The Ukraine War & the Battle of Avdiivka

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Arguably the most brutal battle of the Ukraine War is now in its fourth month: the battle of Avdiivka. Let’s take a deep look at its strategic importance for both sides.

Avdiivka is located in southeastern Ukraine and offers access to vital Ukrainian logistical hubs – so both sides are intent on having control. The Russians have sent waves of troops, tanks and everything else they have into the meatgrinder of Avdiivka, suffering some 40,0000 battle casualties – a ratio of around 5 to 1 compared to the Ukrainian defenders.  

As bad as that sounds (and it is, indeed, very bad), in terms of equipment, the Russians are suffering loss ratios twice that. And yet, for the Russians, this isn’t even remotely perceived as a defeat. Russia has always fought its wars as ones of attrition. For Moscow, there’s nothing new here. Russia has more men and gear than Ukraine, and the Kremlin’s bet is that even horrific loss ratios like what’s happening at Avdiivka are still a recipe for ultimate victory.  

The Ukrainians need to shift the war to a style that suits their hand – one of movement and logistics, as opposed to sheer volume and numbers. To do this, NATO countries must ramp up materiel production, both for the Ukrainian front as well as for their own needs; otherwise, flows will stop and/or NATO’s capacity to defend itself will thin.

Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:

First, we look across the world and use our skill sets to identify where the needs are most acute. Second, we look for an institution with preexisting networks for both materials gathering and aid distribution. That way we know every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence. Then we give what we can.

Today, our chosen charity is a group called Medshare, which provides emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it. Until future notice, every cent we earn from every book we sell in every format through every retailer is going to Medshare’s Ukraine fund.

And then there’s you.

Our newsletters and videologues are not only free, they will always be free. We also will never share your contact information with anyone. All we ask is that if you find one of our releases in any way useful, that you make a donation to Medshare. Over one third of Ukraine’s pre-war population has either been forced from their homes, kidnapped and shipped to Russia, or is trying to survive in occupied lands. This is our way to help who we can. Please, join us.

Support medshare's ukraine fund
Support medshare's global efforts

TranscripT

Hey everybody. Peter Zeihan here coming to you from Colorado. I’ve had a lot of people write in with questions about what’s going on in the Ukraine front, specifically what’s going on, and the battle of DPKO. This is a battle that’s been churning for a few months already, and it’s happened in a series of very discrete phases. Basically, this is a spot in southeastern Ukraine that the Russians are trying to capture from Ukraine, and it has some significant strategic implications.

If the if the Russians were able to capture it, they would be able to target a number of logistical hubs that the Ukrainians have been using very heavily in their counter offensives. So it’s not a nothing battle. It’s not an ego battle like we saw in Borehamwood last year with Russian mercenaries. This is this is a real fight.

And it’s it’s a bloody one. It’s happened in a number of phases. First, the Russians tried to use tanks to capture it. Then they sent human waves in which, you know, did as well against in place machine guns as it did back in World War One. In World War two. When that didn’t work, they sent hundreds of drones.

And now they’re trying these kind of combined armored infantry thrusts, lots of bodies. It has been the only place that the Russians have been attacking and reading between the lines of both Russian and government statements and private statements on both sides, as well as third party estimates, whether it’s from Turkey, China or Britain. It looks like the Ukrainians have been inflicting a 5 to 1 casualty ratio upon the Russians, which is just, you know, horrific.

But in terms of equipment, in terms of like tanks and APCs, it’s more like 10 to 1. Now, from the Russian point of view, this is not necessarily a disaster. This is kind of par for the course, not in terms of the numbers, but just kind of the impact of it. Ever since the Russians failed with that initial thunder run to Kiev at the beginning of the war.

The Russians have always known that this was going to be a battle of attrition for public support, for numbers of troops, for amount of equipment, and in that they definitely have the advantage, even giving the Ukrainians the most positive spin. Ukraine has less than one third the population of Russia and less than one eighth of the industrial plant.

And in terms of the order of battle that was inherited from the Soviet Union, it’s more like a 30 to 1 ratio. Russia was the primary successor state, and they got all the good stuff, so to speak. And so in any battle of numbers, the Ukrainians are going to have a very, very steep road to hoe here. But from the Russian point of view, this is kind of built in Russia is in control of information space.

So you don’t necessarily have to worry about public uprisings until you know, until you do. But we’re not there yet. And that means they can just keep pulling tanks out to refurbish them and sending them to the front without having to necessarily spin up their own military industrial plant to make new tanks. And they’re doing that, too. Now, there’s certainly burning through them five, ten times as fast as they can bring them online.

But they’re starting from a deep well of something like 16, 18,000 tanks at the beginning of the war. They’ve lost less than 2000 at this point. So they can keep this going for a very long time. In addition, the Russians have never, ever, ever claim to be the technological superpower in any age. They have always fought on the numbers and it has done them well against the against the Nazis.

There were oftentimes battles where they suffered four and five times as many casualties that they still won in the end, because they ultimately just had a much deeper bench of people. And so they’ve never focused on quality over quantity, because, as Stalin said, quantity is a quality all its own. And they’ve known this from the beginning. So when they see the bad numbers rolling in from places like a DEFCON, it’s kind of a shrug and they’re just, you know, throw in some more meat to the grinder.

It doesn’t mean there aren’t challenges, it doesn’t mean there aren’t complications. And this is absolutely why the Ukrainians are trying to turn this into a war of movement. In a war of logistics. But from the Russians point of view, this is a very comfortable place to fight a war, even with these sort of horrific numbers. The difference this time around, of course, is that this is the last time they can do this.

The bottom fell out of the Russian birthrate back in the 1990s, which means it’s already been 25 years since a large crop of people were born. And so they’re running out of people in their twenties. They started this war without 8 million men in the Russian started this war was about 8 million men in their twenties. 1 million have already been killed or removed from active combat roles because of injuries and another million have fled the country.

So at current pace, the Russians can maintain this for another four or five years, both in terms of equipment and manpower. And that’s when things get sketchy, whether or not Ukraine can last that long. You know, we’ll see. It does mean, however, that this is the last war that the Russians can fight of this scale. There’s just isn’t a replacement generation.

Now, whether this is good or bad for the Ukrainians, of course, depends upon how you want to look at the situation. The Ukrainians certainly don’t have as many men. They absolutely don’t have as much equipment. They’re absolutely dependent upon third countries, like most of the NATO forces, to supply them with the hardware that they need in a war of attrition.

That’s kind of a problem because NATO’s wasn’t designed to fight a war of attrition. It was designed to hold the line against the Soviets for just long enough for the Americans with their technological superiority to cross the Atlantic in force. Well, Ukraine’s not a NATO country, and so we’re nearing the bottom of the barrel for a lot of the tertiary countries across the Native Alliance.

And the Germans never had anything. So we’re starting to get into the stuff that really, really matters in a lot of these secondary countries like Poland or France and very soon, if NATO’s doesn’t like massively spin up their military industrial complex themselves, they’re going to have a choice between denuding their own stockpiles or supplying the Ukrainians, but probably settle for some version of both.

