Russia has warned that it could strike western arms shipments, potentially drawing Moscow and Nato closer to armed confrontation, the Financial Times reports, citing a report in Interfax. Deputy foreign minister Sergei Ryabkov described western governments’ arming of Ukraine as a “dangerous move” and one that “turns these convoys into legitimate military targets,” the news agency reported him as saying.

More US arms are heading to Ukraine: This came on the same day that the Biden administration approved another USD 200 mn in arms for Ukraine. Another batch of anti-aircraft, anti-tank and small arms will be sent to the country immediately, taking Washington’s total spend on Ukraine military aid in 2022 to USD 1.2 bn, according to Reuters.

Biden rejects no-fly zone, warns of World War III: US president Joe Biden once again faced down calls for Nato to implement a no-fly zone over Ukraine, writing on social media that a confrontation between the military alliance and Russia will lead to World War III.

ON THE GROUND-

Russian forces are reportedly closing in on key Ukrainian cities, including the capital Kyiv, the country’s second-largest city Kharkiv and the southern port of Mariupol, Pentagon press secretary John Kirby told reporters on Friday, ABC News reports. The Russians are accelerating their advance towards the capital from the east, and are “closing in” on Kharkiv, the official said. Mariupol, which has been surrounded for almost a week, is continuing to suffer heavy shelling.

Russia plans to deploy thousands of volunteer fighters from the Middle East to join its forces in Ukraine, Russian President Vladimir Putin said in a meeting with Russia’s security council (watch, runtime: 2:08). Some 16k people from the region are ready to be deployed to the country, Russian Defense Minister Sergei Shoigu said.

EGYPT IN THE WAR-

Some 2.6k Ukrainians stranded in Egypt have arrived in Budapest since 5 March on chartered flights organized by the Ukrainian and Egyptian embassies, a Budapest Airport spokesperson told Reuters. Some 20k Ukrainians have been stranded in Egypt since Russia launched its invasion of Ukraine, prompting the closure of both Ukraine and Russia’s airspaces.

THE HUMAN TOLL-

More than 2.5 mn people have fled Ukraine so far, with more than 1.5 mn of them crossing the border into Poland, according to the latest tally by UN agencies. The UN estimates that as many as 4 mn refugees may end up leaving the country, as Russian forces continue to advance deeper into the country.

SANCTIONS-

Moscow strikes back at western sanctions: Russia has retaliated against western sanctions by banning the export of more than 200 products until the end of the year, it announced Thursday. The export ban includes telecoms, medical, vehicle, agricultural, and electrical equipment as well as railway cars and locomotives, containers, and turbines.

Crucially, Russia is not (yet) restricting access to its most important exports, including energy, food commodities and other raw materials. It is also still allowing artificial sapphires — crucial components of microchips — to be exported. Russia produces 40% of the world’s synthetic sapphires and the country’s Industry and Trade Ministry has said they will only be restricted as a last resort.

Germany wants to all but end the import of oil and coal from Russia by the end of 2022, the country’s economy minister said yesterday, according to the Associated Press. This is no small feat: Germany currently gets around half of its coal and oil from Russia.

Russia will now face higher tariffs on many of its exports after G7 nations agreed to revoke its “most-favored nation” (MFN) status at the World Trade Organization, the White House announced Friday. If Russia loses this status, western governments will be able to slap whatever tariffs they choose on Russian goods without breaching WTO rules.

FINANCE IN A TIME OF WAR-

Goldman Sachs, JPMorgan and Deutsche Bank have all said they’re pulling back from operations in Russia, Reuters reports (here and here).

Russia’s stock market will remain closed for the next week, the central bank said. Trading on the Moscow Exchange has been closed since 25 February, Bloomberg said.

Credit rating agency Fitch has downgraded 26 Russian natural resources companies, including state gas giant Gazprom, oil producer Lukoil and miner Rusal. Fitch has warned these companies could be at risk of defaulting due to sanctions imposed on Moscow.