After more than four years of war, Russia’s strategic advantage is beginning to erode, and the Kremlin could be faced with a difficult choice: to continue an increasingly costly conflict or to accept a ceasefire. This is the conclusion of an analysis published by Bloomberg, asserting that time no longer automatically plays in Moscow’s favor.
According to the publication, Ukraine has managed to significantly increase the costs of the war for Russia, both on the front and in the occupied territories, and even on the territory of the Russian Federation. Under these circumstances, a complete peace agreement remains unlikely in the short term, but a ceasefire seems more realistic than a few months ago.
The Russian offensive has lost its momentum
Bloomberg notes that approximately 20% of Ukraine’s territory is still under Russian occupation, and attacks on Ukrainian cities continue. However, the prospect of a total Russian victory has receded.
The last offensive launched by the Russian army has largely stalled, while personnel losses continue to be very high. In parallel, the Russian economy is beginning to feel the burden of the conflict more and more strongly.
According to the analysis, Russia’s budget deficit for the first quarter of the year has already exceeded the target set for the entire year, while revenues from oil and gas exports have fallen by approximately 45% compared to the same period last year. At the same time, the liquid assets of Russia’s sovereign fund have decreased from 6.5% of GDP at the beginning of the invasion to only 1.8% in April.
Russia risks an “explosive” banking crisis amid the prolongation of the war.
Russia risks an “explosive” banking crisis due to the prolongation of the war, as credit institutions bear a large part of the country’s war economy burden, shows a report from the intelligence services of a European state, according to Reuters.
A document from the intelligence services of a European country, consulted by Reuters agency, highlights the vulnerability of Russian credit institutions, in the context where the European Union is preparing a series of new sanctions.
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