This is the second part of a two part series covering the causes behind the Russian invasion of Ukraine and what it means for Ukraine, Russia, and the world. Part one focused on the motives behind Vladimir Putin’s decision to invade Ukraine and the potential fate of Ukraine.

The Fate of Russia

The Russian invasion of Ukraine, which began on Feb. 24, 2022, has wrought devastating carnage in only three weeks—and this is only the beginning. The lion’s share of this ruination has been forced upon Ukraine, the nation now suffering from Russia’s unprovoked offensive. In Ukraine, 579 civilians have been confirmed deceased—although this number is likely higher—, thousands of homes have been destroyed, and even a maternity hospital has been bombed. These sickening atrocities come on top of the problems Ukraine was already facing before the invasion.

Despite the suffering of the Ukrainian people, it is undeniable that non belligerent Russians are also suffering as a result of this invasion. However, like Ukraine, Russia faced a myriad of its own problems before Putin’s war began. Many of Russia’s problems–such as drastic population decline, a poor GDP per capita, and a corrupt oligarch class–appear strikingly similar to Ukraine’s issues. These problems only sting worse for Russian civilians when paired with a lack of free and fair elections, as seen with the treatment of Alexei Navalny, and a poor track record regarding civil liberties, most starkly observed in recent mass arrests of around 13,500 anti-war protestors.

However, these are the least of the issues presently facing Russia. Since the start of the invasion, Russian companies, oligarchs, and banks have been placed under increasingly more severe sanctions by the international community. Most damaging to the Russian economy is the removal of Russia from the SWIFT global banking system, the platform which processes financial transactions and payments. Contributing to this damage is the unprecedented step of a freeze on Russian central bank assets, which directly undermines the effectiveness of the $650 billion war chest that Putin and certain Western analysts alike thought would keep Russia safe from sanctions in the event of war. Most recently, Russia lost its “most favored nation” status with Western countries, allowing much higher tariff barriers to be placed on Russian goods.

Thus far, the damage caused by these measures has been substantial. Russia’s currency, the ruble, has lost 40 percent of its value already, a fact which has forced the Moscow Stock Exchange to close. The Russian government has taken steps to mitigate the damage from this currency crash, namely by dramatically hiking interest rates, banning companies and individuals from transferring cash abroad, and forcing Russians who receive payment in foreign currencies to convert 80 percent of their payments into rubles.

Despite these mitigation efforts, the effects of Western sanctions have been broadly felt across Russian society, yet not in evenly distributed ways. Although Russian oligarchs are scrambling to stash away some of their more transparent assets, much of their wealth is difficult to seize due to the opaque nature of the international financial network. Assets funneled through shell companies, offshore bank accounts, and a plethora of vehicles for money laundering gives the ultra-wealthy oligarch class a labyrinthine network that makes their money virtually untraceable. This maneuvering is exemplified by the Dilbar, a 512-foot yacht belonging to the sanctioned Russian oligarch Alisher Usmanov which presently sits in the harbor of Hamburg, Germany yet has not been seized, despite some mistaken accounts, due to it officially belonging to a shell company, although some financial trickery has been worked to keep the yacht stationed in Hamburg. With that said, some oligarchs have not employed this system as keenly as others, as seen in the case of Andrey Melnichenko, who had his €530 million yacht seized by Italian authorities.

Outside of Melnichenko, other oligarchs are also becoming alarmed. Roman Abramovich, another olgiarch, has sold the Chelsea Football Club and will supposedly donate the proceeds of the sale to Ukrainian victims of the war, an act likely undertaken under pressure. Even this has not gone smoothly for Abramovich given the British sanctions placed on him personally. In perhaps the most consequential oligarch-related news of this affair, many have begun calling on Putin to end the invasion of Ukraine, an almost unprecedented break in historically symbiotic relations between Putin’s government and the oligarch class. 

However, while the oligarchs flee on their yachts to safe harbors like the Maldives, ordinary Russians wait hours in lines at banks with the hope of withdrawing whatever currency is left while being unable to flee to Europe, Canada, or the United States. With the increasingly devalued currency they are able to access, Russians are being met with higher and higher prices at nearly every turn as the war continues. While it is unquestionable that the people of Ukraine are the ones suffering the most from this invasion, it would be disingenuous to say that the Russian people are not also suffering because of the actions taken by the West that are explicitly aimed at destroying Russia’s economy.

On top of all of these consequences, companies such as Shell, BP, and Exxon have divested themselves from billions of dollars worth of stake in Russian oil and gas companies, the industry which serves as the lifeblood of Russia’s economy. Perhaps more devastating is the United States’ recent decision to ban Russian fossil fuel imports, which previously accounted for 8 percent of U.S. oil imports. These were two more major blows to the Russian oil and gas industry in the past two weeks, with the first being Germany’s indefinite suspension of the Nord Stream 2 pipeline which would have increased Russian gas flows to Europe substantially. As previously mentioned, Europe is dependent upon Russia for their energy needs to a great extent, but at the same time, Russia is also dependent on European cash to keep their economy running. 

