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1 Russian Invasion and War in Ukraine: Estimate on Regional Consequences Megan Patterson Senior Seminar Course number: INTL498 19 February, 2023
2 This paper serves as an abbreviated National Intelligence Estimate (NIE) on the regional consequences of the 2022 Russian invasion and war in Ukraine. In following standard NIE formatting, included within will be estimative language set by Intelligence Community Directive (ICD) standards, key takeaways, and key judgements/assumptions. Key Takeaway Modern warfare presents a hybrid battlefield of cyber-attacks, economic and humanitarian crises, disinformation/misinformation campaigns, and the threat of nuclear war. The globalized nature of the world we live in means the Russian invasion of Ukraine has long lasting and far-reaching implications on global security, international economy, and the architecture of global energy. The subsequent altered calculus of political, economic, and trade relations with Russia will have lasting ramifications throughout Europe and beyond as global supply chains and energy insecurities are challenged. While Russia faces many challenges across these various topics, its ability to project strength both in strategic messaging as well as military capability and economic rebound show a resolve which could greatly influence its standing as a global power over the next 20 to 30 years. For Ukraine and the greater European continent and political West, the war has highlighted the need for rapid restructuring of economic and security priorities and a need to build and maintain key partnerships with emerging nations in order to ensure survival of democracy on the international stage. Finally, the Russo-Ukraine war has provided an opportunity for China to enhance its own strategic foothold on global economy and security as it looks to counter western influence through mutual support with Russia while simultaneously advancing its own interests regardless of Russian priorities. Key Judgements: 1) Based on current trends and strategic messaging, it is assessed with high confidence that international support for Ukraine will persist in efforts to counter a Russian
3 advantage while strengthening allied support against the expanding influence of Russia and China on global markets. 2) There are four ways that the war in Ukraine can end, each with its own consequences. First, and least likely, would be Russia’s decisive victory over Ukraine and the subsequent descent of a new iron curtain. Second, a partial victory for Russia through internationally recognized annexation of lands currently occupied by Russian forces resulting in perpetual instability throughout the region. Third, should Ukraine achieve a decisive victory, it is highly likely that Putin’s regime would fall, increasing the potential for a fall of the Russian Federation as well. Lastly, and the most likely outcome for the end of the war in Ukraine, is a partial Ukrainian victory in which Ukrainian forces, with international assistance, successfully counter Russian assaults and effectively force Russia to the negotiation table. This brings the potential for a more peaceful Eurasia, or the creation of more conflicts as complex negotiations on security arrangements throughout the region would be paramount. 3) It is assessed with moderate confidence that China’s investments and trade agreements with Russia will continue to counter Western sanctions and embolden Russia to persist with military action against Ukraine. Furthermore, continued Chinese support in countering U.S. and European assistance in Ukraine will hinder negotiations and significantly reduce the possibility of the war ending before 2024. The Battle for Power: Energy in Demand Since the Russian invasion and subsequent annexation of Crimea in 2014, it is evident that energy sources and critical infrastructure are key targets which Russian forces use as a form of geopolitical weapon to influence their adversaries or will groups into capitulation. Europe’s efforts to decrease its energy dependence through renewables and supplier diversification had direct implications on the Kremlin’s ability to generate revenue through
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4 gas supply (National Intelligence Council 2019). This impact was further realized following the invasion of Ukraine in 2022 and subsequent sanctions which limited the ability of the Kremlin to offset decreases in revenue through export to customers in Asia. Ukraine relies heavily upon gas in its energy system and energy security will be paramount for ensuring the country can fully recover from its current wartime standing. Substantial domestic gas resources and positioning as an asset for the transition of Europe’s energy away from Russia has allowed Ukraine to withstand blows to its infrastructure. Where nuclear energy was once prominent, Russian attacks knocked out nearly 50% of Ukraine’s generation capacity with reactors in shutdown due to risks from shelling, damage, and Russian occupation. Conversely, renewable energy such as wind, solar and hydro, all expanded in generation capacity as a key priority leading into postwar reconstruction efforts. Ukraine remains one of the largest gas holders in Europe with most gas resources located in the eastern Dnieper-Donetsk region, an area that has seen some of the most intense conflict. In order to ensure long-term goals of reducing Russian gas transiting Ukraine while increasing Ukrainian gas exports throughout Europe, Ukraine will need to secure gas transit routes, reinforce and repurpose its underground gas storage capacities and capabilities, and look past simply reconstruction of damaged energy infrastructure toward potential opportunities to leapfrog in technologies and diversified means of energy production (Cahill and Palti-Guzman 2023). At the start of 2022, Europe was linked to Russian gas through six pipelines with Nord Streams 1 and 2 supplying over 40% of natural gas to Europe. With the onset of the Russian invasion of Ukraine in February 2022, Russia decreased supply of natural gas to Europe in an effort to stifle European resolve in support of Ukraine and thus gain an early advantage. Following a period of decline since 2021 and a rapid drop in supply after the September 2022 sabotage of the Nord Stream 1 pipeline, Russian gas exports to Europe are
