed Russia on a list of countries engaged in human trafficking or forced labor, the U.S. State Department said on July 19. Russia was also placed on a list of countries whose security forces or government-backed armed groups recruit or use child soldiers. (RFE/RL, 07.20.22)

 

II. Russia’s domestic policies

Domestic politics, economy and energy:

• Russia’s Central Bank cut its key interest rate by 150 basis points from 9.5% to 8% on July 22, citing slowing inflation. The cut marks the fourth time this year Russia’s Central Bank has lowered its rate, after it implemented an emergency hike from 9.5% to 20% in the wake of Russia’s invasion of Ukraine. (MT/AFP, 07.22.22)
• Russia’s international currency reserves have fallen by $56.7 billion to reach $572.7 billion (including the CBR’s frozen reserves in Europe) as of July 8, the Central Bank of Russia reported on July 15. (BNE, 07.15.22)
• Russian GDP fell 4.3% year on year in May, according to the Ministry of Economy, down from a 2.8% fall in April. The CBR has also improved its prediction for growth this year from an 8% contraction by year end to a revised 6.1% contraction, according to its June macroeconomic survey. GDP will then recover to a 1.3% contraction in 2023. (BNE, 07.15.22)
• Russian officials said the economy is likely to contract between 4% and 6% this year, having forecast in April a decline in output of between 8% and 10%. But it said the contraction will extend into next year, when GDP could fall by as much as 4%. "The economic decline will be more extended over time," Nabiullina said. (WSJ, 07.22.22)
• Major Western banks' Russian divisions have started hiring staff this month after Moscow obstructed their exit from the country, Reuters reported July 21. Raiffeisen Bank posted 276 vacancies in Russia in July, while Citi has had 84 job openings. (MT/AFP, 07.21.22)
• Russia's current account surplus hit a record of $70.1 billion in the second quarter of the year, as surging revenues from energy and commodity exports helped offset the impact of U.S. and European sanctions. (BNE, 07.15.22)
• According to the federal operational headquarters for the fight against coronavirus, on the morning of July 20, 5,685 cases of COVID-19 were detected in Russia per day. The daily incidence in Russia has exceeded 5,000 cases for the first time since the beginning of May, Interfax notes. (Meduza, 07.20.22)
• “I have watched him [Putin] stew in what is [a] very combustible mix of grievance and ambition and insecurity. He is professionally trained to be a cynic about human nature. He is relentlessly suspicious and always attuned at our vulnerabilities he can take advantage of. He is not a big believer in the better angels, in the human spirit. He’s a big believer in control and intimidation.... Putin really does believe his rhetoric,” CIA director William Burns told the Aspen Security Forum. (Aspen Security Forum, transcribed by RM, 07.21.22)
• The Kremlin said July 21 that Putin is in good health, dismissing rumors that the leader was unwell as completely unfounded. “Everything is fine with his health,” Peskov told reporters. Scrutiny over the 69-year-old Putin’s health has intensified since he launched a full-scale invasion of Ukraine in February. (MT/AFP, 07.21.22)
  • Asked about speculation that the Russian president was unwell, MI6’s Moore said “there’s no evidence that Putin is suffering from serious ill health”. (FT, 07.21.22)
  • “As far as we can tell he[Putin] is entirely too well healthy... it is not a formal intelligence judgement,” CIA director William Burns told the Aspen Security Forum on July 20. (Aspen Security Forum, transcribed by RM, 07.21.22)
• Starting in first grade, students across Russia will soon sit through weekly classes featuring war movies and virtual tours through Crimea. They will be given a steady dose of lectures on topics like “the geopolitical situation” and “traditional values.” In addition to a regular flag-raising ceremony, they will be introduced to lessons celebrating Russia’s “rebirth” under Putin. (NYT, 07.16.22)
• An all-Russia survey conducted by the Levada Center on June 23-29, 2022, revealed that the popularity of TV as the main source of information for Russians has slightly decreased after the spring surge: 67% in April this year, 63% in May. (Levada Center, 07.15.22)
• Vadim Cheldiyev, a prominent opera singer from Russia’s North Caucasus has been sentenced to 10 years in prison for calling on his home city to protest coronavirus lockdown measures in the early weeks of the pandemic, TASS reported. (MT/AFP, 07.19.22)
• Independent lawmaker Khelga Pirogova in the Russian city of Novosibirsk has been detained over a tweet she posted about Russia's ongoing unprovoked invasion of Ukraine. (RFE/RL, 07.22.22)

