American consumers have enhanced fears of a downturn. This past week, the International Monetary Fund cited weaker consumer spending in slashing expectations for economic growth this year in the United States, from 2.9 percent to 2.3 percent. Avoiding recession will be “increasingly challenging,” the fund warned.

Orwellian lockdowns that have constrained business and life in general. The government expresses resolve in maintaining lockdowns, now affecting 247 million people in 31 cities that collectively produce $4.3 trillion in annual economic activity, according to a recent estimate from Nomura, the Japanese securities firm.

But the endurance of Beijing’s stance — its willingness to continue riding out the economic damage and public anger — constitutes one of the more consequential variables in a world brimming with uncertainty.

sanctions have restricted sales of Russia’s enormous stocks of oil and natural gas in an effort to pressure the country’s strongman leader, Vladimir V. Putin, to relent. The resulting hit to the global supply has sent energy prices soaring.

The price of a barrel of Brent crude oil rose by nearly a third in the first three months after the invasion, though recent weeks have seen a reversal on the assumption that weaker economic growth will translate into less demand.

major pipeline carrying gas from Russia to Germany cut the supply sharply last month, that heightened fears that Berlin could soon ration energy consumption. That would have a chilling effect on German industry just as it contends with supply chain problems and the loss of exports to China.

euro, which has surrendered more than 10 percent of its value against the dollar this year. That has increased the cost of Europe’s imports, another driver of inflation.

ports from the United States to Europe to China.

“Everyone following the economic situation right now, including central banks, we do not have a clear answer on how to deal with this situation,” said Kjersti Haugland, chief economist at DNB Markets, an investment bank in Norway. “You have a lot of things going on at the same time.”

The most profound danger is bearing down on poor and middle-income countries, especially those grappling with large debt burdens, like Pakistan, Ghana and El Salvador.

As central banks have tightened credit in wealthy nations, they have spurred investors to abandon developing countries, where risks are greater, instead taking refuge in rock-solid assets like U.S. and German government bonds, now paying slightly higher rates of interest.

This exodus of cash has increased borrowing costs for countries from sub-Saharan Africa to South Asia. Their governments face pressure to cut spending as they send debt payments to creditors in New York, London and Beijing — even as poverty increases.

U.N. World Food Program declared this month.

Among the biggest variables that will determine what comes next is the one that started all the trouble — the pandemic.

The return of colder weather in northern countries could bring another wave of contagion, especially given the lopsided distribution of Covid vaccines, which has left much of humanity vulnerable, risking the emergence of new variants.

So long as Covid-19 remains a threat, it will discourage some people from working in offices and dining in nearby restaurants. It will dissuade some from getting on airplanes, sleeping in hotel rooms, or sitting in theaters.

Since the world was first seized by the public health catastrophe more than two years ago, it has been a truism that the ultimate threat to the economy is the pandemic itself. Even as policymakers now focus on inflation, malnutrition, recession and a war with no end in sight, that observation retains currency.

“We are still struggling with the pandemic,” said Ms. Haugland, the DNB Markets economist. “We cannot afford to just look away from that being a risk factor.”

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Pilot strike grounds more SAS flights as first Chapter 11 court date nears

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SAS airplanes are parked at the Oslo Airport Gardermoen, as Scandinavian airlines (SAS) pilots go on strike, Norway July 4, 2022. Beate Oma Dahle/NTB via REUTERS

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  • Data shows 63% of SAS flights cancelled on Wednesday
  • Pilot strike grounding flights as SAS files for Chapter 11
  • U.S. court proceedings set to begin on Thursday

STOCKHOLM, July 6 (Reuters) – Airline SAS (SAS.ST) headed into the third day of a crippling pilot strike which sent new bookings tumbling and prompted the cancellation of well over half its flights on Wednesday.

The carrier, whose biggest owners are the Swedish and the Danish states, geared up for the first court date in its bankruptcy proceedings later in the week after it filed for bankruptcy protection in the United States on Tuesday to help cut debt. read more .

Talks between SAS and pilots over a new collective bargaining agreement collapsed on Monday, triggering a strike that adds to travel chaos across Europe and sparked heated trading of blame between management and unions in a region long praised for strong labour market models.

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There have been no negotiations with the Scandinavian airline since the strike broke out, a spokesperson for the Swedish Pilot Union told Reuters.

“We are in principle still sitting and waiting for them at the table,” SAS Chief Operating Officer Simon Pauck Hansen told Reuters.

He said SAS had not been able to agree to a deal yet because the pilots had only met about half of the demands set out in the airline’s comprehensive cost-cutting plan, which it says is crucial to its survival.

