Ukraine hits warehouse of top online marketplace

The Bell, 7/20/26

Ukraine’s long-range drones hit warehouses used by Wildberries, Russia’s answer to Amazon, in attacks over the weekend. The online marketplace handles 10% of the country’s entire retail trade. Kyiv said the facilities were trading in sanctioned goods and supplying the Russian army. The attacks could be an attempt to bring the consequences of the war to regular Russians, who cannot imagine life without Wildberries.

On Saturday night, Ukrainian drones attacked two of the company’s biggest warehouses in Central Russia — one in Elektrostal in the Moscow region, the other in Kotovsk in the Tambov region. According to official statements, eight people were killed and a further 80 injured. Footage of the fire in Elektrostal suggests that nothing at all remains of the warehouse after it burned for more than a day. The Kotovsk facility is likely a total loss as well.

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Hitting the Wildberries warehouse is a lot more painful than it looks

By Ben Aris, Intellinews, 7/20/26

The tit-for-tat missile war escalated at the weekend after Ukraine hit the largest distribution centre belonging to Wildberries, the “Amazon of Russia.” The Kremlin hit back the next day with a massive drone and missile barrage.

The war has entered a new and brutally destructive phase with both sides adopting a “punishment strategy” – both are deliberately targeting civilian infrastructure and assets with the intention of just making people’s lives hell.

Zelenskiy was careful to say that Wildberries sells things like drone parts and both Wildberries, and its Ukrainian equivalent Nova Poshta, are used by regular people to send their men at the front care packages and supplies.

Zelenskiy claims the military supply component makes the Wildberries’ warehouse a legitimate military target, but we all know what is going on here: the AFU just wants to bring the war into the homes of regular Russians, who have been largely insulated from the effects until now. Pictures coming out of Moscow over the weekend show a huge black cloud over the city leading people to quip that it looks like Mordor.

But destroying the Wildberries’ warehouse is actually a lot more painful than it first appears. Wildberries became not only the largest e-commerce site in Russia, but the largest retail outlet of any kind in 2019 when it overtook Sportsmaster, the previous leader. The destruction of its stockpile is not just going to make shopping harder, it has also destroyed the livelihoods of thousands of SMEs that have already been struggling due to the sharp economic slowdown this year.

People (and the sanctions) focus on Russia’s oil wealth, but as I detailed in a piece way back in 2004, Russia is a “Soviet Sandwich” – there is a top piece of tasty and nutritious bread that is the oil and gas sector, but there is also a bottom piece equally appealing that is the retail sector. The middle was made up of greasy, grislily, and unhealthy pink processed and unreformed Soviet industrial sausage meat. There is a reason why half of all Russia’s imports over the last three decades has been machinery.

People forget how vast Russia’s consumer market is: 150mn gadget- and fashion-hungry punters. That is half as big again as Germany, the second most populous country in Europe. Pre-war retail turnover was approaching half a trillion dollars – about one third of GDP. This is why companies like Auchan and Raiffeisen Bank International (RBI) refuse to leave the Russian market – when I was at the EIU companies told me that not only was Russia their biggest market in terms of headcount, but also their most profitable, because the barriers to entry were so high, that pushed up the profit margins.

The upshot is amongst my Russian friends from the 1990s, anyone that had any good idea for any product or service, quickly became a millionaire, simply because the market is vast.

Light manufacturing Which brings us to Wildberries and why it is so successful. The second unusual factor that plays into this equation is not only is the consumer market vast, but so is the country. To get your goods to punters you have to send them over huge distances – literally halfway across the planet if a Moscow widget-maker sells something to a customer in Vladivostok.

Companies like Wildberries, and its rival Ozon (see my 2019 interview with the boss here), stepped into the breach here and have set up marketplaces which have become the basis of a flourishing micro-economy. But crucially they also set up the logistics distribution network. As Ozon CEO Alexander Shulgin told me: “Someone that makes nice chairs used to only be able to sell them to people in his town or city. What we do is open up the whole country to these craftsmen.” The way it works is you make your wooden stylish chair and drop it off at the local distribution centre (or they come and pick it up) but once it goes online and is sold, Wildberries or Ozon take over and will send it anywhere in the country, as well as taking care of billing and collection. Suddenly a small shop in Ryazan has access to 150mn people.

This is Germany’s Mittelstand with knobs on. The German version is thousands of small firms that make things like specialist high precision engineering goods or machines that they sell to bigger companies. The Russian version is much broader and is largely B2C rather than Germany’s B2B.

In other words, we are talking about jobs for regular people. The online marketplaces make it even easier to invent yourself as an entrepreneur in Russia than in Germany, and a very successful one at that if you have a good product.

This process has also been fuelled in a fundamental change in the cost of production. A great example and early success story was Obuv Rossii, a Siberian shoe shop, catering to the middle classes. The CEO, Anton Titov, told me that he used to have his shoes made in China, but after a decade of growth, Chinese wages grew at the same time as the ruble devalued to the point where it became cheaper to make things in Russia. China stopped being the world’s factory, as Chinese President Xi Jinping switched from an export-led economic model to a consumption-led one. This led to an explosion of light-weight manufacturing investment that was catalysed by online market places which appeared at exactly the right time to solve the very serious marketing and distribution problems overnight. In many ways Russia’s online sector has leapfrogged western retail which still relies on bricks and mortar chains on the high street.

Russia is physically so big, and the cities so spread out, that the physical distribution and shop networks make a lot less sense as they are so much more expensive. The heart of the online marketplace revolution is that a handful of leading companies have basically concentrated Russia’s entire logistics into a few centrally controlled systems that cover the whole range of products to make it as efficient as possible and have the economies of scale. The same is true to Ukraine’s Nova Poshta, probably the best company in the country.

