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Russia-Ukraine reality check
Ian Bremmer's Quick Take: Hi everybody, Ian Bremmer here and a Quick Take to kick off your week. I think it's a good time to talk about Russia. Vladimir Putin, just back from a trip to the Hermit Kingdom. Not many people go there. And those that do frequently don't come back. North Korea. Kim Jong un.
Lots of pomp and showing of very close friendship, engagement, alignment. Kim Jong un said that they're now allies. Putin notedly did not use that terminology, and I'm sure advisedly. So, first time that Putin has been there in decades. And lots of ways to think about it. I mean, on the one hand, you can say that Putin's reduced to traveling to meet the world's worst dictator because there are very few countries in the world that are willing to provide wholehearted support for Russia's illegal invasion into Ukraine. The Iranians will. The North Koreans will. The Syrians and Belarus. And that's kind of about it. And so that doesn't speak very well for Putin being able to get weapons, for example, to continue to fight his war. Even the Chinese won't do that because they're worried about US and other knock on secondary sanctions. So, you know, that's the positive spin that you can put on this from the United States and the NATO position.
But there's a negative spin too, and that is that Russia is increasingly allied with a very dangerous nuclear country with cyber capabilities, history of human trafficking, illegal drug transit and export, and a country that is already maximally sanctioned that benefits from chaos, and that previously their top friend was China who wanted more stability in the global order.
And the Russians certainly don't. So this provides cover for North Koreans to cause more trouble vis-à-vis South Korea and Japan and the rest of the world, and also gives lots of weaponry to the Russians and lots of technology to North Korea, none of which is good, not good for the world at all. And while it's true that Russia is isolated in terms of its war and its war goals, that doesn't mean that it's isolated.
And what I mean by that is the willingness of the United States and Europe to put really tough sanctions on Russia. I mean, the kind of sanctions that would reduce Russia and its ability to fight the war. They're not there. They're not there. They talk tough. But the reality is Russia is the largest country in the world geographically and within that territory. They have an awful lot of very important natural resources. They've got oil, they've got gas, they've got platinum, they've got diamonds, they've got uranium, they've got food, they've got fertilizer. And the United States and Europe, if they were so concerned about the war in Ukraine that they were truly willing to cut that off, they could. But it would cost them.
It would cost them because the world would be in a global recession out of not getting that oil and gas. It would cost them because a lot of the nuclear plants in the West wouldn't have uranium, and the prices would go way up. And they don't want to spend that money. And it would cost them because a lot of people in the Global South would starve, because they wouldn't have access to the food and fertilizer, except at a higher cost that they can't afford to pay. And the West isn't willing to pay that cost to take that risk and to squeeze the Russians that hard. They're willing to make the Russians less profitable in terms of the oil and gas they sell. They're willing to freeze and even increasingly seize hundreds of billions in Russian assets and use that to fund the Ukrainians, because it's better than having to pay for the Ukrainians yourself.
But that's very different from saying we're going to force the Russians to pay a price that they would be unwilling to pay. The price that the Russians are presently paying is at the margins. It isn’t an existential for Putin, and it's certainly a much lower cost than he's willing to exact for continued war on the ground in Ukraine, territorial conquest, and perhaps the ability to remove Zelenskyy in the future and have someone that is more aligned with his sensibilities. That's where we are. And the reality there is that Russia can keep on keeping on as a consequence.
Now, you know, we saw, this peace conference, as it's called, supporting Zelensky with representatives of over 90 countries and over 40 heads of state and heads of government. And it was an impressive display in Switzerland just a couple of weeks ago. But it's also true that behind the scenes, Zelensky really, really, really wanted to have that meeting. And the Americans and many NATO allies were saying, maybe not so fast, because of course, every time you have one of these big global shows of support, you lose a little bit of the urgency and the support you show that there are fewer countries that are willing to support you as much as they were six months before, 12 months before. The Chinese didn't show up, the Indians showed up at a relatively low level. They didn't sign on to the ultimate memorandum. Neither did the Saudis. I mean, you know, this is an issue, right? The fact is that NATO is very strongly supportive of Ukraine and of continuing to allow them to have the types of support to defend themselves and rebuild their country. The Global South is increasingly “let's have a cease fire right now.” And China is “let's have a cease fire right now and we're kind of more in the Russian camp than we are in the West camp or in Ukraine's camp.” And Putin sees that and he sees that over time, if he waits these countries out, the likelihood that he'll end up in a better position than the Ukrainians goes up.
