Gazprom grapples with collapse in sales to Europe -Financial Times

Gazprom grapples with collapse in sales to Europe 

Business model in tatters after biggest customer slashes 

Financial Times, Feb 17, 2024

Gazprom grapples with collapse in sales to Europe.

Vladimir Putin was effusive late last year after Gazprom reported record sales to China, telling chief executive and longtime ally Alexei Miller: “This is great, I congratulate you on the results of your work.” 

But the Russian president’s praise, proudly trumpeted on state media, belies the crisis unfolding at a company that is struggling with the loss of its biggest market. Europe has defied expectations by breaking its addiction to Russian gas, and the state-run gas monopoly — Putin’s trump card when he launched his full-scale invasion of Ukraine — has become one of the war’s biggest corporate casualties. “Gazprom understands that it will never again have as big and fat a slice of the pie as Europe, and it simply has to accept that,” said Marcel Salikhov, head of the Institute for Energy and Finance, a Russian think tank. “The only way forward now is to look for relatively smaller sources of revenue and gradually develop them, gathering crumbs.” In an interview with state television channel Rossiya 1 on Sunday, Putin admitted Russia had previously profited more from exporting energy, but denied the loss of business was causing problems. “Maybe it was more fun [previously], but on the other hand, the less we depend on energy, the better, because the non-energy part of our economy is growing,” he said. While Moscow decided early in the war to slash gas supplies to Europe, a move that initially boosted prices enough to offset the slump in exports, the effect was shortlived. Pre-tax earnings hit a record Rbs4.5tn ($49.7bn) in the first six months of 2022 but slumped 40 per cent to Rbs2.7tn a year later, while net profits slid from almost Rbs1tn to Rbs255bn. 

Researchers at the state-controlled Russian Academy of Sciences have even predicted the company’s full-year 2023 results will show it has ceased to be profitable, and that net losses could hit Rbs1tn by 2025. The EU has proved more adept at sourcing alternative gas than many thought possible — Russia’s share of the bloc’s gas imports dropped from more than 40 per cent in 2021 to 8 per cent last year, according to EU data — while prices have collapsed from their peaks in the early days of the war. 

The EU is aiming to eliminate all imports of Russian fossil fuels by 2027. On Sunday, Putin said Russia had coped well after Europe stopped buying its gas, “by exploring alternative routes and focusing on its own gasification efforts.” But in reality these are not a replacement for the EU export business. With its main export business in tatters, Gazprom has sought to find new buyers but its deals in central Asia and minor supply boosts to China and Turkey will compensate for only 5 per cent to 10 per cent of the lost European market, according to Salikhov. Achieving any substantial change in this scenario will require enormous investment in pipelines and other infrastructure to serve new markets, as well as the involvement of external partners that are in less of a hurry to commit. When the invasion began, Gazprom appeared to be in a much better position than other Russian energy exporters given that the country’s gas, unlike its oil, was not under any western sanctions. But its prospects changed in September 2022 when underwater blasts ruptured the Nord Stream gas pipelines that had carried 40 per cent of Russia’s gas exports to Europe, drastically reducing Moscow’s ability to use the fuel as leverage. Moscow and the west have accused each other of sabotage. Gazprom did not reply to a request for comment. The Russian market, which has always accounted for a much bigger share of the company’s output than Europe, has helped it stay afloat but with gas sold at a much lower price domestically, local sales cannot make up for the collapse of the EU market. Gazprom has to sell gas domestically at regulated prices, while competitors such as Rosneft and privately-run Novatek can offer discounts to attract bulk buyers. “After the war started, Gazprom intensified its efforts to ensure fair competition on the Russian market with the lifting of domestic price restrictions,” said Irina Mironova, a lecturer at the European University at Saint Petersburg, who previously worked as an analyst at Gazprom. Critics have long suggested that Putin has used the group to funnel profits to his acolytes — although the subject remains taboo in Russia. State-owned Sberbank’s investment arm in 2018 sacked two senior analysts after they published a report saying Gazprom deliberately opted for unprofitable projects to secure lucrative contracts for companies owned by the president’s close friends Gennady Timchenko and Arkady Rotenberg. Gas emanating from a leak on a Nord Stream pipeline in the Baltic Sea in 2022. Moscow and the west have accused each other of sabotage 

“Gazprom’s model, which consisted of generating excessive profits in Europe and then distributing them among contractors close to Putin . . . no longer exists,” said Vladimir Milov, a former deputy energy minister who was the architect of Gazprom’s reforms in the early 2000s and who later became an associate of opposition figure Alexei Navalny, who died in an Arctic penal colony on Friday according to Russian authorities. 

The primary recipient of Gazprom’s profits is now the Russian state, which shortly after the invasion imposed an additional monthly levy of Rbs50bn on the company until 2025. While gas exports to China have risen, the volumes remain relatively small — Russia sent about 22bn cubic metres of gas to the country via pipeline last year, a fraction of the average annual 230 bcm it exported to Europe in the decade before the Ukraine war. The company could improve its prospects if it reaches an agreement on the construction of the 3,550km “Power of Siberia 2”, which would connect the gasfields that once supplied Europe to China, and a second pipeline to the Asian nation. 