Russia skipped over the light manufacturing stage in 1991. Usually, emerging markets get their first shot in the arm after the transition by attracting light manufacturing foreign direct investment (FDI) because wages are so low. But in Russia’s case the so-called Dutch disease of a heavily overvalued currency, thanks to oil and gas exports, meant that the cost of labour was too high, adding to the pain of the Yeltsin-era chaos. When I arrived in Moscow in 1993, despite the fact the economy had collapsed about a year earlier, the city was insanely expensive.

Belatedly, the light manufacturing boom finally took off nearly 20 years after the collapse of central planning. The tasty bottom layer of bread in the Soviet sandwich is also part of the reason the Russian economy has been so robust in the last few years as it can’t be sanctioned. VAT is the biggest contributor to budget revues (40%), far more than oil & gas (25%). How do you sanction retail sales that happen entirely inside the Russian economy and rely on no imports? That’s the whole point of local light manufacturing: it only uses Russian inputs to keep things cheap.

And there is the rub. Not only did Ukraine blow up a retail distribution hub so it will be harder to get your groceries this week in Moscow, but it also blew up the stock of thousands of small entrepreneur businesses. This has wrecked not just their jobs, but many of these small businesses have sunk life savings into funding their production in an effort to grow. I have seen reports of one woman that had invested $25,000 into her children’s clothes production and all her capital was tied up in inventory – all stored in the Wildberries’ Elektrostal logistics centre. She will have to go back to scratch and start all over again, carrying some heavy debt.

That is why Zelenskiy’s decision to hit the warehouse is so painful. He has chosen a target that is in many ways more painful for the economy than blowing up the oil terminals at Primorsk and Ust-Luga last month, not because it will hurt the budget, but because it will hurt a big source of employment for regular people. It was a lot more painful than it first appears as it hit a part of economy that was flourishing.

It was only one warehouse, but that is the main feature of the escalating missile war: both sides are now hitting warehouses, supermarket, delivery trucks and transport hubs. For example, Russia has started to systematically target Ukraine’s petrol stations. There are hundreds of these, but Russia is producing millions of drones. It will slowly wear Ukraine’s ability to put fuel in cars in the same way that Ukraine has already caused a fuel crisis by targeting Russian oil refineries. Soon just getting your shopping could become hard too. And currently the plan is to continue the war for two more years.

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Russian Strikes Pound Ukrainian Cities After Ukrainian Drone Attacks Killed Eight in Russia

By Dave DeCamp, Antiwar.com, 7/19/26

Russian missiles and drones targeted multiple Ukrainian cities on Sunday, killing at least six people, in strikes that came a day after a Ukrainian drone barrage killed eight people in Russia.

Russia’s Defense Ministry said that its forces intercepted 379 Ukrainian drones over multiple Russian regions on Saturday. Local officials said that seven people were killed and 25 were wounded by an attack that hit a logistics center belonging to Wildberries, a Russian online retailer, in the Tambov Oblast. One other person was killed, and 61 were wounded by various attacks in the Moscow Oblast.

Russian officials vowed there would be a response, and according to the Ukrainian Air Force, Russia’s armed forces fired 41 missiles and 125 drones into Ukraine overnight into Sunday. Local officials reported three killed in a Russian attack that hit a postal facility near Kharkiv, and three other people were killed by separate attacks in Kyiv, Sumy, and Kherson.

Russia’s Defense Ministry claimed attacks on military targets, facilities that produce military equipment, and energy infrastructure, though photos show apartment buildings were also damaged in the Russian barrage. The Russian ministry also said its forces targeted Ukrainian ports and “vessels used in the interests of the Ukrainian army,” and Ukrainian officials reported five people were killed by a Russian strike on a cargo ship in the Black Sea.

Ukrainian forces also launched drones into Russia again on Sunday, with the Russian Defense Ministry claiming its forces downed over 160 Ukrainian drones over the Black Sea and multiple Russian regions. Ukraine’s drone attacks are known to be supported by US intelligence, meaning they always risk an escalation between Moscow and NATO.

By Ben Aris, Intellinews, 7/2/26

Russian public confidence in the economy has collapsed to its lowest level in at least two decades, according to a new Gallup survey, suggesting the economic resilience that underpinned the Kremlin’s wartime strategy may be beginning to fray as the conflict in Ukraine enters its fifth year.

The poll found that 60% of Russians now believe economic conditions in their local area are deteriorating, the highest proportion since Gallup began tracking the measure in 2006. Only 27% believe conditions are improving, marking a dramatic reversal from the early years of the war when buoyant government spending and record labour shortages fuelled optimism despite sweeping Western sanctions.

The findings adds to pressure on Russian President Vladimir Putin, who is facing a muted rebellion in the ranks of the elite between the doves and the hawks, both of which want to end the hostilities, but have very different proposals of how to do that. The collapse of confidence is also a function of the deteriorating state of the economy, which has been split in half: the military industrial complex is flourishing, while the civil sector is stagnating. The official growth outlook for this year has been cut from 1.3% to a mere 0.4% as strong inflation, sky high interest rates and falling oil prices weigh on budget revenues and spending.

While unemployment remains close to record lows and defence factories continue operating at full capacity, civilian sectors are increasingly struggling under the weight of labour shortages and the poor health of the economy. Nevertheless, the economy soldiers: S&P Global reported on July 2 that Russia’s manufacturing PMI moved back above the no-change 50 points benchmark in June and expanded for the first time this year on the back of a mild recovery in demand.

