The Revolution That Changed America

The Fractured World of the Global Energy Map 

Weissword 

 

 

“Safety and certainty in oil lie in variety, and variety alone.”
—Winston Churchill, British House of Commons, 1913

One man, somewhat less well known than the names that accompany us, such as Steve Jobs, Elon Musk, or Sam Altman, is responsible for the enormous transformation of the United States from an energy-importing country into one of the world’s largest exporters. His name is George Mitchell, and he persistently advanced various technologies for extracting gas from rock formations. He agreed to finance experiments for years, even when the wells did not justify the investment. Most importantly, he was not looking for the perfect well, but for an inexpensive process that could be repeated again and again. The revolution associated with his name was not the discovery of a new resource, but the discovery of a new way to produce a resource that was already known.

 

 

At the beginning of the 2000s, the United States worked vigorously to import enormous quantities of gas from Algeria, Nigeria, Equatorial Guinea, Angola, Qatar, Oman, Australia, Malaysia, Russia, Trinidad and Tobago, and Egypt. Vast investments were made in infrastructure intended to connect it to gas suppliers in the Caribbean, Africa, and the Middle East. American gas became more expensive in the early 2000s, conventional production appeared to be stuck, and demand for electricity, heating, and industrial use continued to rise. In practice, the Americans competed against other LNG-importing countries during those years, including countries in Asia and Europe. The country that paid more received the tankers at the expense of other countries.

At the beginning of the 2000s, Washington did not try to keep Russian gas out of the American market. On the contrary. The George W. Bush administration viewed Russia as a potential source for diversifying the world’s energy supply. In 2002, Bush and Putin launched a joint “energy dialogue.” The declared objective was to increase Western investment in the Russian energy industry, develop Siberia, the Russian Far East, and offshore regions, and expand Russian energy exports to global markets. Perhaps you now understand why, years later, the United States opposed Germany and acted against it over Nord Stream. It was not because of Europe’s dependence on Russia, but because more gas flowing from Russia to Europe would come at the expense of the United States and, above all, would provide Europe with the ultimate ability to dictate elements of American foreign, economic, and industrial policy.

The United States and Russia declared that they were interested in American investment in Russian LNG facilities and in increasing Russian LNG exports to the American market. The two governments even sought to advance actual projects by 2008. At that stage, Russia was viewed in Washington in three ways: as an alternative to OPEC countries and the Persian Gulf in the oil market; as a new source of LNG for the Atlantic market; and as a country that could be integrated into the Western trade and investment system. This policy was almost the opposite of the one that developed after 2014. Washington was still concerned about Russia’s political power and its influence over its neighbors, but in the field of energy, it hoped that investment, trade, and integration into the Western market would turn Russia into a more predictable partner.

Qatar developed the North Field and became one of the world’s largest LNG exporters. The relationship was not limited to purchasing cargoes. Qatar Petroleum and ExxonMobil jointly established the Golden Pass terminal in Texas as an import facility. The model was that Qatari gas would be liquefied in the Persian Gulf, cross the ocean, and enter the American pipeline system. Following the shale revolution, that same project was converted into a facility for exporting American gas, while Qatari ownership remained part of the project. The Department of Energy describes Golden Pass as a joint venture in which Qatar held 70 percent and ExxonMobil approximately 30 percent.

During the 2000s, the United States prepared for a future in which a growing share of its gas would arrive by ship from Russia, Africa, and the Middle East. However, the American soil was blessed by the heavens, and an entrepreneur like George Mitchell, through the teams working under him, found an inexpensive method for extracting gas from rock formations. The shale revolution erased that future almost overnight. LNG imports fell rapidly after their 2007 peak, while American gas production increased by almost 80 percent between 2007 and 2021. Before the shale revolution, Russia and Qatar were potential suppliers that the United States wanted to integrate into its market. After the shale revolution, they became competitors of the American industry in the global market.

In 2011, the State Department established the Bureau of Energy Resources. Its purpose was to place energy at the center of American diplomacy: to manage the geopolitics of energy markets, work with producing and consuming countries, protect transit routes, and shape the energy policies of other countries. In 2014, the White House itself emphasized that LNG exports were a long-term solution. Large export facilities were not yet operating, constructing a liquefaction terminal took years, and some of the gas would be sold according to market prices rather than by government order. The reason is that if the United States supplies energy to countries around the world, it will be able to use energy as a political weapon and force countries to bend according to its interests against competing states.