However, Beijing and Moscow have yet to agree on the PS2 project, which will pass through Mongolia. “Those two sides still need more time to do more detailed research on the economic studies,” Mongolia’s Prime Minister Luvsannamsrain Oyun-Erdene told the FT in January. 

The gas group has become one of the war’s biggest corporate casualties. 

Even under the most optimistic scenario the PS2 would take years to build and would not make up for lost European sales, independent analysts and state-sponsored researchers agree. Construction of the pipeline will also be different from other Gazprom projects, as it will most likely be financed from the state budget — which has historically enjoyed generous contributions from the gas company — and not from Gazprom’s excess profits. Meanwhile, while Russian liquefied natural gas exports are gradually increasing, they remain a fraction of the prewar pipeline deliveries. Novatek accounts for most of Russia’s LNG exports, with Gazprom lacking the specialised infrastructure to convert and transport the liquid form of the fuel, having bet on pipelines rather than liquefaction technologies at the dawn of the Putin era. Gazprom’s oil business, Gazprom Neft, has become the company’s main lifeline, contributing 36 per cent of revenues and 92 per cent of net income in the first half of 2023. The division’s market value even surpassed that of its parent company last year. “Oil is not a side business for Gazprom, it is not just the cherry on the cake — it is the entire layer of it,” said Sergey Vakulenko, a former head of strategy at Gazprom 

Neft who is now a non-resident scholar at the Carnegie Russia Eurasia Center. 

Gazprom’s oil business, Gazprom Neft, has become the company’s main lifeline © Oliver Bunic/Bloomberg 

He also noted Gazprom’s generous dividends to shareholders including the state had often been very close to the sum of dividends it received from Gazprom Neft. However, he described the group’s position as “not great, not terrible”, insisting “the company isn’t yet on the verge of collapse”. 

Ron Smith, oil and gas analyst at Moscow-based BCS Global Markets, also said Gazprom’s financial position was not yet “catastrophic”. But the company faces the risk that its fortunes and prospects will never be the same again.

The most dangerous European scenario - Jakub Janda

 From @JakubJanda:

“THE MOST DANGEROUS EUROPEAN SCENARIO:

Jakub Janda

Jan 27, 20333

(based on my private talks with many European political and military leaders)

If the United States would end its material military support to Ukraine in short and mid-term, it could mean the following cascade of (worst case) events:

- since Europe is unable to deliver weapons & ammo Ukraine needs in near-close quality and quantity, Ukrainian defenders will have to first select to which attackers they shoot at, later this will become a strategic problem forcing Ukrainian leadership to search for any form of cease-fire

- why would terrorist Russia agree on any cease-fire or keep such promise if they would see their own strategic initiative and Ukraine desperately lacking defensive weps and ammo? Russia would keep attacking until Ukraine has to plead for capitulation, likely leading to internal political instability in Ukraine

- during this process, we can expect several million Ukrainians running West in panic, flooding Central and part of Western Europe, leading to natural rise of far-right (which is always a Russian fifth column), shaking internal stability of European NATO member states

- since most of Europe lacks large and modern air force able to deterring Russia, we will be (as always) dependent on the decisions of the American President. Those hundreds of F-35s ordered by European nations will be coming after like 2028/2030, so we have at least 4-5 year gap when much of Europe is really vulnerable. 

- Even if brave countries like Poland, Sweden, Finland or Baltic republics spend as much as they urgently can, our strategic balance of (military and political) power to Russian terrorists is not favourable to Europeans, if we cannot be sure about American strategic decisions after January 2025

- we see a lot of symbolic actions by large European economies (Germany, France, Italy, Spain), but are they running their defense industry and spending to semi-war levels like Russia does? Not at all, because they are not scared by the most realistic change of Russian attack on EU/NATO countries in last four decades. Why? Because they are not in the first line and many within their economic establishments still hope to get back to “normal” business with Russia. We are facing the most dangerous split over strategic plans across European allies now.

So, supporting Ukrainian defenders with everything we have got is the only realistic change we have to keep this war from erupting in a geostrategic disaster for Europe.”

The Empire Strikes Back: Putin’s Drive To Revive Soviet Borders Is Doomed - Barry Gander (Medium)

The Empire Strikes Back: Putin’s Drive To Revive Soviet Borders Is Doomed

 

https://barry-gander.medium.com/the-empire-strikes-back-putins-drive-to-revive-soviet-borders-is-doomed-faf588929d03

 

Barry Gander

Medium, March 26, 2023

 

Thousands flee Putin’s Russia into Georgia as part of a million-person refugee tide.

We have been here before.

History gives us a way to forecast Russia’s future, as the reign of state control again erodes the country’s ability to move forward.

These events have happened back in 1991, when Soviet president Mikhail Gorbachev was faced with a coup by Soviet security forces. But the coup’s leaders had no popular support, and the ruling bureaucracy was also split. Boris Yeltsin climbed aboard a tank, the people of Moscow rallied for freedom and democracy, and the coup leaders surrendered within days.