Gallup also found that 56% of Russians believe their own standard of living is worsening, the first time in two decades that a majority has expressed such pessimism. At the same time, perceptions of the labour market have deteriorated sharply. Just 35% now say it is a good time to find a job where they live, down from an average of 51% during the previous two years, while 58% now describe the job market as poor.

The survey suggests that Russians increasingly recognise the difference between an economy sustained by unprecedented military expenditure and one generating genuine improvements in household prosperity.

“The longer the war grinds on, the more it may test people’s patience with the conflict and the sacrifices it demands,” Gallup concluded.

The deterioration comes as Russia’s macroeconomic outlook has become noticeably weaker.

Weak economy

Earlier this year the government cut its 2026 growth forecast from 1.3% to just 0.4%, acknowledging that the rapid expansion fuelled by defence spending is beginning to fade. Russia’s small- and medium-sized enterprises (SMEs) have been particularly exposed and are deteriorating rapidly.

Even the temporary boost from higher oil prices following the conflict between Israel and Iran has done little to change the broader trajectory, while the Central Bank of Russia has repeatedly warned that the economy is overheating after years of exceptionally tight labour markets. The windfall effects of oil prices over $100 caused by the war have already worn off as oil prices fall back to pre-war levels of around $75 per barrel so that the impact on the Russian budget will be small and short lived.

The country’s labour shortage has become one of the defining characteristics of the wartime economy, with military recruitment and defence production competing directly with civilian employers for workers. The result has been rapid wage growth in strategic sectors but mounting difficulties for manufacturers, retailers and service industries trying to recruit staff.

Gallup’s findings suggest that Russians increasingly view these shortages as a symptom of economic strain rather than strength.

The survey also recorded the sharpest annual decline in confidence in key state institutions since the series began.

Confidence in the military fell 13 percentage points to 66%, confidence in the national government dropped 14 points to 53%, while confidence in the honesty of elections declined 16 points to 40%. Perceptions of media freedom suffered an even steeper fall, dropping 25 percentage points from 59% to a record low of 34%.

The poll was conducted between March and May, before Ukraine intensified its campaign against Russia’s domestic fuel infrastructure. Ukrainian long-range drone attacks have increasingly targeted refineries, storage depots and logistics hubs across Russia, contributing to fuel shortages in several regions, particularly in occupied Crimea.

Timothy Ash, the senior sovereign strategist at BlueBay Asset Management in London, argues that the deterioration in public sentiment may therefore only be beginning.

“After 4.5 years of a war, or ‘special military operation’ which was meant to be over in weeks, the war seems to be finally coming home to Russians,” he wrote in a recent commentary.

Ash argues that several factors are likely to reinforce the negative trend.

The temporary rise in oil prices triggered by the conflict in the Gulf has already begun to unwind, while US sanctions relief briefly granted to allow Russian producers to continue exports has expired. As benchmark oil prices retreat towards the $70 per barrel range, he expects Russia’s Urals crude to resume trading at discounts of around 30%, potentially pushing realised prices back into the $50 per barrel range or lower.

Longer term, Ash sees even greater pressure building. He argues that higher production from countries such as the United Arab Emirates, combined with weaker global demand following the Iran conflict, could leave Brent crude closer to $60 per barrel over the next year, implying Urals prices could fall below $46, levels already associated with recessionary conditions in Russia earlier this year.

Perhaps more importantly, Ash believes the recent resilience of global oil markets has altered the sanctions calculus.

“The Iran war has shown that the West has much more leverage over Russia than it has perhaps dared to assume,” he wrote.

“If the West, and even China, wants to bring this war to an end they should cut off Russian energy exports.”

According to Ash, eliminating Russia’s remaining oil exports would deprive the Kremlin of around €500mn per day in revenue, potentially triggering a much deeper recession, accelerating capital flight, placing severe pressure on the banking system and forcing a sharp depreciation of the ruble.

“The wheels would literally come off Putin’s war machine,” he argued.

Ash also points to the growing asymmetry between Russia’s economy and that of Europe. With the European Union having approved a €90bn financial package for Ukraine and additional pre-accession funding under discussion, he argues Kyiv now has the financial resources to continue expanding drone production and deep-strike capabilities for years.

“Russia’s $2.5 trillion, and declining economy, just cannot compete with Europe’s $25 trillion economy,” Ash wrote. “Putin started an arms race with Europe that Russia simply cannot win now.”

While the asymmetries between the EU economy and Russia’s are large, Russia has repeatedly surprised with the resilience of its economy to the extreme sanctions regime, which has caused as much, or more, damage to the increasingly dysfunctional European economy than to the Russian economy. At the same time the Kremlin continues to fund its war with cash, while Europe is increasingly funding its support for Ukraine with debt.

Nevertheless, Russians are becoming increasingly sceptical about the economic trajectory of the country. The patriotic rallying effect – patriotism was at an all-time high in 2022 – has evaporated, replaced by growing concerns over living standards, employment prospects and the longer-term costs of sustaining a war that the Kremlin initially expected to conclude within weeks.

By Kautilya The Contemplator, Substack, 7/8/26

The recently concluded NATO summit in Ankara was presented as another demonstration of alliance unity. Leaders reaffirmed their unwavering support for Ukraine, pledged €70 billion in military assistance through 2027, expanded defense-industrial cooperation, endorsed new drone production agreements and announced plans to help Ukraine develop the capacity to manufacture Patriot missile systems. The imagery of US President Donald Trump and Ukrainian President Volodymyr Zelensky standing together reinforced the message that the West remains committed to Kiev for as long as necessary.

