Maxym Krapivnyy, host at Ukraine’s Kanal24 in Kyiv, spoke with me recently while I was in the USA about: Ukrainian’s drone war against Russian energy, its economic situation, and the USA’s expanding energy war targeting Russia, Iran, Venezuela, and India’s Russian oil imports. I explained that soon, the late-Lindsey Graham’s (R, S.C.) and Richard Blumenthal’s (D., Conn.) “draconian” secondary sanctions bill is expected to be signed by Trump, blocking most Russian oil exports. (Last night, the Senate voted 86-12, advancing the bill. See Blumenthal, here.)
However, Maxym also then asked my view on the likeliness of a Putin soon agreeing to serious peace talks. I said I expected Russia to be unwilling to end the war even if its forces are pushed back to the Russian border. Putin would likely long refuse to admit defeat as this would devastate Russian credibility as a major power in the eyes of leaders and peoples of surrounding Eurasia and beyond. See below for a fuller explanation of this.
On the energy war, I stressed that Russia is well known to be a petrostate. Russia’s wealth and capacity to finance aggression abroad overwhelmingly depends on its oil export revenues. Russia’s continued existence as a-petrostate is what the ongoing Ukrainian and USA energy offensives are targeting, on two main fronts.
There are two sides to this energy war. One is the Ukrainian’s kinetic war against Russia’s domestic refineries, the other is the USA and allies’ global sanctions offensive. Both aspects are evolving in breath and complexity:
- First, there is the Ukrainian drone and missile campaign, including deep strikes against domestic Russian oil refineries and infrastructure. This has been gaining in success. I pointed out that these attacks have to, however, increase still more, requiting heavier missiles to close refineries and oil export terminal ports for sufficient time to render repairs unprofitable. However, Ukraine is now and testing and/or has begun to produce such heavier weapons, which should be available in the short-to-medium term. We discussed Russia’s refined product supply problems, and what Ukraine must yet accomplish.
- Second, oil which increasingly cannot be refined is pouring into Russian export terminals, its big Baltic and Black Sea oil ports. This was already the situation before the Iran war began on February 28. At that time, oil that could not be refined due to drone attacks was being loaded on ships for export. However, with USA sanctions having been intensified, many of these ships had no customers, it had nowhere to go. During the initial phase of the Iran war, the USA allowed India and other allies to purchase this oil (i.e., it unsanctioned oil already loaded on ships without any clear destination) to avert it going to China. This accumulation is apparently again building up, for the same reasons.
the USA now maintains sanctions against Russian oil firms Rosneft and Lukoil, and is working to supply India with non-Russian oil to end its Russian oil purchases, making it harder for Russia to find export markets besides China. However, the reclosing of Hormuz will of course make this somewhat easier for Russia to find buyers.
Furthermore, just before Senator Lindsey Graham died a few weeks ago, he announced that Trump had agreed to Graham’s bipartisan Senate bill to impose “draconian” secondary sanctions on Russian oil. In principle, these sanctions should come in due course, depending somewhat on what happens in coming weeks in the war to keep Hormuz open.
Returning to the unlikelihood of Putin negotiating seriously now: I stressed that this is so for the identical reason the USA, under LBJ and Nixon, doggedly continued to fight against Viet Nam despite having obviously already lost the war. I said that Ukraine should take note that the USA, albeit a democracy, conducted mass bombings across VN far exceeding in tonnage anything Putin has so far been able to accomplish, against both military and civilian infrastructure and population, while forcing its young soldiers’ to sacrifice their lives, long after it was obvious the USA had lost. In fact, this led to widespread killing of officers, drug use and refusals to engage in combat by US draftees.
In that war, Nixon and Kissinger, escalated a lost cause and, under severe domestic pressure, finally invented a formula to avoid openly admitting the American loss. As they signed a Paris Peace Accord, agreeing to withdraw, they nevertheless “Vietnamized” the war by turning responsibility for the continued fight over to the USA’s puppet proxies in South VN. Of course, this regime soon fell. Nevertheless, this did not transfer the humiliation onto the South Vietnamese allies, American military prestige was devastated globally for years.
While the USA, a democracy, with a mammoth economy and new-technological prowess, slowly revived its military prestige and capacities, Putin’s Russia, an impoverished, economically backward autocracy, would very likely forever lose its Great Power status should it be chased out of Ukraine. It could disintegrate, suffer occupations by peripheral states, and become a Chinese dependency. In this case, it might still refuse democratic reforms and to allow an autonomous business class, instead accepting a China-dependent status, to be economically modernized, reindustrialized and remilitarized. This is something which today’s China is quite capable of accomplishing considering with its technical-industrial and organizational prowess.
The Global Barrel 