The coup by the security forces actually accelerated the demise of the Soviet Union. It gave the people of the USSR a stark choice. Yes, independence was frightening, but it could not be worse than the totalitarian alternative. In turn, republic after Soviet republic tumbled towards independence. In Moscow a jubilant crowd tore down the statue of “Iron” Felix Dzerzhinsky, the founder of the secret police, right in front of the KGB headquarters.

That revolution for freedom was extinguished in the heartland, a bit at a time, by Putin, through assassination, mass bombings and military occupation.

Now however Putin’s overlay of dictatorship is also fraying, and the pattern of freedom is reasserting itself again. This is “Overthrow 2.0”.

Putin has just been betrayed by China, which is about to tear out Russia’s Asian heartland.

Russia’s other dependencies are attracted to Western values, and are seeking independence — just like 1991.

Once an area has tasted independence from a dominating power, it will not go back into its box.

This is the problem facing Putin as he fumbles to put back the pieces of the old Soviet empire.

He has denied that he has a goal of re-establishing the Soviet Empire. His denials lost credibility after he ordered Russian troops to be sent to eastern Ukraine. We have been here before with this man.

He has continually questioned Ukraine’s sovereignty. In 2008, Russia supported two Georgian separatist regions and has backed a breakaway region of Moldova, Transnistria, since the 1990s. He annexed Ukraine’s Crimea peninsula in 2014. He became the first person to annex sovereign foreign territory by force since Saddam Hussein in Kuwait. He cut off Europe’s energy supplies, threatened the use of nukes, and ran a fascist propaganda campaign around the world.

Last year his militia took over eastern Ukraine’s Donetsk and Lugansk rebel republics and he recognized them as “independent-with-Russian-troops”.

Weeks before Russia’s invasion of Ukraine he was insisting that he had no intention of attacking Ukraine and accused the U.S. and NATO of stoking the tension by refusing to accept Moscow’s demands for “security guarantees” from the Western alliance.

Ukraine wants to be part of Europe. There is no guarantee Putin could get that would change that perspective. It also wants to be part of NATO. Both organizations are voluntary bodies — no one is forced to belong and no “security guarantees” can be part of an equation where the people have picked the path to democracy.

Putin actually wants guarantees against freedom, not NATO.

The desire for freedom is hard to detect in Russia itself, because the people are so muffled.

But it can be seen more clearly in Russia’s fringe of reluctant puppet states, where the control is less. They are able to make the choice that faced the Russians themselves in 1991: do you want freedom or do you want to be ruled by a gong show run by a poisoning dictator and his five gangs of thieves.

It is not really surprising that the West “let” Putin turn Russia into a concentration camp. At any step where a change could be made, it would mean fighting a world war. That is what kept the allies from stopping Hitler when he occupied the Rhineland. In a democracy, could the French President have gone to his people with a motivating rationale for war against Hitler?

Dictatorships have it easy; democratic countermeasures are hard. We need to have some sympathy and understanding for the bewildered democracies in Europe in the 1930s.

But we have learned from that era.

In the build-up to Putin’s invasion of Ukraine, to paraphrase Winston Churchill’s definition of appeasement, we are feeding the crocodiles, hoping they will eat us last.

(And I will keep calling this “Putin’s War”, not “Russia’s War”. The Russians were never asked for their approval. That would have meant the need for a reason for the war…beyond ego-driven empire-building)

Instead of standing on our principles about the universal values of human rights and human life, we quibbled with Russia’s propagandists about whether Russia’s feelings were being hurt. Is it uncomfortable for you to have NATO so close? OOPS — our fault!

But it has never been about NATO. Russia has in the past acknowledged Ukraine’s right to join NATO. Taking NATO off the table will not quell his insecurity; what he fears is democracy. In fact, up until Putin’s invasion of Ukraine, NATO had been drawing down resources in Europe, not increasing them.

Our focus therefore has to be the final triumph of Western-style democracy over bygone dictatorships. NO appeasement or apologies will be possible, because this is a binary game: democracy or dictatorship.

And in the process, we cannot promote democracy while treating the leaders of the world’s most repressive regimes as equals, advises Garry Kasparov, former chess champion turned activist. His mother had hung a sign above his bed — a saying of the Soviet dissidents — “If not you, who else?” We are all responsible for seeing that justice is done.

We have a lot on our side.

Almost every nation in the world that matters today is democratic. There was a time in the 1940s when dictators ruled from the English Channel to the Bering Sea. Now there are only TWO meaningful hold-outs: Russia and China.

I may be wrong, but I sense that China can evolve; we don’t need to shake a spear at them. Their biggest existential threat anyway is India, not America: India is poised to take their jobs and industry.

Our goal in Russia would ideally be to provide the citizens with hope and possibilities for a brighter future.

They exist right now in an increasingly fraught environment. The war is going badly. Russia currently controls only 17 percent of Ukrainian territory, which is the least amount of area that its forces have occupied since April. Russian leaders can see that the walls of their tents are coming down, and the light is getting in.

And sadly, Russia will not become a democracy until it falls apart. Russia is not really a nation-state but a premodern multiethnic empire living for 300 years on geographic expansion and resource looting.