Defense and aerospace:

• Employees of the regional departments of the Federal Penitentiary Service and the FSB, accompanied by representatives of the Wagner PMC, have been visiting prisons in St. Petersburg, Mordovia, Adygea, Komi, Krasnodar Territory, Leningrad, Nizhny Novgorod, Lipetsk and Voronezh regions to recruit soldiers to fight in Ukraine. First, prisoners with experience in the army or who participated in hostilities are called to war. Priority in recruitment is given to those serving sentences for murder, but those convicted on drug charges, rape and pedophilia are not considered. (Istories, 07.20.22)
•  See section Military aspects of the Ukraine conflict and their impacts above.

Security, law-enforcement and justice:

• Zalim Kerefov, the deputy rector of the Russian Customs Academy who had been arrested on charges of alleged drug dealing, has been found dead in police custody. (RFE/RL, 07.18.22)
• A deputy rector at Russia's presidential Academy of National Economy and State Service, Ivan Fedotov, has been placed under house arrest on financial-fraud charges. The Tver district court announced the decision on July 22, less than one month after the institution’s rector, Vladimir Mau, was put under house arrest. (RFE/RL, 07.22.22)

 

III. Russia’s relations with other countries

Russia’s general foreign policy and relations with “far abroad” countries:

• The official G20 finance ministers summit ended on July 16 without a final communique as differences on how to characterize and respond to Russia’s invasion of Ukraine prevented unanimity within the group. Russian Deputy Finance Minister Timur Maksimov attended the talks in person. (RFE/RL, 07.16.22)
• German Chancellor Olaf Scholz says the EU can no longer afford to allow individual member states to have veto power over the bloc's actions if it wants to maintain a leading role in the determination of global policy. Scholz said in an article published on July 17 by the Frankfurter Allgemeine newspaper that Russia's war in Ukraine made European unity more urgent and raised the need for an end to "selfish blockades" of European decisions by individual states. (RFE/RL, 07.18.22)
• Russia's Justice Ministry has demanded the closure of the Russian branch of the Jewish Agency for Israel, Sohnut, which processes the immigration of Jews to Israel. The Jerusalem Post cited a top Israeli diplomatic official as saying that the ministry’s request is based on allegations that Sohnut "illegally collected info about Russian citizens." (RFE/RL, 07.21.22)
• Russia has added Croatia, Denmark, Greece, Slovakia and Slovenia to its list of nations that "carry out unfriendly actions towards Russian companies and citizens." According to the government press service, the embassies of the mentioned countries will now have to limit staff levels. (RFE/RL, 07.22.22)
• Japan has sounded the alarm over greater military cooperation between Russia and China in its defense white paper, saying an isolated Moscow could draw closer to Beijing in the wake of the war in Ukraine. “For Russia, which is internationally isolated and has suffered losses in ground forces, the importance of political and military cooperation with China could increase,” the white paper said. (FT, 07.22.22)

Ukraine:

• A Ukrainian cargo plane carrying 11.5 tons of Serbian-made weapons destined for Bangladesh crashed in northern Greece late on July 16, killing eight Ukrainian crew members and setting off an investigation into whether the hazardous material being transported posed a threat to the local population. (NYT, 07.18.22)
• Flight booking data on the movements of Igor Girkin and Igor Plotnitsky, two pro-Russian militants formerly active in the Donbas has yielded clues as to two possible cover identities: “Sergey Runov” and “Igor Plotnikov” respectively. (Bellingcat, 07.18.22)
• Ukraine’s finance ministry on July 20 was to ask foreign private creditors to agree to a delay in debt repayments, according to people with knowledge of the process. Ukrainian news outlet Economic Truth reported on July 19 that the cabinet had signed off a request for a two-year repayment moratorium on $3 billion of outstanding Eurobonds. A rescheduling would amount to a Ukrainian default. (FT, 07.19.22)
• The foreign ministers of the Czech Republic, Austria and Slovakia have made a surprise visit to Kyiv in a show of support for Ukraine. (RFE/RL, 07.20.22)
• A group of Ukraine’s creditors including Germany, the U.K. and U.S. have announced they support Ukraine’s plea for a debt moratorium and will “strongly encourage” private bondholders to consent to Kyiv’s request. (FT, 07.20.22)
• Ukraine's central bank, citing the deep economic impact of the war with Russia, has devalued the hryvna by 25%. The bank said in a statement on July 21 that the new official rate for the currency is 36.5686 to the U.S. dollar. (RFE/RL, 07.22.22)
• Ukraine has 200,000 computer engineers and code writers. Figures from the National Bank of Ukraine show that in the first five months of this year, technology companies brought in $3.1 billion in revenue from thousands of customers, many in the Fortune 500, a jump from $2.5 billion a year earlier. (NYT, 07.22.22)
• On July 18, Putin’s deputy chief of staff, Sergei Kiriyenko narrowly escaped a Ukrainian missile strike when visiting a hydroelectric plant in the Kherson region, according to the pro-Kremlin military journalist Semyon Pegov. (WP, 07.21.22)

