Russian gas cut to Europe hits economic hopes, Ukraine reports attacks on coastal regions

  • Gazprom says shutting down turbine will further reduce gas to Germany
  • UN hopes for grain exports within days
  • US explores land routes after Russian strike
  • Fire breaks out at oil depot in Russian-occupied territory

KYIV, July 26 (Reuters) – Russia said it would cut off gas supplies to Europe from Wednesday, dealing a blow to countries that have backed Ukraine, as missile attacks in the Black Sea coastal regions raised doubts about whether Russia would stick to a deal to let Ukraine export grain.

The first Ukrainian ships could set sail within days under an agreement reached on Friday, the United Nations said, despite a Russian missile attack on the Ukrainian port of Odessa over the weekend, and a spokesman for the military administration said another missile hit the Odessa region on Tuesday morning.

Soaring energy prices and the threat of hunger facing millions in the poorest countries show how Europe’s biggest conflict since World War II, now in its sixth month , has an impact far beyond Ukraine.

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European Union countries are expected to approve a weakened emergency proposal on Tuesday to reduce their gas demand as they try to wean themselves off Russian power and prepare for a possible blackout. Read more

The Ukrainian military on Tuesday reported Russian cruise missile strikes in the south and that Ukrainian forces hit enemy targets. Serhiy Bratchuk, a spokesman for the military administration in Odessa, told a Ukrainian TV channel that a missile fired from the direction of the Black Sea hit the area, but gave no information on the victims.

East of Odessa, along the Black Sea coast, Mykolaiv’s port infrastructure was damaged in an attack, according to Mayor Oleksandr Senkevich.

The Russian Defense Ministry did not immediately respond to an out-of-hours request for comment.

A major fire broke out at an oil depot in the Budionnovsky district of the Russian-backed Donetsk People’s Republic in eastern Ukraine after Ukrainian troops shelled the province, the report reported. Russian TASS, citing a reporter at the scene. No casualties or injuries were reported.

Russian energy giant Gazprom (GAZP.MM), citing instructions from an industry watchdog, said on Monday gas flows to Germany through the Nord Stream 1 pipeline would fall to 33 million cubic meters per day from Wednesday.

This is half of current flows, which already represent only 40% of normal capacity. Before the war, Europe imported about 40% of its gas and 30% of its oil from Russia. Read more

The Kremlin says the gas disruption is the result of maintenance issues and Western sanctions, while the European Union has accused Russia of energy blackmail.

European politicians have repeatedly said Russia could cut gas this winter, a move that would plunge Germany into recession and hurt consumers already hit by soaring inflation.

Moscow says it is not interested in a complete shutdown of gas supplies to Europe.

Adding to concerns on the energy front, Ukraine’s gas pipeline company said Russian gas giant Gazprom (GAZP.MM) had, without notice, sharply increased pressure in a gas pipeline that crosses Ukraine to deliver gas Russian to Europe. Read more

Such pressure spikes could lead to emergency situations, including pipeline ruptures, and pipeline operators are obliged to notify each other in advance, the Ukrainian company said. Gazprom could not immediately be reached for comment.

GRAIN VESSELS

Prior to the invasion and subsequent sanctions, Russia and Ukraine accounted for almost a third of global wheat exports.

Russian, Turkish, Ukrainian and United Nations officials agreed on Friday that there would be no attacks on merchant ships crossing the Black Sea to Turkey’s Bosphorus Strait and to markets. Read more

Moscow dismissed fears the deal could be derailed by a Russian attack on Odessa on Saturday, saying it only targeted military infrastructure.

The White House said the strike cast doubt on Russia’s credibility and was watching closely to see if commitments would be met.

“We will also continue to actively explore other options with the international community to increase Ukrainian exports overland,” he said.

Russia’s Black Sea Fleet has blocked grain exports from Ukraine since the February 24 invasion of Moscow. Moscow accuses Western sanctions of slowing its food and fertilizer exports and Ukraine of having mined the approaches to its ports.

As part of Friday’s deal, pilots will guide ships along safe channels through naval minefields. Read more

A Ukrainian government official said he hoped the first shipment of grain could be made from Chornomorsk this week, with shipments from other ports within two weeks.

Zelenskiy was adamant about resuming trade: “We will start exporting and let the partners take care of the security,” he said.

Russian Foreign Minister Sergei Lavrov, while touring African countries, said there were no obstacles to the export of grain and nothing in the agreement prevented Moscow from attack military infrastructure.

The Kremlin has also said the United Nations must ensure that restrictions on Russian fertilizers and other exports are lifted for the grain deal to work.

AIR STRIKES

The Kremlin says it is engaged in a “special military operation” to demilitarize and “denazify” Ukraine. Kyiv and Western nations say war is an act of unprovoked aggression.

Thousands of civilians died and millions fled during the war. Artillery barrages and Russian airstrikes pulverized cities.

As Western weapons bolster the Ukrainians, Putin’s forces are making slow progress, but are believed to be preparing for a further push east.

Ukraine said on Monday that its forces had used US-supplied HIMARS rocket systems to destroy 50 Russian ammunition dumps since receiving the weapons last month.

Russia did not comment, but its defense ministry said its forces had destroyed an ammunition depot for HIMARS systems. Read more

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Reports from Reuters offices; Written by Costas Pitas and Stephen Coates; Editing by Simon Cameron-Moore

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