Maxym Krapivnyy, host at Ukraine’s Kanal24 in Kyiv, spoke with me recently while I was in the USA about: Ukraine’s drone war vs. Russian energy, Russia’s economy, 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. (Note: the Senate yesterday voted 86-12, to advance the bill. See Blumenthal, here.)
However, Maxym also then asked my view on the likeliness of Putin soon agreeing to serious peace talks. I said I expected Russia would be unwilling to soon end the war even if its forces were pushed back to the Russian border. Why? To admit defeat would devastate Russian credibility as a Great Power in Eurasia and beyond. (See below for a comparison to the USA in Vietnam.)
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 testing and 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.
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