“We must get the compensation level down so it matches other companies,” Hansen said adding that SAS’ pilots are about 30% more expensive if you measure what is being paid per day they fly compared to peers at other airlines in Denmark.

The pilots have said they are not asking for increased wages and would accept cuts but won’t accept SAS’ decision to hire new pilots through two new subsidiaries – Connect and Link – under what unions say are worse terms.

They insist the airline should instead first re-hire 450 former employees dismissed during the pandemic, when almost half of the airline’s pilots were let go.

SOLIDARITY

Asked about the fact many say the strike increases the risk SAS won’t make it, Swedish SAS pilot Joakim Oberg – who was on the picket line at Arlanda Airport on Monday and Tuesday – said: “We are aware of that but I am prepared to risk my job for this cause. If not I will not have a job anyway down the line.”

Oberg, who usually flies from Oslo, said job security and solidarity with colleagues let go during the pandemic were the main reasons he was striking.

SAS has said the strike will cost it $10 million to $13 million per day and the company’s ticket sales for future flights will also take a hit.

“The (booking) activity is very low and that is very harmful for the company,” SAS’ Hansen said.

Data from flight tracking website FlightAware showed 196 SAS flights grounded on Wednesday, a cancellation rate of 63%. The airline has said the strike will affect about half its flights on a daily basis.

At Stockholm’s Arlanda Airport, normally buzzing with SAS flights, ground-handling staff were doing their best to cope with the situation, said Martin Johansson, chairman of the local branch of the white-collar Unionen labour union.

“They are worried,” he said. “Ground handling are the ones taking the first hit – we are always the first ones that the travellers meet here.”

“There is little they can do but to send people home.”

The airline has said the move to seek bankruptcy protection was aimed at accelerating a restructuring plan announced in February. The first hearing in the proceedings had been scheduled for Thursday in New York city, a court filing showed.

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Reporting by Anna Ringstrom in Stockholm, Jamie Freed in Sydney and Stine Jacobsen in Copenhagen, writing by Niklas Pollard;
Editing by Tomasz Janowski and Emelia Sithole-Matarise

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Oil drops 2% to 12-week low on fears of global recession

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Crude oil storage tanks are seen from above at the Cushing oil hub, in Cushing, Oklahoma, March 24, 2016. REUTERS/Nick Oxford/File Photo

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  • Recession fears continue to weigh on prices
  • Dollar holds near 20-year high against other currencies
  • China reports new COVID-19 cases across the country
  • Norwegian oil output to return within days after strike
  • Russian court orders halt to Caspian oil pipeline

NEW YORK, July 6 (Reuters) – Oil prices slid about 2% to a 12-week low in volatile trade on Wednesday, extending the prior session’s heavy losses as investors grew more worried energy demand would take a hit in a potential global recession.

Looking ahead, analysts polled by Reuters forecast U.S. crude inventories fell about 1.0 million barrels last week. A drop in crude stockpiles could support prices. ,

The American Petroleum Institute (API), an industry group, will issue its inventory report at 4:30 p.m. EDT (2030 GMT) on Wednesday. The U.S. Energy Information Administration (EIA) reports at 11:00 a.m. EDT (1500 GMT) on Thursday. Both reports were delayed one day by the U.S. July Fourth holiday.

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Brent futures for September delivery fell $2.08, or 2.0%, to settle at $100.69 a barrel. U.S. West Texas Intermediate (WTI) crude fell 97 cents, or 1.0%, to settle at $98.53. Both benchmarks closed at their lowest since April 11, in technically oversold territory for a second straight day.

U.S. diesel futures also fell over 5%.

Trade was volatile, with both crude benchmarks up over $2 a barrel early on supply concerns and down over $4 a barrel at session lows. Crude futures have been extremely volatile for months.

On Tuesday, WTI slid 8% while Brent tumbled 9%, a $10.73 drop that was the third biggest for the contract since it started trading in 1988. Its biggest drop was $16.84 in March.

Analysts at investment banks Goldman Sachs and UBS said oil prices dropped due to recession fears.

UBS cited numerous reasons, including “the unwinding of the oil trade as inflation hedge, a stronger US dollar, hedge funds reacting to negative oil price momentum, producer hedging, and new mobility restriction concerns in China.”

With the U.S. Federal Reserve expected to keep raising interest rates, open interest in WTI futures fell last week to its lowest since May 2016 as investors cut back on risky assets.