5 currently a quarter of what they were previously. This tactic, however, had the opposite effect and instead resulted in a much more unified European approach to filling storage and shifting to conservative measures and renewable power in order to migrate energy dependency away from Russian gas supplies. These shifts and emerging markets in gas infrastructure will dramatically alter global gas trade and energy markets and will likely create new climate challenges as the rapid shift to energy alternatives leaves developing markets vulnerable to poor practices (Palti-Guzman, Majkut and Barlow 2023). As a result of European shifts in energy trade, the EU will continue to rely heavily upon U.S. and Norwegian liquid natural gas (LNG). The U.S. became the second largest exporter of gas to the region and saw the greatest rise in units imported out of all LNG sources (see Figures 1 and 2). This shift in energy trade flows impacts not only the U.S. and the EU, but also those countries who have carried the burden of increased prices and diverted energy supply. In the U.S., taxpayers will be unlikely to continue support of long-term rises in price and running large-scale liquefication plants at maximum capacity for a seemingly endless war. Additionally, a failure in U.S. gas infrastructure would bring forth significant ramifications for global energy security, further driving the importance of cyber security and a diverse energy infrastructure to support demand moving forward (Palti-Guzman, Majkut and Barlow 2023). Meanwhile, limited energy supplies abroad coupled with high inflation will negatively impact economic growth and result in increased protectionism and desire to turn inward as opposed to building multilateral cooperations. Divergent priorities over the war in Ukraine will likely influence investments and increased commercial ties that pull opportunities away from the U.S. and its strategic energy security goals and increase the role of China on the international stage (Stratfor Global Intelligence 2023a).
6 Figure 1. U.S. LNG Exports, 2021 vs. 2022 Trade flows of vessels that left the United States between January 1, 2021 to June 1, 2021 and January 1, 2022 to June 1, 2022 Source: Palti-Guzman, Majkut and Barlow 2023 Figure 2. EU-28 Natural Gas Imports, 2021–2022 All units in billion cubic meters (bcm). EU-28 defined as EU-27 + UK; Russian LNG exports are net (i.e., Russian exports consumed in Europe) Source: Palti-Guzman, Majkut and Barlow 2023 For Russia, it is highly likely that domestic support for President Putin and the war in Ukraine will continue to decline in light of economic contractions and without any major battlefield successes. Falling oil production compounded by wide sanctions have increased the probability of severe economic difficulties should there be any large fall in crude oil prices or decision to enforce an even lower Russian oil cap price (Stratfor Global Intelligence
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7 2022). Despite the potential for increased domestic strife regarding the Kremlin’s energy strategies, it is likely that those already unstable regions throughout the Middle East, Asia, and South Africa will be influenced by domestic needs to maintain or even build relations with Russia as a failsafe against a declining U.S. presence. Global Trade: Evolving Supply Chains The modern-day globalized economy is segmented into various economic and security blocs that are primarily centered around the U.S., China, the EU, and Russia. The main focus of these blocs is on resiliency, self-sufficiency, and defense, with vulnerable developing countries often vying for some way to stave off becoming a failed state by entering into economic and/or security agreements with one or more of the main players. With these widely varying and segregated information flows, supply chains, and international trade, global issues are rarely addressed cohesively, if at all (National Intelligence Council 2019). The Russian invasion of Ukraine has brought to light the porous nature of global supply chains, the shortcomings of sanctions, and the volatility of trade partnerships, effectively paving the way for the emergence of new trade patterns and evolutions within supply chains. Russia has witnessed declines in trade value with nearly every nation for at least the last 3 years. This decline includes countries with developed economies as well as emerging economies; however, three countries in particular – China, Iran, and Turkey – have differed from this trend by increasing their exports to Russia since June of 2022 (see Figure 3) (Maciejewska, Skrzypek, and Ziolkowski 2023). Furthermore, India’s imports from Russia have represented the most significant shift across the world’s largest economies for trade relationships during 2022 (see Figure 4).
