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U.S. presses for diplomatic solution as markets are hit by latest Ukraine-Russia tensions

This has been CNBC's live blog tracking Thursday's developments in the crisis involving Ukraine and Russia.

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Russia and Ukraine tensions build as U.S. proposes diplomatic options to crisis

The Ukraine-Russia crisis is at a pivotal moment. Ukraine accused pro-Russian separatists of attacking a village near the border. In the U.S., meanwhile, Secretary of State Antony Blinken, speaking at the United Nations, made an urgent appeal against an invasion.

For months, the U.S. and its Western allies have watched a steady buildup of Kremlin forces along Ukraine's border with Russia and Belarus. The increased military presence mimics Russia's playbook ahead of its 2014 illegal annexation of Crimea, a peninsula on the Black Sea, which sparked international uproar and triggered sanctions against Moscow.

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Russia has deceived the world, says Sec. of State Blinken in United Nations remarks

President Joe Biden has warned Russian leader Vladimir Putin of extraordinary and crippling economic sanctions if the Kremlin proceeds with an attack on Ukraine, Russia's ex-Soviet neighbor.

Here are some key news items:

Tensions weigh on stocks

'I am here today not to start a war but to prevent one,' Blinken says

Russian official calls accusations 'baseless'

U.S. officials head to Middle East to discuss potential energy issues

Workers are seen at the construction site of the Nord Stream 2 gas pipeline, near the town of Kingisepp, Leningrad region, Russia, June 5, 2019.
Anton Vaganov | Reuters

The White House said Thursday that U.S. officials traveled to Saudi Arabia and the United Arab Emirates in the past week in order to discuss potential energy market pressures stemming from a possible Russian invasion of Ukraine.

State Department Special Envoy for Energy Affairs Amos Hochstein and Coordinator for the Middle East and North Africa Brett McGurk both met with Saudi officials, according to National Security Council spokesperson Emily Horne. The statement did not detail who exactly within the Saudi government met with the small U.S. delegation.

President Joe Biden has warned that if Russia were to move into Ukraine, energy markets could see a big impact. Biden has also pledged that a major new Russian-German gas pipeline would be halted.

The Nord Stream 2 natural gas pipeline between Russia and Germany was finished in September of last year, but it has yet to transport any actual gas.

Separately, McGurk reaffirmed to both the Saudis and Emiratis U.S. support against Iranian-enabled missile and unmanned aerial vehicle attacks. He also discussed the need to combine pressure on the Houthis in Yemen in order to end the war there.

– Amanda Macias

Nation's highest-ranking military officer intensifies outreach with regional partners

General Mark Milley, Chairman of the U.S. Joint Chiefs of Staff, answers questions from reporters about Russia and the crisis in Ukraine during a news conference at the Pentagon in Washington, U.S., January 28, 2022.
Joshua Roberts | Reuters

The Pentagon said Thursday that the nation's highest-ranking military officer has continued to update NATO members and allies on the deteriorating security situation in Ukraine.

Chairman of the Joint Chiefs of Staff U.S. Army Gen. Mark Milley spoke Thursday with Latvia's Chief of Defense Lt. Gen. Leonids Kalnins and Estonia's Chief of Defense Lt. Gen. Martin Herem in separate phone calls.

"The leaders discussed a range of issues, including security environment in the Baltic region and Eastern Europe," Milley's spokesman U.S. Army Col. Dave Butler wrote in a readout of the calls.

In the past week, Milley has spoken four times to Ukrainian Armed Forces Lt. Gen. Valery Zaluzhny as well as counterparts from Canada, France, Germany, Italy, Poland, Romania and the United Kingdom.

Milley has also spoken to Russian Gen. Valery Gerasimov and NATO Military Committee chair Adm. Rob Bauer.

Last month, Milley told reporters at the Pentagon that Russia's posture along Ukraine's border was unlike anything he has seen during his four-decade military career. He said the Russians have deployed air forces, naval forces, special forces, cyber electronic warfare, command and control, logistics engineers and other capabilities along Ukraine's border.

"Given the type of forces that are arrayed, the ground maneuver forces, the artillery, the ballistic missiles, the air forces, all of it packaged together. If that was unleashed on Ukraine, it would be significant, very significant, and it would result in a significant amount of casualties," Milley said on Jan. 28.

"It would be horrific," he added.

– Amanda Macias

Dow suffers worst day of 2022 on Russia-Ukraine tensions

Stocks suffered steep declines Thursday as traders fretted over Ukraine-Russia tensions.