 

 

 In February 2016, Sabine Pass began exporting commercial LNG. From that moment, the United States was no longer merely talking about diversifying the gas supply; it was capable of actually sending cargoes. By the end of the Obama administration, the policy explicitly connected LNG exports with European security. The administration helped Ukraine reduce its dependence on Russia, promoted European infrastructure, and expected that a more liquid LNG market would weaken Moscow’s ability to use gas as an instrument of pressure. Yes…yes…the Obama administration.

The first Trump administration did not invent the geopolitical use of gas. The Obama administration had already laid the foundations and used the possibility of exports against Russia. Trump’s change was in the language, pace, and scale. In June 2017, the White House said that turning the United States into a major energy exporter was a “strategic advantage” that could advance American interests abroad, and that energy policy was also foreign policy. The administration adopted the term “Energy Dominance,” promoted LNG permits, and linked gas deals to trade negotiations with Europe, China, and Asian countries.

The Russian invasion of Ukraine in 2022 was the stage at which the strategy became a large-scale supply system under the Biden administration. The Americans told the Europeans that they could supply gas instead of Russia, whereas years earlier they had only proposed alternatives to Russia, such as connecting pipelines to Central Asia. When the United States becomes the alternative to Russia as Europe’s gas supplier, it effectively dictates the foreign and security policies of European governments. The sanctions against Russia and the measures being led by the European Union against Chinese industry could only come into existence through the energy weapon employed by the United States. For the Europeans, the choice is between Moscow and Washington, and naturally, the United States is the preferred alternative.

 

 

In November 2025, the Trump administration published the United States’ National Strategic Policy. The document included a sentence that translates the declarations into the reality now taking shape: “Expanding the United States’ net energy exports will deepen its relationships with allies and reduce the influence of its rivals.” The document adds that energy will help the United States defend itself and, when necessary, project power. This is much more than “Drill, baby, drill.” Cheap energy at home is the foundation of reindustrialization, providing the United States with a technological and military advantage, and as energy exports grow, the dependence of its allies on the United States becomes greater, thereby reducing the influence of America’s rivals.

Three different presidents—one policy.

What Is the Meaning of the War in Hormuz?

The United States wants to be less dependent on energy passing through Hormuz, but it is not prepared to allow a rival to control the energy that passes through it to the rest of the world. The United States itself is not as dependent on Hormuz as it was in the past. But China, India, Japan, South Korea, and Europe are still affected by it. Therefore, the importance of the strait has changed. It is less of a direct American vulnerability and more of a point of control over the energy system of competitors and allies.

Is Trump in a hurry to reopen Hormuz, or does the crisis serve the United States? An increase in risk, insurance costs, and fears of disruption is enough to increase the relative value of American energy. A shipowner transporting oil or gas will not want to endanger the ship’s crew, the ship itself, or the cargo it carries in an unstable region if oil and gas can be transported more safely to global markets from another region, such as the American continent.

Shipping through Hormuz stopped on the third day of the war because insurance companies could not provide coverage, and the American administration did not say a word about this step. In practice, Washington did not provide British intelligence with information regarding the developing situation in the Persian Gulf, and British intelligence could not provide any information to British insurance companies. The use of this technical element gave the United States the change it wanted to achieve from the countries of Asia…and it came.

 

 

The Hormuz crisis demonstrated that gas exported from the Gulf may be inexpensive at the point of sale, but it must pass through a narrow strait, in a sensitive region, aboard a vessel that requires insurance. American gas travels along longer routes, but it leaves from coasts that are not dependent on Hormuz. China was the country that anticipated the expected crisis in Hormuz and prepared for it for many months. Other countries in Asia were forced to diversify their energy imports away from the Persian Gulf and toward the United States.

The Changing Energy Map

What is new today is that geopolitics determines energy policy far more than “market forces,” and what was once efficient and economical is no longer relevant today. The world has changed and continues to change. The number of conflicts between countries is rising, and the arms race is in full swing. The crises in Hormuz, the Red Sea, and the Black Sea are not separate campaigns, but rather a single system intended to disrupt the energy map in the war between the great powers. For example, transporting oil from Venezuela to India is not an efficient or economical route, but it is much safer than the Persian Gulf.