“There are undeniably concerns about recessionary demand destruction, plus, WTI open interest at multi-year lows has created a bit of a liquidity crunch,” said Robert Yawger, executive director of energy futures at Mizuho.

The head of the International Monetary Fund said the outlook for the global economy had “darkened significantly” since April and she could not rule out a possible global recession next year given the elevated risks. read more read more

U.S. job openings fell less than expected in May, pointing to a still-tight labor market that could keep Federal Reserve policy aggressive as tries to bring high inflation down to its 2% target. read more

Oil prices were also slammed by a soaring U.S. dollar

In China, the world’s biggest oil importer, the market worried that new COVID-19 lockdowns could cut demand. read more

China’s crude oil imports from Russia in May soared 55% from a year earlier to a record level. Russia displaced Saudi Arabia as top supplier, with refiners grabbing discounted supplies as Western countries sanctioned Moscow over its invasion of Ukraine. read more

Further pressuring oil prices, Equinor ASA (EQNR.OL) said all oil and gas fields affected by a strike in Norway’s petroleum sector were expected to be back in full operation within a couple of days. read more

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Additional reporting by Rowena Edwards in London, Emily Chow in Kuala Lumpur and Arathy Somasekhar in Houston; Editing by David Clarke, David Goodman, Deepa Babington and David Gregorio

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How War in Ukraine Roiled Russia’s ‘Coolest Company’

What a difference a war makes.

Just a few months ago, Yandex stood out as a rare Russian business success story, having mushroomed from a small start-up into a tech colossus that not only dominated search and ride-hailing across Russia, but boasted a growing global reach.

A Yandex app could hail a taxi in far-flung cities like Abidjan, Ivory Coast; Oslo, Norway; or Tashkent, Uzbekistan; and the company delivered groceries in London, Paris and Tel Aviv. Fifty experimental Yandex robots trundled across the campus of Ohio State University in Columbus, bringing Grubhub food orders to students — with plans to expand to some 250 American campuses.

Often called “the coolest company in Russia,” Yandex employed more than 18,000 people; its founders were billionaires; and at its peak last November, it was worth more than $31 billion. Then President Vladimir V. Putin of Russia invaded Ukraine.

massacre by Russian troops. “In any other situation, it would be a perfect company, like Google, like any tech company. But Yandex has a problem since it is a Russian company.”

Founded by two math wizards in 1997, it has long claimed to generate around 60 percent of the web searches in Russia. (Google has about 35 percent, Dr. Bunina said.)

Before Yandex, Russian taxis consisted of random drivers trying to earn a few rubles. Uber tried to muscle into the market, but eventually relented and became a partner with Yandex in Russia and numerous former Soviet states. Yandex Taxi has expanded to about 20 countries.

Like many successful companies in Russia, particularly those involved in news in any format, Yandex soon caught the eye of the Kremlin. Mr. Putin’s image keepers inevitably noticed that news critical of Mr. Putin was featured frequently on Yandex.News, the company’s aggregator. During street protests in 2011 and 2012, and then the assaults on Crimea and eastern Ukraine in 2014, Kremlin officials sought to edit the list of acceptable news sources and sometimes even individual headlines.

Yandex tried to push back by explaining that an algorithm generated the list automatically from thousands of sources based on popularity.

“The pressure has been ramping up on us since 2014, and we have done everything we can to preserve a neutral role,” John W. Boynton, an American entrepreneur and the chairman of its board of directors, said in a June interview. “We do not get involved in politics, we have never wanted to.”

But Yandex was too big not to be enmeshed in politics, and the Kremlin kept chipping away at its independence. New laws forced news aggregators and search engines to use officially endorsed sources, while the government wrangled more control over the company’s management structure.

“They were just making it easier to pull the strings if they wanted to,” said Esther Dyson, one of two Americans who resigned from the board when the war started. It became clear that the Kremlin “was going further toward complete control,” she said.

After the Feb. 24 invasion, Mr. Putin quickly signed a law making it a crime to spread “fake news” about the military, subject to jail sentences of up to 15 years and hefty fines. What had been a manageable problem, fending off the Kremlin while maintaining an image of independence, suddenly became a crisis.

For users like Tonia Samsonova, a tech entrepreneur who had sold her start-up to Yandex for several million dollars but was still running it, the impact was jarring. Having read an online story from a British newspaper that the Kremlin had placed the country’s nuclear forces on high alert, she checked the headlines on Yandex.

There she found a bland story from a state-run agency about “deterrent” forces. Alarmed, she texted several Yandex executives to suggest that it present news that would rally opposition to the war; that elicited a firm “No,” she said.