The Dow Jones Industrial Average fell more than 600 points, or 1.8%, for its worst one-day decline of 2022. The S&P 500 slid 2.1%, and the Nasdaq Composite dropped 2.9%.

Traders broadly dumped riskier assets, such as stocks, in favor of traditional safe havens like bonds and gold.

The 10-year Treasury note yield dropped more than 8 basis points to 1.96% (yields move inversely to prices). Gold futures, meanwhile, jumped to their highest level since June.

"In the short term, the market is just moving to the indications that it's seeing out of Russia," said Yung-Yu Ma, chief investment strategist at BMO Wealth Management. "That negativity and that additional cloud over the market definitely has a lot of weight right now."

Fred Imbert

Oil prices dip as traders watch Russia-Ukraine crisis, Iran nuclear talks

Oil prices settled lower on Thursday, putting crude on track for its first negative week in nine.

Tensions between Russia and Ukraine have been driving prices, but traders attributed Thursday's move to progress on the Iran nuclear talks. A deal could bring more than 1 million additional barrels per day to the global market.

"The Iranian wildcard and Ukraine stand-off are likely to come to a head in the next few days, the outcomes of which will determine whether or not higher energy prices are here to stay," said Stephen Brennock, oil analyst at PVM Oil Associates.

West Texas Intermediate crude futures declined 1.44% to settle at $91.76 per barrel. International benchmark Brent crude ended the day at $92.87 per barrel, for a loss of 2%.

— Pippa Stevens

Paul threatens to block unanimous approval of Senate resolution backing Ukraine

U.S. Senator Rand Paul (R-KY) questions Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, during a Senate Health, Education, Labor, and Pensions Committee hearing to examine the federal response to the coronavirus disease (COVID-19) and new emerging variants at Capitol Hill in Washington, D.C., U.S. January 11, 2022.
Greg Nash | Reuters

Sen. Rand Paul threatened Thursday to block unanimous passage of a Senate resolution pledging support to Ukraine.

The Kentucky Republican wants the nonbinding measure to say it is not an authorization to send American troops into Ukraine if Russia invades its neighbor. He said he could object to the resolution's unanimous approval if senators do not change its language or allow him to offer amendments to it.

"We believe that it should say 'nothing in this resolution is to be construed as an authorization of war, and nothing in this resolution is to be construed as authorizing introduction of troops into Ukraine,' and we'll see," Paul said on Thursday.

Lawmakers from both parties have signed on to the so-called sense of the Senate resolution. Its passage would not bring about any concrete action.

The resolution in part says that the Senate "encourages the President that, should any further invasion or other malign activity to undermine the sovereignty of Ukraine occur by Russia, the United States Government should exhaust all tools at its disposal to impose significant costs on the Russian Federation to restore peace in Europe."

— Jacob Pramuk

'I am here today not to start a war but to prevent one,' Blinken says during UN exchange with Russian offiical

U.S. Secretary of State Antony Blinken speaks during a meeting of the U.N. Security Council on the situation between Russia and Ukraine, at the United Nations Headquarters in Manhattan, New York City, U.S., February 17, 2022.
Carlo Allegri | Reuters

Secretary of State Antony Blinken called on Russia during an unexpected Thursday address at the United Nations Security Council to de-escalate tensions on Ukraine's border immediately and engage in dialogue and diplomacy.

"Let me be clear, I am here today not to start a war but to prevent one," Blinken told the international forum.

"The Russian government can announce today with no qualification, equivocation or deflection, that Russia will not invade Ukraine. State it clearly, state it plainly to the world and then demonstrate it by sending your troops, your tanks, your planes back to their various can hangars and sending your diplomats to the negotiating table," Blinken said, following an address made by Russia's deputy minister of foreign affairs, Sergey Vershinin.

"In the coming days, the world will remember that commitment or the refusal to make it," America's top diplomat added.

Blinken, who embarked on a scheduled trip to Munich alongside Vice President Kamala Harris earlier on Thursday, flew instead to New York at the request of U.S. Ambassador to the United Nations Linda Thomas-Greenfield.

Thomas-Greenfield told reporters on a call Thursday morning that she requested Blinken address the international forum because the "evidence on the ground is that Russia is moving toward an imminent invasion."

– Amanda Macias

Russian ruble weakens against U.S. dollar

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The ruble — the official currency of the Russian Federation — weakened in value against the U.S. dollar on Thursday as perceptions of geopolitical tension worsened.

