(Bloomberg) --

Russian airstrikes continued far from the front lines, even as military analysts said Moscow’s offensive operations in eastern Ukraine are scaled back for now. At least three people were reported killed in the central city of Dnipro Friday night. Air raid sirens went off in much of the country.

The US State Department said it supports selling a total of $1.45 billion in weapons to NATO allies Estonia and Norway. Ukraine’s defense minister earlier said the first M270 Multiple Launch Rocket System arrived in the country and would bolster the country’s ability to hit long-range targets. 

Russia plans to reject requests from foreign banks to sell their units in the country while sanctioned Russian banks are unable to sell their business abroad. And President Vladimir Putin ousted his top defense-industry official as Russia digs in for a long war. 

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

Key Developments

• EU Stalls on Ukraine Aid as Fears Spike of Gas Crisis at Home
• Putin Ousts Defense-Industry Head as Kremlin Looks to Long War
• EU Proposes New Russia Sanctions, Fixes to Earlier Actions
• Surging Crimea Shipments Point to Stealing of Ukraine Grain 
• Russia Visited Iran to View Drone Capabilities, US Official Says 

On the Ground

Almost five months into the war, Moscow’s forces have repeatedly hit civilian targets in the past week. Oleksandr Motuzyanyk, a spokesman for the ministry of defense, said 70% of Russia’s strikes hit residential areas. Missiles hit the industrial city of Dnipro on Friday night, regional Governor Valentyn Reznichenko said. At least the people were killed and 16 wounded after rockets hit an industrial company, he said. Russia also fired missiles at port city of Odesa. Ukraine’s defense has been successful in repulsing Russian attacks in eastern region of Luhansk, which has been “instrumental in reducing Russia’s momentum,” the UK Defense Ministry said in an update. It said Moscow’s offensive operations are currently reduced in size and scope.  

(All times CET)

Russia Visited Iran to View Drone Capabilities, US Says (8:14 a.m.)

Satellite images show a Russian delegation visiting Iran to view weapons-capable drones that could be purchased for use in the war in Ukraine, a senior US official said Saturday.

The disclosure by the US is intended to bolster the assertion by National Security Adviser Jake Sullivan -- made without details of the underlying intelligence -- that Russia was seeking to purchase hundreds of unmanned aerial vehicles to help its campaign in Ukraine.  

Russia Storing ‘Missile Systems’ at Massive Nuclear Plant: AFP (8 a.m.)

Kremlin troops are storing weaponry at, and launching attacks from, the Zaporizhzhia nuclear plant in southeastern Ukraine, Agence France Press reported, cited an official with Kyiv’s nuclear agency. 

“The occupiers bring their machinery there, including missile systems,” Petro Kotin, president of the Ukrainian nuclear agency Energoatom, said in a televised address on Friday, AFP reported.

Russian forces took control of the plant, Europe’s largest, in the early weeks of the war. The International Atomic Energy Agency hasn’t been able to inspect the plant since Feb. 24. 

Zelenskiy Says Identifying Vinnytsia ‘Guilty’ Has Begun (7:55 a.m.)

The identification of “all of those guilty in the attack” on Vinnytsia on Thursday has begun, President Volodymyr Zelenskiy said Friday in his nightly address to the nation. 

“Both at the national level and at the international level, we will do everything to make absolutely all Russian murderers responsible for what they have done,” he said. 

Russia’s missile strike on the central Ukraine city left 23 dead with four still in critical condition and four more unaccounted for.  

Russia Deliberating Escalating Civilian Attacks: Guardian (7:30 a.m.)

Moscow has has deliberately escalated airstrikes on civilian targets in recent weeks, a top Ukrainian official told the Guardian. 

“We have a system to monitor and track all airstrikes and other attacks in our country and what we have noticed recently is a tendency to destroy more and more civilian targets,” Oleksiy Danilov, secretary of Ukraine’s national security council, told the UK newspaper. “They have decided to terrorize civilian population.”

The comments came two days after Russian missiles struck Vinnytsia in central Ukraine, hundreds of miles from the Donbas front line. The attack killed 23 people, including three children. Russia claimed responsibility, saying it targeted “foreign weapons suppliers.”  

G-20 Meeting Expected to End Without Formal Communique: Reuters (3 a.m.)

The G-20 finance ministers meeting is expected to conclude without a formal communique as the Ukraine-Russia war continues to divide the group, Reuters reports, citing two unidentified people familiar with the matter.

Japan Will Aim to Keep Stake in Russia’s Sakhalin-2, Nikkei Says (2 a.m.)

