Ukraine War

• Ukrainian officials admitted that the port city of Kherson had fallen to Russia, making it the first major city to be captured.
• Kharkiv—the second-largest city—is still under Ukrainian control, though residents are reporting that Russian air strikes are hitting residential neighborhoods and civilian infrastructure.
• That 40-mile Russian column hasn’t made much progress over the past three days: it’s still 19 miles (30 km) from Kyiv. UK defense officials say it’s been “delayed by staunch Ukrainian resistance, mechanical breakdown and congestion.” There are also reports that demoralized Russian troops are complaining about shortages of food and fuel.
• Ukrainians on the ground see this Russian convoy as an opportunity to cripple the invading army by blocking off its supplies and transport equipment before it reaches Kyiv, and they’re challenging the U.S., EU, and NATO to support airstrikes to pin the column down.
• Overt U.S. or NATO airstrikes would be disproportionately risky, but Ukrainian Su-24 and Su-25 fighter jets have already been shelling and bombing the convoy, and there are certainly other ways the West could support their effort at a crucial point when it could change the tide.

What’s Next

• Ukraine and Russia met for talks again today, and Russia agreed to Ukraine’s request to carve out humanitarian corridors (and possibly enact limited ceasefires) so civilians can safely flee the fighting.
• Pres. Zelensky also asked Pres. Putin for direct talks again…though his request was ignored last time.
• France’s Pres. Macron spoke with Putin (and Zelensky) yesterday and his office said it expects “the worst is yet to come” since Putin reiterated his commitment to taking “full control” of Kyiv by diplomatic or military means unless Ukraine agrees to his demands.
• Moody’s and Fitch downgraded Russian debt to “junk” status because of expectations that sanctions will continue to inflict damage on Russia’s economy and hinder its ability to repay debts.

Iran

• According to multiple reports, Iran has agreed to sign a new nuclear deal in Vienna soon—likely within the next 72 hours.
• The head of the IAEA is due to travel to Tehran on Saturday, which analysts read as another clue that a deal is close to done.
• Oil prices fell from record highs on the rumor since it’s widely believed the deal would lift sanctions on Iranian oil exports. Analysts estimate Iranian supplies would add 1.3 million bpd to the market (though that would still only partially compensate for lost Russian oil sales).

Venezuela

• There are also reports that the U.S. is considering easing sanctions on Venezuela to further augment oil supplies in the market. This seems like a more remote possibility than a new Iran deal, though.

Guyana

• Exxon added 200,000 barrels per day (bpd) to its estimated 2027 production capacity offshore Guyana, for a total of 1.2 million bpd—or ten times its 2021 production there.
• Exxon has discovered around ten billion barrels of recoverable oil offshore Guyana, and plans to drill ten new exploration wells this year and another ten next year.

Libya

• The new administration that Aguila Saleh’s House of Representatives elected was sworn in yesterday, although its interim PM, Fathi Bashaga, said his rival PM, Abdulhamid al Dbeibah, tried to interfere with the inauguration by detaining three ministers-to-be.
• UN envoy to Libya Stephanie Williams wrote to both of Libya’s rival parliaments—the House of Representatives and the High Council of State—proposing that they immediately meet to agree on a path back to a unified and elected government. Neither seems prepared to meet or stand down.