The currency market can indicate "how much risk is actually priced in" to financial markets, Dennis DeBusschere, president and chief market strategist at 22V Research, said.

The ruble spot is quoted as U.S. dollars to ruble, so when the spot rate rises, it means the ruble value is falling. The ruble spot rate rose 1.6% on Thursday.

Hannah Miao

Russian official denies plans to attack Ukraine, calls accusations 'baseless'

Russian Deputy Foreign Minister Sergey Vershinin attends the UN Security Council on February 17, 2022, in New York.
Timothy A. Clary | AFP | Getty Images

A Russian official on Thursday downplayed before the United Nations Security Council that Moscow was preparing for an attack on Ukraine, echoing messaging delivered for months by the highest levels of the Kremlin.

During his address, Russia's deputy minister of foreign affairs, Sergey Vershinin, said accusations from the United States and its allies of a mounting Russian invasion are "baseless."

"Resist the temptation to play to the cameras and do not make this meeting of ours into a circus," Vershinin said. He added that Russia does not intend to attack Ukraine and added, "I think we've had enough speculation on that."

Vershinin's comments to the international forum came as Secretary of State Antony Blinken made an unexpected trip to United Nations headquarters in New York.

"We have long ago clarified everything and explained everything and the announced date of the so-called invasion is behind us. And so, therefore, my advice to you is to not present yourself in an awkward situation," Vershinin added, referencing leaked U.S. intelligence that the planned invasion would commence Feb. 16.

– Amanda Macias

European stocks retreat

The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, February 17, 2022.
Reuters

Stocks are broadly lower in Europe as the trading day winds down oversees.

The FTSE 100, tracking the largest stocks traded in London, has lost roughly 1.3%. The German DAX fell 1%. In comparison, Asian indexes were more mixed on the day, with stocks rising in Hong Kong and Korea but falling in Japan.

Exchange traded funds that track European stocks are similarly under pressure. The Vanguard FTSE Europe Index Fund is off by 1.2%.

The VanEck Russia ETF remains down by nearly 5%.

–Jesse Pound

Oil prices slip despite Russia-Ukraine tensions

Oil prices moved lower on Thursday, despite the growing tensions between Russia and Ukraine. Still, prices remain elevated.

Crude has surged above $90 per barrel on fears that any disruption in supply could push prices above the $100 mark. Demand has bounced back in the wake of Covid-19 while output has remained constrained, pushing oil to the highest level since September 2014.

West Texas Intermediate crude futures, the U.S. oil benchmark, dipped 2.9%, or $2.74, to $90.92 per barrel around 11 a.m. on Wall Street. International benchmark Brent crude traded 2.6% lower at $92.31 per barrel.

Several factors could be keeping a lid on prices, including progress on the Iran nuclear talks, as well as oil's 21% gain this year.

— Pippa Stevens

Ukraine announces partnership with UK and Poland

British Foreign Secretary Liz Truss and Ukrainian Foreign Minister Dmytro Kuleba attend a news conference following their talks in Kyiv, Ukraine, February 17, 2022.
Efrem Lukatsky | via Reuters

U.K. Foreign Secretary Liz Truss said during a news conference in Kyiv that Britain would boost its defense aid to Ukraine by £20 million ($27 million), raising the overall aid amount to £100 million.

Ukraine also announced a trilateral partnership between the U.K., Poland and Ukraine which will focus on defense, cyber and energy concerns. In the joint statement, the parties said, "Poland and the UK will continue to provide Ukraine with support, standing in unity with Ukraine, in the face of ongoing Russian aggression, and fully committed to stand with Ukrainian nation in its efforts aimed at defending Ukraine's sovereignty, independence and territorial integrity within its internationally recognized borders."

Truss noted during the news conference that the action taken "demonstrates that the United Kingdom is willing and ready to stand shoulder to shoulder with allies across Eastern and Central Europe."

— Brad Howard

Biden: Russian invasion threat is 'very high,' U.S. believes Kremlin engaged in 'false flag'

U.S. President Joe Biden speaks to members of the press prior to a departure for Cleveland, Ohio from the White House on February 17, 2022 in Washington, DC.
Alex Wong | Getty Images

President Joe Biden warned that the threat of Russia invading Ukraine is "very high," telling reporters that an attack could come within "the next several days," NBC News reported.

Biden, speaking outside the White House, also said the U.S. has reason to believe the Kremlin is engaged in a so-called false flag operation, wherein Russia would try to pin a provocative action on its adversaries as a pretext for an invasion.