But again, as long as the Russians are fighting a war of attrition that they’re comfortable with, that’s a bit of a problem. But the real issue is the numbers. We talk about the thunder runs of the Russians going down to Kiev fairly, but what we’ve forgotten is that after a couple of amazing successes that Ukrainians had last year, the Ukrainians have not been able to return the favor.

If the Ukrainians cannot turn this into a war of movement and logistics, then it is by default a war of attrition. And if this is a war of attrition, that of DPKO is about the minimum level of success that the Ukrainians need to achieve. Five times as many men, ten times as much equipment they need to do that a hundred more times to defeat the Russians in a war of attrition.

And that is a extremely tall order.

Ukraine, MedShare, Cindy Crawford, and a New Book

We’re checking in on Ukraine today, and it appears that Mother Nature is keeping temps cold, the ground frozen, and enabling operations to continue. This means the Ukraine War will shift towards a war of logistics – which the Russians are notoriously bad at. As for the Ukrainians, it means support from outside countries will be even more critical in the coming months.

With that in mind, on behalf of the entire Zeihan on Geopolitics team and everyone at MedShare International,  thank you to those who participated in our November fundraiser. ZoG subscribers – and especially those who offered matching donations of their own – were able to raise over $500,000. With this infusion of cash, MedShare will be able to deliver nearly $25,000,000 worth of life-saving medical supplies and equipment, including spinal surgical kits, directly to healthcare providers in Ukraine before the end of the year.

This is because of all of you – whether you subscribed, helped share the word, or were able to donate – we helped MedShare do what they do best: partner with organizations in the US and abroad to maximize our donations by a couple orders of magnitude and deliver vital equipment where it’s needed most. And while our November campaign is over, the people of Ukraine will continue to need our help. We will continue to have a link posted if any of you want to donate to MedShare in the future.

DONATE TO MEDSHARE'S UKRAINE FUND

And our last order of business today, Cindy Crawford is a fan of my books (see the clip attached in today’s video)!!! Now that I know she’s a reader, I wanted to remind her (and everyone else) that the updated version of my first book – The Accidental Superpower – will be released on December 26th. You can preorder it using the link below!

Prefer to read the transcript? Click here

Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:

First, we look across the world and use our skill sets to identify where the needs are most acute. Second, we look for an institution with preexisting networks for both materials gathering and aid distribution. That way we know every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence. Then we give what we can.

Today, our chosen charity is a group called Medshare, which provides emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it. Until future notice, every cent we earn from every book we sell in every format through every retailer is going to Medshare’s Ukraine fund.

And then there’s you.

Our newsletters and videologues are not only free, they will always be free. We also will never share your contact information with anyone. All we ask is that if you find one of our releases in any way useful, that you make a donation to Medshare. Over one third of Ukraine’s pre-war population has either been forced from their homes, kidnapped and shipped to Russia, or is trying to survive in occupied lands. This is our way to help who we can. Please, join us.

Support medshare's ukraine fund
Support medshare's global efforts

TranscripT

Hey, everybody. Peter Zeihan here coming to you from the Chicago River Walk. I figured I owed you an update on what’s going on in Ukraine. Really? This is a weather thing. So normally, what happens when it turns from summer and fall to winter is you get a six week period kind of mud season where everything gets all gooey.

Well, it looks like that’s not really happening this year. It’s been much colder and as a result, operations can continue. But if there’s going to be a limiting factor in the war, it’s probably going to be equipment. Most of the Western countries have already provided the Ukrainians with all of the spare gear that they have and anything they provide at this point, they have to dig into their stocks of what is actually operational equipment.

And that’s a very different decision making process. So we’re probably not going to see the sort of big camera fences that we’ve seen of the attempts this year in the Big Apple operations we saw last year. Instead, this is likely to turn into a war logistics. Now, the Russians are have never been very good at that. And the Ukrainians have proven that they’re able to take basically garage project missiles and take out Russian flagships.

So expect the Ukrainians to be going after rail nodes, especially in the areas of Crimea and southwestern Russia. There was this massive storm in the Black Sea last month that did a lot of damage in those areas that the Russians are still cleaning up, which makes it’s kind of a perfect time for the Ukrainians to snarl things as much as possible.

And if you consider how poorly the Russian soldiers have fought and how badly they’ve been equipped to all of a sudden lose access to resupply is something that can really hit them where it hurts. The Russians have made it very clear what sort of targets they go after. Their guidance isn’t nearly as good as what the weapon systems are that the U.S. has provided to the Russians.

So they go after static emplacements, specifically power nodes and rail junctions. So you should expect large scale brown and black outs to be carpeting Ukraine over and over and over again. Which brings me to you. In the month of November, we had a matching program for donations to Medicare, which is a charity that provides medical assistance to communities who are under threat in some way.

Specifically, we were giving to the Ukraine fund and a number of people wrote in to help us with our matching. And ultimately we matched the first $100,000 of donations. Well, including that 100,000 donations from all of you hit us up to 500,000, which just blows my mind so much. Has it been given millions, $25 million in surgical kits and they now have the cash necessary to get these into the hands of doctors and provide training to save God knows how many lives.

So thank you. Thank you. Thank you. Thank you. Thank you. Now, do have one other announcement. There was a book fair in New York recently and it came to my attention that Cindy Crawford, of all people, has read my book. I’m Cindy Crawford. And the most recent best book I read was called The End of the World Is Just the Beginning by Peter Zeihan.

I believe, and it’s fascinating, but a little depressing. Cindy Crawford knows what I mean. So two things. Number one, call me. And second, if you like books, if you like my book personally, Crawford likes my book. There’s this bad boy. About ten years ago, Accidental Superpower, my first book was published, and we have been working in the last few months on an updated version that kind of fills the gap in those ten years and give you an idea of where it was right, where I was wrong and why and what is next.

And it publishes and it is available for you the day after Christmas. So, you know, everyone by 14 copies, that would be great. But mostly I want to make sure is Crawford gets one.

 

Russia and China Gang Up on Finland

The schoolyard bullies are back at it again. Russia is funneling waves of migrants into the Finnish border, and China has wreaked havoc on the Gulf of Finland by dragging an anchor across the sea floor.

These are clearly intentional and deliberate actions, but what do they signify? In all likelihood, these indicate potential cooperation between Russia and China in different global theaters – challenging the ability of the US to focus on multiple fronts.

We’ve discussed this in the past, and I’m not too worried about the United States’ ability to handle both Russia and China simultaneously. Click below for a refresher:

Can the US Military Fight Russia and China?

Besides Russia (once again) underestimating Finland’s support network, these actions will likely spark some changes in naval patrol patterns for the US.

Prefer to read the transcript? Click here

Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:

First, we look across the world and use our skill sets to identify where the needs are most acute. Second, we look for an institution with preexisting networks for both materials gathering and aid distribution. That way we know every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence. Then we give what we can.

Today, our chosen charity is a group called Medshare, which provides emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it. Until future notice, every cent we earn from every book we sell in every format through every retailer is going to Medshare’s Ukraine fund.

And then there’s you.