Russia’s influence in the region has waned and citizens have repeatedly signaled their desire to escape Moscow’s grasp. Subservience to Putin is now required. If the regions could be free, why could not the Russians themselves?

This almost happened, in the elections in 2011. They were the largest protests in Russia since the Soviet collapse. Ordinary Russians showed themselves to have both the will and the capability to threaten his grip on power.

With this fear of democracy as his overriding motive, Putin will remain committed to undermining Georgian, Moldovan, Armenian, etc. democracy and sovereignty.

Russia has gotten so good at quelling regional aspirations that the government of Iran asked Russia for help in suppressing a popular uprising.

The former USSR. All the states not marked “Russia” will become independent as soon as they can. The central Asia group is now being courted by China, in a display of breathtaking hypocrisy by President Xi.

In Kazakhstan, for example, there were nationwide protests against fuel prices last year. The protests morphed into a working-class grievance campaign. The President could not get a response from his own security forces and called on the Russians. The crowds were brutally crushed and 238 people died. The former defence minister has just been jailed for not doing enough to protect the government.

Dagestan is a mountainous republic within the Russian Federation. There have been confrontations between police and crowds of mothers who were infuriated that their sons were being drafted for the war in Ukraine.

Some other ethnic minority parts of the Russian Federation, including its 22 ethnic republics, as well as other far-flung territories, or krais, even majority ethnic Russian ones, have seen anti-mobilization protests in recent weeks — as far afield as the Siberian city of Yakutsk, the capital of the Sakha Republic and Vladivostok in Russia’s far east.

While they have died down for now they have left sullen anger and resentment, which is compounding long-standing economic and local political grievances in the Russian Federation’s periphery.

Russia’s ethnic republics and far-flung territories will not remain quiet and subdued for much longer, suspects Russian-born political scientist Sergej Sumlenny, a former chief editor at Russian business broadcaster RBC-TV.

“The republics have long chafed under Moscow’s imperial rule — so too territories in the far east and parts of remote northern Russia.” The seeds of potential rebellion, especially in the North Caucasus, the Sakha Republic and the Middle Volga, are being sown, he thinks. Increasing economic distress and impoverishment, the exploitation of natural resources only for the benefit of Moscow, the failure to drive development and investment, a reckless attitude to pollution and environmental degradation, and governance swinging from repression to negligence are all stoking simmering grievance.”

What could trigger real revolt? “It could be a small spark,” he says. “Look at what triggered the Arab spring — a Tunisian fruit vendor setting himself on fire over injustice. Or look at Iran now: it can be something [like] … the death of a 22-year-old Kurdish woman because she wasn’t wearing a hijab. Revolt is often be sparked by perceived insult.

Russia’s Defense Minister Sergei Shoigu made a comparison to Yugoslavia, warning external pressures combined with internal threats risk breaking up the Russian Federation along ethnic and religious lines. At the Beijing Xiangshan Forum in 2019, Shoigu said: “Chaos and the collapse of statehood are becoming the norm.”

When the Soviet Union dissolved it wasn’t only the big constituent republics of the Soviet Union — like Ukraine, the Baltic states and Kazakhstan — that sought independence. Many of Russia’s smaller republics and even some far-flung predominantly Russian territories, cities and regions used the political turmoil to claim or to try to grab autonomy.

In 1990, fourteen of the 22 republics of the Russian Federation declared themselves sovereign and when a Federation Treaty was being negotiated the heads of several republics, including Tatarstan, demanded the new post-Communist Russian constitution recognize their “state sovereignty” as well as a right to secede from the Russian Federation. Chechnya refused to sign the Federation Treaty and declared independence, triggering an 18-month war of liberation.

Putin decided that the sovereignty of the Russian Federation would override any declaration of sovereignty by the republics or other federal subjects. Provincial authorities have been weakened.

Any candidate in a regional election who wants to register must have Kremlin backing and Putin can sack and appoint regional heads at will.

In 2021 the Russian justice ministry suspended the activities of Tatarstan’s All-Tatar Public Center “due to its extremist activities.”

Last month, retired U.S. General Ben Hodges, a former commander of the U.S. Army in Europe and a veteran of Iraq and Afghanistan, said the West should prepare for the Russian Federation breaking up within the next four or five years. “We were not prepared for the collapse of the Soviet Union. We need to be prepared for this possibility,” he told Times Radio.

Regional elites may start calculating that Moscow isn’t able to stop them breaking away, he says. “Once it starts, it could unravel fast.”

Western policymakers seem unnerved by the possibility of a break-up of nuclear-armed Russia,

That was also the case with the dissolution of the Soviet Union. Western leaders preferred the status quo and frowned on Ukraine and others breaking away. “Americans will not support those who seek independence in order to replace a far-off tyranny with a local despotism. They will not aid those who promote a suicidal nationalism based upon ethnic hatred,” President George Bush said in an infamous 1991 speech in Ukraine nicknamed the Chicken Kyiv speech.

Bureaucrats will always prefer the status quo to a social revolution — no matter that it is justified.

