Russia advances towards strategically important city; Yellen urges EU allies to act on frozen Russian assets

Treasury Secretary Janet Yellen urged European allies to act together with the US to find a way to unlock the value of around $280-billion in frozen Russian assets so they can provide sustained financial support to Ukraine.

Russia temporarily lifted its ban on petrol exports to avoid overstocking at refineries as domestic supplies have met demand 

Russia advances near Chasiv Yar as Ukraine bolsters Kharkiv

Russia stepped up attacks in the east of Ukraine, advancing toward the strategically important city of Chasiv Yar in the Donetsk area as Kyiv rushed troops to bolster defences on the new northeastern front near Kharkiv.

Attacks intensified in all areas including in the directions of Kramatorsk and Kharkiv in the week ended 19 May, Ukrainian military spokesperson Dmytro Lykhoviy said on television. Moscow’s forces “marginally advanced” near Chasiv Yar during assaults using tanks and infantry fighting vehicles, the Institute for the Study of War said on 18 and 19 May.

Russian forces “intensified their effort to seize the operationally significant town of Chasiv Yar”, the Institute said. Moscow was seeking to exploit “greater theatre-wide pressure” on Kyiv caused by the Kharkiv offensive coupled with ongoing operations throughout eastern Ukraine.

Ukraine’s military forces were dealing with a “challenging moment” and were engaged in a “hard fight”, US Defense Secretary Lloyd Austin told reporters at the Pentagon on Monday after a virtual meeting with counterparts supporting Ukraine.

Austin and General CQBrown, the top uniformed officer, sidestepped questions about whether Ukraine should be allowed to use US-provided weapons to fire into Russia, saying only that the priority should be the “close fight” along the frontlines.

Russia is targeting Chasiv Yar — a key hilltop settlement that gives Ukraine control of the roads near the major city of Kramatorsk — and increased attacks in the area in recent months. On 10 May, the Kremlin opened a new front, piercing the border north of Kharkiv, forcing Ukraine to divert soldiers to reinforce the area. Ukraine hasn’t disclosed where the reinforcements came from.

Ukrainian forces in Chasiv Yar repelled attacks on 17 and 18 May and destroyed a Russian column of vehicles, according to the General Staff and DeepState, a conflict map and information service maintained in cooperation with the Ukrainian Ministry of Defence.

Yellen urges EU allies to act jointly on frozen Russian assets

Treasury Secretary Janet Yellen urged European allies to act together with the US to find a way to unlock the value of around $280-billion in frozen Russian assets so they can provide sustained financial support to Ukraine.

“It’s vital and urgent that we collectively find a way forward to unlock the value of Russian sovereign assets immobilised in our jurisdictions for the benefit of Ukraine,” Yellen said in excerpts of a speech on the transatlantic alliance she was set to deliver on Tuesday in Frankfurt.

Yellen touted US collaboration with the European Union under the Biden administration in a range of areas, and called for intensified cooperation especially in the field of security, according to the excerpts, released by the US Treasury on Monday.

“It’s also critical that we ensure Ukraine has the support it needs to equip its military, fund critical services, and ultimately rebuild in the medium- to long-term,” Yellen said.

The US has been leading a push for the past few months to use these assets to help Ukraine. Options on how to do that have ranged from outright seizing the assets and giving the money to Ukraine, to securitising them to issue debt, or using them to back some form of loan.

Read more: Seize or freeze Russian assets? It’s a fraught debate

European countries have reacted with scepticism, raising concerns over the implications such a move would have on financial stability, the role of the euro as well as the legal risks it could entail. The vast majority of the frozen assets are in Europe.

The topic will be a key focus of discussions between Group of Seven finance ministers meeting in Stresa, Italy later this week.

The G7 finance chiefs, who will be joined by their Ukrainian counterpart, are also expected to discuss the effectiveness of their collective sanctions against Russia.

Russia temporarily allows petrol exports after meeting local demand

Russia temporarily lifted its ban on petrol exports to avoid overstocking at refineries as domestic supplies have met demand.

Refiners are allowed to export gasoline from 20 May 20 until 30 June, according to a government decree, signed by Prime Minister Mikhail Mishustin on 17 May and published on Monday.

The decision was made taking into account “the saturation of the domestic market” and “to prevent a drop in oil processing volumes at individual refineries due to overstocking of [petrol],” according to the statement.

Russia restricted petrol shipments to foreign markets from 1 March for six months to avoid domestic fuel shortages and price spikes amid President Vladimir Putin’s campaign for a fifth term. At that time, Ukraine’s drone attacks on Russian refineries and scheduled spring maintenance threatened to reduce petrol production, just as domestic demand experienced a seasonal uptick.

However, a shortage was avoided as Russia’s refineries utilised their spare crude-processing capacity and relatively quickly restored operations at some damaged units, maintaining petrol production.

Russia’s fuel market was stable and “our economy, companies and people are fully provided with oil products”, Deputy Prime Minister Alexander Novak told legislators last week. “It’s important to prevent overstocking at refineries.” DM