I will begin with the Middle East. The regime in Iran is divided between politicians who seek to reach an agreement with the United States and, by doing so, moderate the influence of extremist elements within the Revolutionary Guards. Those extremists are, in practice, a cartel that controls weapons, drugs, oil and gas, food imports, medicine, and more, and they are the ones who run Iran. An agreement with the United States neutralizes their power because it transfers the revenues from Iranian oil and gas exports into an American supervisory system that allows food and medicine to be purchased.

The cartel is not prepared to lose billions of dollars in revenue, and therefore, the war is being conducted against elements within the Revolutionary Guards rather than against Iran as a state. The cartel has no interest whatsoever in rebuilding Iran or restoring its economy. As with cartels in other countries, a crisis gives them an opportunity to rule. It is no different in the Red Sea against the background of the Houthi attacks. This does not involve all of the Houthis, but rather those elements connected to the Iranian cartel. In the Israeli context, one can see the pressure being applied to Lebanon, which for years served as the cartel’s drug field.

The Americans will try to strike the cartel surgically, and this presents the Americans with a problem for which, at present, they have no tools to deal with. Elements in China know this and are exporting weapons to the cartel in order to wear down the Americans in the Hormuz region, inflict casualties, and encourage them to withdraw from Hormuz.

According to a Reuters report published several days ago, Iran signed a deal to purchase 300–400 Chinese-made portable air-defense systems, mainly QW-12 and FN-16 models, at an estimated value of $60–70 million. The first shipment is expected to arrive within weeks. These are short-range missiles carried and operated by a small team, intended primarily for low-altitude targets such as helicopters, drones, and low-flying aircraft.

 

 

According to the report, the contract was signed with a Hong Kong company called Zhongqing Baoshang International Investment, which allegedly served as an intermediary between Iran and the Chinese supplier. The reported plan is to transport the systems from Urumqi in western China, through Pakistan, and from there to Iran. The sources could not say with certainty whether the Pakistani leg would be carried out by air or by land.

If those elements in Iran lose their ability to protect the energy infrastructure, China loses an oil supplier, a strategic partner, and leverage against American power in the Gulf. Therefore, Russia and China are providing intelligence to those Iranian elements so that they can strike American targets across the Middle East with precision. By doing so, they hope to wear down decision-makers in Arab countries, who may come to view the American presence as a security burden, and to erode the status of the United States in the region.

Another crisis is taking place in the Black Sea. The Ukrainians are striking Russian energy facilities, but, for some reason…Kazakhstan’s energy facilities are also being hit. What is strange is that Ukraine, which is supported by the Europeans, is striking the pipeline that transports oil from Kazakhstan to Europe, while European decision-makers remain silent. In the first quarter of 2026, Kazakhstan was the European Union’s third-largest oil supplier, after the United States and Norway, providing approximately 9.6 percent of European oil imports. The media focuses far more on the strikes in Saudi Arabia than on those in the Black Sea.

Finally…this week, Cyprus announced that it would export gas to Europe through Egypt. Almost anyone who opens a map can see that this makes no economic sense, since Cyprus is closer to Europe. But…geopolitics.

Turkey opposes projects in the Eastern Mediterranean that, in its view, ignore it or the rights that it attributes to Northern Cyprus. It also wants to become the main energy transit country between the Middle East, the Caucasus, and Europe.

On July 28, the energy companies Eni and TotalEnergies announced the final investment decision for the development of Cyprus’s Cronos field. The plan is to transport the gas from Cyprus to the Zohr facilities in Egypt, liquefy it in Damietta, and export it mainly to Europe beginning in 2028. Eni presented the move as a structural renewal of Egyptian LNG exports and the establishment of a regional gas hub in the Eastern Mediterranean.

One day later, on July 29, a drone struck two gas vessels inside the port of Damietta. It is difficult to ignore the timing. It does not prove that the Cronos announcement was the reason for the attack, but it certainly justifies examining the possibility that the target was selected because of Damietta’s future role in Europe’s energy map.

 

 

 Strikes on energy facilities and infrastructure have become legitimate means, and as a result, the world’s energy map is changing. The impact will be quite extensive on foreign policy and international economies across every continent, and almost every person, everywhere, will feel it.