Ms. Samsonova then posted her handwritten resignation letter on Instagram, accusing the company of hiding civilian deaths perpetrated by the Russian military.

“It is not accurate by design and the management knows it,” Ms. Samsonova said in an interview. “It is a crime to continue to do that when your country is invading another one.”

Aleksei A. Navalny, the imprisoned opposition leader, wrote on Twitter: “Don’t forget that the main propagandist of the war is not TV at all, but the Russian IT giantYandex.”

In its first sanctions against one top executive, the E.U. cited online accusations of disinformation made by a former head of Yandex.News.

The company responded to the accusations that it spread disinformation by saying that Russian law tied its hands, and that it wanted to preserve the livelihoods of its employees and the interests of its investors.

Keenly aware that the government had wrested control over another social media giant, VKontakte, the equivalent of Facebook, Yandex executives tread carefully, worried about a similar nationalization.

Facing internal questions, Dr. Bunina said that, during a weekly company forum soon after the war started, she told employees that putting independent news onto the home page would last about 10 minutes, bring no change and potentially bring an end to Yandex as they knew it.

Executives figured that as long as they controlled the Yandex search engine, users could find credible news on the war from abroad, she said, noting that Russia was not yet China.

But that proved to be far too optimistic. The company soon announced that it would spin off Yandex.News and Yandex.Zen, a kind of blogging platform that had attracted government wrath as a main vehicle for spreading videos that Mr. Navalny regularly produced exposing Kremlin corruption.

For now, Yandex executives say their main concern is to continue to innovate while the heart of the company remains in Russia, cut off from most Western technology.

“Since the war, we have put all our initiatives to take our services global on hold,” said Mr. Boynton.

Some 2,500 employees who left Russia remain outside, Dr. Bunina said, and the pace of departures from the company is accelerating.

Yandex is further bedeviled by a growing split between the employees who stayed in Russia and those outside, which makes even conversation difficult, much less collaboration. Those inside anxiously refuse to discuss the war or the world, sticking to IT, while those who left in disgust often want nothing more to do with their native land.

“Whether you leave, or whether you stay, these are such different worlds right now, so you will not understand each other,” Mr. Krasilshchik said. “This is not only about Yandex, Yandex is like the country in miniature.”

Alina Lobzina contributed reporting.

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Russian gas flows to Europe fall, hindering bid to refill stores

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  • Nord Stream 1 pipeline capacity down to 40%
  • Europe’s gas price jumps up to 30% after disruption news
  • Gazprom blames cuts on equipment delays from Canada
  • Freeport LNG terminal in U.S. offline until September

LONDON, June 16 (Reuters) – Russian gas supply to Europe via the Nord Stream 1 pipeline fell further on Thursday and Moscow said more delays in repairs could lead to suspending all flows, putting a brake on Europe’s race to refill its gas inventories.

The faltering flows came as the leaders of Germany, Italy and France visited Ukraine, which is pressing for swifter weapons deliveries to battle invading Russian forces and wants support for Kyiv’s bid to join the European Union. read more

Russia’s state-controlled Gazprom said it was reducing gas supply for a second time in as many days via Nord Stream 1, which runs under the Baltic to Germany. The latest move cuts supply to just 40% of the pipeline’s capacity.

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Kremlin spokesperson Dmitry Peskov said reductions in supply were not premeditated and related to maintenance issues, a reference to earlier comments saying Russia was unable to secure the return of equipment sent to Canada for repairs. read more

Germany said Russia’s excuse was technically “unfounded” and was instead aimed at driving up gas prices. Italy said Moscow might be use the issue to exert political pressure. read more

Dutch wholesale gas prices , the European benchmark, jumped around 30% on Thursday afternoon.

Russia’s ambassador to the European Union told state news agency RIA Novosti flows via the pipeline could be completely suspended because of problems in repairing turbines in Canada.

Alexey Miller, the chief executive of Gazprom, the state-controlled company with a monopoly on Russian gas exports by pipeline, said Western sanctions made it impossible to secure the return of equipment from Canada for the pipeline’s Portovaya compressor station. read more

EUROPE RACES TO REFILL STORAGE

Nord Stream 1 has capacity to pump about 55 billion cubic metres (bcm) a year to the European Union, which last year imported about 140 bcm of gas from Russia via pipelines.

Germany, like other European countries, is racing to refill its gas storage facilities so they are 80% full by October and 90% by November before winter arrives. Stores are 52% full now.

Cutting flows through Nord Stream 1 would make that job harder, the head of the Germany energy regulator said.