Our newsletters and videologues are not only free, they will always be free. We also will never share your contact information with anyone. All we ask is that if you find one of our releases in any way useful, that you make a donation to Medshare. Over one third of Ukraine’s pre-war population has either been forced from their homes, kidnapped and shipped to Russia, or is trying to survive in occupied lands. This is our way to help who we can. Please, join us.

Support medshare's ukraine fund
Support medshare's global efforts

TranscripT

Hey everybody. Peter Zeihan here coming to you from Phenix, where I’m on my last business trip of the year. Very exciting. Today we’re going to talk about something that the Russians and the Chinese are doing against Finland, of all places. We’ve had two big events over the course of the last few weeks. Number one, the Russians started funneling illegal migrants from Central Asia and South Asia into the Finnish border.

Clearly, this was intentional, clearly that it was premeditated because you don’t go from having less than one person a day to almost a thousand in an area that the Russians consider a security zone. Second, the this one, Solaris the Chinese in with the container ship new new polar bear. Makes more sense in Mandarin dropped their anchor in the Gulf of Finland between Finland and Estonia and then proceeded to drag the anchor on the seabed for about 20 miles until they suffered a telecommunications cable and damaged pipeline or sorry, it was an electricity transmission and make them some cable damaged pipeline.

Again, that’s not something that happens by accident. And in both cases, the Russians, the Chinese are kind of going like, what do you do about it? And it’s not clear exactly what anyone is going to do about it, because it’s one of those definitely less than war scenarios. So we’ve got three things going on here. First is this is practice for the Russians and the Chinese.

They’ve never really functionally cooperated before. They’ve certainly never coordinated their actions. But in doing two things in different theaters versus the same country that has managed to displease the Russians of late by joining Dito, this is practice for kind of a larger scale. Well, the U.S. does not consider itself capable of being involved in two major military operations at the same time, even though one would be naval and China and one would be on the land in Ukraine.

But, you know, putting that to the side. So anything that forces the United States to look in two directions at once is kind of a win in above itself, even if nothing comes from it. Second, there is the issue of implications for action. And we’re already seeing NATO countries changing their naval patrol patterns to look out for things like the Chinese.

Because, you know, when you’re dragging your anchor for 20 miles, it’s not like that is a normal bit of operation. Oh, by the way, they found sea anchor. They matched it to the vessel in question. So the Chinese are, you know, doing their normal association and lying thing. But the Finns and the Estonians really have no doubt as to what went down here.

But then there’s the third issue, and that’s the target choice. Now, until recently, Finland was officially a neutral country because it was terrified of facing the Soviet Union. And then eventually the Russians. It’s not that they think they’re weak. It’s that they know that they’re outnumbered. So if you go back to World War Two, the Finnish chapter of that conflict was called the Winter War.

And when Stalin’s troops came in, they were massacred in the winter conflict, looking at 2241 casualty ratios throughout the winter. But when the snows finally went away and the advantage of just being able to ski through the Russian forces went away. The Finns were forced to sue for peace and accept a deal that gave up territory on which about a quarter of their population prewar lived.

It’s something the Finns have never really forgotten. And so ever since then, the Finnish military has basically prepared for one fight. What happens when the Russians finally come? But this is a creative country that has shown that it can punch well, well, well, well above its weight. It arguably has the most effective military in terms of per capita in natto.

And they’re starting to trade with nature now that they’re members. And they just kicked everybody’s ass in the biathlon competition last winter, which, you know, they’re terrifying because that’s one of the reasons why the casualty ratios were so high, because these are all natural sharpshooters and these are all natural ski folks anyway. Also, when the Finns are involved, it’s not just the Finns.

They’ve got their kind of little brothers, if you will, Estonia, Latvia and Lithuania. But more importantly, they get along excellently with their other Scandinavian cousins in Denmark and Sweden and Norway. You know, the Vikings, not to mention excellent relations with the United Kingdom and now the United States. So basically what the Russians have done is pick someone that they thought was on the fringe they thought was alone.

But primitive is representative of the fact that Russian decision making at the diplomatic and security level has really broken down. They’ve kind of forgotten that even Stalin was a little bit scared of the Finns. And so they walked around and now they’re going to find out.

 

Economic Warfare in Siberia

There’s been a series of explosions along one of the main lines of the Trans-Siberian rail network. To fully understand the significance of these attacks, we must look at Russian exports, alternative options, and what maintenance looks like.

These explosions could cause disruptions to Russian exports, specifically those bound for China, but the lack of alternative routes and limited maintenance capabilities could be the nail in the coffin.

Ukrainian officials have claimed responsibility for these attacks – unofficially, of course. Regardless, Russia’s economy could be facing a severe blow if these explosions continue.

Prefer to read the transcript? Click here

Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:

First, we look across the world and use our skill sets to identify where the needs are most acute. Second, we look for an institution with preexisting networks for both materials gathering and aid distribution. That way we know every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence. Then we give what we can.

Today, our chosen charity is a group called Medshare, which provides emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it. Until future notice, every cent we earn from every book we sell in every format through every retailer is going to Medshare’s Ukraine fund.

And then there’s you.

Our newsletters and videologues are not only free, they will always be free. We also will never share your contact information with anyone. All we ask is that if you find one of our releases in any way useful, that you make a donation to Medshare. Over one third of Ukraine’s pre-war population has either been forced from their homes, kidnapped and shipped to Russia, or is trying to survive in occupied lands. This is our way to help who we can. Please, join us.

Support medshare's ukraine fund
Support medshare's global efforts

TranscripT

Hey everyone. Peter Zeihan here coming to you from chilly Colorado. The news is that last week, on Tuesday the 20th, I believe, a series of explosions hit a couple of pieces of Russian infrastructure in the Far East in southeastern Siberia. Specifically the Sarah Mosque tunnel, which is part of the Trans Siberian network, specifically the Buckle Aylmer main line were hit.

And then a few hours a day later, details are a little fuzzy. A similar line in the vicinity of the tunnel was also hit, which is serves as the backup for the tunnel, a place that they call the Devil’s Bridge. Some anonymous Ukrainian security officials have claimed responsibility for the attack. I can’t tell you if that is true or not.

What I can say is that we’ve got three things going on here. Exports, options and maintenance. So first, exports. Since the Ukraine war began, the Russians have only found it more and more difficult to get their product to market. The Europeans were the natural market. They were the closest for most oil and gas, even a lot of the minerals.

And so when they decided, for whatever reason to stop buying it, a lot of this stuff ended up in China. And for that, the Koreans Siberian rail system is critical. It provides probably 80% of the cargo capacity for land based stuff. And more stuff is going on lands than ever before. Also, all of these lines of which there are basically five, you’ve got one that’s the least important that kind of goes down into Kazakhstan before going over into emersion, Zhejiang.

That’s the least used and the most Frankenstein, the other for all parts of the Trans Siberian system that does cross over the mountains on the passes into China at different places. But all of them collectively are the only way to get things to China. And they’ve all been running at more than 100% capacity, which, you know, we’ve been kind of waiting for a safety situation to boil up, to knock things off line.

And now it’s been done, at least in part by an attack. And when a blight is being used at more than 2% capacity, that means you can’t just ship it to alternatives, even if you’re willing to turn your train around for off people, can you back up the trains you depot? Anyway, point is that one of the four lines, at least for the moment, is off line completely.