Now, Moscow is trapped between a rock and a hard place: to withdraw and face humiliation, or to keep on fighting through brutal economic sanctions and massive international condemnation. Given Russia’s authoritarian nature and revanchist nationalist leader, the former option becomes very unlikely, especially when considering the embarrassment Vladimir Putin has already suffered. According to some reports, Putin expected the invasion of Ukraine to end quickly, as he calculated that Ukrainian defense would crumble when faced with the overwhelming numbers of the Russian military. This miscalculation was perhaps due to an underestimation of the spirit of the Ukrainian people combined with a downplaying of the significance of the high numbers of poorly trained conscripts in the Russian invasion force who are now surrendering en masse. 

Whatever the case may be, Putin thus far seems to be doubling down on this invasion. This stubbornness comes in spite of sanctions, international denunciation, underwhelming performance, and embarrassments such as the refusal of Kazakhstan, one of Russia’s closest allies, to send troops to support the war effort. A military convoy, hampered by logistical issues and Ukraine’s famous rasputitsa mud, creeps towards Kyiv, while Kherson has become the first Ukrainian city to fall to Russia. Furthermore, Moscow has begun recruiting battle-hardened Syrian fighters, experienced in urban combat, to help take more major cities and has enlisted the legendary Wagner Group, a Russian mercenary company famed for their brutality. Some postulate that Putin’s actions here could be due to apparent illness that is poisoning the mind of the Russian leader, while others suspect that this invasion is an entirely rational strategic decision.

No matter the stability of Putin’s mental state, the fate of Russia seems to be short-term ostracization from 141 of the world’s nations and long-term strategic distance and tension between Russia and the West, as Europe rearms itself and public opinion sours against the state. While successfully federalizing or instituting regime change in Ukraine might fulfill some of Putin’s personal fascistic cravings, isolation on the world stage will certainly not help solve many of Russia’s deep-rooted problems.

What is perhaps even more unfortunate for the Russian people is the cornered state that their leader has backed himself into through this poorly planned and executed invasion. There are already rumors swirling regarding a potential coup facing Putin should an embarrassing defeat be suffered. For a man obsessed with his grip on power who seems to be settling in nicely to the position of the archetypal paranoid Russian czar, Putin might seek to employ the strategy of gambling for resurrection should things continue to go poorly. This game theory idea dictates that if leaders are held accountable by some force capable of removing them from power that they might continue fighting a losing war as they have nothing to lose. Given Putin’s reckless nuclear-button-rattling, this paints a grim picture not just for the Russian and Ukrainian peoples, but also for the world as a whole.

The Ultimate Threat

The string holding the nuclear sword of Damocles above us all only frays further when elected representatives such as Adam Kinzinger (R-Ill.) and talkshow giants like Sean Hannity call for actions that would drag the United States into a hot war with Russia. Although the Biden administration has ruled out doing so, establishing an American-enforced no-fly zone over Ukraine, as Rep. Kinzinger suggested, would directly lead to American missiles destroying Russian aircraft. This action would bring two nuclear powers into direct conflict for the first time in history in the same way in which Sean Hannity’s idea that the United States and its NATO allies bomb the Russian convoy heading to Kyiv would.

Thankfully, the majority of Americans understand what catastrophe U.S. military action in Ukraine might cause. They do, however, staunchly support the Ukrainian people in their resistance to this invasion, as do other anti-war protesters from around the world. Although opposition to Putin’s invasion among ordinary citizens undoubtedly stems mostly from genuine humanitarian impulse, there is at least a degree of self-interest present in calls for a cessation of conflict, as gas prices rise in the United States, energy costs continue to climb in Europe, and food security wavers in the developing world in response to this crisis. 

American and European Reassessments

At a geostrategic level, the implications of this invasion are also wildly significant for the rest of the world. 

This is most pressingly true for Europe, a continent which, largely shielded under the NATO umbrella, must now present a strong united front against Russian aggression to maintain the integrity of its alliance networks. To do so, traditionally dovish Germany is leading the charge in increasing historically low European defense spending by pledging a €100 billion funding increase to its armed forces. Although the defense spending of European NATO countries began to increase in recent years, the Russian invasion represents a sea change in this regard. 

Furthermore, Europe is now being forced to rethink its energy strategy, as long-term reliance on Russian energy exports has become untenable. The most obvious move in this regard is to ramp up the construction of more liquefied natural gas (LNG) terminals in Europe since Europe’s existing LNG infrastructure is woefully inadequate in meeting European energy demand. Germany has taken the first step here too, vowing to build an LNG terminal in the northern port city of Brunsbuettel. Unfortunately for Europe, regasification facilities usually take years to build under normal circumstances, and most current LNG producers are tied up in existing contracts. Once more terminals are built and new LNG is produced, however, Europe will likely turn towards the United States, soon to become the world’s largest LNG exporter, to supply its LNG needs as it has increasingly done since 2019.

