(Bloomberg) --

Rescue efforts are under way after a Russian air strike on a school in Ukraine’s Luhansk region, with dozens of civilians feared dead. All women, children and elderly have been evacuated from the Azovstal steel plant in Mariupol, a week into the rescue operation. President Volodymyr Zelenskiy said efforts to get Ukrainian fighters out of the site are continuing. 

Group of Seven leaders plan to discuss potential new penalties against Russia on Sunday, a day before Russian President Vladimir Putin is expected to a address a military parade in Moscow. 

Gazprom PJSC sought to reassure European customers they can keep paying for gas without breaching sanctions. Croatia may join Hungary, Slovakia and the Czech Republic in requesting more time to comply with a proposed European Union embargo on Russian oil imports.  

(See RSAN on the Bloomberg Terminal for the Russian Sanctions Dashboard.)

Key Developments

  • G-7 Leaders to Discuss More Russia Sanctions on Sunday Call 
  • EU Revises Russia Oil Sanctions Plan to Give Hungary More Time
  • Boehly-Clearlake Group Lands $5.25 Billion Deal for Chelsea 
  • Russia Can’t Shake Default Risk After Last-Minute Bond Payment
  • U.S. Warns Russian Moguls of ‘No Hiding Place’ in Yacht Seizure

All times CET:

Luhansk Official Says Many Feared Dead in School Shelter Bombing (6:45 a.m)

As many as 60 people may have died in a Russian strike on a school in Bilohorivka, a village in the Luhansk area, according to regional head Serhiy Haiday on Telegram. 

Russian forces on Saturday bombed a school building where around 90 people -- most residents of the village -- had been sheltering, he said earlier. About 30 people were rescued from within the rubble and two were found dead. The final number of victims will be known once the debris is cleared, Haiday said.

Ukraine’s Counteroffensive Said to Make Progress Near Kharkiv (7:30 a.m.)

Pushback from Kyiv’s forces northeast of Kharkiv “is making significant progress and will likely advance to the Russian border in the coming days or weeks,” according to the Institute for the Study of War. 

The U.S.-based think tank said the offensive “likely intends to push Russian artillery away from Kharkiv city and drive to the border” of Belgorad oblast in Russia. 

Moscow’s forces may be conducting a limited withdrawal in the face of successful Ukrainian attacks, and reportedly destroyed three bridges to slow Ukraine’s advance, ISW said, adding, “Armies generally only destroy bridges if they have largely decided they will not attempt to cross the river in the other direction anytime soon.”

Ukraine Says It Destroyed Two Raptor-Class Boats (6 a.m.)

Ukraine destroyed two Russian Raptor-class boats craft with Bayraktar drones near Snake Island in the Black Sea, according to its southern operational command in a Facebook post. Bloomberg News couldn’t independently verify the claim. 

U.K. Pledges 1.3 Billion Pounds of Aid to Ukraine: PA (11:31 p.m.) 

The U.K. will provide an additional 1.3 billion pounds ($1.6 billion) in military support to Ukraine, adding to earlier commitments of 1.5 billion pounds to assist in its war against Russia, Press Association reported. 

The funding includes the 300 million pounds of military equipment announced earlier this week by Prime Minister Boris Johnson and will be drawn from the U.K.’s reserves, PA said. That marks the highest rate of U.K. military spending on a conflict since the height of the campaigns in Iraq and Afghanistan, according to the report.

Still Trying to Get Fighters Out of Mariupol, Zelenskiy Says (9:45 p.m.)

Ukraine is still working to extricate its fighters from the besieged steel mill in Mariupol after humanitarian aid agencies helped evacuate 300 women and children, President Volodymyr Zelenskiy said Saturday.

“It is extremely difficult, but we’re not losing hope,” he said in his nightly video address. “Now we are preparing the second phase of evacuation mission -- the wounded and health-care workers.” He thanked the International Committee of the Red Cross and the United Nations for helping with the first phase.

On Friday, Zelenskiy said “influential states” are involved in mediation to free armed defenders holding out at the Azovstal complex. 

Russia Claims Strike on Western-Supplied Weapons (7:25 p.m.)

Russia’s Defense Ministry said Iskander missile strikes destroyed caches of arms supplied by the U.S. and allies.