Second options. You’ve got these four lines, one that crosses through Mongolia, two that go into northeastern China and one that goes all the way over to the Russian Far East, where things can be kind of repackaged and put on ships. No one lives in Siberia because they want to. I mean, there’s a reason why this is where all the prison colonies were.

Some of the more stable lines, like the bomb line that was hit, are on permafrost, which is not particularly stable. Something happens to the permafrost. The whole thing just kind of sinks in. And it looks like, at least on one of these attacks, a rail car that was full of fuel was hit. So we’ve seen in other parts of the conflict in Ukraine how that can go bad really, really quickly.

Because of this. There are not a lot of population centers along this entire route. In fact, less than 10% of Russia’s population lives along this line. Everybody else is on the western Russia where it’s, you know, warm. And because of that finding, repair crews in the first place might be really difficult. You’re dealing with a lot of tunnels, a lot of bridges, a lot of canyons, a lot of permafrost, a lot of territory where if there is damage, you don’t just slap down some fresh line and start up.

And a road takes years. When this line was built back in the seventies and eighties, the Russians wouldn’t even allow any foreign observers to see it because it was so shoddily put together and it could only operate reliably over about a third of its length. And this was when the Soviets actually had engineers. post-Soviet Russia really doesn’t. And as we’ve seen with the Kerch Bridge, which connects the Russian mainland to Crimea, you know, that was hit over a year ago now, and it’s still not running at full capacity.

So doing repairs in this area is no minor issue. Of course, getting information out of this area is no minor issue as well. Anyway, third maintenance. The Russian educational system collapsed 35 years ago and so there aren’t a lot of people who are, I would consider to be fully capable of claiming the term engineer. In fact, the younger of them turn mid-sixties this year.

Also, everyone that the Russians have who can repair physical infrastructure is in the Ukraine theater right now because the Ukrainians have been blowing up rail depots and rail lines in bridges and roads and everything for a year and a half now. So there just isn’t a lot left that the Russians can use if all of a sudden they’re getting hit on a very, very exposed, vulnerable place 4000 miles east of Moscow.

If this was the Ukrainians or really if this was anyone who really means the Russians ill will, this is an excellent strategy because the Russians barely have the military capacity to patrol their own lands in western Russia abutting Ukraine, much less 4000 miles. The other direction, 5000 miles, the other direction. This is something that can really hit to the heart of their economic plans in a postwar scenario, because if they can’t get the stuff to the Chinese, the Chinese aren’t going to pay for it.

And there’s really only three other lines now that this stuff could be shipped. And so if this is real, we’re going to find out about it really, really fast because there’s just so many points of exposure and so many failure points throughout this part of the Russian system. It would be an easy way to take down the Russian economy far more effectively than anything we’ve seen with sanctions so far.

All right. That’s it. Stay warm.

The Collapse of Russia’s Navy: The Four Seas Problem

Naval challenges are nothing new for the former Soviets, but the Ukraine War has introduced some added stressors in the Black Sea. Russia’s inability to unify its naval presence across the four major seas in the region is a bad sign for Putin.

Russia’s vast swath of territory makes it a logistical nightmare to float a navy. Between the conflict in the Black Sea and the strategic loss of the Baltic Sea with Sweden and Finland joining NATO, Russia’s logistical nightmare is only getting worse.

With Russia’s economy highly dependent upon maritime shipments, finding a solution should be a top priority; however, any naval projects diverting resources away from the Black Sea could be devastating.

No matter what move the Russians make, limiting maritime power will have substantial economic impacts. Putin has once again backed himself into a corner, and I’m absolutely okay with that.

Prefer to read the transcript? Click here

Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:

First, we look across the world and use our skill sets to identify where the needs are most acute. Second, we look for an institution with preexisting networks for both materials gathering and aid distribution. That way we know every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence. Then we give what we can.

Today, our chosen charity is a group called Medshare, which provides emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it. Until future notice, every cent we earn from every book we sell in every format through every retailer is going to Medshare’s Ukraine fund.

And then there’s you.

Our newsletters and videologues are not only free, they will always be free. We also will never share your contact information with anyone. All we ask is that if you find one of our releases in any way useful, that you make a donation to Medshare. Over one third of Ukraine’s pre-war population has either been forced from their homes, kidnapped and shipped to Russia, or is trying to survive in occupied lands. This is our way to help who we can. Please, join us.

Support medshare's ukraine fund
Support medshare's global efforts

TranscripT

Hey everybody. Peter Zeihan here coming to you from Colorado, where we just had our first big snowstorm, nine inches and counting today. Considering the weather. I figured it was a great time to talk about what the Russians call the Four Seas problem. Most countries who have navies that are worthy of the name have a relatively limited frontage or it’s insulated from all their land power neighbors, and that allows them to float a navy that can then sail whenever they need it.

In the case of some countries like the United States, we have two big ocean fronts, a big chunk of land in between. And so it was an imperative early in the American Republic, around 1900 to build the Panama Canal so that ships could go back and forth. And you’re buying your two navies into a single one for a mailed fist.

To a degree, the French have to do the same thing, but they can’t do a canal. They have to sail around the Iberian Peninsula. And that means that countries like the United Kingdom or Japan, being island nations, are always going to fairly well on the water. Not only because they don’t have land borders to defend, but it’s easy for them to combine all of their navies into a single force when they need it.

The Russians have never had this option. Russians are obviously heir to the physically the largest country on Earth and largest country in history, but they’re not able to combine their naval forces. So they have four seas, the Pacific, the Arctic, the Baltic and the black. And because of that, other countries that have found themselves fighting with the Russians have often been able to defeat the Russians in the tail, with the Japanese being the quintessential example.

In the years of Soviet war of 1904 1905. The Japanese decided that the Russian territories in China were ones that they wanted. So they sailed over there and smashed the Navy. And the Russians spent the next almost year, six months to a year sailing the rest of their navy from the European theater all the way around Asia until they could get there to try to seek the territories back.

And the Japanese destroyed all that, too. So in two battles less than a year apart, the Russians lost everything because they couldn’t combine their forces into a more capable force. That’s even before you consider the Russians have tended to be a technological laggard on all things naval. We’re seeing some version of the forces problems today. The Ukraine conflict is obviously happening on the shores of the Black Sea.

One of those four bodies of water. And the Russians reinforced the Black Sea fleet in the days and weeks leading up to the war so they’d have more punch. But now that Western weapons have made their way into Ukrainian hands, combined with some very clever garage projects by the Ukrainians, the Ukrainians have been able to sink the majority of the major surface combatants, including the flagship.

And what is left of the Russian navy, if it was going to dock in Crimea, which was originally the Russian naval base, going back to the Crimean or sorry, going back to the Tsarist times. They’re all in range of Ukrainian weapons. And so the Russians have had to basically close down their naval base and their primary shipyards and move everything further east to the other major port they have, which is never a cease, which is doesn’t have the dry docks, doesn’t have the service capability, doesn’t have the ability to build ships.