The United States will also be forced to make changes in response to this Russian invasion. In terms of energy, although the U.S. is not nearly as directly dependent on Russian oil and gas as Europe is, the recent ban on Russian fuel imports will further drive up gas prices. To counter dependence on fuel from authoritarian petrostates for itself and for its allies in Europe, the U.S. must do three things: increase hydraulic fracturing for natural gas in the short-term to supply Europe with LNG, drill for oil to bring down gasoline prices at home, and launch a sweeping nuclear energy expansion program at home. 

Although fracking is indeed destructive for the environment, particularly when done improperly, and should continue to be phased out as quickly as possible, current geopolitical realities demand that a new source of energy be found for the world’s third most populous continent, Europe. Luckily for Europe, the United States is capable of meeting that need as soon as Europe is ready to receive new flows of LNG.

The United States must also secure the production of more petroleum as soon as possible. The recent release of 60 million barrels of oil from the strategic petroleum reserves of International Energy Agency countries, including 30 million contributed by the United States, has unfortunately not been enough to halt the precipitous rise of gas prices. Thus, immediate action must be taken; given that it can take between one month and a year to bring new oil to market, increased production should be initiated now.

However, the environmental devastation from further oil drilling need not last long. To ensure that the U.S. domestic economy is not further subjected to the degrees of oil and gas instability that it is now, a Nuclear New Deal should be enacted in the United States. Nuclear power is the most reliable and one of the cleanest sources of energy available to us today, and technological advances since the dawn of the nuclear age have made nuclear energy tremendously more meltdown-resistant and far cheaper than ever before. Additionally, a nuclear overhaul would create over a million well-paying jobs, making such a plan attractive to environmentalists and economists alike. 

The United States must also reassess its role in the more conventional areas of geopolitics, such as diplomacy and military postures, in response to the Russian invasion. Since 2011, the United States has gradually and somewhat sloppily instituted a “pivot to Asia,” a shift in U.S. foreign policy to focus more closely on the area of the globe accounting for 39 percent of the world’s GDP. After an uncertain four years for U.S. cooperation with Asian partners under former President Trump, diplomatic efforts are ramping up under the Biden administration. On the economic front, they continue down a similar route as was established by the Trump administration, which began a needed reassessment of the United States’ trade relationship with the People’s Republic of China.

Although the pivot to Asia is still necessary, especially in the face of an increasingly belligerent China, the Russian invasion of Ukraine forces the United States to at the very least glance back towards Europe. The degree to which this reassessment takes place depends on the outcome of Putin’s war, but ultimately the United States must assure that its European allies continue on their newfound path of strategic self-sufficiency by remaining committed to NATO and ensuring that European defense spending increases continue, at least to a reasonable degree. With this done, the U.S. can more safely and effectively look towards constructing some form of anti-hegemonic coalition against the one rising superpower capable of undermining the liberal world order: China.

China’s Response

China is also being forced to readjust its strategies because of the Russian invasion. Prior to the invasion of Ukraine, Vladimir Putin and Chinese President Xi Jinping met at the opening of the 2022 Beijing Winter Olympics and issued a joint statement outlining the friendship with “no limits” between the two countries. Russia and China agreed to further cooperation in their mutual dedollarization efforts and signed a 30-year contract to supply natural gas to China via a new pipeline from Russia that will settle sales in euros instead of dollars.

Now, however, upon seeing the rocky start to Russia’s invasion and the massive international backlash to the action, China is walking a fine line. Despite lifting wheat-import restrictions on Russia and allowing Russian banks to switch to their card system following Visa and Mastercard’s decisions to suspend operations in Russia, Beijing must still proceed with caution. On the one hand, China risks alienating the nation with which it just affirmed friendship towards and who, in the event of future cooperation, would undeniably be its junior, more controllable partner and who is presently calling out for assistance from Beijing. On the other hand, support for Putin’s adventurism would directly undermine previous Chinese arguments regarding state sovereignty which directly tie into Chinese reasoning for their claims on Taiwan, another potential geopolitical flashpoint in the next decade.

For now, however, Beijing, like the rest of the world, watches with bated breath as events unfold in Ukraine.

In Closing

The Russian invasion of Ukraine is, arguably, the most monumental military action taken since the end of World War II. No matter the outcome, the implications of this conflict will echo on for decades into the future across not just Ukraine and Russia but the world as a whole. As of now, Ukrainian resistance and escalatory rhetoric alike continue as the world cheers on the bravery of the Ukrainian people and the Russian war machine trudges onward. 

As the death toll rises from this brutal and unprovoked conflict, one can only hope that respect for the sanctity of human life will soon overtake the lust for power within the actors capable of stopping this conflict.