“We could perhaps get through the summer as the heating season is over. But it is imperative that we fill the storage facilities to get through the winter,” Klaus Mueller told Thursday’s edition of Rheinische Post daily.

Uniper (UN01.DE), Germany’s biggest importer of Russian gas, said supplies were down a quarter on agreed volumes but it could fill missing volumes from other sources. Power producer RWE (RWEG.DE) said it had seen restrictions in the past two days.

Slovakia’s state-owned gas importer SPP said it expected Thursday’s Russian gas deliveries to be reduced by about 30%, while Czech power utility CEZ (CEZP.PR) said it had seen a similar fall but was filling the gap from other sources.

The European Union aims to ensure gas storage facilities across the 27-nation bloc are 80% full by November. read more

The latest reduction in supply could mean northwest European storage only 88% full by the end of October – 1 bcm less than planned – instead of 90%, analysts at Goldman Sachs said.

DRAWING UP CONTINGENCY PLANS

Germany is not alone in facing falling supplies.

Austria’s OMV (OMVV.VI) said Gazprom informed it of reduced deliveries, France’s Engie (ENGIE.PA) said flows had down but clients were not affected, while Italy’s Eni (ENI.MI) said it would receive 65% of the volumes it had requested from Gazprom.

The Italian government said all possible measures were in place to deal with the situation if gas supply cuts from Russia continued in coming days. Other European countries have also drawn up contingency plans.

Adding to the challenge, Nord Stream 1 will shut completely during the pipeline’s annual maintenance on July 11-21.

Norway, Europe’s second biggest exporter behind Russia, has been pushing up production to help the European Union towards it target of ending reliance on Russian fossil fuels by 2027.

Britain’s Centrica (CNA.L) signed a deal with Norway’s Equinor (EQNR.OL) for extra gas supplies to the United Kingdom for the next three winters. Britain does not rely on Russian gas and can also export to Europe via pipelines.

European states have also boosted liquefied natural gas (LNG) imports but Europe has limited LNG import capacity and the already tight LNG market has faced additional challenges with disruptions to U.S. LNG production. read more

A fire last week at a U.S. LNG export plant in Texas, operated by Freeport LNG, means the plant will be offline until September and will operate only partially from then until the end of 2022.

The facility, which accounts for about 20% of U.S. LNG exports, has been a major supplier to European buyers.

“There is risk of further delay, in our view,” analysts at investment bank Jefferies said, adding that regulators need to approve the restart while two investigations were ongoing into the cause of the LNG leak at the plant.

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Reporting by Reuters, Giuseppe Fonte in Rome, Alexandra Schwarz-Goerlich in Vienna, Jan Lopatka in Prague, Madelaine Chambers in Berlin, Nina Chestney in London; Writing by Nina Chestney; Editing by Jason Neely and Edmund Blair

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What Happened on Day 106 of the War in Ukraine

LYSYCHANSK, Ukraine — Just to move about town, Ukrainian soldiers accelerate to breakneck speeds in their SUVs, screech around corners, zip into courtyards, then pile out and run for cover.

“They see us and they open fire,” Colonel Yuriy Vashchuk said of the need to move quickly or become a vulnerable target for Russian artillery. “There’s no place in this town that is safe.”

He was careering around on the high ground of Lysychansk, across the river from Sievierodonetsk, the site of the fiercest fighting in Ukraine’s East. To be prepared, he placed a hand grenade in the cup holder between the front seats of his vehicle. A box of pistol ammunition slid back and forth on the dashboard as he drove.

Signs of Ukraine’s tenuous military positions are everywhere: On the hills overlooking Sievierodonetsk, smoke from a dozen or so fires testify to weeks of seesaw urban combat. The single supply route to the west is littered with burned vehicles, hit by Russian artillery.

The clanging, metallic explosions of incoming shells ring out every few minutes.

These two cities, separated by the Seversky Donets River, have become the focal point of the battle in the East, though weeks of bombardment have driven away most civilians, and President Volodymyr Zelensky of Ukraine recently referred to them as “dead cities.’’

Russia’s goal is clear: It aims to capture the cities, even if that means flattening them, and continue its march westward.

Yet Ukraine’s strategy there remains unclear. Analysts say Sievierodonetsk, with its empty streets and hollowed-out buildings, is of limited military significance, and in recent days, Mr. Zelensky has spoken both of the merits of pulling back and the longer-term risks of doing so.

On Wednesday night, he swung back toward emphasizing its importance, framing the fighting here as pivotal to the broader battle for the region. “In many ways, the fate of our Donbas is being decided there,” he said in his nightly speech to the nation.

