With the illegal invasion of Ukraine, Vladimir Putin only served the needs of China and the United States.
The Russian ruble is losing value in leaps and bounds against the US dollar, despite all the talks about a supposed “de-dollarization” currently ongoing. As of Monday morning, the ruble passed the 100-for-1 threshold against the dollar.
The Russian currency is closely linked to the Kremlin’s illegal invasion of Ukraine. The war started by Russia on February 24th, 2022 immediately plunged the ruble’s value to an all-time low.
In March 2022 one dollar was worth 134 rubles, but the currency quickly gained back speed in the months following the invasion. In June, one dollar was worth 54 rubles, roughly as much as pre-war levels.
One reason for the ruble’s quick comeback in the months following the invasion was the accelerated purchases of Russian oil and gas from Europe. Sensing an upcoming stop in the oil and gas trade, European countries rushed to fill up their storages ahead of winter.
By December, when European storages had been filled, Western countries enacted their harshest restrictions, imposing a price cap on Russian oil. In response, the Kremlin stopped exports of these commodities to Europe altogether.
After the definitive seizure of Russo-European trade, the ruble steadily lost value.
Putin lost the war
Russian President Vladimir Putin started the war in Ukraine in the hopes of gaining ground against NATO expansion in Eastern Europe. Its purposes were to install a puppet regime in Kyiv (similar to that of Belarus) and extend the Russian sphere of influence.
18 months later, not only has Russia completely failed in its objectives, but it also undermined its global strategic position in favor of the USA and China.
The Russian army proved to be a paper tiger, currently defending against another Ukrainian counter-offensive. Though such a Ukrainian attack is not going as well as planned, Russia lacks the military capabilities for a full-scale offensive to end the war in its favor.
The worst-case scenario appears as a “Korean situation” between the Donbas and the Kyiv government. A complete Russian victory appears extremely unlikely.
But even if somehow Russia achieved total victory in Ukraine, Putin has nevertheless lost. NATO has not stopped its expansion, and in fact found renewed unity and welcomed two more members: Sweden and Finland. The latter has a direct border with Russia and is a stone-throw away from Saint Petersburg, Russia’s second-largest city.
Furthermore, without European buyers, Russia is forced to sell its oil and gas to China and India. These Asian powers (especially China) can therefore buy oil at a bargain, knowing Russia depends on these sales.
The war essentially made Russia dependent on China, an objective strategic loss. Hence why the ruble continues to lose value and why the yuan became Russia’s most traded currency.