Yet beneath the carefully choreographed declarations lay a more revealing reality. The summit produced no new diplomatic initiative, no political framework for ending the conflict and no serious discussion of what an eventual settlement might look like. Instead, Ankara institutionalized a strategy of endurance rather than one of resolution. If history has taught anything, it is that betting on exhausting Russia has rarely ended well for its adversaries.

The summit therefore raises a fundamental question. Has NATO abandoned the search for a political solution altogether? For several years, the alliance’s policies have increasingly suggested that its objective is not to negotiate an end to the war, but to prolong it, thereby buying time for Europe’s rearmament while seeking to impose maximum military, economic and political costs on Russia through sanctions, long-range drone and missile strikes and continued battlefield attrition. The underlying assumption appears to be that time will gradually weaken Moscow while strengthening NATO. Whether that assumption withstands strategic scrutiny is the central question this essay seeks to answer.

Ankara Institutionalizes a Long War

The clearest message to emerge from Ankara was not one of victory but of long-term commitment. The pledge to sustain at least equivalent levels of military assistance through 2027 signals that NATO increasingly views the conflict as a prolonged contest requiring years rather than months.

The emphasis on expanding Ukraine’s domestic defense industry points in the same direction. Trump’s announcement that Ukraine would eventually receive the capability to produce Patriot missile systems was politically symbolic, but its practical significance is far less obvious. Patriot production requires sophisticated industrial facilities that would almost certainly become priority targets for Russian ballistic missiles and long-range drone strikes.

A far more plausible outcome is that production will remain in Europe, with missiles or major components transferred into Ukraine much as European partners already support drone manufacturing today. The announcement therefore signals a long-term commitment to continue waging the proxy war more than an immediate transformation of Ukraine’s industrial capacity.

The Missing Political Strategy

Every NATO summit since the conflict began has announced additional weapons, funding and security commitments. What none has articulated is a realistic political end state.

Unlike NATO, Russia has consistently framed the war in terms of concrete political objectives, specifically preventing further NATO expansion into Ukraine, demilitarization and securing what it regards as its core security interests. Whether one accepts these objectives is beside the point. They provide Moscow with a clearly defined political framework against which military operations can be assessed.

The omission from NATO summits is striking because military strategy derives its coherence from the political objective it is intended to achieve. If the objective remains the restoration of Ukraine’s internationally recognized borders, the battlefield offers little evidence that this is becoming more attainable.

If the objective is Russian capitulation – a goal that several European leaders have at times implied or articulated in various forms – it rests on an assumption that is detached from both history and ground realities. The result is an increasingly open-ended strategy whose costs continue to mount even as the political objectives it seeks become progressively less attainable.

Buying Time for Rearmament

Viewed through this lens, NATO appears less concerned with ending the war than with using time as a strategic resource. Across the continent, governments are increasing defense budgets, expanding industrial capacity and rebuilding armed forces after decades of post-Cold War reductions. These efforts require years to bear fruit.

Ukraine increasingly serves as NATO’s strategic bulwark on Russia’s border while Europe rebuilds the military capabilities that decades of post-Cold War underinvestment allowed to atrophy. Buying time is only strategically valuable if it materially improves one’s political position. What evidence suggests that another three years of war will produce a fundamentally different political outcome than the previous four? The Ankara summit offered no explanation for that.

Can Attrition Actually Work?

The central assumption underpinning NATO’s strategy appears to be that time favors the West. Yet this raises a more fundamental question: what if prolonging the war is not weakening Russia, but instead transforming the conflict into precisely the kind of war in which Russia has historically been at its strongest?

For more than three decades, Western military doctrine has emphasized technological superiority, precision-guided weapons, rapid maneuver and decisive campaigns. Russian military thought evolved along a different path. Shaped by the experience of the Second World War, it has long viewed time, space, industrial mobilization, operational depth and attrition not as signs of strategic failure, but as instruments of victory. Major wars between industrial powers are ultimately decided by which side can better replace losses, sustain production, withstand attacks and steadily erode the enemy’s capacity to fight.

One of the great ironies of the Ukraine conflict is that NATO increasingly finds itself fighting the war Russia wants rather than the one the West spent three decades preparing for. Expectations that precision weapons and technological superiority would deliver decisive breakthroughs have instead given way to a grinding contest of artillery, drones, industrial production, logistics and manpower. Ukraine has become a hybrid form of warfare that combines twenty-first-century network-centric technologies with a twentieth-century industrial war of attrition. While drones, satellite intelligence and digital networks have transformed the tactical battlefield, the strategic logic of the conflict has resembled the Soviet conception of large-scale conventional warfare.

This also explains why each side measures success differently. Western analysis often focuses on territorial gains. Russian operational thinking has traditionally prioritized the systematic destruction of the enemy’s combat power. Territory can be regained. Experienced soldiers, trained officers and scarce equipment are far harder to replace. From this perspective, degrading Ukraine’s military faster than NATO can regenerate it matters more than the pace of territorial advances.

If NATO’s strategy is to prolong the conflict in the expectation that Russia will eventually exhaust itself, Ankara raises an uncomfortable possibility. Rather than forcing Moscow onto unfamiliar terrain, the alliance is encouraging precisely the form of warfare in which Russia has historically demonstrated its greatest resilience. The longer the war continues, the less it resembles the conflicts that shaped modern Western military thinking and the more it resembles those that shaped Russian military doctrine.