Russia's other post-Soviet neighbors:

• A special commission in Kazakhstan created last month to track down and repatriate funds allegedly stolen by former President Nursultan Nazarbaev's relatives and associates announced it recovered some 230 billion tenges ($478 million). (RFE/RL, 07.18.22)
• The independent Russian television station Dozhd, which was forced to suspend operations in March amid pressure linked to its coverage of the Russian invasion of Ukraine, says it will start broadcasting some of its programs from Latvia. (RFE/RL, 07.18.22)
• The head of Russia's Foreign Intelligence Service (SVR) met with Armenian Prime Minister Nikol Pashinian in Yerevan on July 18, three days after Burns made an unexpected visit to Armenia. Tigran Grigorian, an Armenian political analyst, told RFE/RL on July 15 that U.S. and Russian security "experts" arrived in Yerevan in recent days for confidential discussions focusing on the war in Ukraine. (RFE/RL, 07.19.22)
• Armenia will withdraw all troops from the contested Nagorno-Karabakh region by September, officials said July 19. (MT/AFP, 07.19.22)
• Russian private military company Wagner has started recruiting citizens of Kyrgyzstan and Uzbekistan to fight in Ukraine, Kyrgyz media reported July 20. (MT/AFP, 07.20.22)
• A fact-finding mission by the U.N.’s civil aviation agency has alleged Belarus committed an "act of unlawful interference" by diverting a Ryanair passenger flight bound for Vilnius to Minsk in order to arrest a dissident journalist. Belarusian journalist Raman Pratasevich and his Russian girlfriend at the time, Sofia Sapega, were detained in May 2021 after the flight landed in Minsk. (RFE/RL, 07.20.22)
• Leaders from five Central Asian nations have ended a summit in the Kyrgyz resort town of Cholpon-Ata with a pledge to increase cooperation to strengthen the region. (RFE/RL, 07.21.22)
• Tajikistan and Turkmenistan soured a gathering of Central Asian presidents taking place in Kyrgyzstan on July 21 by refusing to sign off on a treaty committing all countries to “friendship, good neighborliness and cooperation.” The gathering of leaders in Cholpon-Ata, which was billed as a consultative meeting, had been viewed as an opportunity for the region to pursue more integration and emerge from under the overbearing influence of neighboring nations like Russia and China. (Eurasianet/BNE, 07.22.22)
• Kazakh President Kassym-Jomart Tokayev has proposed inviting leaders of Russia and China to attend Central Asian summits as guests. (Interfax, 07.21.22)
• A court in Tallinn has sentenced Vladimir Shilov with dual Russian-Estonian citizenship for publicly raising funds and buying drones for the Russian armed forces invading Ukraine. (RFE/RL, 07.22.22)

 

IV. Quotable and notable

• "It's murderous," an Iranian trader said of the $30 a ton discounts that Indian and Chinese buyers wanted to match Russian steel prices. (WSJ, 07.16.22)
• Lev Gudkov of Levada: “The intellectual ‘elite’ of Russia has discredited itself and does not seem to be significant or authoritative for the bulk of the population. And not only because of censorship, but also because the opposition [in recent years] has not put forward a convincing platform, a position that a significant part of the people would listen to. Therefore, people are at a loss, in a state of chronic disorientation and are ready to join what the authorities say.” (Meduza, 07.18.22)
• ''The Russians are trying to get us to tear ourselves apart,'' FBI directory Wray said. ''The Chinese are trying to manage our decline, and the Iranians are trying to get us to go away.'' (NYT, 07.20.22)