Short on fuel, Putin runs from Belarus to Kazakhastan
Ukraine’s drone sanctions deliver a biting blow
Over the past two to three weeks, a subtle trend has emerged. Western, Russian, and even Ukrainian media are increasingly gravitating towards an alarmist position. On one hand, there are reports discussing the dire situation in Ukraine, while on the other hand, there are reports suggesting that Russia is running out of gasoline.
Neither is true.
There are difficulties.
Some of them are extremely painful for both Ukraine and Russia. But declaring either Ukraine or Russia as going down because of these painful events is simply not true.
I do not see anything that can trigger a collapse for either side. Putin cannot give up, no matter how badly things go for him or how many Russian men he throws into death, because his throne and his future are at stake. Failure means only one thing for dictators. Ukraine is being forced into a challenging situation because some Western leaders are as scared of a victory as they are of a defeat.
Ukraine’s Drones Turn Russia into a Gasoline Importer
Russia used to be a net exporter of gasoline.
However, due to the steady rise in the size and scale of Ukraine’s drone strikes on Russian oil refineries, the government imposed a six-month ban on the export of fuel starting from March 1.
But the real fury of Ukraine’s drone attacks did not commence until mid-March. For nearly five days, Ukraine relentlessly pounded Russian oil refineries, most of which were located to the west of Moscow. The sheer number of oil facilities in Western Russia and the low number of air-defense systems did not give the Russians much of a chance to protect their oil facilities.
Ukraine pounded them over and over.
By the end of March, nearly 14% of Russia’s refining capacity had been forced offline.
As the attacks continued and Russian refining capacity decreased percentage by percentage, I anticipated Russia would dip into its reserves to fill the production gap.
The Kremlin will never release the data. One of the benefits of a dictatorship is the ability to propagate lies from the top down. Observing their actions and drawing conclusions from them is a much more reliable approach than believing anything a dictatorship claims.
It appears that the former gas station with nukes does not possess ample gasoline reserves. Two years of conflict. With half a million troops deployed in Ukraine and tens of thousands of armored vehicles in operation, the demand for gasoline in Russia must have surged significantly. With a population of more than 140 million, the nation’s daily gasoline consumption is considerable.
While Russia likely maintains reserves to sustain its military operations, the strain on these reserves, coupled with a decline in refining capacity due to the prolonged conflict, has pushed the country to a critical point: Either allow the price at the pump to increase, stoking further inflation, or find an alternative.
In response, Putin has enforced a blanket ban on gasoline exports and turned to neighboring countries like Belarus and Kazakhstan to help supplement Russia’s gasoline supply.
- Russia imported no gasoline in January.
- In February, Russia imported 590 tons of gasoline from Belarus. In the first half of March, Russia imported 3000 metric tons of gasoline from Belarus.
- In April, Russia asked Kazakhstan to be ready to send 100,000 tonnes of gasoline in the event of shortages.
From exporting refined petroleum products and profiting from it, Putin’s Russia is now being compelled to pay for importing gasoline from outside. They will have no choice but to continue doing this now.
Under normal conditions, when global oil production is disrupted, the price of oil will increase. Russia, as an exporter, stands to benefit from this. Since most of their internal consumption comes from their own products, their domestic market will not feel the impact, while the Kremlin will enjoy the benefits of rising oil prices.
But Ukraine’s drone attack on oil refineries has turned this whole situation upside down. Belarus and Kazakhstan are not going to offer the Russians a fixed-rate contract. The price will be tied to the market, meaning Russia will pay more when the oil price increases. The era of cheap gasoline has come to an end for average Russians.
Their Problems Are Just Getting Started
Russia defends its military assets on the mainland but has left the oil facilities unprotected.
It was a difficult choice.
Russia has far too many economic and military assets spread across the mainland. They cannot protect everything. Video footage of drones striking Russian refiners and air bases shows that the Kremlin has moved air defense assets to protect its air bases, but they have not done the same for oil refineries.
Expect this pattern to persist across Russia: protect the military assets while taking the risk with everything else.
Russians would have created a priority list. There will be some economic assets present in that list. But that is as far as they can go. They cannot protect everything, and they will have to endure some pain.
Ukraine’s attacks on Russian air bases were not as successful as their attacks on the refiners were. Part of the reason is that Russia has some protection in place, and also because Ukraine is still testing the waters with what it can achieve.
If you had noticed, the attacks on the refiners were mounted by a handful of drones. Often, there were just two or three drones sent their way towards the atmospheric distillation plants. In contrast, the attack on the Morozovsk airbase last week saw Ukraine fire more than 40 drones.
Ukraine needs to increase the size of drone attacks when they encounter facilities with air-defense protection.
The Rise of Ukraine’s Drones
Ukraine’s drone production rates continue to scale up. By the end of last year, they were discussing building a million drones. I have no idea how many of this group will be long-range drones and how many will be the smaller First Person View (FPV) drones used on the frontline. But whatever the case may be, Ukraine is now discussing building two million drones.
A lot of people say these claims are not true. As I have said before, it is always better to draw our conclusions from actions rather than words. In the last few months, more than 60% of tanks destroyed by Ukrainian forces were due to drones.
This data point can be easily backed up. The number of Russian armored vehicular losses since February has remained extremely high. However, Ukraine is still not entirely free from its artillery shell problem. There can be only one way this could have happened: Ukraine is bombarding the frontline with drones and grenades. Clearly, production of first-person drones has increased significantly.
On top of this, we noticed that Ukraine’s drones are reaching deeper and deeper into Russian territory. The drone that attacked the Shahed drone manufacturing facility in Tatarstan had to travel more than 1,200 kilometers. It was a successful attack.
Due to these factors, I believe Ukraine’s drone production has significantly increased. What this also means is that Ukraine may very soon start to increase the size of its drone attacks. Russians achieved some success in defending their airbases against the drone attacks. But what if Ukraine fires 250 drones or 500 drones into a single air base, instead of 60?
Oleksandr Kamyshin, Strategic Industries Minister of Ukraine, told the Globe and Mail, that “Ukraine is on course to produce a million or more of the machines this year. They will range from small, light surveillance drones that cost a few hundred dollars apiece to heavy, deadly long-range versions that are estimated to cost about US$200,000”.
Ukraine’s drone production is scaling up.
Scale reduces cost of production.
Ukraine can protect its economy as long as they control the navigation in the black sea. They can protect their black sea as long as Britain and France keep sending their long range missiles to Ukraine. Since these are weapons supplied by Britain and France, you can rely on them. A good economy will allow Ukraine to invest in its own production.
If I were Ukraine, I would pour every dollar I could muster towards building more drones, specifically long-range drones. I would build as many drones as possible within the 500-kilometer range. If Ukraine can push the Russians from using their air bases that are scattered around their eastern border, it will be a huge victory.
Putin will continue praying to his gods, hoping that the Biden administration will find a way to stop Ukraine from attacking its oil facilities. The American administration has now publicly made it clear that, due to their fear of rising oil prices, they do not support Ukraine’s attack on Russian oil facilities.
These attacks may indirectly affect the global energy situation. Ukraine is better off pursuing tactical and operational goals that can directly affect the current struggle- Lloyd Austin, United States Secretary of Defense
Ok.
There are sixty Patriot batteries in the United States. The current production rate is one system per month. If you order ten tomorrow, you will have ten units by this time next year. Provide Ukraine with seven to ten Patriot batteries and 1000 interceptors in exchange for stopping their attacks on Russian oil facilities. Allow Ukraine to protect its civilians from Russian missiles in exchange for stabilizing the global energy situation.
Sounds like a fair deal.