“We defend our positions, inflict significant losses on the enemy,” Mr. Zelensky said. “This is a very fierce battle, very difficult. Probably one of the most difficult throughout this war.”

Still, the government’s mixed signals emerged again on Thursday when Oleksiy Reznikov, Ukraine’s defense minister, made a desperate plea for more powerful weapons. “We have proved that, unlike many others, we do not fear the Kremlin,’’ he said. “But as a country we cannot afford to be losing our best sons and daughters.”

He warned that as many as 100 Ukrainian soldiers were being killed every day.

Indeed, the fighting on the plains in eastern Ukraine has become a race between Russia’s tactic of making slow, methodical advances that gain ground even as they reduce towns to rubble and kill untold numbers, and the delivery — far too slow, Ukrainians say — of powerful Western weapons needed to halt the invaders.

The Ukrainian military and government are now making no secret of the challenges they face in the East, three and a half months after Russia invaded. Their daily updates that highlight real setbacks are atypically honest by the standards of military press offices, a tactic perhaps intended to add a sense of urgency to their daily calls for heavy Western weaponry

Credit…Ivor Prickett for The New York Times

Russia has also been moving swiftly to punish Ukrainian soldiers captured on the battlefield.

On Thursday, two Britons and a Moroccan who fought for the Ukrainian military were sentenced to death by a court in a Russian-occupied region of eastern Ukraine, after they were accused of being mercenaries, Russia’s Interfax news agency reported.

The death sentences for the men — Aiden Aslin, 28, and Shaun Pinner, 48, of Britain and Brahim Saadoun of Morocco — alarmed human rights advocates and raised questions about the protections for thousands of foreign-born fighters serving in Ukraine, some of whom have been taken prisoner.

In Russia, investigators said on Thursday that they had opened 1,100 cases of potential “crimes against peace” committed by captured Ukrainian service members, possibly paving the way for a mass show trial.

The fighting in Sievierodonetsk has come down to bloody, block-by-block combat, though a senior Ukrainian official, Oleksiy Arestovych, an adviser to Mr. Zelensky, suggested Thursday that Russia may have partially withdrawn to clear the battlefield for further artillery bombardments.

Sievierodonetsk lies on the mostly flat, eastern bank of the river and the Ukrainian forces’ sole supply line is a partially obstructed bridge. Two other bridges were blown up earlier in the fighting. On the river floodplain below one of the ruined bridges lies the upside-down wreck of a truck that plunged when the span was destroyed.

Seversky

Donets R.

Sievierodonetsk

Lysychansk

Sea of

Azov

On the high, western bank is the city of Lysychansk. The two cities form a single metropolitan area, separated only by the river. Lysychansk, on the high bank, is seen as a more defensible fallback position for the Ukrainians fighting in this area.

In Lysychansk, asphalt chunks, sheared-off tree branches and other debris from shelling litter the city’s streets, which were otherwise mostly empty on a visit this week. Broken power lines droop from poles. At one spot, an unexploded Russian rocket juts out of a sidewalk.

Across the river, the streets in Sievierodonetsk were at moments eerily quiet, at other times a cacophony of gunshots and explosions.

Rapid fire from the large-caliber guns on armored personnel carriers, sounding like a jackhammer at work, echoed around the area.

A few miles to the west, another battle is raging across a pastoral landscape of rolling steppe and small villages, as Russian forces try to cut supply lines, surround the two cities and trap the Ukrainian fighters there. The two armies continually fire artillery at each other, with the Russians getting the upper hand for now.

A maze of rural back roads is now the only route in for the Ukrainians, and it is vulnerable to Russian artillery. In a field a few hundred yards off a road on Wednesday, a Ukrainian military vehicle burned and sent up a plume of black smoke.

“They are trying to make a circle, to trap all soldiers inside and destroy them,” said Mariana Bezugla, the deputy head of the Security, Defense and Intelligence Committee in Ukraine’s Parliament.

The military does not disclose troop numbers, but Ms. Bezugla said several thousand Ukrainian soldiers are now deployed in the area at risk of being surrounded.

Ms. Bezugla wears a military uniform and gold-tinted aviator glasses while driving about in a van once used as an armored vehicle for a bank. She has been living in the potential encirclement zone for the past two weeks, she said, working to ensure that military aid to Ukraine is not misused. That issue is likely to rise in importance as billions of dollars in Western aid arrives.

