(Reuters) – Ukraine said its forces may need to retreat from their last pocket of resistance in Luhansk to avoid being captured by Russian troops pressing a rapid advance in the east that has shifted the momentum of the three-month-old war.
FIGHTING
* In the southern Kherson region north of Russian-held Crimea, Ukrainian officials said Russian forces were fortifying their positions and trapping civilians with constant shelling.
* The U.S. Army has awarded a contract worth up to $687 million to Raytheon Technologies Corp for anti-aircraft Stinger missiles to replenish stocks sent to Ukraine, sources said.
DIPLOMACY
* Ukrainian President Zelenskiy said Russia was weaponising a global food supply crisis and the world must prevent large-scale famine. Moscow did not appear ready for serious peace talks, he said.
* The Kremlin, which holds Ukraine and its Western allies responsible for the food crisis, said Kyiv was to blame for stalled peace negotiations.
ECONOMY
* European Union countries are negotiating a deal to embargo Russian oil deliveries by sea but not pipeline to win over Hungary. EU ambassadors could seal a deal before a May 30-31 summit, an official said.
* Ukraine’s state gas company asked Germany to halt or curtail Russian gas flows through the Nord Stream 1 pipeline.
* Russia will need huge financial resources to fund its military operation in Ukraine, its finance minister said. The economy minister blamed Russia’s economic troubles on low household spending.
* Russia said it successfully paid coupons in foreign currency on two Eurobonds, a move that could mean Russia may have again averted a default.
* Global ratings agency S&P cut Ukraine’s sovereign rating to ‘CCC+/C’ from ‘B-/B’, citing a larger impact from Russia’s attack on the country.
QUOTES
* “I’m afraid that Putin, at great cost to himself and to the Russian military, is continuing to chew through ground in Donbas,” British Prime Minister Johnson told Bloomberg UK, adding the Russian president was making “gradual, slow, but I’m afraid palpable, progress”.
COMING UP
* The EU summit on May 30-31 could see divisions between members who want to take a hard line against Russia and those calling for a ceasefire.
(Compiled by Philippa Fletcher, Edmund Blair and Andrew Heavens; editing by Rosalba O’Brien and Grant McCool)