8 Figure 3. Trends in Exports to Russia May 2021 – October 2022 Source: Maciejewska, Skrzypek, and Ziolkowski 2023 Figure 4. Trends in Imports from Russia May 2021 – October 2022 Source: Maciejewska, Skrzypek, and Ziolkowski 2023
9 In the Middle East, rising prices of energy and grain have greatly impacted already unstable regions such as Syria. Though primarily aligned with Russia and Iran, the presence of U.S. forces and western interests bring concerns of a major world problem should regional instability and power struggles intensify. The supply of Iranian weapons to Russia for use in Ukraine reflect a growing partnership with a major middle east power and the regional interest of maintaining a close relationship with Russia where needed (Kim, et al. 2023). Furthermore, this relationship highlights a growing shift in global supply chains as nations seek to reduce their dependencies, circumvent sanctions, and ensure security of manufactured equipment (Simchi-Levi and Haren 2022). Sea-Based Power Projection – The Black Sea, The Arctic, and Beyond A critical aspect when considering future implications brought forth by the war in Ukraine is that the world economy moves by sea. 85% of commercial trade, 70% of energy trade, and 80% of agricultural trade relies upon freedom of maneuver and secure transport via naval shipping lines (Kim, et al. 2023). The onset of war in Ukraine and the subsequent turning of the Black Sea into a war zone brought interruptions to global trade with immediate consequences. Additionally, while Putin’s ground forces may be dramatically diminished following the war, the capabilities of the Kremlin’s naval and submarine fleets have yet to be affected and currently even outpace that of China in some forms (Kim, et al. 2023). While the Black Sea and its role in global trade has been a closely watched area of concern, the long- term implications of Russian and Chinese power-grabs in the Arctic region will be felt long after the war in Ukraine ends. As the North Atlantic Treaty Organization (NATO) alliance expands to include Sweden and Finland, Russia undoubtedly feels pressure in the Arctic as the sole country without membership and as a focal point of much of the tension which NATO focuses its military attention toward. The main intergovernmental venue in the region – the Arctic
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10 Council – was halted when Russia invaded Ukraine. The underpinning of security in the Arctic is further highlighted by Russian hybrid tactics to include sabotage of undersea cables, along with an expanding conventional military presence in the Arctic along the strategic Northern Sea Route (see Figure 5). Additionally, 2022 marked the first year since 2013 in which the U.S. released policy documents specific to a government-wide Arctic strategy while also emphasizing the increase in geopolitical tensions and potential for unintended conflict in the U.S. National Security Strategy (NSS) (The White House 2022). Figure 5. Russian Arctic Military Installations Source: Wall and Wegge 2023 Military strength along the Northern Sea Route serves to not only the homeland from sea- and air-based threats, it also plays a very strategic role in protecting economic projects that would provide for ambitious global trade endeavors. War in Ukraine has not altered Russia’s core interests in this region or looking beyond to global sea lane trade. The Kremlin continues to work on expanding oil megaprojects in the Arctic but risks a diminishing Northern Fleet to defend its activities due to heavy reliance on U.S. parts which have been
11 largely impacted by sanctions. However, where Russia stands to prevail is through resilient partnerships with non-sanctioning countries such as India and China (Wall and Wegge 2023). Information and Influence: Messaging Power Mis- and disinformation campaigns are prevalent in today’s threat landscape, further emboldened by the interconnectivity of globalized societies and rapid forms of communication. Controlling aspects of narratives and ideas surrounding various influential and compelling topics can effectively alter the attitudes and priorities of individuals and organizations. Information technology has allowed Russian forces and hacktivists alike to conduct covert influence operations in a form of gray zone warfare (CSIS, n.d.). These efforts seek to legitimize Russian power by promoting narratives of western decline and overreach, often capturing attention of outside populations through culture, entertainment, sports, and technology. Influence of public opinions and policies has lasting ramifications of systemic shocks which bring about a multitude of second-order effects often not realized until much later and often rooted in a lack of trust between populations and leaders (National Intelligence Council 2019). Sources of influence and power adjust with changes in global dynamics, preventing any one actor from remaining a dominate figure across all regions and domains. Opportunities arise for individuals or organizations to compete for influence that can have impacts on a global scale in trade, information, geopolitics, and more. The use of psychological campaigns, especially in conjunction with interstate conflicts, can drastically influence shifts in geopolitical balance and social opinions. The Russian invasion of Ukraine showed the timely role social media can play in alerting the world to current events. However, it also continues to highlight how it can be used to spread propaganda and support through manipulative strategies. The Kremlin has employed proven tactics of psychological