 

 The Rotten Core : Why Europe’s Giants Are Crumbling

Europe’s Economic Decline is Real. What it Actually looks like is However not what You’ve Been Told it does

Leo and Kaiser Bauch 

 

“You’re losing.”

That was the stark judgment of Jamie Dimon, CEO of JP Morgan, the largest bank in the world by market capitalisation, speaking at an event in Dublin about a year ago. “Europe has gone from 90% of U.S. GDP to 65% over 10 or 15 years. That’s not good. The EU has a huge problem at the moment when it comes to the competitiveness of its economy.”

This echoed the warning by Mario Draghi, one of the most respected members of the technocratic EU establishment, made a year earlier in his report on the competitiveness of the continent. Ringing the alarm bells about Europe’s pervasive falling behind has become something of an evergreen over the past decade or so. Complaining about the lack of impactful European tech companies especially has gotten as old as cheese way past its due date. Even though one might be slightly annoyed by all the kvetching, this assessment of Europe being uncompetitive is still largely correct.

Yet one must always look past the aggregate numbers talking about the European economy as a whole, since the reality is that while the European Union represents a powerful homogenising force in many respects, Europe is still a continent of many different regions and countries with very different levels of economic development and culture.

Beyond the narrative of the ‘European’ economy and its competitiveness, a multitude of simultaneous stories unfolds, which often move in contradicting directions. A most interesting pattern emerges, but is not often mentioned: the European countries affected most by various forms of economic, social and political decline tend to be the largest, most important and most populous ones. They also often happen to be former imperial powers.

The Sick Men of Europe

The United Kingdom and France, historically great rivals, the second and third most populous countries of Western Europe and once its mightiest colonial powers, seem to somewhat mirror each other in their chaotic socio-political development.

The political centre, represented by Labour Prime Minister Starmer and President Macron, seems to be singing its swan song, while populist challengers from both left and right sharpen their knives, confident that their time is coming. Yet few truly believe that this change will bring a return to stability in societies convulsed by lack of economic growth and ethnocultural divisions caused in large part by mass immigration from former colonial territories. Some even speak of the real possibility of more widespread political violence.

If we look at labour productivity — or simply how much value a worker creates per hour of work — which is perhaps the ‘cleanest’ measure of economic sophistication, since it removes both the impact of population and employment growth that often distorts GDP figures and the differences in working hours that can distort GDP per capita, we can see that both countries are facing long-term stagnation.

Using the 2010 level as a baseline of 100%, productivity in France and the UK in 2025 would stand at 106% and 107% respectively. For frame of reference, labour productivity in the US economy grew by 25% over the same period, and in Poland by 50%. Yet before one concludes that Poland is simply undergoing catch-up growth and the US is an exception, it is worth noting that even countries like Denmark or Switzerland have grown their productivity by nearly 20%. The annual labour productivity growth in France between 1999 and 2025 was 0.3%, showing that its stagnation started even before the 2008 crises.

Italy, a nation of almost 60 million people and thus the third most populous country in the EU, has become the epitome of economic stagnation. It is in fact one of the few European countries — along with Greece and Luxembourg — whose labour productivity has not grown at all since 2010, currently sitting slightly below that level. Facing strong demographic headwinds with persistently low fertility and the second oldest population on earth after Japan, spending 16.1% of GDP on pensions — the highest figure in the world — and burdened by decades of very high debt that severely limits the government’s fiscal options, it is very hard to imagine significant growth for Italy anytime soon. Stagnation, at this point, seems like the optimistic scenario.

And of course, there is the industrial heart of the old continent: Germany. In the aftermath of the 2008 crisis, Germany was seen as the uncontested hegemon of Europe — it weathered the crisis better than its peers, returned to growth, recorded massive trade surpluses and even reduced its already considerable public debt through budget surpluses.

Yet when problems came, they formed a perfect storm, with enough power to sink a Bismarck-class battleship. The reality is that Germany’s successful 2010s were the product of a confluence of factors that were never going to remain in place. The Chinese economic boom was fueling enormous demand for German industrial products such as cars, but especially the machinery used to equip Chinese factories.

Cheap gas from Russia guaranteed competitive energy prices, keeping industry viable. The massive baby boom cohorts were in their peak productive years, still working but edging towards retirement, which suppressed wages as workers preferred pre-retirement stability over pay rises. Meanwhile, the euro was undervalued relative to the needs of the German economy, further supporting exports.

