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.

Hey everybody. Peter Zeihan here coming to you from Colorado today. The topic is going to be the next phase of the war in Ukraine and from an economic point of view. For those of you who’ve been watching for a while, you know that last winter the Russians went out of their way to hit the power grid in Ukraine wherever and whenever they could, because that was the way they could generate the most casualties and have the most political impact on decisions in Kiev.

And then in about May, once it had warmed up enough that you didn’t necessarily need heating in Ukraine, they switched targets to the agricultural supply chain system with a very, very heavy emphasis on the infrastructure that collects and especially exports the grain take it out. Things like grain silos and ports first in places like Odessa, and then later moving on to the Danube River Delta, which is where the Ukrainians and tried to get the stuff out.

In this, the Ukrainians have kind of faced a triple bind. Number one, they import most of the materials that are necessary, like fertilizer, in order to grow crops in the first place. Number two, there isn’t a lot of storage in Ukraine that was available because of last year’s efforts in the war. Most of the storage was full completely.

So the Ukrainians were focusing on getting that out so they could make room for this year’s harvest. And in some degrees, there has been failure there. And this stuff has nowhere to go because number three, almost 80% of this maybe even a little bit more, goes up by water, primarily through the Odessa region. And with that kind of off line, the only other option is to rail it out.

And that means you have a limited number of rail cars. You have to ship it through other countries that are already grain exporters like Bulgaria, Romania and Poland, who don’t like the idea of that stuff being dumped on their market. So most of them have barred Ukraine from having terminal arrivals for their grain and you have to keep on going.

So for every kilometer you have to go further. That’s a kilometer that that railcar has to be committed. So all in all, you’re talking about over an 80%, nearly a 90% reduction in Ukraine’s ability to get the stuff out. And now that a lot of these ports on the Danube have been damaged, there’s just no place to put the stuff from this year’s harvest.

So from the Russian point of view, mission accomplished. And now they’re switching targets. This past week, the week of the 18th of September, they’ve started switching targets again because we’re now getting into fall and they’re going after the power grid again. And over the course of the next month, I would expect that general shift to be almost complete.

They’ve destroyed the Ukrainians ability to play in international grain markets any in any meaningful way. And now they’re going to have the power grid to cause mass casualties again there. So definitely, you know, the Russians have absolutely won this round. The only way that the rest of the world might be able to help is to massively, massively expand the rail connections between Ukraine and their neighbors.

And then the next line of countries beyond. It’s not enough just to get the stuff to say, Poland or Romania. You’ve got to get it on to the water. And that means you also build out the lifting infrastructure for transferring something from rail onto a ship, because these countries were already grain exporters. That stuff is already used to capacity.

You can basically need to double the entire thing. Normally you would expect something like this to be really bad for grain prices are good, I guess. Depends on your point of view. Send them up. But miracle of miracles. The Russians have had a bumper harvest so they have increased their wheat exports by over a third and that by itself is nearly enough to compensate for all the Ukrainian grain that has left the market.

So wheat prices are actually down. Now, I am not a grain trader and I’m not trying to give you anybody price recommendations, but just a couple of things to keep in mind. Number one, the Russian climate is incredibly erratic. And so just because they had a bumper crop this year doesn’t mean they’re can have a bumper crop next year.

Keep that in mind. Number two, the Russians have said that any vessels, civilian vessels anywhere in the Black Sea going anywhere near a Ukrainian coast, they reserve the right to attack. The Ukrainians are trying to convince people to come anyway and they’ve had very, very, very limited success. But that war risk is always there. And for their part, the Ukrainians have said and have demonstrated that they can strike Russian ports as far away as never seasick, which is their major green loading facility for the Russians.

Now, they have not gone after civilian vessels yet, but again, there’s still the possibility that we can have a widespread war on the water, in which case all civilian shipping in the north eastern half of the sea is in a degree of risk. So for the moment that there’s enough grain out there, I’d not get used to it.

But at the moment, that’s where we are. Okay. Talk to you later.

