The US released video footage it said showed Russian jets dumping fuel on a US surveillance drone in international airspace and apparently clipping the aircraft, challenging Moscow’s contention that it had no role in Tuesday’s downing.

Mark Milley, the chairman of the US Joint Chiefs of Staff, said on Wednesday that “we do not seek armed conflict with Russia” in the wake of the spy drone incident.

Key developments

• Ukraine grain deal outlook still unclear two days before expiry
• Microsoft warns Russia may plan sandworm attacks beyond Ukraine
• How Russia’s invasion of Ukraine pushed Finland and Sweden towards Nato

China, Ukraine ministers discuss ties, invasion 

Chinese Foreign Minister Qin Gang spoke to his Ukrainian counterpart Dmytro Kuleba about bilateral ties and Russia’s invasion, before a possible call between the presidents of their countries.

Chinese leader Xi Jinping is expected to travel to Russia next week for talks with President Vladimir Putin, and may speak to Ukraine’s Volodymyr Zelensky afterward. China in February released proposals aimed at achieving peace in Ukraine, but they were rejected by Kyiv’s allies as favouring Russia.

Latvia sees Russian employees at Council of Europe as unacceptable

Latvian Foreign Minister Edgars Rinkevics told Council of Europe Secretary-General Marija Pejceinovic Buric that it was unacceptable for Russian citizens to continue working for the organisation’s institutions given that Russia was excluded, according to a statement from the Baltic nation’s ministry.

Rinkevics met Buric in Riga, as Latvia will take over the chairmanship of the Council of Europe in May for six months. Latvia and its Baltic neighbours have been among Europe’s harshest critics of Moscow’s invasion of Ukraine, supplying weapons and aid to help Kyiv.

Poland detains foreigners in probe of Russia-linked spy ring  

Polish authorities detained nine foreign nationals accused of monitoring deliveries of weapons and aid to Ukraine, saying evidence indicated that the suspected operatives were receiving payments from Russian special services.

“The suspects were also preparing for sabotage activities, with the goal of paralysing the transport of equipment, weapons and assistance for Ukraine,” Interior Minister Mariusz Kaminski told reporters.

Russian economy on path to steady growth, says Putin 

Russia’s economy is on track for “substantial” growth in the second quarter as domestic demand expands despite sanctions, President Vladimir Putin told a televised meeting with top business tycoons.

Inflation would drop close to the 4% target this month, he said, appealing to the executives to step up investments at home, filling niches left by foreign companies’ departures.

Poland to send Soviet-era jets to Ukraine

Poland will gradually transfer to neighbouring Ukraine more Soviet-era MiG-29 warplanes, of which it has a dozen or so in its fleet, President Duda said at a press conference in Warsaw. Defence Minister Mariusz Blaszczak had said earlier that Poland was in talks with Slovakia on transferring such Soviet-era planes to Ukraine as part of a “wider coalition” of countries.

Ukrainian President Zelensky and his military leadership have sought aircraft since the first days of the war. US President Joe Biden’s administration has signalled support for Nato allies that opted to send air power, though the US leader has said delivering F-16 fighter jets isn’t on the cards for now.

Ukraine keeps key rate unchanged amid IMF talks

Ukraine’s central bank held borrowing costs steady as the government closed in on a deal with the International Monetary Fund for about $15-billion in financing. 

The key policy rate remained at 25%, the level it’s been since the central bank raised the benchmark by 15 percentage points in June to halt a spike in inflation. 

US releases footage of Russian fighter jet/US drone intercept 

The US military’s European Command released footage showing Russian Su-27 jets dumping fuel on a US MQ-9 Reaper drone in international airspace and apparently clipping the drone, challenging Moscow’s contention that it had no role in Tuesday’s downing. 

The 42-second video of what the US called the “unsafe/unprofessional intercept” was edited for length, but the events were “depicted in sequential order”, the US said.

The drone crashed into the Black Sea after the encounter. US defence chief Lloyd Austin spoke to his Russian counterpart about the incident on Wednesday. Russia said its planes didn’t make contact with the drone, which it claimed crashed on its own. Moscow didn’t release official video footage, however.