Yet a good thing rarely lasts forever. Reliance on cheap Russian gas turned from a blessing into a curse as soon as bombs began to fall on Ukrainian cities. And as if that were not enough, Germany proceeded with its plan to shut down its nuclear power plants — which produce no CO2 — in order to reduce the amount of CO2 it produces. If you needed to read that sentence again because you thought you had missed the logic, do not worry. There simply isn’t any. China, meanwhile, transformed from an export market into a ruthless competitor, slowly but surely squeezing the German industrial sector, which is a whopping 15% below its peak production levels from around 2017. The baby boomers began to retire, and the plan to replace them with Syrian refugees backfired as spectacularly as, say, the famous 1,300-tonne Gustav artillery gun would.

In terms of labour productivity growth since 2010, Germany fared somewhat better than the aforementioned countries, reaching close to 112% of its 2010 level. Yet that growth occurred almost entirely during the 2010s. Since 2020, German productivity has barely moved. The countries mentioned comprise half the population of, for lack of a better term, ‘political Europe’ — meaning the EU and non-member states such as the UK, Switzerland, Norway and so on. If they are in trouble, the continent as a whole will inevitably be.

Moreover, it is instructive to look at the 10 OECD countries with the lowest labour productivity growth since 2000. Five of the six founding members of the European Coal and Steel Community in the 1950s — the foundation of what would later become the EU — appear on that list. Luxembourg, Italy, France, the Netherlands, and Belgium all feature, with only Germany missing.

The View From the Periphery

Yet it is also true that Europe offers many examples of countries that remain dynamic, though these lie mainly in the continent’s periphery and are often among the smaller states. There is the post-communist East, which continues its catch-up growth and is drawing closer to Western European living standards, albeit with still a long way to go.

In the five years since 2020 alone, Poland and Croatia have recorded higher productivity increases than Italy or France have managed since the year 2000. GDP per capita in purchasing power parity in Czechia, Lithuania, Slovenia or Poland is now above that of Japan, Israel, or New Zealand — a testament to the staggering success of post-communist European economies’ efforts to bridge the gap with the West.

That Eastern Europe is growing faster than the European average is well known, yet another interesting story is unfolding in Southern Europe. Every year, The Economist puts together a ranking of the best performing advanced economies on the planet based on inflation, GDP growth, employment, and stock market performance. In 2022 and 2023, Greece took first place; in 2024 it was Spain, and in 2025, Portugal. How many people would have believed that ten years ago?

Moreover, Southern European countries were previously seen as a byword for chaotic public finances and an inability to rein in sovereign debt. Cyprus and Greece have recorded some of the highest public debt reductions in recent history, their debt-to-GDP ratios having fallen by a remarkable 60% since 2020. Portugal is not far behind, with a reduction of almost 40% over the same period. Greece and Cyprus recorded primary budget surpluses of almost 5% of GDP in 2025, with Portugal once again being close behind. It is of course true that these countries, and especially Greece, were very heavily indebted to begin with, and are therefore reducing their debt from an elevated baseline. Much of their economic growth — and thus their ability to generate budget surpluses — stems from the post-COVID tourism boom, a sector that does not meaningfully increase productivity, since it is difficult to implement new technologies when serving tourists their sangrias and tzatziki. Yet it illustrates something important: there are European countries that are capable of confronting their systemic problems, even when doing so requires making painful political decisions. Needless to say, this reality goes against the narrative of a continent which is unable to make tough choices.

 

 

 Spain deserves closer attention. Not only is it one of the largest countries in Europe, but also the fastest growing eurozone economy in recent years by far and, by some metrics, the best performing advanced economy on the planet, outpacing even the United States in both GDP growth and job creation in 2024.

Yet Spain’s vaunted unmitigated success story requires qualification. The perhaps uncomfortable truth is that the Spanish boom has been powered by the aforementioned massive tourism boom, a large increase in public spending, and consistently large immigration figures year after year, which I wrote about in a previous piece for LEO.

Spain has also not managed to reduce its public debt to the same degree as Greece or Portugal. These drivers of growth have one thing in common: they are not based on rising productivity or individual citizens getting wealthier. Yet growth still matters, especially for countries grappling with persistent government debt. There are however examples of countries that managed to combine similar mixes of increased spending and large immigration waves without achieving anything close to the nominal GDP growth seen in Spain, most notably the UK.