Hey everybody. Peter Zeihan here coming to you from Colorado. Today’s the 18th of August. And the news is that the Netherlands and Denmark have received approval from the Biden administration to send their F-16 fighter bomber aircraft to Ukraine as part of the defense of works. There’s a lot of things that are packed in here. Let’s start with the most obvious one.

Even if these things start to ship today, they’re not going to be there in sufficient numbers or with the infrastructure to support it in time to have any impact on this fighting season. So the summer counteroffensive that the Ukrainians are fighting in an attempt to break the Russian position in southern Ukraine and Crimea, they’re not going to be able to help with that at all.

There’s more to having the jets than simply having the pilots. You have to have the logistical infrastructure to supply them with fuel, with spare parts, especially with munitions. And they have to be able to do all of the repairs and all of the maintenance within Ukraine proper. Now, we know for certain that the United States has been doing steps to accelerate this process over the last few months.

We know that there have been a number of Ukrainian pilots across the United States and databases system that have been training on the F-16s and getting flight time. But there’s going to be a lot more that it needs to be done in terms of the maintenance side of the equation. Okay. So that’s piece one. This is something that’s going to affect over the winter and then into next year.

Second, the players, the Netherlands and Denmark basically run almost exclusively American equipped forces. So there is no way that this came out of left field. Copenhagen and The Hague undoubtedly have been coordinating with Washington since the beginning on this. And if they’re doing it, you can bet your ass that they’re going to be any number of NATO countries up to and including the United States who are going to be following suit now that the seal has been broken.

It’s just a question of timing. Now, again, this is something that’s going to impact operations over the winter and into next year. Not right now. Third, what’s next? The next big step of what the Ukrainians have on their wish list that they haven’t gotten is longer range weaponry that will allow them to strike deeper into the occupied territories and in their mind, ideally even into Russia proper.

Now, the primary reason why this specific request has been denied so far by all of the Western allies is they don’t want to provoke the Russians to direct fight. But as the Russians move deeper and deeper into isolation and as it becomes becomes possible that this is going to be a broader conflict in economic terms, even if not a military warrants.

That argument has been losing luster in a number of places in the Western world. No one wants to start World War Three, obviously, but it’s pretty obvious who’s doing the raping in the genocide, and that is No. One on the west side of the line. So we are going to see longer range weapon systems. I don’t want to comment on which ones because there’s any number of things that could come into play.

And the argument that they cannot be used within Russia proper is weakening as well. Now it’s a political decision if they decide to remove that structure. But if you look at what’s been happening over the last few weeks, the Ukrainians have been provided with storm shadow missiles by the Brits, and that’s a longer range weapon system, more than capable of striking into Russia proper.

But the Russians have not once used it to do so. At the same time, the Ukrainians developed a number of weapon systems, including drones launched by special forces troops and suicide drones that are maritime in style to directly attack Russian targets within Russia proper. They don’t necessarily need Western tech to take the war to Moscow. And since we’re seeing this blurring of capabilities, the idea that simply because a weapon has a range that could be problematic, that automatically is problematic.

That argument is fading very, very quickly. There’s still going to be a lot of brackets on all of this. This is not going to something that’s going to change overnight. But now that they’re going to be getting NATO’s fighter aircraft that clearly have the capacity, if you put an extended range fuel tank on them to strike Moscow directly.

You got to ask yourself, what else can be pushed across the line at this point? And that’s the discussion that’s going to be happening in Brussels and London and Berlin and Paris and Washington quite aggressively over the next couple of months. And by the time we get to the end of the year, I have no doubt that in addition to longer range missiles, artillery systems and jets, there’ll be a whole phalanx of additional technology going to be handed over in order to help the Ukrainians out.

And for those of you say that this is costing the United States too much. Number one, check your math. With the exception of two Patrick batteries, every single other thing that has been transferred from the United States at this point has been spare parts and decommissioned equipment that we were going to have to pay to dismantle. So in many ways, the Ukraine war has saved us a lot of money.

And second, if you think the money has been stolen, you’re literally just making that up. Call your congressperson because they have every day a full list of every piece of equipment, how it was used, how it was transferred, and how much money to actually cost the United States. And anyone who tells you otherwise is lying to you. All right.

That’s it.