War costs rise for Putin

Ukraine is steadily making progress on the battlefield [View in browser]( [Bloomberg]( Despite gloomy talk from some allies about the slow pace of the military counteroffensive, Ukraine is steadily making progress on the battlefield and raising the cost of the war for Russia. After weeks of punching against fortified Russian frontlines in the occupied east and south, Ukrainian forces may have made significant breakthroughs that open up the prospect of a more rapid advance. Key Reading: [Ukraine Says It Pierced Russian Defense Line in Occupied South]( [Ukraine Gets ‘Vampire’ Anti-Drone System From US Amid Raids]( [Russia Hit by Drone Wave as Kyiv Battles Biggest Blitz in Months]( [Ukraine’s Slow Counteroffensive Boosts Putin and Worries Allies]( Follow our [Ukraine Recap]( for the latest on the Russian invasion. Kyiv announced troops have pierced the first line of fortifications in the southeast and are pushing to widen the breach, part of a strategy aimed at splitting Russian forces in two by pressing toward the Sea of Azov and cutting off occupied Crimea. Further north, Ukraine declared it’s continuing an advance around the city of Bakhmut. Russian President Vladimir Putin is also confronting intensifying drone assaults on Moscow and other cities, undermining his claim to be able to secure the country as Ukraine retaliates for the war he started. Putin potentially faces presidential elections in March with his nation’s cities under regular attack and his troops in retreat. Ukraine knows that victories help counter war-weariness among allies it depends on for weapons. While Joe Biden’s administration says the US backs Ukraine for as long as it takes, Republican contenders to challenge him for the presidency next year are far more divided. A lot of hard fighting lies ahead and Russian forces remain well dug-in. Ukraine knows it must gain as much ground as possible before the terrain becomes muddier ahead of a second winter of war. Early expectations for the counteroffensive were high after the delivery of billions of dollars of weapons, even as military analysts warned of the difficulties. It has so far lacked the fireworks of last year’s spectacular wins in Kharkiv region and Kherson city. As Ukraine’s battle-hardened troops press their advantage, the weeks ahead will help define whether it’s judged a success. A destroyed Russian tank with ribbons featuring the colors of the Ukrainian flag attached to its cannon in Kyiv on Aug. 21. Photographer: Roman Pilipey/AFP/Getty Images Listen to our [X Space discussion]( on the global fallout from the China economic slowdown. And if you are enjoying this newsletter, sign up [here](. Global Headlines Opposition is growing to Beijing’s latest standard map showing its expansive South China Sea claims, with the Philippines joining India and Malaysia [in rejecting it](. Manila said the representation on the maritime map “has no basis under international law” and urged China “to act responsibly.” - Chinese President Xi Jinping has yet to confirm to India [whether he will attend]( the Group of 20 summit starting next week in New Delhi, Indian sources say. US Commerce Secretary Gina Raimondo won a promise from her Chinese counterpart to [revive business talks]( between Washington and Beijing, as both sides look to ease tensions. She said that will provide some predictability to US companies that have told her they consider China increasingly “uninvestible” due to rising risks, but American firms are still wondering whether the renewed communication channels will allay their concerns. - The US for the first time approved the [transfer of weapons]( to Taiwan under a program usually reserved for sovereign states, the State Department said yesterday. Iran is slowing the rate at which it’s stockpiling near [weapons-grade uranium](, the United Nations nuclear watchdog is expected conclude in a quarterly report next month, adding to an easing of Persian Gulf tensions that’s already seen Tehran and Washington discuss the release of prisoners and more oil pour onto global markets. Iran began enriching to 60% in retaliation for a 2021 attack on its largest nuclear fuel plant, which it blamed on Israel. Best of Bloomberg Opinion - [Xi’s Live-to-Work Ideology Is So 1960s: Shuli Ren]( - [A Mammoth Industry Hidden by Private-Label Chips: Tim Culpan]( - [China’s Energy Security Is Hit by Mine Disasters: David Fickling]( Gabon’s new military leader sought to justify the [armed takeover]( of the OPEC member state as the deposed president appealed for help from his supporters. Hours after seizing power, the junta appointed General Brice Nguema — a cousin of ousted leader Ali Bongo — as transitional head. Nguema said the decision to remove Bongo was motivated by the president’s illness, along with what he described as a flawed Aug. 26 election that secured him a third term. Soldiers holding Nguema aloft in the capital, Libreville, yesterday. Photographer: Gabon24/AP Photo Mexico’s opposition coalition is set to pick [Xochitl Galvez](, a senator of Indigenous origin whose informal, charismatic style has helped her connect with younger voters, to challenge Andres Manuel Lopez Obrador’s ruling Morena party for the presidency next year. AMLO — as the president is known — remains hugely popular but is unable to seek reelection in June. Polls suggest Galvez, a businesswoman before entering politics, will struggle to catch the Morena candidate to be named Sept. 6, but could still upset their ability to govern. Explainers You Can Use - [The Search for Lessons From 2023 Bank Failures]( - [How Tunisia’s Migrant Crackdown Muddles Bailout Talks]( - [Fallout From Europe’s Biggest Tax Scandal Is Only Getting Larger]( North Korea test-fired two suspected ballistic missiles about a week after its attempt to put a spy satellite into orbit failed. The action was a [show of defiance]( after the US sent a B-1B strategic bomber to airspace off the peninsula for military drills with South Korea that Pyongyang denounced as a preparation for a nuclear attack. - Japan’s Defense Ministry is seeking a record budget for the next fiscal year as the traditionally pacifist country is set to have some of the [highest military spending]( in the world in response to mounting threats in its region. Tune in to Bloomberg TV’s Balance of Power at 5pm to 6pm ET weekdays with Washington correspondents [Annmarie Hordern]( and [Joe Mathieu](. You can watch and listen on Bloomberg channels and online [here](. News to Note - UK Energy Secretary Grant Shapps was handed the [defense ministry portfolio]( after Ben Wallace resigned ahead of the general election expected next year, when he has said he’ll leave Parliament. - Donald Trump and his company [inflated the value of his assets]( by as much as $2.2 billion, New York’s attorney general said, urging a judge to find the former US president liable for fraud before a trial set to start in October. - Western-based creditors expect to [resume talks with Zimbabwe]( on restructuring its $18 billion of debt, despite doubts over the credibility of last week’s elections that handed President Emmerson Mnangagwa another five-year term. - Guatemala’s Congress [has stripped]( five sitting legislators belonging to President-elect Bernardo Arévalo’s Semilla Movement of their party status. - The US government urged its citizens to leave Haiti [as soon as possible]( as gang violence escalates. And finally ... The new chief executive of Shell, Wael Sawan, has quietly ended the world’s biggest corporate plan to develop carbon offsets, the environmental projects designed to [counteract the warming effects]( of CO2 emissions, and is focusing on cost cuts and profit drivers like oil and gas. The decision is a sign that the favored approach of most big companies to address global warming is faltering. “The company has flipped to the short-term focus, to profit maximization,” said Adam Matthews, chief responsible investment officer at the Church of England Pensions Board. A flare stack at the PCK Schwedt oil refinery, controlled by the German government, beyond a Shell gas station in Schwedt on March 20. 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