And this is why when you talk to members of NATO and you say, well, what's your position on negotiations? And their public statements are, look, it's it's completely up to the Ukrainians to decide. The reality is that you'll need to pressure the Ukrainians, both with carrots and sticks, to get to a place where you can negotiate, even if the Russians aren't yet ready to do that. And they aren't in reality though Putin says, “sure, I'll negotiate if you move out of the territories that I've illegally annexed, including those that you're presently occupying.” That's a nonstarter. But you have to get the Ukrainian there. You have to prepare them to be there.
And there are a couple of ways you do that, right? One is you give the Ukrainians the support to rebuild their country. You fast track them into the European Union, so they have a shot at better rule of law, improving their democracy, reducing their corruption that gives them a future. And you also give them some harder security guarantees for the parts of their territory that Russia hasn't occupied and hasn't illegally annexed. And if you do all of those things, you're in a better position to get the Ukrainians to the negotiating table.
You provide more cover to Zelensky or the future leaders of Ukraine and the future leaders of Ukraine. And you also make it more compelling multilaterally before you're in a position where Ukraine gets thrown under the bus as they might, for example, if Trump wins, come November, as they might, for example, if Le Pen gets a majority, in the European, in the French Parliament, and then the French are suddenly vetoing European additional gives to Ukraine.
I mean, this is the problem is that a lot of the uncertainty about Ukraine isn't only about what Russia does, isn’t only about Ukrainian capacity, but it's also keeping that multilateral effort, which has been strong and united together. And there have been a couple of almost misses, especially the US, the six months getting them $61 billion, but also coming up with the electoral cycles. And the longer you push that out, the more dangerous it is for Ukraine and ultimately for the NATO alliance. So that's a little bit of the sort of real talk about what's happening in Russia and Ukraine on the back of the news of the past week. As always, what you want to happen is not the same as analysis.
And if it is, it means that your analysis is crap. That is not what we do here. And I hope all of you have a great week. Talk to you soon.
Europe’s oil sanctions and a shifting Russian war narrative to come
Ian Bremmer's Quick Take: Hi everybody. Ian Bremmer here and I am back in New York City with a Quick Take to kick off the week. And the big news, a hundred days in just about continues to be, yes, the Russian war in Ukraine. And most importantly, in the last 24 hours, the sixth round of sanctions agreement coming from the Europeans, most importantly, essentially an oil boycott.
Now there's a lot of back and forth on what exactly this means because the Hungarians, with Viktor Orban, much more aligned with the Russian president and also very dependent on energy from Russia, was extremely obstreperous and basically refused to participate in the deal. So they got an extension and that extension is temporary but undefined.
What that basically means is that the boycott is on oil that's transferred through ships as opposed to by pipe. And that means that a bunch of the East Europeans will be excluded from it, will still be buying Russian oil. But the reality is, two thirds of all the oil that Europe gets from Russia is already going to be cut out. And if you add to that, what the Germans and the Poles are doing, their pledges to wind down their own pipeline imports by the end of the year, you're talking about 90% of Russian crude to Europe is now going to be boycotted. That's a very big deal. That's a very big cost, billions and billions of dollars, to the Russians every year. Some of that they'll be able to sell at a discount to other countries around the world. Some of it they won't because there's going to be a challenge when most of the ships that they can get the oil out come from Europe and they need to be insured as well. And all of that is under direct sanction. It means the Russians are going to have a very hard time.
And on the back of that, crude prices, and for Brent shooting up to 124 bucks a barrel. Gas prices, which are already record levels in the United States are going to continue to go up. There's going to be more pressure on Biden to lean into additional forms, additional sources of fossil fuel production, both in the United States, as well as a deal from the Saudis. And of course the progressives in the Democratic Party don't like that, but Biden doesn't like even more the fact that his approval rates are down around 40%, the lowest of his administration to date. Not looking great for the midterms.
Anyway, all of that is to be seen in the context of the United States and Europe that for the last three plus months has been trying to increase the costs to the Russians of this invasion and improve the support that the Ukrainians have been getting. That has been the story for the first three months. Increasingly that's not the story. Increasingly the story is going to be that the Americans and Europeans are doing close to the maximum of what you're going to see. It's going to be harder for the Europeans to get to a seventh round of sanctions, and it's also going to take a lot longer before the gas is cut off, and everything else is pretty marginal. Most of that gas we're talking about really next year, the year after, not talking about this year. Unless of course it gets blown up through Ukraine or the Russians themselves decide they're going to do this on their timeline. There's an economic cost to that.