Oleksiy Danilov, Secretary of Ukraine’s National Security and Defense Council, said in September that the process of Russian dissolution “has already begun and will accelerate.” He said he obtained and analyzed the results of a social survey conducted in Russia. Danilov said the focus was on separatism in the central Russian Republic of Tatarstan and the southern Chechen Republic.

Tatarstan and Chechnya have large Muslim populations, and had declared their independence at the end of the Soviet Union. Chechnya fought two wars with Russia. Failure in a war of aggression without cause could spur the fires of separatism throughout the Russian Federation.

Moldova is a tiny nation of just 2.6 million people that borders Ukraine to the southwest. Russia has 1,500 troops there supporting separatists, just as it did in Ukraine. Moldova’s government has opposed the Russian presence since it gained independence in the Soviet breakup in 1991, but has no way of forcing the Russians to leave.

Georgia, on Russia’s southwestern frontier, remains in a state of dispute. If Russian occupation forces left, there is no doubt it would swing West.

At the United Nations in March of 2022, six former republics voted in favor of a resolution condemning Russia and calling for its immediate withdrawal from Ukraine. Seven more abstained or were conveniently absent. The only country to take Russia’s side, aside from Russia itself, was Belarus. Which has Russian troops on the ground.

It is not only a geographic fragmentation that Russia is facing, but a horizontal war-of-the-dukedoms. Different factions within the government have their own armies. They could fight for power because they have their own supplies of weapons. Even criminals have weapons. Chechens have weapons. The Internal Ministry has weapons. The Defence Ministry has weapons. The security forces — KGB/FSB — have weapons. Everybody has weapons. It could be chaos in the streets. It will be the same situation as 1917–18.

Political scientist Ekaterina Schulmann told The Economist that “the Russian Federation as we know it is self-liquidating and passing into a failed-state phase.” Its administration, she continued, is unable to carry out its basic functions:

“This includes the most basic mandate of any government, which is the protection of its citizenry. But Putin’s regime now presents the greatest threat to that citizenry by threatening to forcibly conscript them in the hundreds of thousands and send them into battle with almost no proper equipment and even less training.”

The Kremlin’s decision to build its army by having each region of Russia create battalions of soldiers is unbelievably stupid. At least eight regions have created such units. Leaders of these regions have ready-made battalions under their command to enforce a separation.

Western governments should prepare a response to this rule of disorder.

It was to Russia’s extreme misfortune that Yeltsin handed over power to Putin.

It was Russia’s misfortune before that, to have Stalin take power from Lenin.

And before that, to have Lenin take power from the Tsar.

If Russia were a car on a highway, it would be veering off-course every few hours, pulled to the right or left. Anywhere there is a sign that says “Higher Power Here”.

I would feel sorry for them, but I’m impatient to see what a democratic Russia — stripped of the trappings of empire — could do for the world.

They deserve better than they’ve got, for sure.

Barry Gander

A Canadian from Connecticut: 2 strikes against me! I'm a top writer, looking for the Meaning under the headlines. Follow me on Mastodon @Barry

 

 

Russia's war of aggression against Ukraine: NYTimes briefing, November 4, 2022

The New York Times 

By Carole Landry Editor/Writer, Briefings Team November 4, 2022

Welcome to the Russia-Ukraine War Briefing, your guide to the latest news and analysis about the conflict.

The U.S. is setting up a new command to train and equip the Ukrainian military and committing to an additional $400 million in military aid. The Group of 7 nations pledged to help “repair, restore and defend” Ukraine’s energy and water infrastructure. About 4.5 million Ukrainian households are without power, including nearly half a million in Kyiv.  China called on the world to oppose the threat or use of nuclear weaponsin Ukraine. Get the latest updates here. Track the invasion with our maps.

Russian recruits attended a ceremony in the Rostov region on Monday before leaving for Ukraine. Sergey Pivovarov/Reuters

Russian conscripts in combat

Russia is sending newly drafted troops to the front line in eastern Ukraine to try to push back Ukrainian forces, but the influx has not resulted in any Russian gains on the ground, according to military analysts.

President Vladimir Putin used a National Unity Day appearance today to announce that 318,000 soldiers had been recruited to join the Russian Army, with 49,000 of those already in combat.

The fighting in the eastern Donbas region has been particularly intense. Gen. Valeriy Zaluzhnyi, the commander of the Ukrainian military, said in a statement posted on Telegram yesterday that Russian forces were staging up to 80 assaults per day.

The scale of Russian losses in these battles is uncertain, but analysts say the number of casualties is high. The Institute for the Study of War, a research group based in Washington, said ill-prepared conscripts were being “impaled” during offensives in Donetsk. The Ukrainian military said today that more than 800 Russian soldiers had been wounded or killed over 24 hours.

In two counter-offensives in the northeast and the south, the Ukrainian military has reported step-by-step gains in cutting supply lines and damaging Russian ammunition and fuel depots.

In the south, Ukrainian troops are advancing toward Kherson, which fell to the Russians in the early weeks of the war. The Russian-appointed administration in the city has relocated to a site 50 miles away, but Russian troops have not decamped, according to residents and Ukrainian officials.