That weaponry is flowing in, but not reaching the front quickly. Poland has promised tanks and armored vehicles, according to the Polish government. Norway has sent self-propelled howitzers, along with spare parts and ammunition. The United States and allies sent towed howitzers. And earlier this month, the United States and Britain promised advanced, mobile, multi-rocket launchers, what the Ukrainian military has said it needs to hit Russian targets far from the front.

But it’s unclear how much of it has arrived in the places it is most needed, and whether it will be enough.

“I cannot say that I am satisfied with the tempo and quantity of weapon supplies. Absolutely not,” said Mr. Reznikov, the minister of defense. “But at the same time, I am extremely ​grateful to the countries that support us.”

Ms. Bezugla said she was also thankful. “But for me, it’s hard to understand why help is given in doses, just enough to survive but not enough to win,” she said. “It worries me. Our people are dying every day here.”

Out in a field of green wheat shoots, one sign of the need for additional American military aid was the blown-up debris of earlier assistance. An American M777 howitzer had lost an artillery duel; it was blasted into several blackened, charred pieces amid craters from Russian artillery.

Reporting was contributed by Oleksandr Chubko from Kramatorsk, Ukraine, Marc Santora from Warsaw, Michael Levenson from New York, Dan Bilefsky from Montreal, Ivan Nechepurenko from Tbilisi, Georgia and Valerie Hopkins from Chernihiv, Ukraine.

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Live Updates: Taking on Russia With West’s Arms, Ukraine Goes on Offense

KRAKOW, Poland — Ukrainian troops, emboldened by sophisticated weapons and long-range artillery supplied by the West, went on the offensive Friday against Russian forces in the northeast, seeking to drive them back from two key cities as the war plunged more deeply into a grinding, town-for-town battle.

After weeks of intense fighting along a 300-mile-long front, neither side has been able to achieve a major breakthrough, with one army taking a few villages one day, only to lose just as many in the following days. In its latest effort to reclaim territory, the Ukrainian military said that “fierce battles” were being waged as it fought to retake Russia-controlled areas around Kharkiv in the northeast and Izium in the east.

The stepped-up combat came as the White House announced on Friday that President Biden would meet virtually on Sunday with President Volodymyr Zelensky of Ukraine and the leaders of the G7, which includes Britain, Canada, France, Germany, Italy, Japan and the United States.

Additionally, President Biden is sending a new security package to Ukraine worth $150 million, according to an administration official, who says it will include 25,000 artillery rounds, counter-artillery radars, jamming equipment and other field equipment.

Jen Psaki, the White House press secretary, noted that the leaders would convene as President Vladimir V. Putin of Russia prepares to celebrate the annual holiday of Victory Day on Monday with military parades and speeches commemorating the Soviet Union’s triumph over Nazi Germany.

The holiday has intensified fears in Ukraine and some Western capitals that Mr. Putin could exploit the occasion to expand his Feb. 24 invasion, after his initial drive failed to rout the Ukrainian military and topple the government.

“While he expected to be marching through the streets of Kyiv, that’s actually not what is going to happen,” Ms. Psaki said. She called the G7 meeting “an opportunity to not only show how unified the West is in confronting the aggression and the invasion by President Putin, but also to show that unity requires work.”

Ukraine on Friday urged civilians to brace for heavier assaults ahead of Victory Day in Russia, warning them to avoid large gatherings and putting in place new curfews from Ivano-Frankivsk in the west to Zaporizhzhia in the southeast.

Credit…Daniel Berehulak for The New York Times

Ukrainian police forces were also placed on heightened alert ahead of the holiday, which will be commemorated in Russia with military parades in Moscow and hundreds of other cities.

Vadym Denysenko, an adviser to Ukraine’s Interior Ministry, warned civilians that they could risk their lives by gathering in crowded places.

“We all remember what happened at the train station in Kramatorsk,” Mr. Denysenko said on Telegram, referring to a devastating missile strike in that eastern city last month, which killed dozens of people as they crowded on railway platforms, trying the flee the invasion.

“Be vigilant,” Mr. Denysenko said. “This is the most important thing.”

The regional governor of Luhansk in eastern Ukraine, Sergei Haidai, warned that Russian forces were preparing for a “major offensive” in the next few days against a pair of eastern cities, Severodonetsk and Popsana. He assailed what he called “continued horror” in the region, where he said that the latest Russian shelling had killed two people and destroyed dozens of houses.

The pace of Russian missile strikes across Ukraine has been intensifying in recent days as Moscow tries to slow the flow of Western arms across the country. But as with so many aspects of the war, uncertainty about Mr. Putin’s intentions runs deep.

