In the fifth year of war, with the battlefield front stuck due to exhaustion and the deadly swarms of drones dominating the entire contact line, both Ukraine and Russia have embarked on a race to see who can bring down the rival’s economy from a long distance, which is what really causes a country to lose a conflict. In this war of attrition, where both nations feel the exhaustion of military and civilians, bombings of factories, power plants, or logistics companies have become the main current military target.
In this war of two capitals, Kiev and Moscow, both have sought to continue imposing high doses of destruction this past night. The Z army launched ballistic missiles against the capital and southern Ukraine (Kremenchuk and Krivi Rig, the hometown of President Zelenski). Among them are the Russian Iskanders and also the KN23, missiles sent by North Korea, with great destructive power but less precision. Over the past years, the Iskanders and the KN23 have been the main culprits of civilian massacres by firing on urban areas throughout Ukraine.
The news this year is that, in this mirror strategy, Ukraine can strike as severely as Russia does, although with a totally different strategy. While the Kremlin massively uses ballistic missiles because it knows Ukraine has great difficulty shooting them down (due to the absence of Patriot anti-aircraft systems on the market), Kiev uses cheap Lyuti drone swarms (similar to the Russian Shahed) to destroy refineries and distribution centers. Last night it hit three large logistics spaces of the company Wildberries, a sort of Russian Amazon responsible for 45% of all online commerce in the Russian Federation: Kolédino, Podólsk, and northern Domodédovo, which projected its smoke column over all Moscow.
This effect, desired by Ukraine, aims not only to bring down the Russian logistics giant (and the banks that finance the small businesses that depend on it), but also seeks for the Russian population to feel the war in their own neighborhoods, after years of suffering where the Ukrainian people have borne the consequences of the Kremlin’s aggression without much of the Russian population being aware. The statistics of attacks on Wildberries show 21 logistics sites affected by attacks, fires, or evacuations from July 18 to August 16, including the largest ones. These attacks could have caused damages of about 10 billion dollars and more than 400,000 Russian sellers face losses, in some cases catastrophic. Russia had been destroying Ukrainian logistics centers of companies like Nova Posta for years and now suffers the same strategy.
Another undesirable consequence for the Russian people is the gasoline supply problem. The bombing of refineries across the country, sometimes even 2,500 kilometers from the front, has taken out of service about 40% of refining capacity, causing kilometer-long queues throughout the country, but also in Moscow and Saint Petersburg. Every week, Ukrainian drones destroy a new refinery or revisit one that has already been repaired from previous bombings to put it out of service again.
Shielding Moscow
Ukraine manufactures more and more drones (launching about 300 or 400 each night) and challenges Russian air defenses. Although the Kremlin has tried to shield Moscow, there are more and more occasions when Ukrainian drones manage to breach the Russian fortress. Also, concentrating almost all defense in the capital leaves huge areas of territory (Russia is the largest country in the world) unprotected, which Kiev takes advantage of to launch its economic war.
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A barrage of drones hit three localities in the southwestern Russian region of Rostov, where five people died, said local governor Yury Slyusar. The attack, with more than 150 drones, damaged several homes and a train station and caused a forest fire. Another Russian citizen died in the Moscow region due to the fall of drone debris on his house.
Boris Aronstein, an independent oil and gas analyst, believes that “Ukrainian drone attacks have caused the most serious crisis in recent years, because the size, coordination, and repeated waves of drones prevent Russia from repairing refineries before the next attack occurs.”
Regarding the attacks on Wildberries, the think tank Chatham House states that “regardless of their military significance, these attacks are bringing the war closer to the Russian population. Options to mitigate these costs seem limited. A tax relief for a company as large as Wildberries would mean additional unwanted pressure on the federal budget. Moving logistics centers to ostensibly safer areas in the Urals or Siberia would be very costly. The burden of protecting commercial infrastructure from Ukrainian attacks increasingly falls on the companies themselves.”
Regarding the Russian economy and the damage from these attacks, Elina Ribakova, from the Peterson Institute for International Economics, believes that “the Russian economy has stagnated. It will have zero growth this year; at best, we have seen an economic contraction in the first quarter and also a contraction in industrial production. The contraction in industrial production means that the defense sector has also slowed down significantly.
