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I have only written one commentary on the Ukraine War, (UKRAINE– USA & RUSSIA ARE WINNING. EUROPE IS LOSING January 2023 ). I believe that commentary has stood the test of time. Furthermore, I believe the USA and Russia keep on winning and Europe (including Ukraine) will continue losing.
USA & RUSSIA ARE STILL WINNING
I have only written one commentary on the Ukraine War, (UKRAINE– USA & RUSSIA ARE WINNING. EUROPE IS LOSING January 2023 ). I believe that commentary has stood the test of time. Furthermore, I believe the USA and Russia keep on winning and Europe (including Ukraine) will continue losing.
The purpose of this commentary is to explain how and why the USA and Russia are winning this war. This can only be done by stepping outside of the western propaganda bubble. I will assist the reader in this endeavour by offering a simple thought experiment as follows:
World Population = 8 billion
NATO Population (32 countries) = 1billion
Russian Population = 150 million
Neutral / Non-NATO Member Population = 6.85 billion
In spite of the war and denunciations from the west Russia has continued to receive visits from heads of state from foreign countries. For this thought experiment I decided to pose the following a tricky questions to Grok;
What is the combined population of countries whose heads of state visited Russia since the beginning of the Ukraine war?
The number is 4.8 billion. The details are available online if you post the question yourself. Russia is merely one country. These visits tells us that leaders from well over half of the world population consider it reasonable or normal to visit Russia. Obviously, their populations do not live in our western media bubble.
Many people reading this in the west will jump to the conclusion that people in non-NATO countries are just ignorant or ill-informed. I tend to agree. But I suspect that they are no more ignorant or ill-informed than their counterparts in the west. They just live in different media bubbles.
We in the west are much too taken by good guy / bad guy narratives (dominant historical realities). We want to believe that America and NATO are for human rights, freedoms, international law, respecting boundaries and lots more good stuff. Additionally, we are too quick to believe that Russia is against all of these good things and that President Putin is callous and evil.
Our biggest failing in the West is that we cannot even imagine that perfectly reasonable people in other parts of the world have different opinions to us. The public in the west are so immaculately brain washed that they do not have the sufficient free mental acreage to consider other points of view. There is no room in their worldview to seriously consider an alternative viewpoint.
That ends our little thought experiment. It certainly proves nothing, but hopefully it readies the mind for what comes next. The best way to examine how the protagonists are doing in this conflict is to measure their performance against their objectives. We need to look at things from their perspectives.
How and why the U.S. Are Winning in Ukraine
It is simply not credible to think that U.S. military actions around the world are for the benefit of U.S. citizens (see here). Counter arguments that claim the U.S. foreign policy is conducted with some complex global strategic goal that ultimately benefits it citizens strikes me as little more than ‘sales speak’ to bamboozle both Joe Sixpack and the college educated pseudointellectuals. Many U.S. promoted wars are little more than rackets - and Ukraine is certainly a racket.
Arms Sales
As I stated in my last commentary, American arms manufacturers are a key driver of US foreign policy. They are more than lobbyist; in my opinion they exert an enormous influence on US foreign policy. It has come to a point where politicians openly declare that US warfare spending is good for the economy.
“While this bill sends military equipment to Ukraine,” Biden said Tuesday, “it spends the money right here in the United States of America in places like Arizona, where the Patriot missiles are built; and Alabama, where the Javelin missiles are built; and Pennsylvania, Ohio, and Texas, where artillery shells are made.”
The chart above is not presented as proof that war is profitable (as if proof were needed), but there can be little doubt that the Ukraine war is very good for large influential arms manufacturers. The U.S. government are not the only ones buying from its domestic arms suppliers. According to the BBC, in U.S. fiscal years end October 2023, Poland bought $32Bn worth of Apache helicopters, HIMARS, and Abrams tanks etc. Poland is just one country.
This war has been an incredible bonanza for the U.S. defence (war) industry.
Energy Sales
The Ukraine war has also served the interest of the U.S. Oil and Gas industry. President Biden and President Trump had repeatedly complained about Europe’s Oil and Gas imports from Russia before the war. They felt that their natural allies in Europe should be buying US Oil and Gas. This complaint was particularly acute in relation to Natural Gas.
