Ukrainian President Volodymyr Zelensky vowed a “strong” response after a Russian missile strike on a residential area in Lviv killed at least four people and injured dozens more.

More than 1,000km to the east of Lviv, Ukrainian forces continued offensive operations around Bakhmut, the General Staff said, making small but steady advances.  

Zelensky is on the move ahead of next week’s Nato summit. He visited Bulgaria on Thursday and plans to meet Turkish President Recep Tayyip Erdoğan in Istanbul on Friday to bolster support for an extension of the Black Sea grain deal due to expire on July 17. 

Wagner chief Yevgeny Prigozhin is back in Russia after spending time in Belarus, said Belarusian President Alexander Lukashenko. The intentions of Prigozhin and his mercenary army within Belarus remain hotly debated.  

Ukraine and Russia continue to trade accusations over a potential attack on the Russian-occupied Zaporizhzhia nuclear power plant in Ukraine’s south. Ukrainian military intelligence chief Kyrylo Budanov told The Times, though, that the danger of an attack is “quietly going down.” The UN’s nuclear watchdog demanded better access to the plant but said it didn’t discover mines or explosives there during recent inspections.

Latest developments

• Finland announces 17th defence package
• Zelensky visits Bulgaria as Cabinet boosts support for Ukraine
• Finland plots retaliation as Russia orders consulate closing
• Wagner chief Prigozhin is back in Russia, says Lukashenko
• Russian missiles hit western Ukraine as Zelensky vows response
• Russia is losing its heavy weapons edge in Ukraine

Wagner chief Prigozhin is back in Russia, says Lukashenko 

The chief of the Wagner private army that staged an aborted rebellion against the Kremlin’s military leadership last month is back in Russia, according to Belarusian President Alexander Lukashenko.

Yevgeny Prigozhin “is in St. Petersburg”, Lukashenko told reporters in Minsk on Thursday, according to the state-owned Belta news agency. The mercenary leader may also have gone to Moscow, the president said.  

Lukashenko said last week that Prigozhin was in Belarus days after he agreed to turn his mercenaries away from a march on Moscow on 24 June that had spiralled into the greatest threat to President Vladimir Putin’s nearly quarter-century rule in Russia. The Wagner founder hasn’t made a public appearance since the revolt ended. 

The Kremlin isn’t following Prigozhin’s movements and has no wish to do so, Putin’s spokesman Dmitry Peskov told reporters on Thursday, the Interfax news service reported. 

Russia gas giant warns of sanctions risk for Ukraine energy firm

Russia may sanction Ukraine’s state-run energy company if it pursues legal claims against the nation and Gazprom, putting gas shipments to Europe at risk.

Naftogaz Ukrainy started a dispute last year with the Russian gas giant over Gazprom’s refusal to use services outlined in a transit contract between the two companies. At the end of June, Naftogaz filed a motion to a US court, asking it to confirm an earlier award by a tribunal in The Hague that ordered Russia to pay $5-billion in compensation for the damages and lost property after Moscow annexed Crimea.

“If Naftogaz continues such malevolent actions, it can’t be ruled out that this may lead to the imposition of sanctions by the Russian Federation,” Gazprom CEO Alexei Miller said in televised comments on Thursday. “Then any relations between Russian companies and Naftogaz will simply be impossible.”  

It’s the second warning from Gazprom in almost a year over the possible imposition of sanctions, which could halt the remaining Russian pipeline gas flows to Europe. Gas transiting through Ukraine is one of the last two routes for Gazprom to deliver fuel to what was formerly its biggest market.  

Russian officials unperturbed at rouble’s biggest downswing yet

Top Russian officials couldn’t agree on what’s dragging down the rouble but signalled little alarm at the depreciation that’s brought the currency to its weakest levels since the immediate aftermath of the invasion of Ukraine.

As the rouble weakened past 93 per dollar on Thursday, Bank of Russia Governor Elvira Nabiullina attributed the declines largely to a deterioration in trade that’s seen exports drop sharply while imports inch up. The Kremlin’s spokesman, Dmitry Peskov, however, didn’t rule out that “speculative games” could also be to blame.

With a loss of more than 19% against the dollar this year, the rouble is only ahead of Turkey’s lira and the Argentine peso among the worst performers in emerging markets. On Wednesday, it briefly depreciated by as much as 3.1% — the steepest slide this year — before paring losses and trading 1.2% weaker as of 3.25pm in Moscow.

Speaking at a conference in St Petersburg, Nabiullina said “foreign trade for the most part explains” the rouble’s current performance and also pointed to higher budget spending that’s fuelling demand for imports. 