Military orders boost Rheinmetall sales

Germany’s largest defence contractor expects revenue to jump by as much as 19% this year on accelerating orders of military equipment as the war in Ukraine enters its second year.

“The epochal shift and the war in Europe has also ushered in a new era for Rheinmetall,” CEO Armin Papperger said in a statement. “Many countries have recognised the urgent need to step up their efforts for security.”

Shares in Rheinmetall, which makes parts for the Leopard 2 battle tank, have more than doubled since Russia’s invasion of Ukraine.

EU will broaden efforts to sanction relatives of Russian billionaires

The European Union will provide a clearer legal framework to target family members of sanctioned Russians after an EU court last week annulled penalties imposed on the mother of Yevgeny Prigozhin, the head of Russia’s Wagner mercenary group and a close ally of Putin.

The bloc’s foreign service arm in charge of listings told member states on Wednesday that it would submit legislation soon, people familiar with the matter said. The idea was first floated before the court ruling and has gained traction since.

Latvian premier in Kyiv for talks

Prime Minister Krisjanis Karins was in Kyiv to discuss additional support Ukraine needs from Nato and the EU, he said in a statement. 

The Baltic country has given Ukraine weapons and support worth 1.1% of GDP, and will continue to provide aid, according to the statement. Karins will discuss Ukraine’s goal of joining the EU, and will visit Bucha and Irpin during the visit. 

Latvia’s leader has called for Ukraine to join both the EU and Nato after the war ends.

EU leaders to agree to further measures on ammunition, says Scholz

German Chancellor Olaf Scholz said European Union leaders would agree at a summit next week on further measures “to achieve an even better, continuous supply” of ammunition for Ukraine.

“We will continue to ensure that Ukraine receives weapons and equipment to hold out and defend itself,” Scholz said in a speech to the lower house of Parliament in Berlin on Thursday morning.

He pledged that the EU would maintain its “sanctions pressure” on Russia, and said member states would work together to ensure that the measures “are not circumvented via third countries.”

Russian defence ministry wants to compete with Wagner success: UK

The Russian defence ministry’s campaign to capture Vulhedar in Ukraine’s Donetsk region may be driven “partially because it wants its own success to compete with Wagner’s achievements”, the UK defence ministry said in a Twitter update.  

The UK said efforts to assault Vulhedar had slowed, potentially after Ukraine’s adoption of Remote Anti-Armour Mine systems, artillery shells which scatter anti-armour mines up to 17km away from the firing unit. Kyiv’s forces have launched the mines over and behind advancing Russian units, the UK said.

Glencore won’t renew aluminium contract with Rusal 

Glencore is willing to walk away from a $16-billion deal to buy aluminium from Russia’s No 1 producer, in a move that would distance itself from one of its biggest rivals.

Under the company’s policy of not doing any new business with Russia, it won’t renew a deal with United Co Rusal International when that expires next year, according to CEO Gary Nagle.

Zelensky meets with billionaire Laurene Powell Jobs

Ukraine’s president met on Wednesday with billionaire philanthropist Laurene Powell Jobs, the widow of Apple co-founder Steve Jobs and president of Emerson Collective, majority owner of The Atlantic magazine.

The meeting was also attended by Jeffrey Goldberg, the magazine’s editor-in-chief, and journalist Anne Applebaum, author of Red Famine: Stalin’s War on Ukraine.

They discussed the use of technology in war, counteracting Russian cyber attacks, the further involvement of Ukrainian IT specialists and the technology sector’s role in the future reconstruction of Ukraine, according to a post on the presidential website.

Black Sea grain deal in focus as deadline approaches

Wheat prices fell from the highest level in more than a week, with traders seeking clarity over the terms of renewing a key grain export deal that allows Ukraine to ship crops from its Black Sea ports.

The pact, initially brokered by the UN and Turkey in July, currently runs until 18 March. Russia suggested renewing it for 60 days, half of the initiative’s previous two terms, but hadn’t received official reactions from all parties, according to Tass.

Kyiv has pushed back on Moscow’s proposal, saying it contradicts the terms of the original agreement and wants a four-month extension. DM