Ukrainian military intelligence says Russia has deployed about 40,000 soldiers to the area, including some elite troops such as airborne forces, to stop Ukrainian forces from reclaiming Kherson.

The remaining residents in Kherson are stocking up on food and fuel to survive.

Ukraine war at a turning point with rapid escalation of conflict (WP)

 

Ukraine war at a turning point with rapid escalation of conflict

People remove debris from a damaged house after shelling in Sloviansk, Donetsk region, Ukraine, on Monday. (Andriy Andriyenko/AP) The Washington Post, October 10,2022 In little more than a month, the war in Ukraine has turned abruptly from a grueling, largely static artillery battle expected to last into the winter, to a rapidly escalating, multilevel conflict that has challenged the strategies of the United States, Ukraine and Russia. Russia’s launch of massive strikes on civilian infrastructure Monday in nearly a dozen Ukrainian cities far from the front lines brought shock and outrage. The strikes, which Secretary of State Antony Blinken described as “wave after wave of missiles” struck “children’s playgrounds and public parks,” left at least 14 killed and nearly 100 wounded, and cut electricity and water in much of the country. “By launching missile attacks on civilians sleeping in their homes or rushing toward children going to schools, Russia has proven once again that it is a terrorist state that must be deterred in the strongest possible ways,” Ukraine’s United Nations Ambassador Sergiy Kyslytsya said at the opening of a General Assembly session scheduled before the assault to promote world condemnation of Moscow. The attacks were the latest of many head-spinning events — from Ukrainian victories on the ground to Russian President Vladimir Putin’s threat of nuclear weapons use — that have changed the nature and tempo of the war in recent weeks, and raised questions about whether the United States and its partners may have to move beyond the concept of helping Ukraine defend itself, and instead more forcefully facilitate a Ukrainian victory. So far, the U.S. supply effort has been deliberative and process-oriented in the kinds of weapons it provides, and the speed at which it provides them, so as not to undercut its highest priority of avoiding a direct clash between Russia and the West. That strategy is likely to be part of the agenda at Tuesday’s emergency meeting of G7 leaders, and a gathering of NATO defense ministers later in the week. U.S. officials continue to express caution about precipitous moves. “Turning points in war are usually points of danger,” said a senior Biden administration official, one of several U.S. and Ukrainian officials who spoke on the condition of anonymity to discuss policy deliberations. “You can’t predict what’s around the corner.” Russian leaders have cited their own turning point. Viktor Bondarev, head of the foreign affairs committee of Russia’s upper house of parliament wrote in a Telegram post on Monday that the strikes were the beginning of “a new phase” of what the Kremlin calls its“special military operation” in Ukraine, with more “resolute” action to come. Putin, speaking early Monday to his security council, said the attacks were retaliation for what he called Ukrainian “terrorism,” including the blowing up over the weekend of the strategic Crimean Bridge that is a crucial logistics route for Russian occupying forces in southern Ukraine. The bridge destruction, for which Ukraine has only indirectly claimed responsibility, came after a steady stream of Ukrainian gains that buoyed both Kyiv and its Western supporters. In a surprise counteroffensive begun in early September, Ukrainian forces recaptured more than 1,000 square miles of Russian-occupied territory in the north east, followed by other gains in the south. The Ukrainian victories, along with persistent reports of poorly equipped and low-morale Russian soldiers who fled the onslaught, abandoning equipment and leaving behind their dead, brought public criticism of the conduct of the war from inside Russia, including from some senior Putin advisers. Within days, Putin had called for the military mobilization of up to 300,000 civilians to bolster his failing forces. The humiliation was compounded by a chaotic implementation and the fleeing of hundreds of thousands of military-aged men across neighboring borders. In what was widely interpreted as a reference to nuclear weapons, Putin threatened to use “all means available” to defend Russian-occupied territory, even as he moved to annex four Ukrainian regions. “I want to remind you that our country also has various means of destruction … and when the territorial integrity of our country is threatened, to protect Russia and our people, we will certainly use all means at our disposal,” he said on Sept. 21. “This is not a bluff.” The mobilization and nuclear threats, the senior administration official said, were “signs of two things: Putin does know how bad he’s doing. … That was a question mark before.” “Two, it’s definitely a sign that he’s doubling down. That we’re not close to the end, and not close to negotiations. Those realities don’t give anyone any great comfort here,” the official