“Precarious” Nuclear Power Plant; Naftogaz vs. Gazprom

(Bloomberg) – The UN nuclear agency has stepped up its warning about Ukraine’s Zaporizhizhia nuclear power plant, saying the facility could soon lose power and shut down its last operating reactor after sustained shelling in the area . “It is an unsustainable situation and is becoming more and more precarious,” the agency chief said.

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Ukrainian President Volodymyr Zelenskiy said the national army had taken over more than a thousand square kilometers (386 square miles) of territory since September 1, including dozens of settlements.

The World Bank and the European Commission have estimated that rebuilding Ukraine will cost at least $349 billion, based on damage inflicted in early June, and that figure is expected to rise as the war continues.

(See RSAN on the Bloomberg Terminal for the Russian sanctions dashboard.)

Key developments

  • US Treasury issues guidance on Russian oil price cap plan

  • US sees economic reasons for Russia to comply with oil price cap

  • Ukrainian military breakthrough in the north threatens Russian stranglehold

  • Russian-occupied reactor poses heightened security risk, warns UN

  • Russia’s current account surplus hits record high as growth slows

On the ground

Russia continued to shell the city of Kharkiv on Thursday night, local authorities said. Ukrainian forces are conducting a successful counter-offensive towards Kharkiv, advancing nearly 50 kilometers in three days, the Ukrainian General Staff reported. Ukrainian forces will likely capture Kupyansk within the next 72 hours, severely but not completely degrading Russian land lines of communication with Izyum, the Institute for the Study of Warfare said. Ukraine is launching military drills along its border with Belarus in response to similar war games in the neighboring country, Ukraine’s Interior Ministry said on its website.

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US issues guidelines on Russian oil price cap plan (00:50)

The US Treasury released rough compliance guidelines for its proposed Russian oil price cap on Friday, shortly after officials said Russia would have an economic incentive to participate.

The guidelines, issued by the Treasury’s Office of Foreign Assets Control, instruct private companies to enforce the cap by seeking certification that Russian oil is being sold at or below a price set by the United States with d other members of the Group of Seven. The guidance is aimed at insurance companies and financial firms that facilitate the international oil trade.

The cap is expected to be in place by December 5 for crude oil and February 5 for petroleum products, in line with the implementation of the European Union’s ban on services associated with oil transported by sea and to refined products.

Ukraine Files Arbitration Case Against Gazprom (4:56 p.m.)

Ukraine’s state-owned Naftogaz filed an arbitration claim against Russia’s Gazprom PJSC for failing to pay for natural gas transit on time and in full, according to an emailed statement.

Naftogaz asked Gazprom to pay for the transit of gas through Ukrainian territory, because its contract includes a pumping or payment clause, which means that the Russian company must pay the minimum gas transit fee even if it does not does not displace the contractual volumes. Russia cut off its gas transit through Ukraine this year.

A hearing will be held in Zurich, according to the statement. Gazprom did not immediately respond to a request for comment sent by Bloomberg News.

The situation of nuclear power plants is “increasingly precarious”, according to the UN agency (4:30 p.m.)

Operators of a Russian-occupied nuclear reactor in southeastern Ukraine may soon have to tap into their last line of defense to prevent a nuclear accident, according to the most dire warning ever issued by nuclear watchdogs. International Atomic Energy Agency.

Continued attacks around the Zaporizhzhia nuclear power plant have cut power cables and rendered layers of back-up systems ineffective. Today, the electrical systems of the nearby town of Enerhodar were destroyed by bombardment, IAEA chief Rafael Mariano Grossi said in a lengthy statement.

The IAEA described the situation as “increasingly precarious”.

Poland could buy Ukrainian electricity (3:22 ​​p.m.)

Poland may soon buy an undetermined amount of electricity from the Khmelnytskyi nuclear power plant in western Ukraine, Prime Minister Mateusz Morawiecki said at a joint press conference in Kyiv with Ukrainian President Volodymyr Zelenskiy.

Imports from Ukraine could help the European Union’s largest eastern economy weather this winter, as the coal-dependent country faces tight supplies following the embargo on Russia. Ukraine synchronized its network with the EU earlier this year.

Northern Kyiv Breakthrough Threatens Russian Grip (2:00 p.m.)

A Ukrainian counter-offensive appears to be progressing in the north, but less so in the southern region of Kherson which has attracted greater Russian attention and reinforcements.

On Thursday, Ukrainian officials and Russian military bloggers described a counteroffensive in the north that surprised with its speed, the first time since the start of the war that Ukrainian forces were able to push Russian defenses to a level more than tactical.

Read more: Ukrainian military breakthrough in the north threatens Russian grip

Ukraine inflation tops 23% as prices rise for seventh month (1:55 p.m.)

Ukraine’s inflation rate accelerated for a seventh month as the country grappled with the Russian invasion, which devastated the economy and hampered logistics.

Consumer prices rose 23.8% in August from a year earlier, driven by staples such as eggs and sugar, data showed Friday.

Ukraine may need $349 billion to recover from war damage (1:30 p.m.)

The World Bank and the European Commission estimated that rebuilding Ukraine would cost at least $349 billion, according to an assessment that covered damage inflicted between February 24 and June 1. on, said the World Bank.

The first stage will require $17 billion, of which $3.4 billion is already needed this year, Prime Minister Denys Shmyhal said. The Ukrainian government needs to balance recovery plans and immediate needs, and the World Bank’s assessment will help the cabinet set priorities.

Ukraine will need $105 billion over three years to restore education and health systems and heating infrastructure before the winter season and to remove ruins and explosives, the World Bank has estimated.

Ukraine begins drills to mirror Belarus war games (12:02 p.m.)

Ukraine has started military exercises along its border with Belarus in reaction to similar war games on the territory of the neighboring country.

The National Guard of Ukraine, border troops and police from the northern regions of the country are training to defend the border, the Interior Ministry said on its website.

Belarusian troops have started massive exercises in the border areas of Ukraine and Poland near Brest, simulating the “liberation” of its captured territory from a hypothetical enemy. The drills, scheduled for September 8-14, involve paratroopers, tanks and rocket artillery.

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