12 manipulation to sow distrust abroad while enhancing appearances of success internally (Abrams 2022). Support of Russian Orthodox minorities outside of Russia provides the Kremlin a means of exploiting identities in order to achieve goals in foreign policy. These efforts to create an international order that is reflective of Russian interests and devoid of Western norms are critical themes in strategic messaging and influence campaigns. The Russian- dominated world view and desire to promote traditional values provides an alternate vision on the role of the state and societal norms of human rights (National Intelligence Council 2019). Control of the narrative regarding the war in Ukraine spans not only military and political endeavors in the immediate region, but has shown the potential for lasting ramifications on world views as marginalized communities seek truth in a misguided online social structure. Brain Drain Compounding Demographic & Migratory Shifts Migrations of people across the globe have always played a large role throughout history and the evolution of geopolitics, security, and trade. The massive emigrations from Africa and the Middle East show how profound of an impact such movements can have on surrounding economies and cultural life, especially as it pertains to Western ideals. It is assessed with high confidence that major demographic shifts across the globe will be a dominate trend over the next 20 years as population growth slows and average household age increases. The rate of older populations facing rapid contractions has a direct impact on economic growth and can be seen affecting developed and emerging economies alike across Europe and Asia (National Intelligence Council 2021). Current trends from the war in Ukraine show increasing numbers of human capital fleeing from Russia. This is a trend which can be traced back to the start of Putin’s presidency, but that has significantly increased following the onset of the invasion of
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13 Ukraine. Russia’s weakened economy and increasingly repressive regime has influenced many to flee the country for Western democracies and the hope of pursuing better opportunities to put their skills to good use in a free society (see Figure 6). This politically driven brain drain could lead to a crippled Russian educated class as a remarkably high number of those who flee the country possess high levels of education and valuable qualifications (Herbst and Erofeev 2019). Figure 6. Top 6 Reasons for Leaving Russia Source: Herbst and Erofeev 2019 The post-Soviet political system as run by President Putin has become an authoritarian kleptocracy which maintains control through a state monopoly on mass information and a fusion of organized crime within the Kremlin’s security apparatus. In an effort to maintain the status quo and his political grip domestically and abroad, Putin’s Kremlin follows the frozen-conflicts strategy as demonstrated by the 2014 annexation of Crimea and hybrid warfare in Donbas. While most internal audiences praised what they
14 considered to be a political victory of countering the West, domestic issues were made worse by sanctions and sharp declines in the price of hydrocarbon (Herbst and Erofeev 2019). Shifting National Identities – Security Architecture in a New Global Order The war in Ukraine is the largest of a series of conflicts and crises that now marks a different form of warfare wherein two nuclear states are involved in more than a proxy war but fall just short of direct war. This represents a serious threat to the last guardrail preventing all out nuclear war and will require greater understanding of the various players involved to overcome these increased risks. Rallying the non-western world into international order driven by strategic goals of the “political West” is often met with a view of “The West against the rest” and a segregation of the “global South”, or those who are not part of the West. Inclusive language and policies which bring in other nations and countries and better define a global self is critical for understanding and incorporating the new middle powers – Israel, Saudi Arabia, South Africa, India, Turkey, Indonesia (Kim, et al. 2023). The growing contest between Russia and the political West will require a different security architecture that takes into account the fact that, geographically, Russia will always have a role in Europe. France, presiding the EU at the start of the invasion and the only nuclear weapon state in the union, initiated sanctions against Russia early on and continues to play an important role in defining future policies and geopolitics. The war has forced concessions in decades-old policies that held onto political tensions with Russia for Germany, pushed Poland to emerge as a leading military power in Europe, and put Madrid and Rome at the center of plans for Europe to diversify its energy supplies (Stratfor Global Intelligence 2023b). These shifts in internal power dynamics are unlikely to result in any immediate threat to the EU; however, it is likely that by 2030 new confrontations will arise that will test the bloc’s unity and resolve through geopolitical changes and adaptations.