Credit…Lynsey Addario for The New York Times

There is rampant speculation that he might use the upcoming holiday to convert what he calls a “special military operation” into an all-out war, which would create a justification for a mass mobilization of Russian troops and set the stage for a more broad-ranging conflict. Kremlin officials have denied any such plans. But they also had denied plans to invade Ukraine.

Ukrainian officials have said that a military draft in Russia could provoke a backlash among its citizens, many of whom, polls show, still view the war as a largely distant conflict filtered through the convoluted and sometimes conflicting narratives provided by state-controlled media.

“General mobilization in Russia is beneficial to us,” Oleksei Arestovych, an adviser to Mr. Zelensky’s chief of staff, said during an interview on Ukrainian television this week. “It can lead to a revolution.”

Some Western analysts speculate that Mr. Putin may instead point to the territory that Moscow has already seized in eastern Ukraine to bolster his false claims that Russia is liberating the region from Nazis.

The Pentagon, for its part, has avoided stoking speculation about Mr. Putin’s Victory Day plans.

“What they plan to do or say on Victory Day, that’s really up to them,” John F. Kirby, the Pentagon spokesman, said on Thursday. “I don’t think we have a perfect sense.”

Fears that Russia could intensify its assault came as the United Nations Security Council adopted a statement on Friday supporting efforts by the U.N. secretary general, António Guterres, to broker a diplomatic resolution to the war.

The statement, initiated by Mexico and Norway, was the first action regarding Ukraine that the council had unanimously approved since the invasion began. Russia supported the statement, which did not call the conflict a “war,” a term the Kremlin forbids.

Mr. Zelensky insisted on Friday that peace talks cannot resume until Russian forces pull back to where they were before the invasion. Still, he did not foreclose the possibility of a negotiated settlement.

Credit…Daniel Berehulak for The New York Times

“Not all the bridges are destroyed,” he said, speaking remotely at a virtual event held by Chatham House, a British research organization.

Alexey Zaitsev, a Russian Foreign Ministry spokesman, said on Friday that talks between Russia and Ukraine were “in a state of stagnation,” Russian state media reported.

Mr. Zaitsev blamed NATO countries for prolonging the war by shipping billions of dollars in arms to Ukraine, even as those countries have urged Mr. Putin to withdraw his troops.

“This leads to an extension of hostilities, more destruction of civilian infrastructure and civilian casualties,” he said.

Mr. Zelensky said that Russian propagandists had spent years fueling “hatred” that had driven Russian soldiers to “hunt” civilians, destroy cities and commit the kind of atrocities seen in the besieged southern port of Mariupol. Much of the city, once home to more than 400,000 people, has been leveled, and it has become a potent symbol of the devastation wrought by Russia in Ukraine.

Mr. Zelensky said Russia’s determination to destroy the last Ukrainian fighters holed up with desperate civilians in bunkers beneath the Azovstal steel plant in Mariupol only underscored the “cruelty” that has defined the invasion.

“This is terrorism and hatred,” he said.

On Friday, about 50 women, children and elderly people who had been trapped beneath the Azovstal plant in Mariupol were evacuated in a humanitarian convoy, according to a high-ranking Ukrainian official and Russian state media. The official, Deputy Prime Minister Iryna Vereschuk, said the evacuation had been “extremely slow” because Russian troops violated a cease-fire.

Nearly 500 people have managed to leave the Azovstal plant, Mariupol and surrounding areas in recent days with help from United Nations and the Red Cross, according to Mr. Guterres.

As the fighting drags on, concerns are growing that the war could exacerbate a global hunger crisis.

Credit…Finbarr O’Reilly for The New York Times

The United Nations said on Friday that there was mounting evidence that Russian troops had looted tons of Ukrainian grain and destroyed grain storage facilities, adding to a disruption in exports that has already caused a surge in global prices, with devastating consequences for poor countries.

At the same time, the organization’s anti-hunger agency, the World Food Program, called for the reopening of ports in the Odesa area of southern Ukraine so that food produced in the war-torn country can flow freely to the rest of the world. Ukraine, a leading grain grower, had some 14 million tons in storage available for export, but Russia’s blockade of the country’s Black Sea ports has prevented distribution.

“Right now, Ukraine’s grain silos are full,” said David Beasley, executive director of the World Food Program, while “44 million people around the world are marching towards starvation.”

Marc Santora and Cora Engelbrecht reported from Krakow, and Michael Levenson from New York. Reporting was contributed by Dan Bilefsky from Montreal, Nick Cumming-Bruce from Geneva, Rick Gladstone from Eastham, Mass., Zolan Kanno-Youngs from Washington, and Farnaz Fassihi from New York.

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