But Biden maintained that he still believes there is a diplomatic path out of the conflict.

"That's why I tasked [Secretary of State Antony] Blinken to go to the United Nations to make the statement today," the president said.

Asked if he will call Russian President Vladimir Putin, Biden said he had no plans to do so.

Kevin Breuninger

Russia lays out security demands

Russian President Vladimir Putin chairs a meeting on economic issues via a video link in Moscow, Russia February 17, 2022.
Alexey Nikolsky | Sputnik | Reuters

The Russian government on Thursday published its response to U.S. proposals on security guarantees over Ukraine, stating that "demands to withdraw troops from certain regions on Russian territory are unacceptable and undermine the prospects for reaching real agreements."

Moscow also insisted that "the West should stop pumping weapons" into Ukraine and called for a withdrawal of Western troops, bases and military activity in countries that were formerly part of the Soviet Union, according to state media.

Several Western countries have sent military hardware to Ukraine to help it defend itself from a potential Russian attack.

Russia repeated earlier claims on Thursday that it had no intention of invading Ukraine.

Russia has requested several other security guarantees relating to Ukraine from the U.S. and NATO — the world's most powerful military alliance — including demands that Ukraine never be permitted to become a member of the organization.

Last month, the U.S. delivered a response to Russia's proposals, in which it repeated previous refusals of those demands.

 — Chloe Taylor

Stocks slip as developments in Ukraine weigh on investor sentiment

U.S. stocks opened lower on Thursday as investors eyed developments in Ukraine, with the Dow Jones Industrial Average down about 300 points, or 0.9%, and the S&P 500 down about 1%.

The news from Ambassador Linda Thomas-Greenfield that Russia appears to be preparing for an "imminent invasion" seemed to be a modest negative for the market in premarket trading. Dow futures were down fewer than 100 points before her comments but extended their losses to more than 200 points.

Shares of energy and defense companies, which could potentially benefit from a conflict in Ukraine, were slightly higher in early trading. The VanEck Russia ETF fell nearly 5%

However, oil prices were actually lower in early trading. Oil futures spiked late last week after U.S. and U.K. officials warned of a potential Russian invasion in the coming days, as a conflict could lead to Western Europe no longer purchasing the country's gas.

-Jesse Pound

‘False flag operation’

British Prime Minister Boris Johnson arrives at Royal Air Force Station Waddington, in Waddington, Lincolnshire, Britain February 17, 2022.
Carl Recine | Reuters

British Prime Minister Boris Johnson told PA Media on Thursday that the attack on a kindergarten in eastern Ukraine was a "false flag operation designed to discredit the Ukrainians."

"We fear very much that that is a thing we will see more of over the next few days," he added.

The U.S. warned on Wednesday that Russia may use false claims about the conflict in eastern Ukraine as a pretext for invasion.

Around 13,000 people have died in a war that has been raging for eight years between Ukrainian government forces and pro-Russian separatists in the eastern region of Donbas.

– Chloe Taylor

Russia expels second-highest U.S. diplomat from the country

Bart Gorman, deputy chief of Mission at the US Embassy in Moscow, is seen outside the offices of the Russian Foreign Ministry in Smolenskaya Square.
Vladimir Gerdo | TASS | Getty Images

The State Department said Thursday that U.S. Deputy Chief of Mission to Russia Bart Gorman, the second-highest U.S. official in Russia, was expelled from the country.

A department spokesperson described the removal of Gorman, who still has a valid visa and had not yet completed his diplomatic mission, as an "unprovoked" and "escalatory step."

The spokesperson said the Biden administration was considering its response to Gorman's expulsion.  The official said the U.S. mission to Russia is now staffed at levels well below the Russian mission to the United States.   

"We call on Russia to end its baseless expulsions of U.S. diplomats and staff and to work productively to rebuild our missions. Now more than ever, it is critical that our countries have the necessary diplomatic personnel in place to facilitate communication between our governments," the spokesperson added.

– Amanda Macias

Ukraine reportedly says shelling has stopped

A Ukrainian soldier stands next to a damaged wall after the reported shelling of a kindergarten in the settlement of Stanytsia Luhanska, Ukraine, on February 17, 2022.
Aleksey Filippov | AFP | Getty Images

Ukraine's Ministry of Defense has said that shelling in the east of the country has stopped as of 1 p.m. local time, according to Reuters.

It had earlier reported multiple artillery attacks which hit a school and a kindergarten in villages near the border, that it attributed to Russian-backed separatists.

