Russia Is Sputtering To A Stop

Today the Moscow market index just plunged 4%, its worst drop since Putin’s invasion of Ukraine. Here’s why it nosedived…

Ukraine’s bombing campaign against Russia’s oil infrastructure has brought on an energy catastrophe.

Ukrainian drones have struck at least half of Russia’s 38 oil refineries in the last two months alone.

The very power that Russia had that was supposed to make it strong – its vast distance – has been exploited as a weakness by Ukraine, which selects its targets across an almost undefended frontier.

Sensing Russia’s oncoming weakness, China has just gone from being an ally of Russia to being a friend of Western interests, cutting off its supply to Russia of precision machine tools. Russia depends on foreign machine tools for more than 98% of its production. It’s a clear sign China is not interested in deepening production ties with Russia, seeking instead to reduce sanctions risk.

Repeated strikes on its oil sector have devastated Russia’s fuel manufacturing, forcing civilians into massive queues and rationing supplies to frontline troops.

At least ten Russian regions are reporting widespread fuel shortages. These include Ryazan, Nizhny Novgorod, Saratov, Rostov, Leningrad Oblast, the Primorsky and Zabaikalsky regions in the Far East,

Ukraine’s strikes have also constricted Russian gas supplies in the two regions (oblasts) that open the door to the Ural Mountains and West Siberian Plain.

Sverdlovsk Oblast is a center of Russian industry, especially for heavy machinery, including trucks, excavators, and other equipment. Tyumen Oblast’s economy is strongly tied to the oil and gas industry. A bit ironic, then, that no gas is available for any vehicles.

Neighboring Chelyabinsk Oblast has also announced similar restrictions, as has the Crimean peninsula. Roughly half of gas stations in Crimea have halted gasoline sales due to disrupted supplies.

The distance record for Ukrainian missile hits changes daily; here is the latest record:

Russia’s Independent Fuel Union has confirmed that deliveries to many stations have stopped completely. Some private fuel stations have shut down entirely, and others have imposed strict limits on purchases.

All around Russia, drivers face queues several kilometers long. On the front lines, the situation is even worse, as in Donetsk and Luhansk, where Russian soldiers are forced to wait in two-to three-hour lines for refueling. Even then, fuel is rationed, and troops are increasingly paying out of pocket. Armored movements are stalling and logistics chains are heavily degraded.

The chaos has contributed to a stunning reversal of Trump’s opinion of Ukraine’s chances in the war: “I think Ukraine, with the support of the European Union, is in a position to fight and WIN all of Ukraine back in its original form,” Trump wrote on his Truth Social platform.

On Russia’s home front the situation is not much better, as shortages have even spread into Moscow and Saint Petersburg. In Leningrad Oblast, the Lukoil network has banned all canister refills. In the Far East, long queues in Primorsky Krai have forced regional officials to introduce a coupon system to receive fuel.

360 gas stations have currently shut down due to lack of fuel.

The Kremlin’s recovery system is faltering, not just from damage, but from the sheer scale of dysfunction now embedded in the Russian energy sector.

Public unrest is beginning to build. The Russian Communist Party – opposed to Putin - has staged protests at major gas stations, questioning why domestic prices are rising in an oil-rich country.

Since the beginning of the year, fuel prices have surged by more than 50 percent, a clear sign that price controls are failing to keep up with reality.

The Russian Energy Ministry has quietly stopped publishing regional breakdown of fuel availability to prevent further public concern. Maintenance schedules at major refineries like in Omsk are being postponed, not for efficiency, but because taking them offline for repair would trigger further shortages across the country.

Energy officials are dying under mysterious circumstances. The CEO of Russia’s state nuclear agency was found dead recently in the streets of Moscow, laying near his car with a rifle beside him and a suicide note, He was the 20th Russian energy official to die under suspicious causes.

Russian Deputy Prime Minister Alexander Novak admitted that the country faces a “small deficit” of petroleum products, which he said is being offset by reserves.

In the meantime, all this Russian sacrifice of fuel has not been rewarded by gains on the battlefield. Russia has lost 350km of territory in the “unbreakable” Donetsk front. Thousands of Russian soldiers surrendered last week at once after Ukraine encircled their positions.

There is no reliable evidence as of now that Ukraine was behind the fire at the Omsk refinery, but it is one of the largest refineries in Russia. The plant is located 2,000 kilometers away from the border with Ukraine. It produces about 50 types of petroleum products: high-octane gasoline, diesel and marine fuel, jet fuel, bitumen, household gas, industrial sulfur, and other products for the Russian army. The Russian authorities are trying to balance protecting factories in the country’s interior and troops on the front line.

The UK’s Storm Shadow missiles and the current US Army Tactical Missile Systems are limited in range and explosives. Ukraine has developed its own drone-missile systems to sidestep its allies’ restrictions on the use of their weapons, including the turbo-jet drone Paliantysia, with which Kyiv can hit targets about 650km (400 miles) away.

Now Ukraine has unveiled the Flamingo, a ground-launched missile with a range of 3,000km (1,864 miles). Unlike drones, the warhead of the Flamingo missile is about 1,150 kg, which makes it capable of completely destroying targets and causing significant damage to large objects. The missile is protected from the influence of Russian electronic warfare (EW) systems, and its maximum speed reaches 950 km/h.

There is at least one possible report of its use in the battle:

A large fire has broken out at the Zavod Pripoev electronics plant in Novosibirsk. It is 3,500 kms away from the fighting, deep inside Russia.