The Spanish economy has seen growth not only in tourism, but also in business services, consulting, and insurance. This is partly a consequence of increasing wages in Eastern Europe, which means that to many multinational corporations, Spain has once again become an attractive location for their administrative and back-office centers. While the Spanish case may not be nearly as glamorous as the headlines of The Economist suggest, it is still better to grow quickly with caveats than not to grow at all.

 

 

 So far we have only been talking about countries that are outside of the wealthiest part of Europe. Yet even in the latter we can find cases of countries that, while already among the world’s wealthiest, continue to grow and remain competitive. Switzerland, Sweden, and Denmark have managed to grow their labour productivity by 25-30% between 2000 and today, which is not quite at the American level, but much closer to it than Italy, France, the UK, or the Netherlands.

It is perhaps no coincidence that among all European states spending at least 3% of GDP on research and development — the threshold broadly associated with the most sophisticated and innovative economies — the only large country that qualifies is Germany, while the list is otherwise dominated by smaller states: Sweden, Denmark, Switzerland, Austria, Belgium, and Finland.

Sweden is a country of just over 10 million people, yet it is home to 48 unicorns ( tech companies valued at over one billion dollars),almost the same number as France, which has nearly seven times the population. This makes it the country with the fourth most unicorns per capita in the world, and Stockholm itself produces more unicorns per capita than New York or London. The Nordic countries, with the exception of Finland, along with Switzerland and The Netherlands, carry very low levels of public debt and operate some of the most sustainable and well-functioning public pension systems in the world. These are far better equipped to handle their ageing populations than even the United States, where Social Security runs a growing deficit every year that needs to be covered by federal government borrowing, which in turn contributes to the already large and dangerously growing government debt.

The Rotten Core

The economic malaise of Europe is, in reality, mostly the economic malaise of its largest and most important states: the UK, France, Italy, and, in the past couple of years, Germany.

Europe is being dragged down by its hegemons; it is they who tend to underperform relative to their economic weight. Had the UK, France, or Germany been able to produce as many unicorns per capita as Sweden, there would be far less talk of European tech’s impotence.

Had France or Italy been capable of the kind of debt reduction seen in Greece or Portugal, both countries would find themselves in a considerably more comfortable fiscal — and thus political — position. The same applies to the construction of more efficient pension systems, which is most glaring in France, which spends the second highest share of GDP on pensions in the world despite having relatively healthy demographics compared to Italy, Germany, or Japan. Had the UK been able to transform its post-COVID “Boriswave” of over 2.5 million migrants into the kind of growth Spain has delivered over the same period, the political atmosphere in the country would be at least somewhat less charged. Had the German industrial sector performed as Poland’s or Lithuania’s has over the past decade, there would be no talk of a sick man of Europe.

To examine the reasons for this state of affairs is a task for another time. Perhaps the EU’s fixation on making the continent increasingly centralised, no doubt inspired by the examples of China and the United States, is misplaced.

Europe is a continent that has always been defined by its great internal diversity, which encouraged fruitful competition within a shared civilisational framework.

The lesson is clear: no matter what the naysayers claim, Europe is not an open-air museum only. Currently, it is a continent where dynamic development and stagnation exist side by side. It simply needs its giants to turn the tide.

 

 

 

 

 Public Humiliation Can Be Fatal for Aging Dictators

Ines Burrell 

 

 

When Ukraine’s president, Volodymyr Zelenskyy, issued a decree on 8 May authorising Russia to hold the military parade on Red Square on 9 May from 10am Kyiv time, many took it as a brilliant publicity stunt and masterful trolling. In reality, Zelenskyy was dead serious. He did authorise the parade. From this year onwards until the end of the war, come May, the Kremlin will need to seek Kyiv’s permission to hold the parade in front of the mausoleum holding Lenin’s corpse, because the expectation will be that Kyiv will otherwise gatecrash it. Putin knows it. Putin’s elites know it. This bell cannot be unrung.

