Vladimir Putin is preparing to visit China in October, the Russian president’s first foreign trip since a warrant for his arrest on alleged war crimes was issued by the International Criminal Court.

The trip demonstrates a confidence by Putin that his authority is stronger than ever after the death of mercenary leader Yevgeny Prigozhin, investor and long-time Russia watcher Bill Browder told Bloomberg Television.

Drone attacks targeted multiple regions of Russia in a widespread retaliatory strike for the Kremlin’s invasion of Ukraine, as the authorities in Kyiv battled the heaviest air assault the city has faced since the spring.

Latest developments

• Putin agrees to visit China in first trip since arrest warrant
• Putin’s China visit ‘marks renewed assurance’
• Vatican forced to clarify pope’s praise of Russia’s past empire
• Ukraine says it pierced Russian defence line in occupied south

Russians cash in on higher wages as war drives labour shortages

As Russia’s labour market feels the squeeze from the war in Ukraine, real wages are soaring for those who have a job.

They increased in June by an annual 10.5%, the Federal Statistics Service reported on Wednesday, well above the median 9.4% rise forecast by analysts surveyed by Bloomberg. The growth in earnings offers a boost to Vladimir Putin as he prepares to seek a fifth presidential term in elections due early next year.

It’s the ninth consecutive month of wage growth, driven by intensifying competition for workers in many industries following the Kremlin’s mobilisation of 300,000 reservists and a continuing recruitment campaign for volunteers to fight in Ukraine. An exodus of hundreds of thousands of Russians from the country since the invasion began in February 2022 has added to the difficulty of filling vacancies.

Supported by relatively slow price growth and increased budget spending on public-sector employees, wages are set to tick up further in the months ahead before peaking in February, according to Bloomberg Economics. Voting in the presidential election is scheduled for March.

Unemployment also reached a record low of 3% in July, underscoring the tightness of the labour market that is driving salary gains across many sectors of the economy. The government is poised to increase the minimum wage by 18.5% next year following a 6.3% increase in 2023.

Salaries and people’s “wellbeing” should continue to rise, Putin said on Tuesday. “Although the situation on the labour market is stable now, we must always think about it.”

US says Russia-North Korea arms deals are ‘actively advancing’

The US has new information that Russia and North Korea are negotiating arms deals under which the isolated regime would provide Putin’s army with munitions and other support for its invasion of Ukraine, the White House said.

Putin and North Korean leader Kim Jong-un have exchanged letters to increase cooperation, and Russian officials have visited Pyongyang for conversations about possible arms deals, National Security Council spokesperson John Kirby said.

“We have new information which we’re able to share today that arms negotiations between Russia and the DPRK are actively advancing,” Kirby said, referring to North Korea by its official name, the Democratic People’s Republic of Korea. “Under these potential deals, Russia would receive significant quantities and multiple types of munitions from the DPRK which the Russian military plans to use in Ukraine.”

The US revelation comes about a month after Kim met Russian Defence Minister Sergei Shoigu in Pyongyang and gave him a tour of a weapons exhibition where nuclear-capable ballistic missiles and drones were on display. The Biden administration has for months accused Russia and the Wagner mercenary group of receiving deliveries of North Korean munitions.

Russia in talks with Opec+ on extending oil-export cuts

Russia is discussing with its Opec+ partners the possibility of extending oil-export cuts into October, but no decision has been made so far, Interfax reported, citing Deputy Prime Minister Alexander Novak in Moscow.

The decision will depend on the market situation, Novak said, according to the state news agency Tass, which was reporting from the same event.

The statement from the nation’s top energy official and main negotiator with the Organisation of Petroleum Exporting Countries comes as global crude markets are tightening, but the summer price rally has stalled on mounting concern over China’s economic growth.

Saudi Arabia, the de-facto Opec leader and Russia’s close ally in the oil market, is expected to extend its own voluntary oil production cuts for another month, according to traders and analysts surveyed by Bloomberg.

Read more: Saudi Arabia expected to prolong oil cut again, survey shows

Russia is committed to its earlier pledge of cutting exports in September by 300,000 barrels a day compared with the average May to June level, Novak said, giving the baseline for the reductions for the first time. Earlier, the nation pledged to curb its crude exports by 500,000 barrels a day in August.

Russia hit by drone wave as Kyiv battles biggest blitz in months

Drone attacks targeted multiple regions of Russia in a widespread retaliatory strike for the Kremlin’s invasion of Ukraine, as the authorities in Kyiv battled the heaviest air assault the city has faced since the spring.

Four Ilyushin Il-76 military transport planes were damaged at an airport in Russia’s northwestern Pskov region, state-run Tass news agency reported on Wednesday, citing an unidentified emergency services official. Russian air defences claimed they shot down drones in five other regions including near Moscow, as well as in Sevastopol in occupied Crimea.

At least two people were killed and three wounded amid housing damage and falling debris in Ukraine’s capital region following Russian missile and drone attacks, local authorities said. Air defence forces said they shot down 28 Russian cruise missiles and 15 drones overnight in Kyiv and four other regions including Odesa and Mykolaiv in Ukraine’s south.

The strikes came as the Ukrainian military cites progress in a grinding three-month counteroffensive to reclaim occupied territory and steps up attacks far behind the front lines, including widening use of strikes inside Russia and deploying sea drones against Russian ships in the Black Sea. Last week it also staged a special-forces raid in Crimea.