Japan will seek to maintain its stake in the Sakhalin-2 natural gas project in Russia’s far east, the Nikkei newspaper said, after Putin signed a decree transferring rights to a new Russian company just over two weeks ago.

The decree gave stakeholders a month to say whether they’ll take a holding in the new company. The Japanese government has proposed to trading companies with stakes in the existing operator that they remain as shareholders after the transfer, the paper reported, without saying where it got the information.

Wheat Falls to Pre-War Low (10:45 p.m.)

Chicago wheat futures extended losses back to the lowest since before Russia invaded Ukraine in February, capping its worst week in a decade with surging shipments of agricultural goods in Crimea underscoring how grain is still entering world markets despite the war.

Futures slumped as much as 3.7%, briefly wiping out all of the gains from 2022, before trimming losses and settling 1.8% lower at $7.81 a bushel.

Ukraine Accuses US, European Banks Over Russia Links: FT (10:30 p.m.)

Ukraine told banks in the US and Europe to cut ties with groups that trade Russian oil, the Financial Times reported, citing letters it had seen. 

Oleg Ustenko, an economic adviser to the Ukrainian president, wrote to top bank officials, including Jamie Dimon of JPMorgan and Noel Quinn of HSBC, asking them to stop financing firms that trade Russian oil and sell shares in state-backed companies Gazprom and Rosneft. Letters were also sent to Citigroup and Crédit Agricole.

The banks were accused of “prolonging” the war by giving credit to firms that ship Russian oil. They were also told they would be blocked from participating in post-war reconstruction in Ukraine, the report said.

State Department Backs Weapons Sales to Estonia, Norway (9:27 p.m.)

The US State Department said it supports the sale of $950 million worth of AIM-120 missiles to Norway and $500 million for HIMARS Rocket Systems to Estonia -- both key NATO allies bordering Russia. 

In a statement announcing the decision, the State Department said the sales will enhance the national security of the US. The principal contracts benefiting from the sale are Lockheed Martin Corp. and Raytheon Missile Systems Co. 

Multiple Launch Rocket System Arrives in Ukraine (6:41 p.m.)

Ukraine’s Defense Minister Oleksiy Reznikov said on Twitter that the country received the first M270 MLRS intended to help hit targets further from the front lines. 

Russia Plans to Thwart Sale of Foreign Bank Units (5:34 p.m.)

Putin’s government plans to reject requests from foreign banks to sell their units while sanctioned Russian banks are unable to sell their business abroad.

If a foreign bank seeks to sell branches in Russia, the authorities will block the move, the Interfax news service cited Deputy Finance Minister Aleksey Moiseev as saying. Citigroup Inc. said earlier that it’s considering a “full range of possibilities” on exiting its Russia business. 

Russia Plans to Thwart Sale of Foreign Bank Units Amid Sanctions

Surging Crimea Shipments Point to Stealing of Ukraine Grain (5 p.m.)

The Russian-occupied peninsula of Crimea is shipping more than 50 times the volume of food it usually does, likely indicating that seized Ukrainian grain is being taken abroad, according to analysts and the Kyiv School of Economics. 

The port of Sevastopol shipped about 462,200 tons of agricultural goods since the beginning of March, according to Geneva-based researcher AgFlow. Last year, the port shipped about 8,000 tons.

Putin Shuffles Defense-Industry Officials (4:41 p.m.)

Russia’s president reassigned the top official responsible for military production as the Kremlin digs in for a long war in Ukraine that’s tested an industry long plagued by inefficiency and corruption. 

He named Yury Borisov, formerly deputy prime minister, to head Russia’s space agency. Responsibility for defense production passed from Borisov to Industry Minister Denis Manturov, who was promoted to deputy prime minister.  

Putin Thursday signed a law allowing the Russian government to impose special measures, including night shifts and overtime work, to boost weapons repairs and production of military equipment, citing a “short-term increased need.” 

Truss Says Moscow Bears Full Responsibility for UK Prisoner Death (4:09 p.m.)

The UK Foreign Office said it had summoned Russian ambassador Andrey Kelin following reports British national Paul Urey had died in captivity after being taken prisoner by Moscow-backed separatists in April.  

“I am shocked to hear reports of the death of British aid worker Paul Urey while in the custody of a Russian proxy in Ukraine. Russia must bear the full responsibility for this,” Foreign Secretary Liz Truss said in a statement. 

A representative of the self-proclaimed Donetsk People’s Republic in eastern Ukraine said Urey died on July 10, according to Interfax. The reported cause of death was chronic disease including type 1 diabetes.  

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