The old (2006) pipeline map below gives a simple outline of former Russian flows to Europe. I have added the red line to present the Nord Stream 1 & 2 pipelines completed in2012 and 2021.
The United States has an abundance of natural gas. It is often a byproduct of oil production, so much so, that that in some parts of the country it sells for negative dollars. In other words, oil producers have to pay companies to take the natural gas away from them. The only way this gas can be sold in Europe is via a Liquified Natural Gas (LNG) process. The LNG process compresses natural gas down into a liquid form. It can then be transported on ships across the ocean. This process is expensive and makes Liquified Natural Gas (LNG) more expensive than normal piped gas. Up until the beginning of the Ukraine war Europe had traditionally bought cheaper piped Russian oil and gas.
According to the a European Commission report, “In 2021, the EU imported more than 40% of its total gas consumption, 27% of oil imports and 46% of coal imports from Russia.” Since the beginning of the war, Europe has made every effort to diversify away from Russian supplies. It is surprisingly difficult to get hard data, but we can say that Russian sales to Europe have dropped precipitously and that U.S. Oil and Gas companies have stepped in to replace Russian sales.
The Institute for Energy Economics and Financial Analysis (ieefa.org) tells us that the U.S. exported 30 billion cubic metres (“bcm”) to the EU in 2021. This was more than doubled to 72/77/63 bcm in 2022/23/24. That works out at about $65Bn in extra sales over the three years. That’s a win for US LNG exporters.
According to the US Energy Information Administration, U.S. domestic Oil production has increased by about 700m barrels per annum from 2021to 2024. I have been unable to nail down any hard data on US oil sales to Europe since the onset of the war. The best I can offer is are Artificial Intelligence estimates. According to which, the U.S. has roughly doubled its oil exports to the EU since 2021. This is an increase of around 350m barrels from 2021 to 2024. I will spare the readers the maths, but this equates to about an extra $75Bn in sales over three years. It looks like Europe may be soaking up half of the US’s growth in production and paying top dollar for it. Another win for U.S. energy exporters.
Potential Reconstruction Contracts and Mineral Deals
President Trump has been quite frank about U.S. interests in terms of ending the war. He wants a mineral deal that favours the United States. This is in addition to earlier rebuilding deals established by U.S. investment giants like Blackrock et al. However, it remains to be seen as to whether there will be much of anything to rebuild. Most of the destruction is taking place in the new Russian territories. Indeed, it could be that the most lucrative mineral areas will be behind Russian lines. These deals remain uncertain and so they cannot be notched up as wins for the USA yet.
Now that we have concluded the list of US successes, we need to assess the cost imposed on America.
International Prestige and Dollar Usage.
U.S. policy statements promising unwavering support for Ukraine have not aged very well. Here is one from VP Kamala Harris:
“Our support for Ukraine is unwavering. We will defend the sovereignty and territorial integrity of Ukraine.”
Apparently, U.S. support can and does waver. Clearly the U.S. is no longer defending the territorial integrity of Ukraine. Furthermore, U.S. support does not guarantee victory. There are numerous examples of US officials confidently predicting a Russian defeat. The failure of the collective west to break Russia economically and defeat it militarily is a loss for the USA. This is a first for the US / NATO. It has been a case of their fantasy rhetoric crashing into harsh reality of their own limitations in this conflict.
This failure by the west and the United States in particular leads to a loss of influence in international affairs. It is like the big boss doesn’t seem so big anymore. How confident can Taiwan be of America’s ‘unwavering support’? How worried should China be?
Theodore Roosevelt recommended the U.S. foreign policy should be to ‘speak softly and carry a big stick’. The U.S. has used its big economic stick and its big military stick in support of Ukraine. What happens when you demonstrate that the sticks don’t work?
Additionally, the decision to steal Russia’s Dollar assets was a dumb move. It changed nothing in the Ukraine. For no real gain, the US has persuaded other powers and commodity producers’ countries to diversify away from Dollar use. As the world reduces its use of Dollars it simultaneously reduces US power.
Conclusion
The unstated goals for the U.S. are largely mercantilist and shorter term. The winnings go to corporate interests. The enduring costs will be borne by the entire country over a longer-term.
