Update 24 March

24 mars, 2022

One month since the latest Russian invasion of Ukraine began, Russian forces continue to make limited progress. Russian troops are reported to have moved over to the defensive. On 23 March, Russian military troops conducted restricted and localised ground attacks.

In In the north, the fighting in and around Chernihiv has been devastating. The mayor of Chernihiv has declared that the city cemetery cannot accommodate all the deceased. On the outskirts of Kyiv, authorities reported that Ukrainian forces have surrounded Russian troops in Irpin, Bucha and Hostomel. The Mayor of Irpin stated that Ukrainian forces now control 80 percent of the town, and noted that Russians continue to fire missiles into the town and that Russian saboteurs are still present. On 23 March, Oksana Baulina, a Russian freelance journalist was killed during the Russian bombardment of Kyiv. Since the large-scale attack on Ukraine began, five journalists have been killed and several have been arrested or have disappeared.

In the last few days, Russian forces have concentrated its efforts on Luhansk and Donetsk Oblasts, in eastern Ukraine. Russian forces are encircling Severodonetsk and controlling almost the entire Luhansk Oblast. In addition, Russia is shelling the Ocheretine railway station in the Donetsk Oblast. Artillery bombardment continues in Kharkiv Oblast. According to Ukrainian forces, a Russian cruise missile was intercepted over Kharkiv.

In the south of Ukraine, Russian troops have increased its shelling of Mariupol. It is likely that Russian forces will capture Mariupol or force the city to surrender in the coming weeks. A large explosion has been reported in the Russian-occupied port of Berdyansk and according to Ukranian authorities, a large Russian vessel has been destroyed. On March 23, the mayor of Melitopol denounced that Russian troops are building a military base at the Melitopol airfield, in Zaporizhzhia Oblast, to launch missiles targeting other cities.

There have been limited advances in the west, anti-aircraft sirens sounded in Lviv but no strikes have been reported so far. As Western powers are planning to send additional military aid to Ukraine, and as NATO plan on strengthening its eastern flank further, 2Secure believe that there is a heightened risk that Russia will increase its attacks in western Ukraine in a bid to deter Western involvement.

Developments in Russia

According to Kremlin spokesperson Dmitry Peskov, Russia would use nuclear weapons if faced with an “existential threat”. While the use of nuclear weapons remains unlikely, the risk has increased since the Russian representative’s statements on 22 March. The likelihood of use of nuclear weapons increases if Putin sees his position threatened.

Significant progress in the negotiations between Ukraine and Russia is unlikely to be achieved in the coming days after Ukrainian President Zelensky hardened his stance and Russian Foreign Minister Sergei Lavrov stated that the Ukrainian delegation is ”constantly changing its position”. Lavrov also suggested that the US is influencing Ukraine and undermining the negotiations.

On 24 March, the Russian stock market opened on a limited basis for the first time in a month and the benchmark MOEX index rose up to 10 percent in early trading in Moscow. Among the stocks listed are Gazprom, Lukoil, VTB Bank, Sberbank, Rusal and Rosneft. Russian stocks last traded on 25 February, after Russia’s latest invasion of Ukraine caused stocks to drop. In the weeks since Russian stocks stopped trading, sanctions imposed by Western countries have crushed the rouble and caused the country’s economy to collapse. Given the significant depreciation of the currency in the last month, President Vladimir Putin announced on 23 March that Russia will request payment in Russian roubles for gas purchases from ”unfriendly countries”.

After Facebook and Instagram have been banned in Russia, YouTube is also likely to be banned in the coming days after Russia accused the platform of ”terrorist behaviour” for showing content that the Kremlin perceives as anti-Russian. Google has reportedly begun evacuating its staff from Russia in the face of an unprecedented government crackdown on information due to the latest Russian invasion of Ukraine. This once again highlights the extremely high restrictions on freedom of speech and the increasingly volatile operating environment in Russia.

International Reactions

US President Biden has arrived in Brussels to attend NATO, G7 and EU summits today, 24 March. Ahead of the trip to Europe, Biden has stressed the importance of Western unity and it is expected that the US will launch new sanctions aimed at Russia following the summits. Furthermore, it is expected that Biden will push his European counterparts to stop importing Russian oil and gas; consequently, a deal in which the US will help Europe become less dependent on the Russian energy sector is likely. This could lead to that the European Union imposes sanctions on the Russian energy sector, an action that would lead to additional inflation, regardless if the US helps supply Europe with natural gas. Biden’s visit to Europe highlights a new era of confrontation, as Russia is threatening the security order in Europe and challenging Western-style democracy.

According to the latest news from the G7 summit, group of seven leaders have announced that Russia is no longer use gold in transactions. Plus, new package of sanctions against Russia will target more than 400 elites and members of Russian State Duma. After summits, president Biden will meet his Polish counterpart in Poland, focus of the meeting will be the flood of Ukrainian refugees. Today, a White House official announced that the US is trying to help its Eastern European allies by taking up to 100,000 of the 3,6 million Ukrainian refugees who have fled from the invasion.

On 24 March, Ukrainian President Zelensky spoke to the Swedish Parliament by video conference. He thanked Sweden for its military assistance, called for tougher sanctions against Russia, requested a ban on Russian oil and demanded help in rebuilding Ukrainian cities in the aftermath of the war. In addition, Zelensky warned that the Swedish island of Gotland is also under threat from Russia.

Do you want to gain a deeper understanding of how the current situation in Eastern Europe will affect your company?
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