Moscow signalled on Friday it was scaling back its ambitions in Ukraine to focus on territory claimed by Russian-backed separatists as Ukrainian forces went on the offensive to recapture towns on the outskirts of the capital Kyiv.
In the first big sign that western sanctions on Moscow were impacting investment from China, sources said state-run Sinopec Group, Asia’s biggest oil refiner, halted talks on a petrochemical investment and a venture to market Russian gas.
In the month since they launched their invasion of Ukraine, Russian troops have failed to capture any major city. Their assault has met stiff resistance from President Volodymyr Zelensky’s forces and been halted at the gates of Kyiv.
The Russians instead have been bombarding and encircling cities, laying waste to residential areas and driving around a quarter of Ukraine’s 44 million people from their homes. More than 3.7 million of them have fled abroad, half to Poland, which US President Joe Biden was visiting on Friday.
Battlelines near Kyiv have been frozen for weeks with two main Russian armoured columns stuck northwest and east of the capital. A British intelligence report described a Ukrainian counter-offensive that had pushed Russians back in the east.
“Ukrainian counter-attacks, and Russian forces falling back on overextended supply lines, have allowed Ukraine to reoccupy towns and defensive positions up to 35 km east of Kyiv,” the report said. Britain has given Ukraine arms and military training.
In an announcement that appeared to indicate more limited goals, the Russian defence ministry said a first phase of its operation was mostly complete and it would now focus on “liberating” the breakaway eastern Donbass region.
“The combat potential of the Armed Forces of Ukraine has been considerably reduced, which ... makes it possible to focus our core efforts on achieving the main goal, the liberation of Donbass,” said Sergei Rudskoi, head of the Russian General Staff’s Main Operational Directorate.
The cities of Chernihiv, Kharkiv and Sumy in the east have endured bombardment. Chernihiv was effectively surrounded by Russian forces, its governor said.
Western sanctions have isolated Russia from global trade to a degree never before visited on such a large economy. Russia warned that billing in roubles for natural gas exports to heavily dependent Europe could be just days away.
Sinopec halts talks
The Reuters report that Sinopec had suspended discussions about investments potentially worth $500 million was the first concrete sign that sanctions are interfering with trade between Moscow and Beijing. China has insisted it will maintain trade links. But behind the scenes, it is pressing Chinese companies to tread carefully.