Other problems are that the Russian activities in Ukraine have prompted Sweden and Finland to join NATO. Now, Sweden and Finland control the majority of the sea frontage on the Baltic Sea with the second largest chunk of territory in the Baltic Sea, controlled by countries that were already in Naito. And so now that Finland is in and Sweden is going to be in in a matter of weeks, the Russians will basically have this tiny little chunk of territory in a place called Kaliningrad, and the frontage sits in the general vicinity of Saint Petersburg and that’s it.

So less than 5% of the frontage. And in order to get out to the open sea, they have to sail by a sea. One, two, three, four, five, six, seven, eight, nine. And let’s call it nine neutral countries. And then you’re in the North Sea, which is also NATO like. So basically everything that’s in the Baltic Sea now is written off.

It’s a loss and that just leaves the fleets that are in the Arctic Ocean, which have been depleted because they sent ships onto the Black Sea and then off in the Pacific, which are worse off by themselves. So no matter how the Ukraine war goes at this point, Russia has functionally ceased to be a naval power at all.

The question is whether ego will allow them to accept that fact. And honestly, the more money that the Russians throw at naval projects that they’re not very good at in order to base them at bases that they can’t defend and that can’t reinforce one another, I think the better because every ruble that they use for that is a ruble that is not being used to build a tank or kill a Ukrainian.

So, you know, I say bring it on anyway. What this means is we’re looking at this entire space, seeing a change in military statistics and military strategy because the Russians today are one of the countries on the planet that is most dependent upon naval shipments for their economy. Russian industry is not all that. And they depend upon those oceans for getting their oil and their liquefied natural gas and their aluminum and on and on and on to market.

And they’ve now found themselves in a position where they are utterly incapable of projecting power on the seas in a local basis, much less a regional or national one. And so, yes, when the United States and Europe decide that it’s time to really shut down the Russian economy, they’re going to be able to do it at sea with ease in a matter of days.

So we’re only in the early stages of this war, not simply from a military point of view, but from an economic point of view, too. And it’s time to start preparing for what comes next. And that is a world without any Russian commodity exports starting to get cold. Okay. I think I think that’s it for me. See you guys next time.

New Tactics in the Ukraine War & MedShare Donations

Thank you to everyone who has already contributed to MedShare International over the past week!

We have some exciting news to share today. In addition to our donation match of $40,000 – one of our subscribers has graciously decided to match our donation. That’s a potential $80,000 going to MedShare and Ukraine.

So if you haven’t donated already, we encourage you to click the link below and help us (and our other gracious donor) hit our match goals.

CLICK TO DONATE TO MEDSHARE'S UKRAINE FUND

From 30,000 feet, the pace of the Ukraine War appears to be slowing and even reaching a stalemate; however, when we zoom in on places like the Dnieper River and Mariupol, we can see the new tactics and strategies being implemented on both sides.

The Ukrainians are beginning to use smaller waves of units to push across the Dnieper and hold ground along the riverbank. If this continues and they can successfully move south, there’s a chance that they can cut off supply routes and stir up some problems for the Russians.

Of course, the Russians aren’t sitting idle. Between sending more troops through the meat grinder and layering the region with mines, the Russians have been able to prevent any major breakthroughs for the Ukrainians.

There is plenty happening behind the scenes.

Prefer to read the transcript? Click here

Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:

First, we look across the world and use our skill sets to identify where the needs are most acute. Second, we look for an institution with preexisting networks for both materials gathering and aid distribution. That way we know every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence. Then we give what we can.

Today, our chosen charity is a group called Medshare, which provides emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it. Until future notice, every cent we earn from every book we sell in every format through every retailer is going to Medshare’s Ukraine fund.

And then there’s you.

Our newsletters and videologues are not only free, they will always be free. We also will never share your contact information with anyone. All we ask is that if you find one of our releases in any way useful, that you make a donation to Medshare. Over one third of Ukraine’s pre-war population has either been forced from their homes, kidnapped and shipped to Russia, or is trying to survive in occupied lands. This is our way to help who we can. Please, join us.

Support medshare's ukraine fund
Support medshare's global efforts

Transcript

Hey everybody. Peters Zeihan here coming to you from a home office in Colorado. I haven’t done a Ukraine update in a while because there’s been a lot of cross-currents. The front hasn’t moved very much. And in most people’s minds, that means a stalemate. And there’s definitely some truth to that. We’ll get into that a little bit, but there’s been a lot of change in tactics on both sides.

This is the first year that the Ukrainians have brought tanks into the fray and tried to do combined arms. However, the American style combined arms, the NATO’s style also includes air power and at least air parity. And the Ukrainians have nothing like that. So they’ve discovered that sending in lots of armor without air cover is, well, is going for them as well as you would expect it would.

So they’ve kind of devolved back to some older strategy that we’re using in the first part of the war. We’re using a lot more small units and that means the pace of activity has been necessarily slower. They have achieved a number of points of breakthrough in the first, second, and sometimes even the third line of Russian defense. But the Russians have been through and able to put up more and more and more mines to slow the Ukrainians.

So they’ve never actually been able to achieve any sort of breakthrough. So we’ve had a lot of incremental changes in the front, but nothing like the big breakthroughs in places like ISM or Kherson like we saw last year. For their part, the Russians have been innovating their strategies as well. Maybe innovating this the wrong word. They’ve done this silent call up of a couple hundred thousand more troops and just threw them right into the meat grinder and a place called Ivica.

Sorry for the pronunciation there, which is not too far from other places that the Russians were basically doing human wave tactics last year. And they’re having very similar results, very, very, very slow going, dating meters a day at the cost of thousands of lives. But in the last two weeks, the Ukrainians seem to be trying something new. And it would normally be something that I would just say is suicidal.

But let me give you an idea of what they’re doing and then maybe you can choose for yourself. So let’s do a foreign screen share. Go to Google Earth because it’s awesome. All right. We’re looking here at southern Ukraine, and this is an oversimplification, but if you zoom in just a little bit, this river here, this is the Dnieper.

It’s basically the front line for a large portion. Basically, everything south of this line is now in Russian hands and everything. The north line is in Ukrainian hands. And for those of you who remember too, earlier in the year, the Russians thought that the Ukrainians were to be pushing across the river. They blew up all the bridges and especially this dam right here, which is the Nova Kharkov Dam.

And what that meant is the entire upstream reservoir, which is one of the world’s largest, drained over the course of just a few days and flooded everything to the south of this point. So this whole area became flooded. You can call that a war crime. You can call that deliberate destruction, call that whatever you can call it, Max, call whatever you want.

But what it did do is turn this entire Southern section and be kind of a no go zone for most vehicles because you had exposed Riverbank above here, which was muddy or late at I guess it was about. And then down here you had flooded Riverbank that was muddy. So the Ukrainians would wanted to hit the Russians in two or three different places, suddenly found this entire swath became non-viable.

Well, what we’ve seen in the last couple of weeks is the Ukrainians have been probing across this river in worse and actually holding ground, not just using small units, but larger groups, troops. It’s unclear just how many, but the point is they haven’t been going over at night making things up and then running back before dawn. They’ve been going in a it is seen there for days and the Russians have seemed to be incapable of dislodging them.