In the Great O’Neill’s view, the Ukraine conflict has been a resounding success for the US, or more particularly for parts of its ruling Oligarchy. The extra earnings for corporate interests in Arms and Energy are clear and measurable wins. There may even be further wins in the resolution of the war from rebuilding contracts and mineral rights. The costs or losses from this war are in soft power. These losses in soft power can be a little harder to measure insofar as they are tangled up with the naturally declining arc of U.S. power generally. All great powers rise and all great powers fall. The longer-term negative impact on the U.S. from this war will be compounded with other U.S. losses in power.
How and why the Russians Are Winning in Ukraine
Russia views it's invasion of Ukraine as a defensive action to support oppressed Russians living under Ukrainian rule and to prevent Ukraine from entering NATO. Bringing the good fight to nasty Ukrainian Nazis is an important and very persuasive narrative for the Russian public, as is the idea of standing up to an arrogant and bullying USA. Beyond this, it also wanted NATO to withdraw westwards away from eastern Europe. They had hoped to do this cheaply by sending in a mere 90,000 troops and giving Kiev a good rattle. Undoubtedly, they took on a lot more than they bargained for.
Russia has had some success; it has added significant new territory to its federation. It now controls the Sea of Azov and effectively controls most of the Black Sea. These new territories contain valuable farmland and minerals / mines. In addition to this, Russia has gained millions of new Russian citizens that had been ‘stranded’ in Ukraine. If it completes the annexation of the five oblasts (Donetsk, Luhansk, Zaporizhzhia, Kherson, and Crimea) it will increase its own population by about 10% or 14m. Off course much of this territory has been bombed out and it would take time for those populations to reestablish themselves.
This ‘Russian success’ has come at a huge cost. Well over 100,000 Russian soldiers have been killed. It is impossible to get an accurate figure. Military experts tell us that for every death in a war you usually have a multiple of that injured (perhaps 2 or 3 times as many). Objectively speaking this is a huge human cost. However, what matters in this analysis is whether Russia considers it to be a price worth paying. I will come back to this point after we consider some of the unforeseen gains Russia has enjoyed.
Russia has demonstrated economic resilience and strength. The nature of it's economic self-reliance is increasingly valued in our de-globalising world economy. Russia is very advanced in terms of self-sufficiency and near (or friend) shoring its supply chains. A breathtaking series of sanctions, embargoes and trade barriers have failed to break the Russian bear. Arguably it has made Russia stronger and more self-assured. Added to this there has been a growth in national pride and solidarity. In their view, they have resolutely stood up to American and NATO bullying. This national pride combined with a growth in international prestige amounts to a growth in soft power. This has been an unexpected upside to the war. Over 30 heads of state have visited Russia since the onset of the war. The most notable countries have been Brazil, China, India, South Africa, Turkey, Hungary and Egypt. These visits are moral wins for Russia.
As I alluded to earlier, the Russian costs in this war are more than just military casualties. Russia has lost numerous amounts of expensive military hardware including several large naval vessels. Much of its economy has been re-orientated to a war economy. Strangely enough this may not be an entirely bad thing when the war winds down. Technological development and better productive capabilities will allow Russia to capitalise on future arms sales to third countries. It is a depressing thought to realise how much money can be made by arms manufacturers on both sides of this conflict.
Conclusion
In the shorter term this is a win for Russia. The gains for Russia in power, prestige on the world stage, territories and population gained probably outweigh the human costs. It may be a pyrrhic victory, but it is a victory nonetheless.
In the longer term it is harder to know how all this plays out. Arguably NATO is more aggressive than ever. Finland and Sweden joined the anti-Russian military alliance. Many of the eastern European nations are more hostile than before to Russia and Ukraine will probably continue to harbour anti-Russian Nazis. Nevertheless, I would suggest that Russia will continue on its upward trajectory from its ‘everything’ crisis after the collapse of the Soviet empire.
Final Remarks
It is easy to see the near-term wins for both countries. The longer-term outcomes area good deal more nuanced. But I strongly suspect that the Ukraine war will become part of the story in decline of the U.S. empire and part of Russia's re-emergence story from the dark days of the 1990s. Time will tell.