Pathetic Spectacle by the Mausoleum

In hindsight, it might have been more prudent for Putin to chance the Ukrainian long-range drones and Flamingo missiles. It is highly likely that Kyiv would not have struck Moscow anyhow — the countless rings of air defence around Moscow left other targets wide open, and Ukraine might have considered those juicier. Putin could have framed any attacks as proof of righteous war. It would have been a weak response, but he might have looked more like a man and less like Gollum during his brief speech at the parade. Instead, he decided to believe Ukraine would crash his party, and paid for it by looking pitiful.

A popular joke in Russia suggested that Russians should persuade Zelenskyy to authorise the return of mobile internet, blocked on and off for the past few months. Another joke spoke of popular surprise at seeing a president who allows things instead of banning them.

In a system where authority is derived entirely from the appearance of strength, any sign of weakness is treated as a cause to question that authority. This is especially true in Russia. Russians accept ruthless leaders, they do not accept weak ones.

If this was not enough, earlier Moscow had tried to threaten Kyiv with the usual end of the world to get its way on the parade front. The Kremlin declared a unilateral ceasefire from midnight on 8 May and, as a way to enforce it, told embassies in Kyiv to evacuate and warned of a massive missile strike on the city centre. The fear of the attack was supposed to ensure Kyiv’s compliance. This time nobody was scared. Kyiv ignored the threat completely, continuing to strike defence industry and oil infrastructure deep inside Russia. Russia issued threats it could not back up with actions and had to retreat. Ukraine did not even issue threats, but Russia had to seek protection from Donald Trump, and the only way Trump could deliver Ukrainian compliance was by meeting Kyiv’s price — a prisoner exchange.

The humiliation this brought was unrivalled and very public. Putin now has to act — except that his options are very limited, each worse than the last.

Kneejerk Threats

The initial reaction was taken straight from the standard Kremlin rulebook. At a press conference following bilateral meetings in the Kremlin on 9 May, Putin tried to inflate Russian significance and present Russia as a major player in the South Caucasus by suggesting Armenia put its EU aspirations to a public vote via referendum — as if Russia had any say in Armenia’s future. He also issued a thinly veiled threat by reminding his audience that the current situation in Ukraine was a consequence of Ukraine’s EU bid.

This, of course, was the direct result of the Western leader summit (sans US) in Yerevan showing the Kremlin’s diminishing reach in the region. In truth, the longer the war in Ukraine lasts, the further Armenia moves from Russia. Additionally, Armenian integration in the EU is in Azerbaijan’s interests — the last thing Baku wants is for Russia to renew its destabilisation attempts in the region. Short of removing the Prime Minister of Armenia, Nikol Pashinyan, by force, there is not much Russia can do to change Armenia’s course while Russia is otherwise occupied. Russia is slowly learning that its threats can no longer change outcomes.

In the same speech, Putin stated that he was amenable to meeting with Volodymyr Zelenskyy even outside Moscow, which is where he had previously insisted the meeting should happen. This was supposed to show his flexibility — however, he immediately walked that back by insisting that any such meeting was to be held only to sign the final agreement. Considering that his presidential aide Yuri Ushakov had reaffirmed on 10 May that Moscow would only start negotiating in earnest once Ukraine had walked out of Donbas, Putin clearly meant the meeting was intended to accept Zelenskyy’s capitulation. Russia’s position has not changed one bit — they still want control over as much of Ukraine as they can get, even if they cannot take it by force.

And finally, Putin tried to walk back on the prisoner exchange — the price Russia was supposed to pay for the humiliation on Red Square. President Zelenskyy did not even deign to grant Putin any agency in this matter — he announced that the US was in charge of the prisoner swap. Putin could try to weasel out of it, but he would be punishing the US as the guarantor of the agreement, not Ukraine as the beneficiary.

All the traditional Kremlin tactics have stopped working. And yet a response is required. Putin must prove to his elites that he has not lost control, grip, and influence over the country and the situation.

Three Doors, No Exit

At this point, Putin has three choices available to him.

He can push forward with military action and try to take the remainder of Donbas to show he has not been throwing around empty threats. In current circumstances this would be almost impossible to achieve — with the Russian offensive coming to a virtual standstill, Russia might soon be walking backwards instead of forwards. Ukraine’s mid-range drones — known among Ukrainian engineers as “middle-strikes” — have extended the kill zone, a term popularised by former commander-in-chief Zaluzhny to describe territory controlled by enemy drones where all movement stops, to up to 250km behind Russian lines, effectively collapsing logistics and supply chains.