said. Rose Gottemoeller, a former senior State Department official for arms control and nonproliferation issues, and former deputy secretary general of NATO, said: “The use of nuclear weapons is a dead end. It shows the final failure of [Putin’s] policy if he’s somehow driven into that corner,” Gottemoeller said. “It’s the final throwing of the dice,” thinking that “somehow … everyone will panic and all of their supporters will force the Ukrainians to sue for peace … I don’t see that happening.” “I think we have to take these threats very, very seriously,” she said. With the Monday strikes inside Ukraine, Putin was clearly trying to reclaim the initiative, but also to bolster the image of a unified strategy and leadership. In his security council remarks, reported by Russian media, he said the missile attack had been fashioned and recommended by his “Defense Ministry, in accordance with the plan of the Russian General Staff.” He made particular reference to the role of Defense Minister Sergei Shoigu, whose absence from public view in recent days had led to speculation that he had been fired. For its part, Ukraine has long combined its profuse gratitude for Western weapons aid with demands for stepped up delivery of more, and more sophisticated, supplies. The counteroffensive on the ground brought calls for battle tanks to move into contested territory, which the United States and its allies have been reluctant to send. This week, Kyiv attached new urgency to sophisticated air defense systems. A Ukrainian official, referring to a list provided by the senior military command, said Ukraine’s priority items include the Patriot surface to air missile system, MIM-23 Hawk missiles, attack drones and NASAMS (National Advance Surface-to-Air Missile Systems) as well as Israeli air defense systems. People react outside a partially destroyed office building after several Russian strikes hit the Ukrainian capital of Kyiv on Oct. 10. (Sergei Supinsky/AFP via Getty Images) Ukraine’s pleas found new resonance in some quarters of Washington after the Monday attacks, with senior Democrats, in particular, demanding that Biden move more quickly to supply Ukraine. “I am horrified by Russia’s depraved and desperate escalation against civilian infrastructure across Ukraine — including in Kyiv,” Senate Foreign Relations Committee Chairman Robert Menendez (D-N.J.) said in a statement. “I pledge to use all means at my disposal to accelerate support for the people of Ukraine and to starve Russia’s war machine.” Rep. Elissa Slotkin (D-Mich.), a former senior official at the CIA and the Pentagon, tweeted that the need for air defense “is urgent given the scale of these attacks. Providing these systems is a defensive — not escalatory — step, and our European friends need to step up along with us to get the Ukrainians what they need.” But there was little initial sign that the administration intends to change the relatively lengthy approval process by which it decides what weapons to send to Ukraine, and when. The process includes a U.S. analysis, based on its own reporting of conditions on the battlefield, of what Ukraine needs, a senior U.S. defense official said, and “second, do we have that stuff?” “Third, do they already know how to use it? If not, what’s our plan to train them? Fourth, how are they going to sustain the stuff? Keep it in the field? Maintain it? Repair it? Spare parts? … If we can’t do those things, who among our allies and partners can do it?” the defense official said. Once those questions are answered, the request and recommendation is vetted for comment and concerns from other government departments with equities in the decision before going to the White House, where President Biden makes a final determination. When decision is made, delivery can be made within days for equipment taken from U.S. defense stocks, months if extensive training for use and maintenance is required, or years if particular items need to be manufactured. For example, Biden approved sending the NASAMS air defense system early in the summer, and defense officials have said that two will be shipped this fall, once the systems are ready and training is complete. An additional six NASAMS, announced by the Pentagon at the end of August, will take years to manufacture. Patriot systems are already in short supply within NATO, and usually travel with their own U.S. or NATO operating teams — a commitment the West is unlikely to make. Israel, whose prime minister on Monday for the first time condemned Russia, over the missile attacks, has its own complicated relations with Moscow. “We certainly understand that we are at a potential inflection point here in the war, on many levels,” the senior Biden administration official said. “That thinking is baked into [our] decision-making. … Ukraine has certainly done better and been more aggressive recently, and Putin is feeling the heat on the battlefield, at home, and overseas. There is no question that is a different set of conditions.” “But we believe that these changes on the battlefield and in Russia have only validated even more our decision-making process,” the official said. Shane Harris and Alex Horton contributed to this report.

