Ukraine just changed the game in the Black Sea:
Reports have been confirmed—Ukraine struck an oil tanker on its way through the Kerch strait. At first, there was even speculation it might’ve been the bridge, but this might be even more significant. By quitting the grain corridor deal, Russia just put its own shipping under the line of fire. And by hitting an oil tanker—Russia’s greatest source of foreign revenue—Ukraine just effectively shut down Russia’s biggest export through a key shipping lane. There’s no way Russia can protect those tankers once they leave port.
Either Russia renews the grain deal via “good will measure,” or it better find other ways to get its oil out to market.
Unable to meet any of its pre-war goals of taking Kyiv, decapitating the Ukrainian government and installing its own puppet regime, and demilitarizing Ukraine, Russia’s final gambit is to retain the territory it captured until everyone gets tired of supplying Ukraine.
It would not be an insignificant result, as Russia currently holds valuable agricultural steppe in northeastern Ukraine, as well as an invaluable “land bridge” connecting mainland Russia with the occupied Crimean Peninsula. It would be enough for Vladimir Putin to declare victory and call it quits … for now.
As such, Putin has ratcheted up “peace” talk as of late, implying that it is Kyiv who are the real warmongers, unwilling to cease hostilities. Within that context, this weekend’s peace gathering in Saudi Arabia is particularly interesting. Russia is talking about peace only to itself, offering nothing of actual substance. Meanwhile, Saudi Arabia will host 40 countries to discuss Ukraine’s proposal, including, surprisingly, China.
China’s attendance at the peace gathering gives the event some heft beyond mere propaganda value. Reuters reports:
Chinese Special Envoy for Eurasian Affairs Li Hui will visit Jeddah, Saudi Arabia, for international talks on the peaceful settlement of the Ukraine crisis, China's foreign ministry said on Friday.
"China is willing to work with the international community to continue to play a constructive role in promoting a political solution to the crisis in Ukraine," Wang Wenbin, a spokesperson at the Chinese ministry, said in a statement.
Ukrainian and Western diplomats hope the meeting in Jeddah this weekend of national security advisers and other senior officials from some 40 countries will agree on key principles for a future peace settlement to end Russia's war in Ukraine. Moscow will not be attending.
Ukrainian President Volodymyr Zelenskiy said on Wednesday he hoped the initiative will lead to a "peace summit" of leaders from around the world this autumn to endorse the principles, based on his own 10-point formula for a peace settlement.
Ukraine’s 10-point plan is as follows:
Nuclear safety around the Zaporizhzhia nuclear reactor currently in Russian-occupied territory.
Allowing Ukrainian grain exports through the Black Sea.
Rebuilding Ukraine’s energy network while maintaining price constraints on Russian energy exports.
Release of all prisoners of war, and return of all deported Ukrainian citizens.
Restoration of Ukraine’s internationally recognized borders.
Withdrawal of all Russian forces from those internationally recognized borders.
Establishment of a judicial tribunal to try Russian war criminals.
Focus on restoring Ukraine’s damaged ecosystem, including removal of all mines and unexploded ordnance.
Security guarantees for Ukraine, including NATO ascension.
A signed declaration ending the war between Ukraine and Russia.
This peace plan is more like a Ukrainian wishlist of everything it wants. The demand for territorial integrity and the restoration of the pre-2014 borders (which include Crimea) is a hard line for both Ukraine and Russia. There is also no scenario, absent violent regime change in Moscow, in which indicted war criminal Putin ends up at The Hague.
As such, it’s hard to see this leading to any sort of actual negotiated peace. And given the situation on the ground, there is little military impetus for either side to budge at this time.
But this weekend's peace summit is quite interesting nonetheless. Russia will obviously be absent, but what if China comes in and endorses much or most of this document? This summit will also be attended by many of the “global south” nations which Russia has heavily wooed in the past year, hoping to lead this bloc of economically emerging nations against the dominant West.
Brazil, India, and South Africa will be there. Alongside China and Russia, they are the core members of the BRICS alliance (the initials correspond to each of those nations). It’s not much of an alliance right now, as India and China are in a low-grade border conflict, India and Russia have their disagreements, and China and Russia have theirs. And none of those nations are helping Russia militarily in this war. BRICS is more of an idea of a future in which the U.S. Canada, Australia, and Europe don’t have outsized weight in world affairs. Their inclusion in this Ukrainian summit, to Russia’s detriment, is telling.
