By Pavel Polityuk and Terje Solsvik
KYIV/OSLO (Financial Eye) – Russia stopped providing gas to Finland in an escalation of a row over energy payments with the West on Saturday, and intensified an offensive in the Donbas region of eastern Ukraine.
After ending weeks of resistance by the last Ukrainian fighters in the strategic southeastern city of Mariupol, Russia is waging what appears to be a major offensive in Luhansk, one of two provinces in Donbas.
Russian-backed separatists already controlled swathes of territory in Luhansk and the neighbouring Donetsk province before the Feb. 24 invasion, but Moscow wants to seize the last remaining Ukrainian-held territory in Donbas.
The end of fighting in Mariupol, the biggest city Russia has captured so far, could be crucial to that ambition and gives Russian President Vladimir Putin a rare victory after a series of setbacks in nearly three months of combat.
Ukrainian President Volodymyr Zelenskiy told local television that while the fighting would be bloody, and victory difficult, the end would come only through diplomacy.
“For them, all these victories – the occupation of Crimea or Donbas – is very temporary. And all this will return – since this is our territory,” he said on Saturday.
Full control of Mariupol could give Russia command of an overland route linking the Crimea peninsula, which Moscow seized in 2014, with mainland Russia and the areas of eastern Ukraine that are held by pro-Russia separatists.
Luhansk regional governor Serhiy Gaidai said in a social media post early on Saturday that Russia was trying to destroy the city of Sievierodonetsk, with fighting taking place on the outskirts of the city.
“Shelling continues from morning to the evening and also throughout the night,” Gaidai said in a video post on the Telegram messaging app.
Despite losing ground elsewhere in recent weeks, Russian forces have advanced on the Luhansk front.
Sievierodonetsk and its twin Lysychansk across the Siverskiy Donets River form the eastern part of a Ukrainian-held pocket that Russia has been trying to overrun since mid-April after failing to capture Kyiv.
Russia’s state gas company, Gazprom (MCX:), said it had halted gas exports to Finland after it refused to agree to Russian demands to pay for Russian gas in roubles because of Western sanctions imposed over the invasion of Ukraine.
Finland and Sweden applied this week to join the NATO military alliance, a decision spurred by the Ukraine war.
Finnish state-owned gas wholesaler Gasum, the Finnish government and individual gas consuming companies in Finland have said they were prepared for a shutdown of Russian flows and that the country will manage without.
Most European supply contracts are denominated in euros or dollars and Moscow cut off gas to Bulgaria and Poland last month after they refused to comply with the new payment terms.
In addition to trying to isolate Russia through sanctions, Western nations have stepped up weapons supplies to Ukraine.
Kyiv got another huge boost on Saturday when U.S. President Joe Biden signed a bill to provide nearly $40 billion in military, economic and humanitarian aid to the country.
“Look forward to new, powerful defense assistance. Today it is needed more than ever,” Zelenskiy tweeted.
Moscow says Western arms deliveries for Kyiv, and the imposition of sanctions amount to a “proxy war” by the United States and its allies.
The Russian military said it had destroyed a major consignment of Western arms in Ukraine’s Zhytomyr region, west of Kyiv, using sea-launched Kalibr cruise missiles. Financial Eye could not independently verify the report.
Portuguese Prime Minister Antonio Costa became the latest Western leader to visit Kyiv and Ukraine’s Prime Minister Denys Shmyhal said that he had signed an agreement for unspecified financial support.
Putin says Russian troops are engaged in a “special military operation” to demilitarise Ukraine and rid it of radical anti-Russian nationalists. Western countries call it an unprovoked war of aggression.
Thousands of people in Ukraine have been killed and urban areas shattered in the war. Almost a third of Ukraine’s people have fled their homes, including more than 6 million who have left the country.
AZOVSTAL SIEGE OVER
The last Ukrainian forces holed up Mariupol’s vast Azovstal steelworks surrendered on Friday, Russia’s defence ministry said. It said 2,439 defenders had surrendered in the past few days, including 531 in the final group.
Earlier, Zelenskiy said Ukraine’s military had told the last defenders there they could get out and save their lives. The Ukrainians did not immediately confirm the figures on Azovstal.
It is unclear what will happen to the fighters.
The Red Cross has said it had registered hundreds of Ukrainians who surrendered at the Azovstal plant as prisoners of war and Kyiv says it wants a prisoner swap. Moscow says the prisoners will be treated humanely, but Russian politicians have been quoted as saying some must be tried or even executed.