Cogito Ergo Non Serviam
Russia Lacks Ability to Sustain War
The Russian war machine is running into trouble worse than that it found a year ago on the road to Kyiv. Economic sanctions cannot win a war on their own, but in tandem with other tools of persuasion (drone attacks on Moscow and Ukrainian counter-offensives), they are effective in reducing the ability of a nation at war to fight. Statistics show that the Russian military is running out of just about everything it will need to continue the fight beyond this year or next. Moscow has lost the war. The only real question that remains is on what terms will the killing stop?
Ambrose Evans-Pritchard wrote a very detailed piece in the Telegraph that lays all of it out in plain language. For instance, natural gas is no longer a tool Russia can use against Europe nor is it a big source of revenue compared to a year ago. Germany and Italy have storage tanks that are about 75% full, 20% higher than usual this time of year. The price Mr. Putin gets for his gas is also down. Right now, he is getting about 25 euros per megawatt hour. Back in August, that amount was 304 euros. With China having a soft economy, demand in Asia has dropped. Wall Street says there is a 5% permanent drop in demand for Russian gas.
On oil, Russia is not doing much better. This may sound odd when one looks at the volumes Russia exports. They are near record amounts. Yet the volume is not what the sanctions address. The allies of Ukraine are not trying to crash the economies of the South. Instead by limiting the price Russia gets to $60 a barrel, the consumers still get the oil they need but at a price that does not help Russia much. "I doubt that Russia is netting more than $20 a barrel given their own cost of production," said Professor Alan Riley from the Atlantic Council.
Mr. Putin does have a reserve he can raid as needed, $155 billion if one believes Moscow. His budget deficit for the year to date is $40 billion. Raid as much as he likes, that war chest is not infinite. His burn-rate will ensure he runs out of cash before 2025. So, the Kremlin is now assessing "voluntary" contributions from the oligarchs and their companies. For now, that will help, but their pockest are not infintely deep either.
The effects of this are starting to show up on the battlefield. The Russian army has deployed T64 tanks (designed in the 1960s and replaced by the T80 in 1976) and even T55s (introduced in 1945). They will not stand up well to anti-tank weaponry from the West that Ukraine now has. This problem is seen across the Russian order of battle: up-to-date helicopters, rocket systems and artillery are all in short supply. Upgrading the old stuff is hard because there are not enough microchips; Russian needs 30,000 a month and produces just 8,000.
Russia is not going to collapse economically from the sanctions. That is not how sanctions work. What they have achieved is much less dramatic. Russia now has to fight with one hand tied behind its back. The old saying that war is about getting there "firstest with the mostest" applies. It is harder and harder for Russia to do that because it is running low on spare parts and new weapons.
One does not expect the Ukrainian army to march through Red Square in Moscow this summer, nor ever (no matter how gratifying that might be). Kyiv has its own issues with materiel and logistics. However, it has enough to make serious gains with its coming offensive. As autumn comes, and as Russia faces more serious shortages of just about everything, one expects low-level peace talks (talks about talks more likely) to begin.
© Copyright 2023 by The Kensington Review, Jeff Myhre, PhD, Editor. No part of this publication may be reproduced without written consent. Produced using Ubuntu Linux.
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