The attack on Pskov, which borders Nato member states Estonia and Latvia, was particularly noteworthy as it’s located some 800km north of Ukraine. It’s home to an elite Russian paratroop unit that was deployed to Ukraine’s Bucha, where atrocities were recorded during the occupation. Regional Governor Mikhail Vedernikov said on social media that all commercial flights from the airport were halted on Wednesday.

Moscow shut four international airports briefly again overnight in the latest attacks as a combat drone was downed near the capital. In central Russia, drones also were shot down in the Ryazan, Kaluga, Oryol and Bryansk regions.

Russia’s Defence Ministry said it destroyed four Ukrainian special forces speedboats in the Black Sea. Ukraine’s special forces called the claim “fake” in a Telegram post.

The intensified fighting pushed wheat prices up from the lowest level since early June.

Attention shifted this week to the frontline in southern Ukraine, where authorities in Kyiv said troops had pierced the first line of Russian fortifications and are fighting to widen the breach. The counteroffensive has been bogged down by Russian forces dug in along a vast front line stretching from the Donbas region in Ukraine’s east through the south to the mouth of the Dnipro River.

Russia’s diesel, fuel exports poised for August slump

Russian petroleum exports are on course to plunge this month to the lowest in 10 months, amid a drop in oil processing as refiners prepare for planned autumn maintenance.

Oil product flows from the nation dropped to 2.3 million barrels a day during the first 26 days in August, according to data compiled by Bloomberg from analytics firm Vortexa. That’s about 250,000 barrels a day less than during July, and roughly also below year-earlier levels.

The market is observing Russian oil shipments closely for clues on the nation’s crude production after Moscow classified official output data. Seaborne crude flows from the country have risen to an eight-week high, according to the latest tracking data. Refined fuel exports have lost momentum in August — when some products have breached Group of Seven-imposed price caps.

UK’s Cleverly says in China that no state should legitimise Putin

Foreign Secretary James Cleverly urged China to help bring Russia’s war in Ukraine to an end, as he used a trip to Beijing to mend the UK’s ties with the world’s second-largest economy.

Cleverly said in an interview on Wednesday in Beijing that he called on Chinese officials to stand by their past commitments to uphold Ukraine’s territorial integrity. He was responding to a question about a Bloomberg News report on Tuesday that Putin had accepted China’s invitation to visit, in what would be the Russian leader’s first overseas trip since being indicted on allegations of war crimes.

“My visit here is about the bilateral relationship between the UK and China,” Cleverly said. “I have said that Russia’s brutal invasion of Ukraine cannot be justified by Moscow or indeed anywhere else.”

Britain is trying to improve a relationship that has been strained by issues including China’s crackdown on democracy activists in Hong Kong and several crises between Washington and Beijing. A thaw in US-China ties is providing an opening for the UK, with US Commerce Secretary Gina Raimondo also visiting this week.

Orban urges ‘deal’ with Putin, rejects Ukraine joining Nato

The West should make a “deal” with Putin on Ukraine’s new security architecture, which shouldn’t include the return of Crimea nor membership in the Nato military alliance, according to Hungarian Prime Minister Viktor Orban.

The Hungarian leader, who has faced criticism over his efforts to undermine Western sanctions that were imposed on Russia after its invasion of Ukraine, told former Fox News host Tucker Carlson that Ukraine was on track to lose the war because it was outnumbered by Russian troops.

“We should make a deal with the Russians on the new security architecture to provide security and sovereignty for Ukraine but not membership in Nato,” Orban said in an interview with Carlson, which was published Wednesday on X, formerly known as Twitter.

Orban said the return of the strategic Black Sea peninsula of Crimea, which Russia annexed in 2014, before its full-scale invasion of Ukraine last year, was “totally unrealistic”. He also said the best chance for peace was for former US President Donald Trump to return to power and for him to end military support to Ukraine.

“We do not know about Hungary, but Ukraine does not trade its territories or its sovereignty,” Ukrainian Foreign Ministry spokesman Oleh Nikolenko said in a Facebook post.

Orban has tried to block EU aid, refused to supply arms to Kyiv and has repeatedly said that Ukraine’s counteroffensive was doomed to fail.

Orban’s government has also cut deals with Russia on energy, securing gas supplies and pressing ahead with the Russia-led construction of its nuclear power plant over the reservations of some EU and Nato allies. The Hungarian leader has referenced Putin as a model on which he has built what he calls an “illiberal democracy” that opposes the EU’s multicultural values.

Rosneft CEO Sechin decries Russian oil-output cuts once again

Rosneft Chief Executive Officer Igor Sechin said Russia’s intermittent oil-output cuts were curbing the development of the nation’s biggest crude producer.

“Rosneft has been limiting crude oil production in one way or another since 2017, which prevents the company from fully unleashing its potential,” Sechin said in a statement on Wednesday following the release of the company’s operational results. The CEO is one of Russia’s most powerful businessmen and a close ally of Putin.

Still, Rosneft is committed to the current output cuts, implemented as part of Russia’s cooperation with Opec+. The oil giant reduced its liquids production in the second quarter by 2.2% to 3.9 million barrels a day, compared with the preceding three months, according to the statement.

Sechin also said Russia’s tax environment “including legislative changes already enacted and new initiatives, makes the company’s operations more challenging.” The nation’s producers have seen several legal changes since Russia’s invasion of Ukraine — from the introduction of a minimal price of Urals crude for tax purposes to the looming halving of refining subsidies — all aimed at raising oil and gas revenues of the Russian budget.

Since Russia started working with the Opec in 2017, Sechin has consistently criticised the cooperation. The Rosneft CEO has pushed instead for the country to increase crude output and defend its market share from other global producers, including the US. DM