Russian state media claimed on Thursday that Ukraine had committed artillery attacks on territory held by pro-Moscow rebels — but British Prime Minister Boris Johnson told reporters that the shelling was a "false flag operation designed [by Russia] to discredit the Ukrainians."

The east of Ukraine, near the Russian border, has long been the scene of low-level fighting between pro-Moscow rebels and Ukrainian government forces.

– Chloe Taylor

Secretary of Defense pushes for diplomatic resolution with Putin

U.S. Defence Secretary Lloyd Austin looks on as he arrives for a meeting of foreign ministers of the U.S., Britain, France and Germany on Afghanistan at NATO's headquarters in Brussels, Belgium, April 14, 2021.
Kenzo Tribouillard | Reuters

Secretary of Defense Lloyd Austin reiterated Thursday that the United States and its allies would still prefer a diplomatic resolution with Russian President Vladimir Putin.

"Of course, one thing that Mr. Putin says he wants to do is to engage in more dialogue. As we have said all along, we would welcome that," Austin said following a two-day meeting of NATO defense ministers.

"As his deeds thus far tend to indicate, it will be clear to the entire world that we started a war with diplomatic options. It will be Mr. Putin who will bear the responsibility for the suffering and the immense sacrifice that ensues," Austin said, calling on Putin to withdraw troops from Ukraine's borders.

– Amanda Macias

Western officials cast doubt on Russian claims of troop pullback

In this photo taken from video provided by the Russian Defense Ministry Press Service on Wednesday, Feb. 16, 2022, Russian army tanks are loaded onto railway platforms to move back to their permanent base after drills in Russia.
Russian Defense Ministry Press Service via AP

EU Commission President Ursula von der Leyen said on Thursday that there had been no evidence of Russian forces leaving the border, noting that intelligence suggested that Moscow was in fact building up more troops and equipment close to Ukraine.

"We will not let out guard down — we will stay vigilant," she said.

Meanwhile, U.K. Foreign Minister Liz Truss wrote in The Daily Telegraph newspaper on Thursday that there is "currently no evidence the Russians are withdrawing from border regions near Ukraine."

Their comments came after NATO chief Jens Stoltenberg told reporters on Wednesday that contrary to Moscow's claims, "it appears Russia continues their military buildup."

The Kremlin released video footage on Wednesday which it claimed showed military units returning to their permanent deployments after completing exercises near the border. CNBC has not been able to verify the footage.

– Chloe Taylor

Ukraine accuses pro-Russia rebels of 'provocation' after shelling of kindergarten

A view from the shelled kindergarten in eastern Ukraine on February 17, 2022.
Ukrainian Chief of General Staff | Anadolu Agency | Getty Images

Ukraine has accused pro-Russian separatists in the country's east of opening fire on civilian territory, damaging a kindergarten.

President Volodymyr Zelenskyy said in a statement on Thursday that the shelling of a kindergarten in the village of Stanytsia Luhanska was "a big provocation" by pro-Russian forces.

Meanwhile, the Ukrainian Joint Forces Operation said pro-Russian separatists had shelled 22 settlements in the Donbas region of eastern Ukraine, with civilians and military personnel sustaining injuries.

Kyiv's accusations come after Russian-controlled media agency RIA claimed earlier on Thursday that Ukrainian forces had shelled territory held by pro-Moscow separatists. Kiev quickly denied the reports, which CNBC has been unable to verify.

– Chloe Taylor

Ukraine crisis reaches a 'crucial moment,' U.S. ambassador to the U.N. says

U.S. Ambassador to the United Nations Linda Thomas-Greenfield, Deputy Foreign Minister of Russia Sergey Vershinin and British Minister of State for Middle East, North Africa and North America James Cleve attend a meeting of the U.N. Security Council on the situation between Russia and Ukraine, at the United Nations Headquarters in Manhattan, New York City, U.S., February 17, 2022.
Carlo Allegri | Reuters

The mounting Russian threat to Ukraine has reached a critical point, the U.S. Ambassador to the United Nations said.

"The evidence on the ground is that Russia is moving toward an imminent invasion. This is a crucial moment," Linda Thomas-Greenfield told reporters.

Secretary of State Antony Blinken plans to address the U.N. Security Council at 10 a.m. ET on Thursday.

The ambassador's comments follow Ukrainian accusations that Russia attacked a village in eastern Ukraine, CNBC's Amanda Macias reports.

– Jacob Pramuk