The Strategic Paradox

The Ankara summit exposes a profound strategic paradox. NATO remains the most powerful military alliance in the world today. Its combined economic output, technological base and defense spending far exceed those of Russia. Yet that overwhelming military potential has not translated into decisive political leverage because the alliance remains constrained by the one step it is unwilling to take: direct war with another nuclear power, not to mention that even conventionally, NATO is significantly under-prepared to fight the scale and intensity of the campaign that Russia is waging in Ukraine.

This, in turn, raises a more fundamental question. Carl von Clausewitz argued that war is an instrument of policy, not an end in itself. Military operations derive their meaning from the political objectives they are intended to achieve. Yet the Ankara summit devoted enormous attention to sustaining the war while offering remarkably little explanation of how doing so advances the political outcome NATO ultimately seeks.

That omission matters because strategy cannot be judged solely by the resources committed to it, but by whether those resources move the political objective closer to realization. After years of war, Russia has adapted to sanctions, expanded defense production and re-oriented much of its economy toward Asia. Furthermore, the Russian Armed Forces have accumulated an unprecedented volume of large-scale conventional combat experience, knowledge that is now being incorporated into training, doctrine and the development of the next generation of officers.

If the alliance’s underlying assumption remains that a longer war will eventually compel Moscow to accept strategic defeat, the evidence points in the opposite direction. Time alone does not guarantee a more favorable political outcome. It merely extends the conflict unless it materially changes the strategic balance.

The real significance of Ankara lies not in the €70 billion it pledged, but in what it implicitly acknowledged. NATO has institutionalized a long war without explaining how that war ends. Until it can answer that question, additional funding, more sophisticated weapons and deeper industrial cooperation may prolong the conflict, but they cannot substitute for strategy.

Kautilya The Contemplator is a reader-supported publication. To receive new posts and support my work, please consider becoming a free or paid subscriber. I will always be grateful for your support.

RT, 7/1/26

Former top Ukrainian General Valery Zaluzhny has told Vladimir Zelensky he will challenge him in the next presidential election, with current polling suggesting he would win in a run-off, Ukrainskaya Pravda reported on Wednesday [July 1], citing sources. Zelensky’s presidential term expired more than two years ago, and he has since been reluctant to hold a new election despite repeated calls from the US.

Zaluzhny, now ambassador to the UK, was summoned back to Kiev last week – officially to discuss the political turmoil in London, where Prime Minister Keir Starmer announced that he would soon step down. The real reason, the outlet said, was Zelensky’s concern that Zaluzhny will run for president.

In a one-on-one meeting, Zelensky told the former commander that the current battlefield situation has created a “window of opportunity” for an election, but warned that it has to be held in a way that will not divide the country.

Zelensky reportedly asked Zaluzhny: “If elections are held in autumn, will you run?” Zaluzhny replied, “Yes, I will.”

Zelensky did not offer his rival any posts, Ukrainskaya Pravda said – though sources in government circles claimed that the Ukrainian leader was ready to discuss almost any post, including prime minister. Zaluzhny reportedly said that while he has never sought a political career, he could not betray the trust of the Ukrainian people who are counting on him.

Several top Zelensky allies later tried to sway Zaluzhny, without success. As the talks broke down, one negotiator reportedly told Zaluzhny: “Bro, think it over again.”

Zaluzhny was dismissed as army commander-in-chief in February 2024 and was sent off to London to serve as ambassador – a move widely seen as an attempt by Zelensky to sideline a potential rival. Zaluzhny has since consistently topped Zelensky in trust ratings. Though he insists that he has no political ambitions, media reports suggest that he is gearing up for a presidential run.

A closed poll cited by Ukrainskaya Pravda puts Zelensky first with 33% support, ahead of Zaluzhny with 22% and top Zelensky aide Kirill Budanov with 14%. In a run-off, however, Zaluzhny would defeat Zelensky 37% to 32%, and narrowly defeat Budanov 34% to 32%.

Zelensky’s presidential term expired in May 2024. He has refused to call a new election, citing martial law, which was imposed after the escalation of the Russia-Ukraine conflict in early 2022. Moscow has since declared him illegitimate and argues that his dubious legal status as leader is an obstacle to signing a peace agreement.

Zelensky has been pressured to hold a new election by US President Donald Trump, who once called him a “dictator without elections.” Zelensky responded by saying he is ready to hold an election, but demanded that Ukraine’s supporters ensure its security.

Strana.UA, 7/10/26 (Translation by Prof. Geoffrey Roberts)

In Ukraine and the West, there’s constant talk that the current Ukrainian strikes on Russian oil refineries are creating conditions for ending the war.

Yesterday, at the NATO summit, Donald Trump stated that Ukrainian strikes on Russian oil refineries are “an escalation that could help end” the war. And US Secretary of State Marco Rubio said that “this now creates space for negotiations to end the war.”

Meanwhile, Western media believe the next two months will be decisive…”By autumn”, write The Economist, “the Kremlin will decide whether to launch an autumn-winter offensive or conclude a ceasefire.”

The strategy of Kyiv and its Western partners is based on the premise that increased Ukrainian military strikes on far and middle rear areas, the threat of Crimea’s isolation, and the growing gasoline crisis will create problems for the Kremlin of such magnitude that it will be forced to either accept Kyiv and the Europeans’ conditions for a ceasefire along the front lines, or internal upheaval will erupt in Russia, making Moscow’s peace terms even worse.

Of course, both scenarios cannot be ruled out, but they are far from the only ones. One thing can be said with certainty: the current situation poses a direct threat to the Kremlin’s previous strategy of attrition, through which it intended to achieve victory within a certain period (a year, two, or three years) given its superior manpower potential, and against the backdrop of Europe’s mounting economic problems, which pose a strategic threat to the stability of its support for Ukraine – a strategy that does not require completely switching the Russian economy to a war footing or declaring a new wave of mobilisation.

