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DNIPROPETROVSK, UKRAINE – November 18: (Photo by Dnipropetrovsk Regional Military Ad/Anadolu via Getty Images)

Anadolu via Getty Images

Dispatches from Ukraine. Day 1,364.

Russian Attacks on Ukraine

Between Nov. 14-17, Russian strikes killed 18 civilians and injured some 40 others across Ukraine. The northeastern province of Kharkiv was hardest-hit with seven fatalities, followed by southeastern Zaporizhzhia region, where six people were killed. Three individuals lost their lives in the central province of Dnipropetrovsk and two more were killed in neighboring Donetsk.

A drone struck a Turkish tanker on Monday in Ukraine’s Odesa region, officials said, a day after Ukrainian President Volodymyr Zelenskyy signed a deal to import U.S. liquefied natural gas through the area.

Ukraine Signs Fighter Jet Deal with France

Ukraine and France signed an agreement on Nov. 17, under which Ukraine will purchase 100 French-made Rafale fighter jets over the next decade. The deal, which Ukraine’s President Volodymyr Zelenskyy described as “historic,” also includes drones and radars, and, crucially, the supply of eight SAMP/T air defense systems to Kyiv, which Zelenskyy has called “one of the greatest in the world.” Officials in Paris, however, noted that the signed document is only a letter of intent, not a final contract.

A day earlier, Ukraine signed an “extremely important agreement,” President Zelenskyy said, with Greece. Signed amid renewed Russian assaults on Ukraine’s energy infrastructure, the deal will send American LNG through the so-called vertical corridor, an energy lifeline that runs from Greece through southeastern Europe into Ukraine’s southern port of Odesa. The first deliveries are contracted for January 2026.

The agreement is of existential importance for Kyiv as Moscow has knocked out large chunks of its gas infrastructure this fall. This damage has already forced Ukraine to spend some $2.3 billion to increase imports ahead of winter. State-owned Naftogaz, Ukraine’s largest oil and gas company, says its facilities have been hit nine times since October, causing blackouts and heating outages across multiple cities. In total, Ukraine will need to import about 4 billion cubic meters of gas this winter, Naftogaz CEO Serhiy Koretsky said in late October.

Russian Oil Prices Fall to Two-Year Low

Russia’s benchmark Urals oil price plunged to its lowest level in more than two years last week, just days before U.S. sanctions will hit Rosneft and Lukoil, Russia’s two largest oil producers. Urals crude dropped to $36.61 per barrel, the lowest since March 2023, at Novorossiysk, a Russian Black Sea port, on Nov. 13.

The following day, Ukraine attacked the port and forced Novorossiysk and a neighboring Caspian Pipeline Consortium terminal to suspend oil exports for two days, cutting off circa 2.2 million barrels per day, or 2% of global supply.

Urals crude is trading at discounts of more than $23 a barrel, the deepest since June 2023, relative to international benchmarks, such as Brent crude. For the Kremlin, the slump in oil prices threatens to reduce revenues flowing into its coffers. Traditionally, oil and gas have accounted for roughly a quarter of Russia’s federal budget.

The price collapse has been exacerbated by softening demand for Russian shipments in anticipation of the Nov. 21 U.S. oil sanctions deadline, which granted refiners time to wind down dealings with Rosneft and Lukoil, producers previously not under American sanctions. Some buyers, including in India and China, are already pausing purchases, seeking alternatives to Russian oil, but a complete removal of Russian hydrocarbons from these markets remains unlikely.

EU to Close Ukraine’s Massive Deficit

European Commission President Ursula von der Leyen is urging European Union leaders to agree by December on a plan to fund Ukraine’s massive budget needs for 2026 and 2027. The amount of financing needed is expected to be about $155 billion.

In a Nov. 17 letter to the 27 EU member states, she underscored the urgency of a fast decision, while acknowledging its difficulty. “Clearly, there are no easy options … Europe cannot afford paralysis, either by hesitation or by the search for perfect or simple solutions which do not exist,” Von der Leyen wrote.

She outlined three main options to cover Ukraine’s budget shortfall. The first would be through nearly $105 billion in voluntary contributions from EU member states over two years. The second would involve joint EU borrowing backed by legally binding guarantees from all members, which could carry interest costs. The third, and riskiest option, would be a reparations loan using frozen Russian assets.

The last option could avoid extra costs or debt for EU governments, but it also faces skepticism from some member nations, especially Belgium, host of Euroclear, where most of Russia’s frozen assets are held, for the risks it poses. Belgium has pushed for maximum legal certainty to counter potential Russian lawsuits following any seizure of frozen assets, which would be seen in Moscow as illegal expropriation.

Von der Leyen acknowledged that the reparations loan could be seen as “confiscation,” which is prohibited under international law, and noted potential adverse effects on financial markets. However, she said that the options “are not mutually exclusive” and could be combined to deliver funds to Ukraine by the second quarter of 2026. She also warned that the political debate cannot drag on, and that the European Council summit in December must be decisive. “None of the options is easy,” she wrote, “but a decision must be made quickly.”

By Danylo Nosov, Karina L. Tahiliani