The depreciation presents no risks to financial stability, she said, meaning interventions in the currency market aren’t warranted. Nabiullina described as “conspiracy theories” a view that a devaluation is being orchestrated for the benefit of the budget. 

As Ukraine grain deadline approaches, pact is already broken

Global leaders are racing to salvage an international deal to allow Ukraine’s grain shipments by sea before it expires in less than two weeks. 

They face a key problem: the pact, already extended three times, is nearly defunct. 

The nation’s Black Sea ports, bustling with ships last autumn, are almost empty as the joint centre tasked with approving them buckles in dysfunction. The few vessels left are being inspected at a trickle. Russian officials continue to rail against the pact’s extension, while Kyiv accuses Moscow of trying to sabotage it.  

“It feels different this time,” said Tariel Khajishvili, director at shipping agent Novik in Odesa. Vessel traffic at the key grain hub of Chornomorsk is “completely dead.”

The United Nations and Turkey brokered the grain initiative a year ago to allow a safe route for exports following Russia’s invasion. Since then, the agreement has shepherded almost 33 million tonnes of crops to global markets, helping to lower food prices and bolstering a sector vital to one of the world’s top grain producers.

It’s up for renewal again on July 17, with the European Union, US and UN pushing for an extension. The negotiations take place against the backdrop of Ukraine’s counteroffensive, aided by Western governments, against Russian opposition. The presidents of Ukraine and Turkey are set to meet in Istanbul on Friday to discuss prolonging the pact.

Russia’s foreign ministry this week said there were “no grounds” to continue the pact, citing five obstacles to its own food exports it wants removed. Advocates contend that allowing it to lapse could raise costs for Ukrainian farmers and stifle what the UN calls a “lifeline for global food security.” 

EU, Latin American envoys clash over Ukraine mention at summit

Brazil’s Luiz Inácio Lula da Silva and other Latin American leaders will try to avoid any mention of Russia’s war in Ukraine when they meet their European Union counterparts this month, setting up a clash that risks undermining efforts to reboot relations between the blocs.

The Community of Latin American and Caribbean States is seeking to remove any reference to the conflict from the summit conclusions, according to people familiar with the matter. The gathering will take place in Brussels on July 17-18.

Germany, Poland, the Czech Republic and the Baltic states made clear in discussions among EU envoys on Wednesday that excluding any reference to the invasion would be a red line for Europe, the people said, speaking on condition of anonymity about private talks. 

Finland plots retaliation as Russia orders consulate closing

Finland is planning to retaliate after Russia on Thursday announced the expulsion of nine diplomats and ordered the closing of Finland’s consulate in St Petersburg.

The Kremlin’s measures are “harsh and asymmetrical” and mean Finland is preparing a diplomatic response of a similar magnitude, President Sauli Niinisto said in a message posted on Twitter after consultation with leaders of the ruling parties. He noted that Russia’s consulate in Turku on Finland’s southwestern coast is the counterpart to Finland’s St. Petersburg mission.

The newest member of the North Atlantic Treaty Organization, with 1,300km of border with Russia, Finland in June expelled nine people working at the embassy of Russia. They were “members of intelligence personnel”, the government said, adding that their actions were in breach of the Vienna Convention that sets out uniform principles for conducting diplomatic relations. Finland has not ordered the closing of any of Russia’s diplomatic missions in the country.

Speaking to reporters in Helsinki, Prime Minister Petteri Orpo said “it’s crystal clear” the move “will worsen relations between Finland and Russia. I’m worried it will cause less dialogue,” he said. 

“We have chosen our side: we are on Ukraine’s side and we have joined Nato. One day, when the war is over and there’s a new order in Russia, we could perhaps rebuild diplomatic relations.” 

Zelensky arrives in Bulgaria amid shift to support Kyiv 

Zelensky arrived on a one-day visit to Bulgaria as the Balkan country’s new government looks to ratchet up its support for Kyiv. 

After months of political turmoil hamstrung Bulgaria’s backing for Ukraine against the Russian invasion, a new government led by the country’s two main rival parties has taken a strong line in cooperating with Kyiv, including increased military assistance and the sale of nuclear equipment.

Zelensky and Bulgarian officials in Sofia were set to discuss “defence support, Ukraine’s Euro-Atlantic integration, the Nato summit, security guarantees, peace formula implementation,” according to Zelensky’s Telegram channel.

The Bulgarian Parliament on Thursday approved a plan to accelerate the replenishment of state weaponry and ammunition reserves, paving the way for large-scale deliveries of badly needed Soviet-era ammunition to Ukraine. DM