Na Ucrânia, faltou logística às forças russas; os ucranianos exploraram muito bem esse lado - Paul Schwennesen (Law and Liberty)

Putin calculou um breve passeio militar para invadir e ocupar toda a Ucrânia. Os soldados ficaram entregues a si mesmos. Esta a principal razão do fracasso. 

Ukraine's Saratoga?

Paul Schwennesen

Law and Liberty, October 4. 2022

https://lawliberty.org/ukraines-saratoga/?utm_source=LAL+Updates&utm_campaign=bbc3d1ea40-LAL+Updates&utm_medium=email&utm_term=0_53ee3e1605-bbc3d1ea40-72437129

“An Army,” it is famously said, “marches on its stomach.” In the streets and trenches of Lyman, east of Kharkiv, the Russian army was reminded of this timeless maxim. Ukrainian forces (some of whom I know personally) “tightened the noose” around the village, controlling its supply lines, on the way to another major victory in the north. It might even have been Ukraine’s Saratoga moment—the logistical vanquishing of an overstretched invader which ultimately turns the tide of war. Unfortunately, while the moral victory is indisputable, occuring in the midst of Putin’s farcical annexation of eastern territories, an opportunity was lost for a more thumping defeat. 

Lyman, a dusty little village along the Donets River, had become something of a bastion—first for Russia’s advance and then its retreat—which makes its recapture a touchstone for northern operations and for Ukraine’s theater-wide strategy as a whole. I bought carrots from a farmer there as I left Kharkiv last time, and was stunned when it fell to the Russian advance. I’m therefore thrilled to hear of its recapture. Personal attachments aside, the Lyman operation illustrates a larger strategy of “Logistic Leapfrogging” (flanking, then cutting the supply umbilical—leaving enclaves of Russian forces isolated, demoralized, and no option but surrender). It is an investment strategy I had loudly pleaded for as I stood on the frontlines of the battle of Kyiv—a missed strategic opportunity when tens of thousands of Russian troops might have been cut off in their retreat north to Belarus. 

Freshly abandoned lines near Zurivka, east of Kharkiv in April. Flimsy shelter materials and low-quality personal gear exemplify the logistical weakness of Russian operations (Courtesy of author)

The Leapfrog strategy leverages the advantages of Ukrainian internal supply lines and is infinitely better than playing to Russian advantages in a grinding, incremental, frontal assault to recapture territory. The opportunity, I was heartened to see, presented itself again in Lyman, as Russia seems incapable or unwilling to learn from its past. The Leapfrog strategy may become an enduring theme of the entire war—for, as Napoleon adjured, “One must never interrupt your enemy when he is making a mistake.”

Ukraine, for its part, isn’t immune to mistakes either. It was dismaying to see Russian forces able to retreat through the supposed “encirclement” of Lyman—the crowning chance to capture possibly thousands of Russian fighters was squandered in what seems an uncoordinated rush to “take back” the city. Why could they not have waited, reinforcing supposedly “closed” escape routes with infantry? To be fair, Ukrainians cannot afford to lose manpower or materiel: it is fighting a Goliath ten times its size and feels losses disproportionately. The strain is already starting to show after months of sustained combat—soon it may quickly devolve into a crumbling capacity to resist Russian mass, regardless of how clumsily it is wielded. Just yesterday I was informed that five of my colleagues were ambushed in a building-clearing operation in newly liberated territory. In the maelstrom of machine gun fire and grenade shrapnel, all of them were wounded, two critically. The only thing that saved their lives was incoming Russian artillery “support” which caused the ambushers to scurry back to their retreating line. A lucky break at the tactical level, but this can’t go on indefinitely—Ukraine cannot long afford to put its fighting capacity into hospital bunks. 

That is why it is all the more important to continue to Leapfrog: cutting supply lines and enveloping swathes of Russians is the only way to equalize this inherently unequal campaign. Cautious flexibility, of course, is the name of the game: now that Russia’s top logistical officer, General Bulgakov, has been relieved of his post and replaced by 60-year-old Col. Gen. Mikhail Mizintsev, there is a good possibility that this strategy will require extra finesse. Mizintsev, known amongst Ukrainians as the “Butcher of Mariupol,” is likely to want to alter Bulgakov’s approach, if only to save his own neck. There is hope, however: while he is surely aware of his logistical disadvantages, if Mariupol is any indication he is unlikely to break from the basic paradigm of brute force backed by massive artillery support. Luckily, this kind of support requires thick conduits of ammunition transport which are increasingly vulnerable as Ukrainian resistance perfects techniques of light, rapid, flanking maneuvers and logistics interdiction. What’s more, Russian ammunition is not infinite. If abandoned ammunition is any indication, Russia is scraping deep into its stores of firepower:

1980’s vintage ammunition, May 2022 (Courtesy of author)

Could Ukraine’s “Saratoga moment”—cutting off an overstretched invading force from its supply lines—translate into a theater-wide strategy? Yes, and solid indications suggest that this is precisely the idea. With the success in Lyman, it is natural to suppose it will be repeated elsewhere. Crimea, for example, is a Yorktown waiting to happen: a bottled-up army, cut off from supplies of its “beans and bullets” cannot long endure. 

All of this is simply a reminder that this war has become, or more accurately has always been, a logistical one. As such, it is a race against depletion: every loss the Ukrainians incur must be offset by extracting ten times the cost to the Russian war machine. This is a desperately difficult challenge. Western support can fill the deficit to an extent, but it is not reasonable to expect it to fill the imbalance completely. The only real hope is in Ukrainian maneuverability (and patience!)—the capacity to isolate, invest, and pare off elements of the invading force that lie far ahead of its supply lines, leapfrogging and enveloping them in a trap of the Russian’s own making.

Lyman has focused international attention in much the way that Saratoga did for America’s Continental Army in 1777. In addition to a brilliant political blow to Putin’s supporters, the success helps highlight French and German reticence, goading them (for good or ill) into more meaningful involvement. Whether such involvement escalates the conflict into a low-grade nuclear slugfest, or perhaps pushes the more reluctant republics of the Russian Federation to finally make their break remains to be seen, but the fact remains: Lyman, like Saratoga, will be remembered historically as the moment the war turned.

Paul Schwennesen is completing a PhD dissertation on environmental history and Spanish conquest in the Arizona/New Mexico borderlands. He holds a Master’s degree in Government from Harvard University and degrees in History and Science from the United States Air Force Academy. He is a regular contributor to the Property and Environment Research Center and his writing has appeared at The New York Times, American Spectator, Claremont Review, and in textbooks on environmental ethics (Oxford University Press and McGraw-Hill). He is the father, most importantly, of three delightful children.