According to Russian news, the plant restarted production minutes after the fire was put out. The photo shows a fire that looks like it would inflict a bit more damage than could be restored with a fast polish job.

Ukraine is building a new Flamingo missile every day, and mass production will start next year.

American Tomahawk missiles could significantly expand Ukraine’s strike capabilities, although they do not have the range of the Flamingo. With a reach of 2,500 km (1,550 miles) and a speed of 880 km/hr (550 mph), they can fly at low altitude, making them hard to detect on radar.

Trump wants to know where the Tomahawk missiles are going before he hands them over.

Zelensky said Trump had told him Ukraine could retaliate against Russian strikes in a like-for-like manner: for example, by striking energy infrastructure if Russia targeted Ukraine’s energy resources. Vance confirmed that the US government is indeed now considering a request from Kyiv to deliver Tomahawks and said that Trump would be making the “final determination”.

The Trump administration is good with the idea that Kyiv can strike deep into Russia in specific instances. The US’s special envoy to Ukraine Keith Kellogg stated that “there are no such things as sanctuaries”.

Zelensky might intend the weapon to be a bargaining tool rather than a hammer. “We need it, but it doesn’t mean that we will use it,” Zelensky said. “Because if we will have it, I think it’s additional pressure on Putin to sit and speak.”

Russia is running out of viable threats. Everything the West does is somehow intolerable for Putin, yet he has never made a convincing case for reaching for the nuclear option. In fact, nuclear force is so deadly to both sides that it is not really an “option” – more of a ploy. And with each tired use of the threat, its value diminishes.

The last thing Russia wants is to get into a fight with a unified bloc, now that NATO has pulled together and expanded.

Putin can’t play the friend-of-Trump card anymore, now that he backed off any promises he made to Trump in Alaska during their meeting. In fact, he made Trump look like a fool – which is a common occurrence, but one that Trump resents anyway. Trump has given up on the idea that he has a special relationship that will end the war in a matter of days.

Just for the record, the war has been going on now for three-and-a-half years. It actually started with Russia’s aggressive take-over of Crimea in 2014. Some 1,118,370 casualties have been inflicted on the Russian army, including 11,240 tanks, 23,324 armored fighting vehicles, 63,650 vehicles and fuel tanks, 33,519 artillery systems, 1,517 multiple launch rocket systems, 1,225 air defense systems, 427 airplanes, 346 helicopters, 67,965 drones, 28 ships and boats, and one submarine. The submarine was sunk at dockside in Sevastopol, just as repairs were finished on it from a previous strike. Mind you, these boats are meant to be underwater, so no doubt the Russians are claiming that it is on a mission.

Russian possessions in Crimea have taken a beating in general; the largest oil storage facility in Crimea, at Feodosia, was illuminated in an explosion that sparked a fire visible from tens of kilometers away. Its (previous) 250,000 tons of fuel used to supply Russian forces. This was at the beginning of October.

It burned for 24 hours, with the blaze spreading throughout the facility.

Across occupied Crimea and Sevastopol around 50% of gas stations halted gasoline sales.

Russia’s once-vast reserves of battle tanks are running dry. Only 32 tanks remain in decent condition on Russian storage bases, according to satellite images, while thousands of others are either rusting or beyond repair after nearly three years of full-scale war against Ukraine. Russia has been pulling 50-year-old tanks out of the depots as the fighting inventory wears down.

The small number of tanks in “decent” depot condition limits the speed with which Moscow can replace combat losses.

And the lack of fuel on the battlefield considerably limits the range of the tanks.

One wonders if Putin could see any of this happening when he launched his war on that bright sunny day on February 24^th, 2022.

He had kept his plans confined to a handful of trusted advisors. Not perhaps the best minds in the Kremlin, but loyal.

Loyal matters, in a war.

Independent critical minds matter more, before a war. Just to see if perhaps there should not BE a war.

In a similar situation, perhaps there should not have been an invasion of American cities by the American military.

Maybe you should be getting advice from people other than Hairspray Hegseth and Steve “The Anal Polyp” Miller.

Once you have started those actions, there are no off-ramps except total victory.

And that is not happening for either Putin or Trump.

The world is gaining some pluses, however.

When it finishes, Ukraine will have ended the war as the strongest undisputed European power of our time, easily capable of keeping whatever is left of Russia in its cages.

When America recovers, its democracy will be stronger than ever, and probably will comprise bulwarks against autocracy like universal health care and guaranteed income.

While we are in the train wreck, in real time, though, that day seems remote. Tragically so.

But we are witnessing the rise of the ‘common person’ in Ukraine and America, and it is a good and golden sight.

We are gaining a new pantheon of heroes: Zelensky, Newsome, Ursula von der Leyen, Kimmell…

We can be proud of the people who have risen to help us.

As well as being amazed by the people behind the scenes, who build and program the drones that cut off the fuel lines in Russia…how many thousands whose stories we will never know.

But we can be grateful in our own words, to our friends and loved ones, every day.

And that’s just as important.

See you on October 18^th, in the “No Kings” protest.

Onwards and upwards!

Thank you for following Barry’s Substack, focusing on the meaning behind the headlines. A regular summary of a topical book every few weeks helps full subscribers stay ahead of the conversation.

PS - If you have enjoyed this article, please subscribe or consider buying me a coffee

In the next two weeks we will review why we a living a lie – the lie of a mesmerizing spell cast on economists by David Ricardo three centuries ago, whose theory of comparative advantage has misled economics ever since: RICARDO’S DREAM, by Nat Dyer. Thank you to our readers for suggesting this book!

Recent features have delved into: