Russia’s special operation in Ukraine has shaped up to be war on an industrial scale, which raises an obvious question. What does the war cost, and who can sustain the effort the longest?
Here’s a job posting for the Russian National Guard in Moscow offering ₽100,000-300,000 a month, and that seems to be more or less within the same ballpark of what their contract soldiers are making. Combat pay, rank, seniority and other benefits drive a soldier’s pay upward, so for the purposes of this exercise let’s say the average Russian soldier deployed to the special operation costs ₽500,000 a month. If there are roughly 200,000 Russian soldiers actively participating in the special operation, that’s roughly ₽100 billion a month. With the current 1:56 Dollar to Ruble exchange rate, that’s roughly $1.8 billion a month, a little over $7 billion total so far.
As a general rule, payroll is the largest expenditure of an organization’s budget, but what about the other costs of war, including everything from attrition of vehicles to fuel expended, to shells and missiles fired? Since this is a ballpark estimate in the absence of better ways to extrapolate an accurate number, I’ll just use the US DOD’s budget as a point of comparison. 24% of our total military budget goes to payroll. If that proportion holds true for the Russians, that means the war has cost them approximately $30 billion so far.
I wouldn’t even pretend that’s an accurate or reliable statement, but it’s close enough. In the same time period Russia has made $100 billion in oil and gas revenue, which according to Reuters is a 50% jump from before the “start” of the war in February. Apparently, Putin took W. Bush’s advice and his special operation is literally paying for itself.
That said, there are costs of war that Russia will be on the hook for decades from now, and I’m not talking destroyed equipment. Disability and survivor benefits will have to be paid. All territory captured will have to be rebuilt as well.
One crucial factor that I never seen discussed in the western media is unit rotations. It’s logistically demanding and requires having forces to replace them with, but is absolutely vital to a prolonged war effort. Even 1944 Nazi Germany fighting a two-front war was able to do this, as did the Soviets 1942 onward. Are the Ukrainians properly rotating units? If they’re dipping into their territorial defense units and reserves as deep as even the western media and analysts admit, then probably not.
This is why I say that this is an asymmetric war. Russia’s special military operation is within arm’s reach, while NATO’s supply lines stretch across a continent, and the economic consequences (such as refugees and backfiring sanctions) have, so far, overwhelmingly harmed the West more than Russia. Unfortunately, I don’t think this week’s liberation of Lugansk republic and the presumably forthcoming liberation of the Donetsk republic is going to be enough to end the war. I do think Europe running out of food and gas this winter will end the war.
I am going to try to have my Saint Petersburg photos uploaded tomorrow. Also, I caught yet another 30 day ban on Facebook, so if you like my posts, please share them to your social media platforms of choice. I appreciate the support!
Ian Kummer
Support my work by making a contribution through Boosty
All text in Reading Junkie posts are free to share or republish without permission, and I highly encourage my fellow bloggers to do so. Please be courteous and link back to the original.
I now have a new YouTube channel that I will use to upload videos from my travels around Russia. Expect new content there soon. Please give me a follow here.
Also feel free to connect with me on Quora (I sometimes share unique articles there).
“That said, there are costs of war that Russia will be on the hook for decades from now, and I’m not talking destroyed equipment. Disability and survivor benefits will have to be paid. All territory captured will have to be rebuilt as well.”
Let’s hope there is a negotiated end to the fighting — the sooner the better. Clearly, the Ukraine will be partitioned; Russia will retain the Donbas and probably more, while Poland would like to grab a piece of the relatively undamaged west. Who will pay for picking up the pieces in poor damaged Rump Ukraine?
Both Rump Ukraine and Russia will want guarantees — Rump Ukraine to ensure that Russia stays out; Russia to keep NATO out of Rump Ukraine. Who would be an acceptable independent party to patrol the borders of Rump Ukraine and keep both NATO & Russia out? The obvious candidate is China — they have the money, the military, and the interest.
Pre-SMO, China saw the Ukraine as an important piece of their Belt & Road Initiative. And China has plenty of funds to invest in rebuilding Rump Ukraine, unlike the overstretched US and the bankrupt EU. The “least unacceptable” outcome for all parties from a negotiated end to the conflict could have a permanent Chinese military presence in Rump Ukraine and major Chinese influence on that country’s future development.
I don’t consider the Ukrainian “government” a player, Elensky is a puppet. Minsk agreement was all about recognizing Ukrainian sovereignty and insisting that they meet the separatists face-to-face and reach an amicable agreement, with the LPR/DPR eventually being economically reintegrated. Autonomous Crimea could have also been a valuable trade partner for the Ukraine. Even on Feb. 24 there was still a chance for Ukraine to retain sovereignty. But now? I don’t think so. There will have to be a negotiation between Russia and NATO, with pieces of Ukraine as bartering chips.
“I do think Europe running out of food and gas this winter WILL end the war.” (Can’t format text) I believe you’re spot on.
I read a very interesting technical article about Europe’s oil refineries by Dr. Gorge Viches. The European refineries are designed to refine a certain feedstock (Ural) and will have to be redesigned for different feedstocks which is time consuming. Germany is reactivating their coal fired generators which is not only time consuming but who will operate them? The skill has atrophied.
Today I learn the offshore oil workers have gone on strike in Norway.
The European stock market has been bleeding for months.
First they go mad. You know the rest.
I’ll close by wishing you the best in your travels.
Apparently American refineries have the same problem. Their feedstock is a mishmash from different countries and Russian stock can’t be instantly replaced from lighter oil from, say, Saudi Arabia or Canada. That’s why the US has continued to buy Russian oil even after the “mother of all sanctions”
I’m not an expert on this issue, however simple observation (I work as a ship’s agent at a Spanish port with a refinery) tells me that the local refinery uses crude oil from several suppliers around the world, including, of course, Russia. The “trick”, as I understand it, is to mix different qualities to work within the parameters of the refining operation. Of course, there will be crude oil qualities that are better to operate with, and dropping some suppliers altogether will lead to price raises with other suppliers, but it doesn’t look like as such a “big deal” to me.
That’s why I do not understand these claims (I’ve seen them in several places) that European and American refineries are designed to operate mainly or only with some qualities, specially Russian, of crude oil. I find it hard to believe that such a complex infrastructure as a refinery is designed and built in such a restrictive way as to accept only a very narrow option of qualities, particularly in view of how the local refinery works. But, as I said, I’m no expert.
It would be interesting to read this article by Dr. Viches.
Good day Galahad,
Good observations. The Vilches article is long, a thesis. His observations are correct. For example, the Shell Refinery in Curacao is designed to refine Venezuelan heavy crude. A refinery in Houston is the same.
What’s interesting is the Shell Pilot Refinery designed to build desired molecular strings from natural gas. They’ve succeeded. Not only that, they built a plant in West Virginia that takes it further and produces plastics.
Interesting stuff.
Beste
“All territory captured will have to be rebuilt as well.”
True, and it appears to be happening so fast, I can barely believe it, coming from a construction family. They had these lines of planning, supply, machinery and workers ready in the barrel to go. The thing is, the Donbass is Ukraine’s resource heartland along with the best farmland, so I view the river of development $ pouring in there right now as an investment that will have a huge return. As well, helping a massive chunk of the country get the power back on, water running, internet upgraded, etc, will put a very large number of people back to work, reduce government input costs, and, again, raise revenue.
It’s almost like it’s always worth it to help people.
https://twitter.com/RWApodcast/status/1541193310726930434
https://t.me/war_subtitled_en/184
I think that will be a determining factor in Ukraine’s longterm ability to wage war. How will people in the West Ukraine handle suffering from mass unemployment and hunger while their neighbors are living normal lives with jobs, gas, and food?
The Ukraine’s strategy for the past 8 years was to break Donbass Leningrad style. They failed. Now the tables have been turned, will Ukrainians be able to go years under siege conditions? Only time will tell?
I suspect Russia will do what it can to get things working despite all the levels of vitriol against them, but it will be so difficult to do effectively due to the massive corruption throughout Ukraine. You would need to have full control over the country/Rada and I seriously doubt Russia wants anything to do with that. As far as I know, Russia was actually paying Ukraine’s debts up until the start of the SMO, which you will never, ever hear in the west.
Even if the people of Ukraine decide they’ve had enough, they’ll still be fighting the agenda of the EU/America as it regards the country. No help without strings for western interests will come. And then there’s Poland’s wishes for Galicia………
Sorry, that was me again, Ian. As always, keep up the great writing!