Also attending are other key “global south” countries like Indonesia, Egypt, Mexico, Chile, and several African nations like Zambia. Regional power Turkey, which is hosting Putin in a bid to restart the grain corridor deal, will also be there.
Not that diplomatic isolation will, in itself, end the war. Russia has been diplomatically isolated this entire war and it hasn’t altered Putin’s behavior in any way. But this war will end when multiple pieces come together—diplomatic, economic, and military.
Russia's biggest triumph since the start of the invasion has been on the economic front, keeping its economy afloat in the face of punishing Western sanctions. Indeed, the White House once claimed that its sanctions would cut Russia’s economy in half. Instead, its economy grew 1.5% this year after contracting by a mere 2.1% last year.
Much of that growth, however, has come from massive government spending on war stuff, as reported by The Wall Street Journal:
Government spending as part of gross domestic product has jumped by 13.5% in the first quarter compared with the same period last year, the highest growth rate in data going back to 1996 [...]
The output of “finished metal goods”—a line that analysts say includes weapons and ammunition—rose by 30% in the first half of the year compared with last. Other lines associated with military output have also increased: Production of computers, electronic and optical products also rose by 30%, while the output of special clothing has jumped by 76%. By contrast, auto output is down over 10% year-over-year.
“What we’re seeing now is a massive boost in demand distribution via military-industrial complex and war beneficiaries, we can call it military Keynesianism,” said Alexandra Prokopenko, a former Russian central-bank official who is now a nonresident scholar at the Berlin-based Carnegie Russia Eurasia Center.
Russia successfully arrested an economic decline by artificially propping up its currency, the ruble. It did that by forbidding Russian banks from converting rubles to foreign currency, thereby forcing them to carry large supplies of rubles. This had a particularly outsize effect on regular Russians, who would previously convert their rubles to dollars and euros as the more desirable, safer currency. It also forced companies doing business with Russia’s massive energy conglomerates and other economic sectors to make payments in rubles. As long as major economic players needed to convert their local currencies to rubles to pay for Russian goods, that currency retained value.
But that streak is now coming to an end. India and China have expressed little interest in paying for Russian supplies in rubles, and they have far more economic leverage than the Europeans who once depended on Russian energy. As Europe continues to exit Russian energy markets, the ruble is suffering accordingly. Today, the ruble hit its lowest mark against the U.S. dollar since the start of the war. If Russia is unable to reverse that trend, it will raise the cost of goods for regular Russians and increase inflation; that will lead to higher interest rates and add to the growing discontent around the country.
None of this is going to end the war anytime soon. Absent a successful coup, that will still depend, for the most part, on what happens on the battlefield. But the more Russia is isolated diplomatically, the more its economy falters, and the greater the chance of success in the year ahead.
Chris Christie visited Ukraine today.
Many people laughed this off, given his poor status in the Republican presidential field. I think it’s important for any Republican to show support for Ukraine, and push back against the MAGA nihilists who cheer Putin’s war.
Rumors yesterday that Ukraine hit another Russian naval ship are confirmed as true. Video of the drone has been circulating on Twitter and YouTube, and here’s video of the ship being towed to harbor, looking dangerously damaged.
I mean, look at this thing. It might not make it:
This is a Ropucha-class landing ship, designed for amphibious landings. While Russia won’t be making any such amphibious assaults against Ukraine anytime soon, it does seem like that ship would be an effective way to shuttle equipment into Crimea in the case the land bridge in Zaporizhzhia is cut and the Crimean Bridge is destroyed. And in any case, it signals to Russia that their ships are not safe, and perhaps need to be pulled back away from Crimea.
It sure would be nice if Ukraine managed to similarly damage the missile cruisers that have been launching punishing missile strikes against Odesa the past two weeks.
Lots of rumors around Robotyne, suggesting that Ukraine has captured the first Russian defensive lines, and that Robotyne itself may be on the verge of liberation.
The town itself is less important than those trench lines. If the first line has been breached, that would be something to celebrate. Cut off from its supplies, the Russian garrison at Robotyne would either have to fight its way out, or surrender.
Nothing is confirmed, with Ukraine characteristically quiet and Russians uncharacteristically shut down. Remember, the war bloggers are now under pressure from Moscow to refrain from publishing “unflattering” information. The arrest of war criminal and war critic Igor Girkin has had a chilling effect on the Russian war blogging world.