For the Americans, you already see these missile systems that are being provided. There's a lot of debate. You provide the systems, but you don't want long range artillery because you don't want the Ukrainians to be hitting the Russians inside Russia and then expanding the war more significantly. The Americans are trying to thread the needle here. They want to be seen as doing everything they can to ensure that the Ukrainians can retake their land, but not to expand the war. And the Europeans want to do everything they can to show that they're punishing the Russians, but not to hurt their own civilians in a way that would lead to backlash domestically, politically. And if you put that, if you combine that with the fact that for the first few months, the Russians have largely been all about military losses, all about sort of not being able to take Kyiv, having to push back, to pull back, not being able to take Kharkiv in the north and having to give up some of those territorial gains.
More recently, we're starting to see the focus, of course, on the Southeast of Ukraine and the Russians, albeit very slowly, taking more land, about a kilometer every day, as they get closer to occupying all of Luhansk. They're very close to 100% of that. And the majority of Donetsk. Put together, that's the Donbas. That is what the Russians claim the war is now all about. They also have this land bridge to Crimea and so having occupied most or all of that, they start probably annexing it. They start integrating it into Russia. Do we then have the potential for a frozen conflict with Ukraine? And also are the Russians able to say, "We've outlasted the toughest of what the Americans and the Europeans can do, and now we're playing our long game where we're going to squeeze the Ukrainians economically. They won't get as much support from the West. We've killed their economy by 50% in one year when the West contracted the Russians by only 10%. And they can't export any food, any fertilizer."
They maintain the blockade, ad infinitum, unless the West is prepared to reduce some of their sanctions, which they're not willing to do. In other words, Putin has looked on the back foot for the last three months, and certainly he's not in any way going to be happy about where Russia stands in terms of its global geostrategic positioning, in terms of vis-a-vis NATO and expanded NATO and expanded defense spending and being cut off from the West economically. But the narrow perspective of how the war on Ukraine is going, that narrative for Putin is likely to look a little bit better in coming months than it has for the last three.
And if you saw that Washington Post piece over the weekend that focused on Ukrainian troops not doing so well on the ground in Southeast Ukraine, where of course there are a lot more Russian speakers, a lot more ethnic Russians, they aren't quite as welcome. And also a number of them deserting. That's the first really big public story that's been quite negative for the Ukrainian military that I've seen since the war started. You're going to see more of that too. So the information war is going to be a little bit harder for the Ukrainians to continue to win the way they have.
There's also just general question of war fatigue. This has dominated not just my feed, but frankly, a lot of the international news in the West. A lot of the coverage in the West has been about Russia-Ukraine. Can that continue? For the Americans, certainly a big question as we get closer to midterms. But even for some of the Europeans, I'm thinking here, those that are a little more removed from the front and also where the economy is going to be an open question for them. Italy, France in particular, a bit of Germany too. That's something we're going to have to watch very carefully over the coming weeks and months.
One other thing I would mention is just how little the rest of the world cares about the Western narrative on the war. As I've mentioned before, this war matters a hell of a lot more to the rest of the world than Afghanistan or Syria or Libya or Iraq, because of the impact on food prices, on fertilizer prices, because of how many people will starve on the back of this war. But that doesn't mean that the rest of the world blames Russia for it. In fact, increasingly I'd say the rest of the world, the developing world, is angrier at the West for the sanctions that they put on than the Russians who invaded Ukraine, which in turn precipitated the sanctions. Some of that is a communications challenge that just needs more work from the West, more outreach from the West, but some of it is a lack of alignment between poorer countries who don't think the United States care very much about them, except for when it is immediate and expedient.
And that's something that has been a problem growing for decades now on the back of global inequality, and on the back of climate change, on the back of the pandemic and the Russia-Ukraine crisis. In that regard, fits nicely for them into that broader narrative. Something I heard a lot when I was at Davos last week from Indian participants, Middle Eastern participants, Brazilian participants, and the rest. In that regard, closer to the China perspective than they are to the United States. It's something you don't hear a lot about from Washington. Well, I'm there next week, I'll be talking a lot about that.
Anyway, that's it for me. I hope everyone's doing well. And I'll talk to you all real soon.
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