This strategy is now being seriously tested. The question is whether Vladimir Putin will be able to manage the emerging problems and continue to pursue it. Or whether the strategy will have to be radically changed; or whether hostilities will have to cease along the current front lines.

Problems arise on several levels.

The first and most important is economic. Unlike Ukraine, Russia is fighting with its own money. Therefore, any blow to its economic potential is extremely damaging to its ability to continue the war. Disabling the refineries not only inconveniences the population in the form of a massive gasoline shortage, but also entails direct losses to the economy and budget, especially given the need to increase fuel imports. It also threatens the harvest (and therefore food prices and availability) and the entire logistics of goods, including essential goods. Furthermore, damage to other industrial and infrastructure facilities is also being caused. This is compounded by the drop in oil prices following the opening of the Strait of Hormuz.

However, this last factor is not the most significant. Firstly, as recent days have shown, the crisis in the Persian Gulf is far from over, and prices could rise at any moment. Secondly, even if prices remain low for an extended period, the Russian budget has substantial reserves from which resources could be reallocated to the war effort, if necessary. Thirdly, in an era of increasing demand for electricity due to the development of artificial intelligence, energy resources cannot be cheap in principle, and their price increases will continue for the foreseeable future. However, right now, falling prices are significantly increasing the pressure on the Russian budget.

But, to repeat, the main problem of critical importance for the Russian economy are Ukrainian strikes on industrial facilities, the fuel crisis, and prospective problems with electricity and heating if the Ukrainian Armed Forces (UAF) are able to launch large-scale attacks on the Russian energy grid at significant depth.

The second level is the situation in Russian society. Since February 2022, the Kremlin has been trying to maintain the public’s perception that the war is taking place far away, that the country is peaceful, wages are rising, and all is well and calm. So far, this has been quite successful, with the exception of the territories bordering Ukraine. But the gasoline crisis has affected absolutely everyone. And even those Russians who try not to think about the war at all will no longer be able to ignore this obvious consequence of the war. Gasoline lines themselves could become a focal point for mass discontent with the authorities, as they did on the eve of the collapse of the USSR or in February 1917. This is especially true since this is compounded by the already pent-up frustration over the ban on Telegram and VPNs, various other restrictions, and weariness from the protracted war.

The authorities’ attempts to use the Ukrainian attacks to consolidate society under the slogan “Everyone to fight the enemy, let’s close our ranks!” are fraught with difficulties.

Firstly, for a significant portion of Russians, it’s unclear why the war is continuing at all if Kyiv is prepared to stop it at the front line, effectively sealing all of Russia’s territorial gains, which would in itself be a victory for Russia. And many don’t understand what Russia will gain from capturing Slovyansk and Kramatorsk, or even all of Ukraine, if this requires many more thousands of military casualties and civilian suffering in the rear due to gasoline shortages, and even power outages in the border regions. Another segment of the population, ready to continue fighting, will ask questions: why haven’t we achieved victory yet? Perhaps our leaders are fighting the wrong way? Why haven’t they used nuclear weapons yet?

It’s unclear whether all this will lead to rebellion or internal upheaval, but such a situation poses a serious challenge for Putin. Especially given the approaching State Duma elections, which the Kremlin has no plans to cancel.

Another risk factor is the ambiguous situation within the elites. Some of them are also tired of the war and want it to end as quickly as possible. And some, just as they did during the preparations for Yevgeny Prigozhin’s mutiny, are trying to create as many difficulties as possible for Putin to force him to make personnel decisions, replacing the prime minister and the army command, and then effectively remove him from real power.

If unrest erupts in society, this could also potentially significantly impact the governance of the state system.

While the “peace party” within the Russian elite is generally loyal to Putin and can only create relatively minor problems for the Kremlin through quiet grumbling behind the scenes, the second group, as Prigozhin’s rebellion demonstrated, is far more dangerous: it is linked to many security officials and pro-war Telegram channels, which are already stirring up panic about what’s happening in the country and promoting the idea that the current Russian government is incapable of adequately addressing the emerging problems of wartime. If these problems continue to mount, it cannot be ruled out that this group, which once actively supported Prigozhin, could resort to active pressure on the Kremlin to force personnel changes in the government and army command, and if they fail, a new attempt at rebellion. Incidentally, representatives of this so-called “party of turmoil” are more vocal than others about the unacceptability of stopping the war along the front lines and demanding a fight to the bitter end. This is entirely logical: the longer and more difficult the war is for Russia, the easier it will be for them to destabilise the situation. Conversely, the sooner the war ends, the easier it will be for Putin to stabilise the situation, quickly resolve the problems caused by the war (fuel shortages, etc), consolidate his power, and thereby minimise the likelihood of any rebellion.

The third factor is the front. For now, problems in the rear are not directly affecting the situation at the front, where the Russians continue their offensive in many directions, albeit slowly. However, it cannot be ruled out that these problems will manifest themselves in the future, especially on the southern front in the Zaporizhzhia region, where the UAF is trying to increase pressure on Russian troops.

If nothing fundamentally changes at the front, the continuation of Russia’s current sluggish advance will become a problem for the Kremlin – because it’s currently promoting the idea of ​​imminent collapse of the UAF, which suggests patience and endurance of the gas shortages, as victory is already near.

But if the Russian army doesn’t demonstrate any major breakthroughs in the coming months, many in Russia will once again ask: why is this war continuing at all if it’s unknown how long the fighting will last? How long will Russian soldiers last without declaring mobilisation? How much longer will Russia be able to replenish its army and replace losses solely with civilian contractors?