And my first thought that this is just suicidal because if if you’re Ukrainian and you don’t have a bridge that you can retreat across any time that the Russians are able to bring any sort of artillery or even just infantry to bear on your position, there’s nowhere to go. Your backs against the river, you’re just going to die.

That’s not what’s been happening because further to the east, the Russians have been throwing human waves at a very specific location that adeyinka again, again, apologies for the pronunciation, and that’s all of the available troops in the area. The Russians are hitting that spot to prevent the Ukrainians from having a breakthrough further east in Japanese province. And what that means is it’s been difficult for the Russians to get reinforcements and materiel and just fuel into this zone right here.

So let me zoom in a little bit more. You can see how the geography is working against the Russians and for the Ukrainians in this point. You’ve got these sand dunes area, the nature park, where there’s no infrastructure at all. And then you’ve got clusters of Russians over here at this junction point of the transport system and at this junction void of the transport system.

And so what the Ukrainians have done is land all the way across the river throughout here to keep these two groups engaged. And then they’ve used their artillery from the other side of the river to just decimate the parts that are in here. Basically making this a no go zone for the Russians, which has allowed the Ukrainians to build up a bit of a bridgehead isn’t quite the right word because there’s no bridge.

But you get the idea. Any forces that are over here in the east, any Russian forces that are over here in the east, are under pressure because of that massive battle further east. And it’s difficult for the Russians to get anything through that zone to then resupply their troops further to the west. And then the groups that are here on the west side of the sand dunes get their supplies through Crimea.

But the Kerch Bridge has lost both a thrill connections and a half of its road connections. So the Ukrainians are able to play fast and loose in this area and they’re increasingly poking left and right, west and east, especially to the east, because if they can dislodge the Russians here or simply enter into a bit of a war of a move moment, then this entire zone over here, that which is occupied territory becomes in play.

For those of you who’ve been following the war since the beginning, the silly city of Mariupol is right over here, and Mariupol can really only be supplied by road now. And the places where the Russians are and Ukrainians are attempting to basically have a mutual break through of each other’s lines were around it here. So all of the Russian forces are going into this zone, leaving this entire southern swath potentially with very limited supplies.

And so if the Ukrainians can break the connection here, then these little connections that are all that allow stuff to go from Crimea north, all of a sudden are pinched off and you could have theoretically a bit of a breakthrough. Now, there are a lot of moving pieces on this. I’m not suggesting this is where we’re going, but this is the sort of tactic that you normally wouldn’t expect to see.

And we’ve now been seen it for about two weeks. So it’s something to keep your eye on as more things develop, of course, get back to you. But that’s where we are today.

Russia Backs Away From Nuclear Test Ban Treaty

If you were hoping to start your week off with some cheery news – it might be best to skip this video. Russia has stepped away from the Comprehensive Test Ban Treaty, so we have plenty to discuss today.

My initial concerns aren’t about a return to nuclear testing but rather a much darker scenario – that control of Russia’s nuclear arsenal may be compromised. We’ve already seen failures and cracks throughout the Russian military, but have those vulnerabilities made it to the nuclear program?

If Putin hits the shiny red button and nukes take off, we know how that ends..but what happens if Putin hits that button and nothing happens? I’d prefer to keep that can of worms shut, but we’re nearing a reality where that might not be possible.

Prefer to read the transcript? Click here

Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:

First, we look across the world and use our skill sets to identify where the needs are most acute. Second, we look for an institution with preexisting networks for both materials gathering and aid distribution. That way we know every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence. Then we give what we can.

Today, our chosen charity is a group called Medshare, which provides emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it. Until future notice, every cent we earn from every book we sell in every format through every retailer is going to Medshare’s Ukraine fund.

And then there’s you.

Our newsletters and videologues are not only free, they will always be free. We also will never share your contact information with anyone. All we ask is that if you find one of our releases in any way useful, that you make a donation to Medshare. Over one third of Ukraine’s pre-war population has either been forced from their homes, kidnapped and shipped to Russia, or is trying to survive in occupied lands. This is our way to help who we can. Please, join us.

Support medshare's ukraine fund
Support medshare's global efforts

Transcript

Hey everybody. Peter Zeihan here coming to you from the California coast. And it is the 2nd of November. And the big news today is the Russians have withdrawn from something called the comprehensive test ban Treaty, which aims to ban all tests in all forms of all sorts, all types of nuclear weapons. It’s a little bit different from most of the arms control agreements that exist in the world.

Most of the effective ones are bilateral treaties between the United States and the Soviets, plus Russians that have dealt with nuclear ceilings and the numbers of weapons and their stationing and their dispositions, and sometimes even down to conventional weapons. And most of this proliferation excuse me, most of this none proliferation regime is in danger right now because the Russians have stopped enforcing or have simply pulled out of treaty after treaty, prompting the Americans to follow suit.

The city. But never entered into force, however, because it was a multilateral effort, unlike all of the Cold War treaties where Moscow and Washington sat down across a table from another to hash out the details, sometimes with London or Beijing or Paris in tow. The city beat was always a multilateral effort that involved over 100 countries. And so when it was first adopted by the U.N. General Assembly back in the nineties, the hope was that we had entered into a fundamentally new era where everyone would agree that nuclear war is perhaps not something we should aim for because it came from the UNGA, because it wasn’t negotiated primarily by the nuclear powers.

The nuclear powers, for the most part, have not abided by it. It’s not that there’s been a huge amount of testing, but all the other powers have decided to. What’s the most polite way to say this? Pretend the treaty doesn’t exist. So countries like the United States and China have signed it. Same with India and Pakistan. But they never ratified it.

The Brits and the French have signed and ratified, but with a couple of exemptions in there. And now the Russians have basically joined the Americans and the Chinese and the Indians and the Israelis and everything, and basically saying that we’re not going to buy this by this at all. Now, it doesn’t mean that a return to nuclear testing is imminent.

In fact, there’s an open question of whether or not the Russians can even do a quality nuclear test any more longer. They’ve had a number of instances in the last three years where they’ve tested some of their ballistic missiles and they’ve discovered that a lot of them just don’t work anymore. And remember that if you’re going to test something that the world can see, you’re going to b, b that piece of hardware because you don’t want to look like a fool if it doesn’t work.

And the Russians on multiple occasions have looked like fools when it doesn’t work. So the real risk here isn’t so much that the Russians are going to test. The risk is whether or not their command and control over the nuclear arsenal is actually intact, because we have seen that the Defense Minister Shoigu has basically, even in the height of the war in Ukraine, continued to steal from the military hand over fist.

And you hope you hope that he’s not stealing a particularly interesting components from, say, the nuclear program, but the guy really has no ethics and no sense of patriotism. So you really can’t rule that out. The nightmare scenario for me remains is what happens if Putin hits the big candy like red button and nothing happens. And we now have seen on multiple occasions that American intelligence has penetrated so far into Moscow that we’re basically not even knowing what Putin has for lunch before he even wakes up in the morning.

And in that sort of a mire, what do you do when somebody tries to kill half a billion people but fails?

The Ukraine War and MedShare Donation Match

We’ve been talking about the Ukraine War for quite a while now, but I still get questions asking why. So, we’re looking at the historical significance of this region and what this conflict means for all of us.