Ukraine’s plan to kill more troops than Russia can recruit is slowly showing results. With current recruitment levels Russia cannot sustain traditional offensives. More manpower is needed, but the number of men willing to die for Putin’s goals is dwindling. A new mobilisation is needed, and yet Putin does not dare call one. The grumbling in Russia has increased. Russians stayed largely uninvolved when Ukraine was invaded in their name, remained aloof when some of their compatriots were scooped off the streets and sent to the frontline meat-grinder, or when their opposition leader was murdered in prison. However, taking away their mobile internet connection turned out to be the rallying cause. And then, of course, there are the regions hosting oil processing plants which suddenly discovered that when you attack your neighbour, that neighbour can hit back. In other words, there is a palpable air of displeasure in Russia. It is not a sign of impending revolution — Russian people have abdicated any agency long ago. However, it is enough for Putin to fear the consequences of wider mobilisation, including individual non-compliance from the conscripts who might not want to die. And that leads to loss of control.

Putin can also stop yanking everybody’s chain and give diplomacy a real chance. This, however, leaves him vulnerable to a different kind of reality — the one where millions of men who are used to killing, raping, and pillaging, plus getting paid handsomely for it, are released into wider society alongside former criminals recruited from prisons, and expected to come to terms with the fact that all that blood and violence has effectively bought them barely 1% of Ukraine’s territory per year.

Between the promises of stability Putin gave his subjects and the chaos a demobilisation would unleash, the wild 90s, when criminal gangs created by chaos and violent elements returning from colonial wars in Afghanistan and Chechnya controlled Russian streets, will seem like a fond childhood memory.

Even the last argument — nuclear weapons — is a card that can never be played. Once used, you can no longer control the reaction of your adversaries, and dropping a nuclear bomb on Ukraine would not give Putin control over it. Putin is a coward (literally, according to the Russian opposition) and would never choose an option that can cost him everything and still not create a favourable outcome.

And this leaves Putin with door No 3. He can do nothing. This, however, will not mean that things will stay the same. Quite the opposite — they will only get worse.

The state of the Russian economy is such that according to almost all economists, including Russian ones in exile, even a miracle cannot save it. It is going down, and one day it will hit rock bottom. Time is the only variable. And it is capable of inflicting untold pain in the process even before it expires completely.

The other element is the stagnating (indeed, reversing) frontline. In April 2026, for the first time since Ukraine’s Kursk incursion, Russia suffered a net loss of controlled territory. A year ago, it was gaining an average of 171 square miles a month. The loss of internet connection and overall quality of life were supposed to be offset by the glory of wiping out yet another village in Ukraine nobody in Russia had ever heard of before. Living much worse and not getting the glory people were promised can create the kind of cognitive dissonance that snowballs.

And then, of course, there is the ever-growing impact of Ukrainian attacks on Russian industrial targets. Most of the oil industry and defence sector has been built within city limits. When oil starts to rain from the sky or burn through streets to the accompaniment of air raid sirens, and the population increasingly has to search for shelters that do not exist, doing nothing no longer looks like a winning strategy.

The Cornered Rat

Putin has no good moves left. Every single action he takes brings him closer to an outcome he is trying to avoid. And so does inaction. In chess terms this is called zugzwang — a position where the obligation to move is itself the problem, because every available move makes things worse.

As a very gifted tactician and abysmal strategist, Putin can nonetheless employ moves that would temporarily correct the course of action. He did so in the autumn of 2022 when Russian defeat seemed unavoidable. The mobilisation and deployment of Iranian drones stalled the Ukrainian counter-offensive and stretched the war by several years. None of it changed the overall outcome — Russia will not be able to control Ukraine. What it did was drag other countries into the agony of the eventual collapse of Putin’s power.

In his fight for relevance, Putin can still inflict untold suffering not only on Ukraine but on other neighbouring countries. After all, he is not constrained by the welfare of his subjects or even by sustaining minimum life-preserving conditions. For Putin, the goal is his own physical survival and that of his immediate family. The loss of power threatens that survival, so holding on to power is all that matters. Yet all the options available to him lead to loss of power, making him the proverbial cornered rat. This cornered rat has no plan but still has plenty of moves it can throw at us without worrying about consequences.