I replied 😀
The fate of Ukraine is tied to debt as well. They have an enormous foreign debt, well over $100 billion prior to February, and is likely close to $150 billion now. If Ukraine has regime change and becomes a “friendly” country, Russia might offer to pay their debts off – in exchange for their own assets being unfrozen of course. Alternatively, if Ukraine stays “independent” they’ll still be on the hook for the debt… minus 50% or more of their GDP. Sounds impossible to me. I am not qualified to say either way, but I wonder what kind of financial shock Europe would suffer if that much debt suddenly became written off as unpayable.
It’s a genuine mess all the way down, up to and including all the false reasons for blaming Russia for blocking the export of UKR wheat/grains, which the UKR regime wants to sell for…………………more weapons. I keep hearing things like UKR’s banking system, owned and operated in corrupt fashion by UKR oligarchs sputtering along but unreliable, like soldiers haven’t been paid in months, etc, etc. It’s a failed state in every way and we’ll only see how badly when the curtain is pulled back.
Also, EU openly threatening to use stolen Russian foreign reserves to rebuild the country. I mean, what do you even say to that?
Related to our convo, Ian. Lot’s of details.
https://www.rt.com/russia/556495-restoring-peaceful-life-kherson/
Russia has paid all the ex USSR countries debts, finished paying only recently I believe,
Why am I not surprised, Neilo? Got a link to a good post about that? Or maybe Ian does?
I noticed b’s deletion of your comment a few days ago. Lately he’s been deleting fistfuls of comments — and users — in a seemingly arbitrary fashion, strangely exempting some of the worst trolls. So don’t take it as an unfavorable judgment; don’t take it as a meaningful judgment at all, and keep on doing. I’ll be sure to follow you here.
Hi Malenkov, thanks for replying. And, unfortunately, not only did b delete my comment, he actually BANNED Reading Junkie from the MoA altogether (try posting a link, it’ll get auto-filtered). That’s very frustrating for me, needless to say.
Well, “b” doesn’t seem to have banned you personally from commenting altogether (or has he, and you’re using a VPN to circumvent?), but then, he can be pretty sloppy in his vindictiveness and/or heavy-handedness. Sometimes embedding a link to a “forbidden” site (using the codes) works when entering the link in the text of a comment doesn’t. Something like “reading junkie . com (remove spaces)” might also work — until/unless he notices, of course.
It could be he banned your site just because it finally dawned on him that it has a Russian IP address, and you know how the German authorities are about anything emanating from Russia these days.
Of course, there are times when sloppiness and/or negligence sits uncomfortably on the cusp of something more sinister. His site is supposedly in Germany, which has some pretty strict anti-Nazi propaganda laws (if increasingly selectively enforced these days), but he’s allowed some barflies to spew Nazi propaganda long past the point at which other barflies started complaining about such propaganda.
Moral of the story: one can be on the side of the angels and yet be an asshole, and “b” seems to be an object lesson thereof.
Yes, using a VPN to circumvent, but “readingjunkie.com” is now in the autofilter. It is a nasty and vindictive thing to do, and I don’t have an unlimited amount of patience.
It may simply be that a banned word – junkie – is present. Try using a link shortener.
Rando,
Nah, it’s been clarified, one of the moderators “b” took an issue with me for some unknown reasons. I’m over it.
I don’t claim to understand what’s going on with MOA – all sites covering the war, and worth reading, and with non-trivial audience, are getting harassed hard lately. But there’s def. been a wave of blatant trolling / provocateur / distractor type characters, including even a couple overtly neo-nazi types, who seem to return regularly, or are only inconsistently kept in check. Ironically enough, the Saker team have been cleaning up their comments of some of these dipsh#ts compared to the past — and got rewarded for it by a DOS attack today.
That being said, from personal experience having a political blog around 10 years ago: showing up to a comment section mainly to promote one’s own work (not including just use of the signature-line link feature), tends to wear thin on the hosts, and this is an entirely typical reaction.
Well, this stuff about MoA is pretty disappointing, isn’t it. Or should I simply say: it sucks big time, because MoA has developed quite an impressive readership, and many of these guys are well informed. I guess I am still deluded enough to believe that there are sites that won’t start censoring and will forever commit to trying to report independent research and ultimately truth. Well, Ian, there’s your blog, and there is Larry C. Johnson’s blog. And I cannot think of very many like these two, although I should definitely include the Greanville Post, as well.