Before we dive in, I’m pleased to announce our donation matching drive for the month of November. We will be matching up to $40,000 in donations this month to our chosen charity partner, MedShare International.

MedShare is a non-profit humanitarian organization committed to delivering life-saving medical supplies to areas in need around the world. We have been particularly proud to support their mission of supplying medical supplies and equipment to care for the victims of the ongoing conflict in Ukraine. Your donations help deliver surgical kits, life-saving equipment and other urgently needed medical supplies – and in November, your impact will be doubled through our matching donation.

Please click the link below to donate, and all of us at Zeihan on Geopolitics, thank you for your generosity.

Support medshare's ukraine fund
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Russia’s invasion of Ukraine is not an isolated incident; the Russians have been carrying out similar attacks to secure their borders for decades now. So if Russia isn’t stopped in Ukraine, they will continue until all of those critical access points are taken.

As long as Russia is committing war crimes, targeting food and agriculture infrastructure, and attacking the power grid, we must support Ukraine. So, I urge you once again to support MedShare and donate at the link below.

Russia Might Lose Its Influence in Moldova and Transnistria

If you’re keen on finding a place that has been put through the rinse cycle by the Russians more than a few times, look no further than Moldova. Today, we’ll explore the Russian de facto state in the eastern sliver of Moldova, known as Transnistria.

This region operates as a smuggling hub and carries heavy influence in the broader political landscape of Moldova. But as the war in Ukraine rages on, Moldovians are setting their sights on a future that removes Russia as their puppet master.

If Ukraine can hold out, the Russians will lose air and land access to Transnistria – meaning Russian support for this region would become impossible. Anticipating this shift, Moldova is aligning itself with Europe and entertaining a reunification with Romania.

With EU involvement on the line, the future of Moldova (and that tiny sliver in the east) could be resting on the decisions and results of the Ukraine War.

Prefer to read the transcript? Click here

Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:

First, we look across the world and use our skill sets to identify where the needs are most acute. Second, we look for an institution with preexisting networks for both materials gathering and aid distribution. That way we know every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence. Then we give what we can.

Today, our chosen charity is a group called Medshare, which provides emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it. Until future notice, every cent we earn from every book we sell in every format through every retailer is going to Medshare’s Ukraine fund.

And then there’s you.

Our newsletters and videologues are not only free, they will always be free. We also will never share your contact information with anyone. All we ask is that if you find one of our releases in any way useful, that you make a donation to Medshare. Over one third of Ukraine’s pre-war population has either been forced from their homes, kidnapped and shipped to Russia, or is trying to survive in occupied lands. This is our way to help who we can. Please, join us.

Support medshare's ukraine fund
Support medshare's global efforts

Transcript

Hey everybody. Peter Zeihan here coming to you from Colorado where it’s rapidly turning into autumn. And today we’re into the third part of our kind of open ended series on the Russian footprints in the former Soviet Union, places where the Russians have managed to establish military control and kept history from moving forward in order to preserve their own geopolitical power.

And today we’re talking about an area called Transnistria, which is in the former Soviet state of Moldova, which is a tiny sliver of territory on the extreme southwestern fringe of the former Soviet space. You probably have heard of it, but if you’re American but if you’re European, you’re probably fairly aware, especially if you’re Turkish. Moldova is a chunk of territory that once was known as Bessarabia, and it sits in an area known as the best Arabian Gap, which is one of the few points where there’s sure there’s physical access to the former Soviet Union from another geographic zone.

A lot of the Eurasian steppe is, well, the region steppe itself, it’s flat and open. But there are a number of places where there are access points to go to other zones. So the I’ll take out takes you into some of the Chinese space. The Polish gap takes you into Western Europe, the Bessarabia and gap takes you down into Turkey in the Middle East.

And so it’s one of the zones that the Russians have always been incredibly concerned about because they’ve been invaded through that route on a number of occasions. So they took steps through a number of wars culminated in World War Two to try to establish a foothold in that zone so they could plug the gap. And they ultimately succeeded in the world wars and they carved it up into the territory that is now known as Moldova.

Now, Moldova, in the most recent previous incarnation, was actually part of the Romanian state. And the people in Moldova speak basically Romanian and right Romanian. The Soviets basically invented a language called Moldova, which is subtly different but is broadly understood on both sides of the border. Now, Transnistria is a thin sliver of the eastern part of Moldova. When Moldova got its independence from the Soviet system in 1992, the Russians immediately sponsored a secessionist war there in Transnistria, was able to break away with the help of regular Russian forces, and they’ve maintained a force of 1 to 2000 Russian peacekeepers other since the peacekeepers do nothing of the sort.

They have really nothing to do with security, although they’re basically there to run a smuggling state. And it is one of the most active smuggling locations in all of Eurasia, which, if you’re familiar with places like Afghanistan, that is a strong statement. They also manipulate the political system in Moldova pretty aggressively. There is a significant plurality of people in Moldova who would prefer to go back to the Soviet times because post-Soviet Moldova has been an economic basket case.

They really don’t make much except for a kind of low grade, super sweet wine some people care for not me, and they are a smuggling state as well. And probably a fifth of the female population is left for the sex trade and another fifth of the population has just left in general. So this is an area that now is, I think, two under 4 million people.

And it’s just kind of they are sandwiched between one of the EU’s poorer members and Ukraine. The problem the Russians are going to have here, though, is if Ukraine is even moderately successful in its in this war, the Russians have no footprint. They rely on air space access from the Ukrainians to access their military facilities in Transnistria. And Transnistria is on as the name sounds, on the opposite side of the East River from the rest of Moldova.

So it relies on access to all of Ukraine for things like food and fuel. So when this war started and it looked like it was all going to fall apart for the Ukrainians really quick, I did a video which will attach here about how trans this was a likely target for the Russians because they could link up with forces that were already there.

Now it looks very much like it’s going to be the opposite, that this area is completely cut off and the Moldovans are starting to make some bets on that point. And they’ve moved much closer to the European since the war began and they’ve even kind of repudiated that Moldovan language that the Soviets fostered upon them. And now there’s open talk across the political spectrum in Moldova about reunification with Romania.

If that were to happen, they would step in to the EU overnight and avoid a lot of the problems politically, economically and developmentally that some of these other former Soviet states, like the Ukrainians are having in qualifying for EU membership. So this is one of those that all it takes is the right battlefield evolution in Ukraine and this footprint goes away in a day.

That still leaves the issue of clearing out Transnistria. But as we’ve seen in Nagorno-Karabakh and the Armenian situation, when the Russians are unable to provide security assistance like now, it doesn’t take very much to move the needle. And I can easily see a situation where the Moldovans would apply to formally jwn Romania and this becomes Romania’s problem and the EU’s problem.

And since it’s a sliver of only 120,000 people and it’s hard up against Ukraine that all of a sudden would have the EU taking security steps, which is something that would be new and exciting. Okay. Oh yeah. And Romania may top member, too, so that would flip pretty much overnight. All right. That’s it for this one. Take care.

Russian Oil Thrives Despite European Sanctions

While sanctions on Russian natural gas have proven highly effective, those imposed upon Russian oil have somewhat backfired. Although oil exports have dropped by 10%, several factors have skyrocketed Russia’s earning potential.