Overall, Russia now finds itself in its most dire situation since the fall of 2022, when the UAF launched its counteroffensive. Back then, the problem was resolved through mobilisation, which eliminated Ukraine’s manpower advantage at the front. What will the Kremlin do now?

Based on the signals coming from Moscow, one can conclude that it is relying on mitigating the aforementioned problems, aiming to maintain the previous war strategy without resorting to mobilisation or other radical measures.

A key element of this approach is minimising the impact of air strikes on targets in the Russian rear and along logistical routes to Crimea. Judging by hints from Russian military Telegram channels, work in this area is intensifying, primarily through strengthening the air defense system, and the first results are expected within a month or a month and a half. If results are achieved, this could significantly improve Russia’s position.

By solving his most dangerous problem, Putin will shatter his opponents’ scenario and be able to continue the war of attrition, whereas in Europe and Ukraine a sense of defeat could prevail as a result of the failure of the current euphoria to materialise. Calls for compromise with the Kremlin will grow louder. At the same time, existing problems within the country (accusations of corruption against Volodymyr Zelensky, protests against “busification”) and in Kyiv’s relations with European partners, such as the Poles, will worsen.

In such a scenario, there will also be a small chance that Trump, seeing the strategy of forcing Russia to peace failing, will return to the “spirit of Anchorage” and pressure Kyiv and the Europeans to implement the Alaskan agreements on the withdrawal of Ukrainian troops from Donbas, among other things.

But whether this would actually result in a reduction in the number of [drone strikes] and resolve the gasoline shortage and other key issues, remains to be seen. So far, this hasn’t happened. Oil refineries are still being hit regularly. The pace of Ukrainian drone strikes, whose production Europe is now also ramping up, is only increasing, and it’s unclear whether it’s even possible to reduce the number of strikes to zero in this situation. The month to six weeks allocated for setting up a new countermeasure system is a long time, which Russia will still have to somehow survive amid fuel shortages. Moreover, this will coincide with peak consumption—the holiday season and harvest season. This means critical problems could arise much earlier than the end of summer.

Even If there’s no change within six weeks, and the gasoline shortage persists, and Ukraine continues to destroy industrial facilities, this won’t mean Russia can no longer wage war but It will mean Putin can no longer wage it the way he did before.

And then the Kremlin will be faced with a choice between two options for continuing the war.

The first is a sharp tightening of internal regulations, but within the framework of a conventional war i.e. a new wave of mobilisation, new restrictions, imprisonment of dissidents, the introduction of elements of a planned distribution system in the economy (for example, gas rationing), and massive spending cuts on all non-military needs will follow.

However, it’s not clear that would fundamentally change the situation for Russia, since with drones dominating the skies, even sending hundreds of thousands of new soldiers to the front may not lead to a breakthrough. And if strikes on oil refineries and other industrial facilities escalate, even planned and administrative measures won’t help keep the economy afloat.

The second is a sharp escalation, which could either complement the first scenario or occur independently. For example, in the form of the use of nuclear weapons against Ukraine and/or Europe.

Both of these scenarios are extremely dangerous for both Russia and Putin personally.

The alternative is an end to the war along the front lines.

As we have written repeatedly, despite the demands for a ceasefire, Kyiv and the Europeans actually have a completely different baseline scenario: they are proposing a ceasefire only in the hope that Putin will reject it, and they can use his refusal to destabilise the situation within Russia, and then, if successful, impose far harsher conditions than a simple ceasefire. In reality, they don’t want a ceasefire, believing it would be a victory for Russia, something Kyiv sometimes openly admits.

But if Putin suddenly agrees to a ceasefire, then given Trump’s insistence on it and Zelenskyy’s already conditioned the public to believe that Ukraine’s goal is a swift end to the war, it will be difficult for Kyiv and Europe to make a sharp about-face and abandon the ceasefire. At least until the Congressional elections. But that’s if Putin agrees. For now, he’s dismissing this option, even though it’s far less dangerous for him than the two options involving mobilization and escalation. Chatter that the Russian people, not understanding renunciation of initial demands, would perceive it as betrayal, is groundless. The overwhelming majority of Russians would fully support such a solution as a way to save them from mobilisation, from gasoline shortages, and from nuclear war…

Most likely, Putin is hoping for something more than just a ceasefire that will consolidate current gains. And by the end of the summer, and perhaps even much sooner, it will become clear whether he can achieve this “much more” by continuing to wage the war as usual, pursuing a strategy of attrition without mobilising or converting the entire country to a war footing.

If the answer to this question is no, Putin will have three options: mobilisation with a sharp reduction in civilian spending, escalation (nuclear strike, war with Europe), or ending the war along the front lines.

As of now, no one can say with certainty which option he will choose.

***

Kiev Instability amidst Mobilization and Kremlin Caution (Excerpt)

By Oliver Boyd-Barrett, Substack, 7/16/26

The Federov Scandal

In the wake of the Lvov street uprising by citizens against military conscription efforts, we now have street protests across Ukraine against Zelenskiy’s dismissal of Defense Minister Miykhailo Fedorov in favor of the current Minister for the Interior, Ihor Klymenko. At the moment, even as street protests widen and Zelenskiy, in a rare show of humility, has said it is perfectly proper for people to protest, Fedorov has definitely been dismissed, but his replacement by Klymenko has not (yet) been confirmed.

Both these issues suggest that for Zelenskiy what mostly matters right now, despite the apparent success of recent Western-orchestrated drone strikes on Russian oil refineries and on shipping in the Azov and Black Seas (to which Russia has responded with some success by closing down the functionality of the port complex of Odessa) is Ukraine’s continuing ability (or is it inability?) to mobilize.

