As the war in Ukraine has raged on, two things have become clear: Russia will not get the swift victory it had planned for. This much was clear just days into the fighting. At the same time, we know Russia will not withdraw its troops any time soon, even with all of the sanctions it is facing. As it became apparent that Ukraine would not yield without a fight and the international community lined up to support it, many hoped that a quick economic war would cause Russia to buckle.
As this hope has failed to materialize, some analysts in the West have turned defeatist, complaining that the sanctions are not “working.” Clueless journalists repeat the Russian apologist narrative that the ruble is now even stronger than it was before the war, without mentioning that it is impossible to buy foreign currency in Russia at the official exchange rate.
There has been a great shortage of realistic expectations. There is no hope that Russia will withdraw from Ukraine before next spring, but every reason to believe that it could do so once spring arrives.
The Russian economy is crumbling. Unemployment is high, interest rates are above 20 percent making mortgages outright unaffordable for just about everyone, and as I predicted at the beginning of the war, Russia is having to sell its oil and other exports at a massive discount to those countries who have not joined the Western sanctions regime and banned Russian imports. As Russia’s economic position deteriorates, importers’ leverage will increase further, forcing even deeper discounts.
And it will continue to deteriorate. Russian nationalization of foreign businesses that have pulled out of the country may have temporarily kept stores and restaurants such as McDonald’s open, but it is doing so without all the competence of Western management and logistics, and all the corruption of the Russian system, something Russian customers are already noticing. Thanks to a potato shortage, you can no longer get your burger with a side of fries at a Russian McDonald’s. Time will only magnify the difference between Western and Russian management. The Russian economy has never been particularly good at producing user-friendly consumer goods, instead relying on bulk sales of mostly crude petroleum and other unrefined or barely refined products.
The lack of open discontent in Russia can be attributed mainly to two things: the totalitarian nature of the Russian state and the belief that the sanctions are unsustainable. As a country that still suffers phantom pains from its lost Soviet empire, Russians cannot imagine that the rest of the world could simply cut them off and excise them from the world economy like an inflamed appendix. Neither ordinary Russians nor Russian leaders believe this to be possible: In their minds, the West may be throwing a tantrum because Russia is restoring its historic borders, but in the end, they need Russia just as much as Russia needs them. Some knowledgeable Russians may concede that there is an imbalance in the West’s favor, but they still maintain that the West is too dependent on Russia to maintain its unprecedented sanction regime.
This is why winter is crucial. In the narrative that almost all Russians believe in, winter is when the West will come to its senses. Winter is when the West will remember how much it needs Russia, and more specifically its natural gas. Russians are hoping that winter will save them, like it did in World War II. While it is not clear who—Ukraine or Russia—will benefit on the battlefield from the arrival of winter, Russia is counting on winter winning the war for them in the homes of ordinary citizens around Europe.
The idea is that once Europeans are freezing in their own homes, with utilities bills forcing them to choose between heating and eating, support for sanctions will evaporate. Voters will turn on their elected representatives, who, threatened with losing power, will lift sanctions and stop supplying Ukraine with weapons in exchange for Russia turning the gas tap back on. (While Russia is still exporting gas to Europe, supplies have been drastically reduced, with Russia citing “maintenance issues.”). Winter is likely to be hell for Europe, easily the worst in a generation for those living in Western Europe.
To its credit, the European Union, having largely ignored the threat of Russian imperialism prior to the invasion of Ukraine, is enacting a plan that will see imports of Russian oil and gas cease by the year 2030, with a two-thirds reduction of gas imports this year alone.
If the sanctions survive winter, Russia will be left flustered, its citizens wondering when exactly the foreign products are supposed to be returning to their shelves and when they will be able to find work again. This hardship was, after all, supposed to be temporary. If this winter does not break the sanctions, the next winter is even less likely to do so, as Europe will at that point be even less reliant on Russian gas. In short, this winter is the hardest, and Russia knows it.
This winter will also be the last winter when Russia will be able to make significant amounts of money exporting gas to Europe, money that it is using to fund the war in Ukraine. With its military already having to turn to obsolete tanks and other weapons to arm its depleted ranks, this loss of income could very well prove a death blow.
With the loss of European gas money comes the loss of other exporting incomes as well: As it becomes clear, not just to Russia but to the rest of the world as well that the West’s sanctions are here to stay, more countries are likely to fall in line, choosing to sanction Russia to be on the winning side and to avoid the risk of they themselves being sanctioned. Many large Chinese companies have already exited the Russian market out of fear of retaliatory sanctions from Western countries. Meanwhile, businesses that still do trade with Russia will have the upper hand, as Russia will be forced to accept shamefully low bids for its goods and resources just to have any income at all. While this is happening, the lack of spare parts will cause more and more Russian manufacturing to break down. Even transporting goods from one end of the geographically huge country to another will soon prove difficult as trains and trucks malfunction and the parts needed to repair them can no longer be found. This, in turn, will mean that even things that Russia will still be able to produce won’t be available to consumers in all of Russia as supply chains fall apart.
That’s why this winter is absolutely crucial. If Europe is able to hold out and withstand the pressure to abandon Ukraine even as temperatures turn to freezing and the cost of heating and electricity goes up, there is a good chance that both the war in Ukraine and the Putin regime itself could be gone by summer.
Which is also the reason why Russian propaganda channels will be working overtime to convince European consumers that the sanctions are not working. Russian bots, already prevalent on all major platforms, are likely to flood social media in a last-ditch effort of a totalitarian regime to stir the pot in an attempt to prove to Western politicians and journalists that the sanctions are unpopular, whether that is actually the case or not.
This leaves the question of what the U.S. should do to ensure that Europe does not let up the sanctions.
First, the U.S. needs to do everything in its power to supply Europe with as much liquified natural gas (LNG) as possible. U.S. exports of LNG to Europe have been increasing for several years, but expanding capacity to produce and ship LNG is a slow process, one that the U.S. government should work to speed up. Everything from targeted deregulation, to tax breaks and government-subsidized loans should be on the table to accomplish this. This would send a clear signal to Russia: Europe may always need gas, but it will never again need your gas.
Second, the U.S. needs to make it clear that it understands that certain European efforts to halt climate change may have to be temporarily paused and postponed given the circumstances. If firing up previously closed coal plants is what it takes to ensure that Europeans can stay warm during winter without relying on Russian oil and gas, then so be it. While the EU and the US are both signatories to the Paris agreement, these are extraordinary circumstances, and there can be no retaliation nor change of its own climate ambitions if the EU were to temporarily break the rules of the agreement.
Finally, the U.S. must emphasize that any attempt or even talk of lifting sanctions or preventing the export of arms to Ukraine will bring severe consequences. As most sanctions are imposed on an EU level, no individual member state is able to lift sanctions without first lobbying other EU members. Any attempt at such lobbying, even if unsuccessful, should lead to a freezing of diplomatic relations with the United States. Lifting sanctions should not be on the agenda until the last Russian soldier has withdrawn from Ukraine, and any country that puts it on the agenda should face diplomatic wrath.
These past six months have been challenging, yet the darkest times are unfortunately still ahead. Fortunately, there is light at the end of the tunnel, if we make it to next spring with our resolve intact. For now, brace yourselves. Winter is coming.