Oil is much easier to transport than natural gas, so getting it to destinations is of less concern. There’s also a global shortage of heavy sour crude – the kind that comes from Russia’s Urals – which has driven up prices significantly. Europe’s sanction strategy targeted financing and insurance, but Russia has circumvented these restrictions via state-sponsored insurance programs and old tanker purchases.

Thanks to Europe’s phased implementation of sanctions, the Russians had ample time to find loopholes and undermine this system. The Europeans may have to come up with some more “direct” tactics to put the hurt on the Russians.

This situation remains unpredictable; we could see Ukrainian strikes on Russian ports or even some insurance claims will stir the pot. But If oil sanctions were as effective as the sanctions on natural gas, the dynamics of this war would be fundamentally changed.

Prefer to read the transcript? Click here

Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:

First, we look across the world and use our skill sets to identify where the needs are most acute. Second, we look for an institution with preexisting networks for both materials gathering and aid distribution. That way we know every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence. Then we give what we can.

Today, our chosen charity is a group called Medshare, which provides emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it. Until future notice, every cent we earn from every book we sell in every format through every retailer is going to Medshare’s Ukraine fund.

And then there’s you.

Our newsletters and videologues are not only free, they will always be free. We also will never share your contact information with anyone. All we ask is that if you find one of our releases in any way useful, that you make a donation to Medshare. Over one third of Ukraine’s pre-war population has either been forced from their homes, kidnapped and shipped to Russia, or is trying to survive in occupied lands. This is our way to help who we can. Please, join us.

Support medshare's ukraine fund
Support medshare's global efforts

Transcript

Hey everybody. Peter Zeihan here, coming to you from Colorado. Now, yesterday, we talked about how some of the European sanctions on the Russian energy industry were working much better than expected. So now let’s kind of flip that and talk about some that are not doing nearly as well. That has to do with oil, whereas with natural gas, Russian exports to Europe are down by 85% and Russian production is now the lowest in 40 years.

Oil has dropped off a little bit, about 10%, but the Russian ability to profit from it has skyrocketed senior earning significantly more now than it did before the war. And it’s worth explaining why in the sanctions are out of the reason why the Russians are doing so well in that field. So there’s three things to keep in mind when you’re talking about oil markets.

Number one is the physicality of things. Natural gas is a gas. It’s hard to move from place to place. And you pretty much have to have a dedicated piece of physical infrastructure, typically pipeline, to get it from A to B. You can’t chill it down in a liquefied form, roughly negative three degrees, and move it via specialized tankers that unload in specialized facilities.

But those things are so specialized, they’re not really they don’t allow for a really liquid market. Oil’s different. Oil is a liquid and it is a liquid at room temperature. So you can put it into pretty much any type of container shipping device that you want. And while the Europeans did, for the most part, stop taking oil from the Russians in perfect form, the Russians are able to export over half of their oil by water to be a tanker.

And they were even able to redirect some of the piped crude to their ports. Which brings us to the chemistry problem. Not all crude is the same. In the world of natural gas. Methane is methane is methane in the world of oil. There’s different varieties, light and sweet versus heavy and sour. Light and sweet has very few contaminants and it is very thin, almost clear where the heavy sour is thick and gooey might even be solid at room temperature and is black and viscous.

And different refineries around the world are designed to run on different grades of crude, sometimes even specific crude types from specific fields. And that makes it a little bit more of a mismatch problem that natural gas just doesn’t have to deal with. So, for example, in the markets right now, there is an oversupply of light sweet on a global scale, primarily because of the United States.

U.S. shale crude is different from most crude in that it’s trapped at the moment of geological formation. And so it never migrates through the rock strata. And it’s the migration that picks up the contaminants that makes crude heavier and more sour. Well, American refineries are designed to run on heavier and sour, so that light sweet is kind of stranded in North America.

So it has to be exported by tanker to the wider world. And so light sweet crude is trading at a significant discount to a lot of global crude grades, despite the fact that it’s considered high quality. On the flip side, we’re running out of heavy sour. Venezuela used to be a massive producer, and it’s found ever more creative ways to commit national suicide.

The Mexicans used to be a reasonably large supplier, and they’re keeping their crude at home because their economic development has demanded more energy. And the world’s single largest crude grade of all is none other than Russia’s Urals blend, which is a medium sour, medium heavy blend. And so taking even small amounts of that off the market has had an outsized impact on pricing.

And so even though there’s supposedly a price cap that the Europeans set at $60 a barrel, that anything above that the Russians shouldn’t be able to sell it. Right now, Russian Urals is going for 85. And there’s not much the market can do about it. Which brings us to the third point, which is the legalities and the niceties.

When the Europeans stop taking the piped oil and started to slim down, they’re taking of the tanker, shipped oil from Russia. They used their ability to influence global financing, global insurance, specifically saying that anyone who delivered or participated in the supply chain that took Russian crude and if it was sold above $60, they wouldn’t be able to qualify for any European based insurance or financing, trade, finance included.

And since that is the source of the vast, vast, vast majority of the world’s maritime shipping insurance, the thinking was that that is going to discourage anyone from doing it. Well, they also didn’t want to destroy their own economies when they were doing this. So they phased all this in over the course of the year. And it turns out that that was enough time for everybody who was interested to set up alternative systems.

So India, China and Russia now all offer state sponsored insurance programs for maritime shipping. And the Chinese and the Russians in particular, have gone out and purchased huge numbers of really, really old, decrepit tankers and are running them kind of under the radar, turning off the transponders so they can’t be tracked easily. And those two things together has allowed a huge amount of Russian crude to sail the world’s oceans without any even tangential connection to the European financiers that it was thought would be able to keep all of this stuff off the market altogether.

The very act of providing the market with time to adjust gave the market time to adjust for all players. And so the stuff is still coming out now. If the Europeans and to a wider degree, the West in general is going to take an ax to Russian crude, they’re going to have to get a lot more creative or they’re going to have to act a lot more directly.

Keep in mind that roughly 1 million and a half of barrels of crude every day Russian crude are flowing out of the port of Morse on the Baltic Sea and another million and a half on the port of overseas on the Black Sea. And as long as the Europeans are not willing to take direct action against that, and they definitely have the military capacity to do so, should they so choose this seems like it’s going to keep flowing.

About the only potential fly in the ointment there is on the Black Sea, and that the Ukrainians have now said that they are willing to attack targets in Russian ports. Now, since they made that threat about five weeks ago, now they haven’t acted on that threat, even though their supposed deadline now has expired three weeks in the past.

But it’s probably going to take some sort of military action by someone to remove this from the market or one other possibility, as we have some sort of mishap where those insurance claims get called upon and the Indians and the Chinese and the Russians who have never offered these insurance plans before now will probably find themselves in arbitration almost immediately when they try not to pay.

But that’s a series of if then statements that are impossible to predict at the current moment. Honestly, I’m a little surprised it hasn’t happened by now, considering everything that’s gone down in the Ukraine work. But that is where we are. So Europeans natural gas working better than expected will not working nearly as well as expected.