The short-range ballistic missiles targeted weapons storage sites near two railroad stations in the Kharkov region, ministry spokesman Igor Konashenkov said in an emailed statement on Saturday. Earlier, Russian forces targeted another site storing U.S. and European weapons in the same region, he said. 

Ukraine blamed Russian shelling for destroying a museum dedicated to 18th-century philosopher Hryhoriy Skovoroda near Kharkiv, wounding a civilian. Russian shelling of villages and towns around Kharkiv injured at least three other civilians, according to Ukrainian accounts.   

WHO Head Demands Moscow Stop Attacking Health Care (6:45 p.m.) 

The director-general of the World Health Organization called on Russia to stop deliberate targeting Ukraine’s health care infrastructure, and to stop the war. 

WHO estimates Ukrainian health care facilities have come under attack from Russian forces over 200 times since Feb. 24. It continues to document each incident, and has previously called the attacks a violation of international humanitarian law.

“I have been very moved by the resilience of the Ukrainian people” and the commitment of the nation’s health providers under “terrible” circumstances,” WHO’s Tedros Adhanom Ghebreyesus said in Kyiv after a meeting with Ukraine’s health minister.  

All Women, Children, Elderly Evacuated From Steel Mill (6:30 p.m.)

All women, children and elderly have been evacuated from the Azovstal steel mill in Mariupol, Ukrainian deputy prime minister Iryna Vereshchuk said on Saturday without elaborating. 

“The president’s order has been carried out: all women, children and the elderly have been evacuated from Azovstal. This part of the Mariupol humanitarian operation has been completed,” Vereshchuk said. 

Civilian evacuations have been going on for a week at the vast facility, where hundreds of civilians and large numbers of Ukrainian military personnel have taken shelter while under Russian bombardment. 

Ukraine Says It Sank Another Russian Ship (3:41 p.m.)

Ukraine sunk a Russian Serna-class landing craft with a Bayraktar TB2 drone strike near Snake Island in the Black Sea, its Defense Ministry said Saturday in a tweet.

Bloomberg News couldn’t independently verify the claim. Spokespersons for Russia’s Defense Ministry and the Black Sea Fleet couldn’t be reached for comment. 

In April, Ukraine said it struck with a missile and ultimately sank the warship Moskva, flagship of Russia’s Black Sea fleet. Russia’s Defense Ministry said a blaze caused the ship’s ammunition store to explode, without saying what started the fire. 

Gazprom Reassures Clients on Gas Payment Uncertainty (1:36 p.m.)

Gazprom PJSC has written to its European clients in a bid to reassure them that they can keep paying for gas without breaching sanctions, the latest indication that Russia may be trying to find a way to keep gas flowing. 

Gazprom told clients that a new order published by the Kremlin on May 4 “clarifies the procedure” set out in the initial decree on ruble payments. The letter, seen by Bloomberg News, says there’ll be transparency for cash flows from the foreign buyers and excludes the possibility of any “third party” being involved in the settlements. The procedure as set out appears to exclude Russia’s sanctioned central bank.

Croatia Will Also Explore Russian Oil Ban Delay (1:27 p.m.) 

Croatia is considering asking for an exemption to the European Union’s planned embargo on Russian oil, primarily to protect production at INA Industrija Nafte’s refinery in Rijeka, according to a state official.

The EU plans to offer Hungary, Slovakia and the Czech Republic as many as two additional years to comply with a ban it hopes to put into effect at the end of the year.  

EU Revises Russia Oil Ban Plan to Give Hungary More Time 

Putin May Lay Out Next Move in Monday Speech (12:46 p.m.)

President Vladimir Putin may divulge his next steps in the invasion of Ukraine on Monday when he is due to speak at Russia’s May 9 Victory Day parade marking the anniversary of Nazi Germany’s surrender in 1945.  

Russia Still Can’t Shake Default Risk (11:30 a.m.)

Russia avoided a debt default last week, but markets are still priced like it’s on the brink. Bonds are stuck at distressed levels and five-year credit default swaps put an 87% chance of a default. Those odds are lower than in April, but still elevated.

“Russia will likely default eventually,” said Elena Daly, founder of EM Conseil, a Paris-based advisory firm specializing in sovereign debt management. 

 

©2022 Bloomberg L.P.