Klymenko, as a former chief of police, is directly implicated in providing police support for the brutal recruiting tactics (press gangs) that Kiev has long resorted to in order to solve its dire shortage of manpower on the front lines. It is difficult to imagine that his skills will magically enable a significant uptick in military conscription without inciting a popular revolution against Kiev and even if he does, Russia’s response might be it own mobilization with a view to increasing the current Russian force of 800,000 men in Ukraine to an entirely do-able, say, 1,600,000.

The dismissal of Defense Minister Mykhailo Fedorov marks a massive political crisis in Ukraine, triggering widespread protests by civilians, veterans, and military personnel. Fedorov, previously known for modernizing the digital sector, served just six months in the defense role but became highly popular for aggressively pushing a high-tech, data-driven approach to the war which Western propaganda, at least, says has had devasting consequences for Russia.

The significance of Fedorov’s dismissal stemmed from an irreconcilable clash with Commander-in-Chief Oleksandr Syrskyi. Fedorov favored startup-style management, prioritizing autonomous drones, competitive procurement, and asymmetric warfare to bridge personnel shortages. Syrskyi represents traditional, Soviet-style military hierarchy focused heavily on human resources and manpower. Fedorov’s removal has shocked civil society, who viewed him as an anti-corruption crusader. His dismissal sparked large-scale street protests across major cities like Kiev, Lvov, and Odessa. Soldiers and drone commanders on the front lines have openly criticized the move, fearing that his replacement – Interior Minister Ihor Klymenko – will cause military innovation to stagnate.

Fedorov had stated that he proposed replacing Gen. Syrsky and Chief of the General Staff Andrii Hnatov, citing a need to modernize command structures. According to Fedorov, Gen. Syrsky responded with an ultimatum to President Zelensky: “Him or me”. Zelensky chose to back his top army commander and dismissed the defense minister.

President Zelensky has publicly appealed for unity, acknowledging the public’s right to protest while stressing that wartime leadership should not be forced to choose between political and military commands.

During his brief tenure, Fedorov is credited with cutting through bureaucratic red tape, overhauled the military procurement system to save billions of hryvnias, and heavily restricted Russian access to Starlink networks. Protesters and defense experts fear that his departure will stall these critical reforms.

The ouster represents a significant gamble for President Volodymyr Zelenskyy, who is actively undergoing a major cabinet reshuffle. Demonstrators have explicitly directed their anger at the president’s choice to side with traditional generals over innovative reformers.

Surovikin Lining

On the other side of the ledger, there is some speculation that Russia may bring General Sergei Surovikin back to a central position. This is based on his recent return from what was widely viewed as a post-mutiny exile. Surovikin, nicknamed “General Armageddon,” was sidelined in 2023 following a brief rebellion by the Wagner Group, to which he had close ties. Following his dismissal as head of the Russian Aerospace Forces, Surovikin was sent to Africa, where UK Defense Intelligence confirmed he was operating as the head of Russian military specialists.

Reports from independent defense analysts suggest that after completing his mission in Africa, he could return to Russia to assume a high-level state or military position., Observers have noted that President Vladimir Putin frequently demotes disgraced or controversial commanders to peripheral roles rather than discharging them entirely. This pattern allows the Kremlin to utilize their expertise and bring them back into the fold when needed.

Given Surovikin’s reputation for ruthless efficiency in conflicts like Syria and as the architect of Russia’s primary defensive lines in Ukraine, some Russian military bloggers speculate that his tactical experience is being rehabilitated to aid broader strategic goals. Given his role in managing the controversial and politically very awkward Russian withdrawal from the city of Kherson west of the Dnieper in the fall of 2022, Surovikin may be just the kind of military intelligence that is needed now in Zapporizhzhia and Kherson.

On the Battlefield

There has still been no evidence of another massive Russian attack, much touted, on Kiev. Last night, Russia fired a total of 164 drones and missiles on targets in Kiev and Odessa – high, but not in the “massive” range (when we are talking about 500 or more). Missiles included Iskander and S400. Industrial facilities were hit in Kiev, and many vessels were damaged or destroyed in the Odessa ports of Yuzhne and Chornomorsk. Ukrainians, in turn, appear, at least temporarily, to have ended their attacks on ships in the Azov Sea and are concentrating more on Russian vessels in the east of the Black Sea where more than 10 vessels were damaged or destroyed in the past 24 hours. Military Summary channel assesses that we can expect either a shutdown of the Black Sea for both Ukraine and for Russia, or else a resort to some kind of “grain deal” that will allow safe passages for grain vessels to their destinations in countries of the South.

In Zapporizhzhia, Russia has resumed its offensive north of Stepovoye and Malye Shcherbaki towards Orikhiv, so that Orikhiv is now threatened by Russia from the east, south and west. Altogether, we can say that Russian forces are moving in the directions of Pavlivka, Novopavlivka and Orikhiv, while bombing Yuviivka and Kamyshuvakha.

Ukrainian forces are trying to take back control over the settlement of Stepnogorsk and have entered Plavni which is an impediment to Russian progress toward the city of Zapporizhzhia, though Russia is subjecting the city to constant bombardment. In the Dnipro area, Russian forces are moving towards Bilytske and consolidating their positions north and northeast of Hryshyne.

In the Donetsk area, Russians have taken Vasiutyvske, and are only five kilometers from the city of Kramatorsk itself, which Russians maintain under constant bombardment. To the north there are minor Russian advances in the Kupyansk, Kharkiv and Sumy areas.