15 China, having not explicitly condemned Russia and instead blaming NATO and the West for increasing its military strength in the region, seeks to strengthen its relationship with Russia and deepen military partnerships. Beijing has expanded military exchanges and engagements with Russia during 2022 and has even sought to include South Africa. At the core of this growing partnership is a desire to avoid tensions with a former rival while challenging a western-dominated world order where the U.S. and its allies are able to set global standards to enforce a western-defined democracy. However, these efforts to erode western influence have actually resulted in a stronger resolve among western alliances while further fracturing global order. Additionally, despite reports of Chinese companies selling dual-use items to Russian companies to aid Russia’s military, it is assessed with high confidence to be unlikely that China would go so far as to provide direct military support (Kim, et al. 2023). Ultimately, China has many more tools at its disposal for global influence and power projection which enables it to maintain a degree of separation from Russia while still expanding its military, trade, and industry partnerships. Furthermore, the war in Ukraine has very likely affected China’s calculus with respect to Taiwan as the conflict has shown that military superiority doesn’t mean an easy win. China has already taken measures to evade potential sanctions and erode the “dollar dominance” by diversifying its financial mechanisms and has likely taken note of how rapidly Western alliances reacted to Russia’s invasion (Kim, et al. 2023). While the relationship between Russia and China has been strengthened in the near-term, China maintains its own goals and risks in global security and stability. Therefore, gaining Beijing’s endorsement of a strategic outlook and roadmap for peace is not only a critical aspect of getting the Kremlin to sit at the negotiating table, but also for ensuring global stability in the transition out of the war.
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16 Regardless of the outcome of the Russo-Ukraine war, China almost certainly will seek greater global influence and dominance across Asia while avoiding liabilities in marginalized regions. Having already attained what many experts believe to be peer status with the U.S. in military capabilities, Beijing will likely look to tout the benefits of trade and cooperations with Chinese backing while simultaneously warning of severe consequences should any neighbors express defiance. Despite the likely potential for a shift in calculus regarding Taiwan, it remains highly likely that China will maintain pressure and intensive coercion toward Taiwan in an effort to move toward reunification by 2040 (National Intelligence Council 2019). Outlook The war in Ukraine is unlikely to end before the year 2024. Despite relative decline in Russia’s materiel capabilities, economic standing, and human capital, it is very likely set to remain a disruptive and global power broker due to its weapons of mass destruction, energy and mineral resources afforded by its expansive geography, and shifts in global partnerships and alliances. The Kremlin, along with support from Beijing, will work to weaken the resolve of the political West by amplifying divisions will building upon expanding relationships across Africa and the Middle East. Additionally, Russia will continue to enforce an advanced military and commercial presence in the Arctic as NATO expands and power struggles emerge to gain strategic economic advantage in the region. As the U.S. and EU work to overcome Russian and Chinese influence on the international order, it has become apparent that fundamental shifts in geopolitics, security, and trade will need to take into account inclusion of emerging nations and a broader sense of the globalized West.
17 References Abrams, Zara. 2022. “The role of psychological warfare in the battle for Ukraine.” American Psychological Association, June 1, 2022. https://www.apa.org/monitor/2022/06/news- psychological-warfare Cahill, Ben and Leslie Palti-Guzman. 2023. “The Role of Gas in Ukraine’s Energy Future.” CSIS Briefs, January 2023. https://www.csis.org/analysis/role-gas-ukraines-energy- future CSIS. n.d. “Gray Zone Project.” CSIS Programs. Accessed February 11, 2023. https://www.csis.org/programs/gray-zone-project Herbst, John and Sergei Erofeev. 2019. “The Putin Exodus: The New Russian Brain Drain.” Atlantic Council, Eurasia Center. February 21, 2019. https://www.atlanticcouncil.org/in-depth-research-reports/report/the-putin-exodus- the-new-russian-brain-drain-3/ Kim, Patricia M., Bruce Jones, Tara Varma, Natan Sachs and Michael E. O’Hanlon. 2023. “Panel 2: The war’s consequences for international order, security, and strategy.” Brookings Event, The Russia-Ukraine War: Year two and strategic consequences. February 7, 2023. https://www.brookings.edu/events/the-russia-ukraine-war-year- two-and-strategic-consequences/ National Intelligence Council. 2021. “Global Trends 2040: A More Contested World.” Office of the Director of National Intelligence, Strategic Futures Group, March 2021. https:// www.dni.gov/index.php/gt2040-home Maciejewska, Agnieszka, Katarzyna Skrzypek, and Krzysztof Ziolkowski. 2023. “How the Russia-Ukraine War Is Shaping New Global Trade Patterns.” ALM Treasury & Risk, January 31, 2023. https://www.treasuryandrisk.com/2023/01/31/how-the-russia- ukraine-war-is-shaping-new-global-trade-patterns/?slreturn=20230105161606 Palti-Guzman, Leslie, Joseph Majkut and Ian Barlow. 2023. “U.S. LNG Remappipng Energy Security.” CSIS Features, January 17, 2023. https://features.csis.org/us-lng- remapping-energy-security/ Pifer, Steven. 2022. “The Russia-Ukraine war and its ramifications for Russia.” Brookings, December 8, 2022. https://www.brookings.edu/articles/the-russia-ukraine-war-and- its-ramifications-for-russia/ Pszczel, Robert. 2022. “The consequences of Russia’s invasion of Ukraine for international security – NATO and beyond.” NATO Review. July 7, 2022. https://www.nato.int/ docu/review/articles/2022/07/07/the-consequences-of-russias-invasion-of-ukraine-for- international-security-nato-and-beyond/index.html Simchi-Levi, David and Pierre Haren. 2022. “How the War in Ukraine is Further Disrupting Global Supply Chains.” Harvard Business Review, Operations and Supply Chain Management. March 17, 2022. https://hbr.org/2022/03/how-the-war-in-ukraine-is- further-disrupting-global-supply-chains Stratfor Global Intelligence. 2022. “In Russia, What Would Need to Happen to Seriously Threaten Putin’s Power?” Rane Worldview Powered by Stratfor, December 6, 2022.
18 https://worldview.stratfor.com/article/russia-what-would-need-happen-seriously- threat-putin-s-power Stratfor Global Intelligence. 2023a. “2023 Annual Forecast.” Rane Worldview Powered by Stratfor, January 3, 2023. https://worldview.stratfor.com/article/2023-annual-forecast Stratfor Global Intelligence. 2023b. “The EU’s Shifting Balance of Power.” Rane Worldview Powered by Stratfor, January 5, 2023. https://worldview.stratfor.com/article/eus- shifting-balance-power The White House. 2022. National Security Strategy . Washington DC, October 2022. https://www.whitehouse.gov/wp-content/uploads/2022/11/8-November-Combined- PDF-for-Upload.pdf Wall, Colin and Njord Wegge. 2023. “The Russian Arctic Threat: Consequences of the Ukraine War.” Center for Strategic and International Studies. January 25, 2023. https://www.csis.org/analysis/russian-arctic-threat-consequences-ukraine-war
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