Note: This Situation Report acts as an update to KSG’s 17 September, 2024 assessment of the Russo-Ukrainian Conflict.
Key Takeaways:
Ukraine maintains control over a significant portion of Russia’s Kursk Oblast; Russia’s focus remains on its offensive in eastern Ukraine. While both countries continue to target critical infrastructure, Russia has resumed targeting Ukrainian ports and civilian cargo ships.
While reactions to Zelensky’s victory plan have been muted, his recent diplomatic efforts have secured significant military and financial aid from the West. However, the US still refuses to permit the usage of long-range missiles to strike deep into Russian territory.
Russia is strengthening military cooperation with North Korea and China while deepening economic cooperation with Iran and Azerbaijan as relations with traditional ally Armenia deteriorate.
KSG assesses that Ukraine will likely maintain control over territory in Kursk until Spring 2025. Russia will likely continue its offensive in eastern Ukraine – despite deteriorating weather conditions – but is unlikely to make significant gains in the coming month.
Military Developments
Ten weeks into Ukraine’s offensive into Russia, Russian Armed Forces have partially reclaimed areas of Kursk Oblast; meanwhile, Ukraine continues to control the town of Sudzha and surrounding villages.
In eastern Ukraine, the Russian military is steadily advancing (at a high material and personnel cost) in Donetsk and Luhansk Oblast.
In Donetsk, Russian forces are advancing towards the city of Pokrovsk, a key logistical hub for the Ukrainian military in the Donbas.
In Luhansk, Russia is focused on advancing towards Kupyansk.
In addition to bombarding critical infrastructure, Russia has resumed targeting ports and civilian cargo ships in the Black Sea with missiles and drones. Meanwhile, Ukraine increasingly exploits concealment issues to strike Russian ammunition depots and military storage facilities. Ukraine has also targeted fuel storage and transportation infrastructure, intending to limit Russian export revenues and logistical support for the military frontlines.
On September 25th, Vladimir Putin announced changes to Russia’s nuclear doctrine. It opens the possibility for a pre-emptive nuclear response to a large-scale aerial attack on Russian territory; this could include a nuclear strike on a non-nuclear nation, which is deemed to be supported by a nuclear power.
Western Support for Ukraine
Volodymyr Zelensky’s recent diplomatic engagements, including speaking at the UN General Assembly (UNGA) and meeting with numerous Western officials, have resulted in continual announcements of aid focussed on reinforcing air defences and providing additional ammunition. However, the presentation of his victory plan to Ukrainian allies failed to secure permission to use Western-made long-range missiles to strike deep into Russian territory or a definite pledge of support (for Ukraine) from Donald Trump.
On September 20th, the European Commission proposed additional loans of 35 billion euros to Ukraine. This financing is facilitated by the windfall profits from immobilised Russian assets managed by Euroclear; it is yet to be discussed in the European Parliament.
On September 25th, the German parliament agreed to increase funding for military aid to Ukraine by 400 million euros.
Germany, Belgium, Denmark and Norway have collectively committed to deliver further military assistance worth 1.4 billion euros until the end of 2024.
The US pledged 375 million dollars worth of military equipment and ammunition on September 25th. President Biden allocated additional Department of Defence funding towards supporting Ukraine, which resulted in the October 16th announcement of 425 million dollars in additional military aid.
While in the US for the UNGA, Zelensky met with both Harris and Trump to build bipartisan support for Ukraine ahead of the US Presidential election.
Russian Diplomacy
Russia is trying to garner support for its war effort in the Global South whilst intensifying economic and military cooperation with China, Iran, and North Korea. Russian officials have stated that Russia is not ready to participate in a second peace summit based on Ukraine’s framework for peace.
On October 14th, Russian Defence Minister Belousov travelled to meet his Chinese counterpart and discuss defence cooperation. This visit coincided with a Russo-Chinese naval exercise in the Pacific.
China, along with Brazil, still actively promotes its own peace plan for the Russia-Ukraine war, announced by Foreign Minister Wang Yi on September 26th.
Prime Minister Mishustin’s September 30th visit to Tehran revolved around increasing economic cooperation between Russia and Iran and preparing for the ongoing BRICS summit in Kazan.
On September 18th, Armenia, a historical Russian ally, announced it is freezing its membership of the Collective Security Treaty Organisation (CSTO), a Russian-led military alliance.
Domestic Stability in Russia
Russia continues to avoid another round of mobilisation despite the official target to significantly increase the army's size by December. On October 14th, the draft of the Russia-North Korea Comprehensive Strategic Partnership Agreement was introduced to the Duma. The agreement would allow North Korean soldiers to fight in Kursk and protect the Russian border under the umbrella of a mutual defence clause. KSG is closely monitoring the supposed sighting of North Korean servicemen on a Russian military base in Primorsky Krai.
The Russian draft budget for 2025-2027 was introduced into the Duma on September 30th. For 2025, it sees military spending rise to 6.2% of GDP while planning for a deficit that does not exceed 1%. Despite increasing non-hydrocarbon revenue due to tax increases and continuous economic growth, the Russian war economy remains reliant on large-scale state investment in the military-industrial sector. A severe labour shortage limiting free production capacity, especially in non-military sectors, necessitates increasing imports and contributes to persistent inflation.
Despite the ongoing fighting in Kursk, the gas flow through the Ukrainian transit to Central and Eastern Europe has continued. The transit volume has decreased for four consecutive weeks but is still yet to fall under the weekly minimum recorded in 2024.
Domestic Stability in Ukraine
Ukraine’s budget and economy remain heavily dependent on Western financial support. Recent aid pledges by Western allies maintain a short-term trend of increasing financial support. A further source of funding is a tax increase on personal income used to finance the war effort passed by the parliament on October 10th.
On October 16th, President Zelensky presented his victory plan to the parliament. It includes familiar demands such as Ukrainian NATO membership and further military aid but also calls for investment into the Ukrainian economy and denies any potential territorial concessions.
Looking forward:
Military Developments
KSG assesses that Ukraine will likely maintain a military presence in Kursk throughout the winter of 2024/25. Russia’s focus on the offensive in eastern Ukraine and deteriorating weather conditions will likely prevent Ukrainian forces from being pushed back within the next month, thereby enabling Ukrainian troops to fortify their positions ahead of spring 2025.
Russia will likely sustain unsuccessful offensive efforts in the direction of Pokrovsk throughout the winter as it has pushed on through adverse winter weather conditions in previous years. However, Ukraine’s presence in Kursk, impassable weather conditions, and the limited strategic value of recent captures like Vuhledar will likely mean Russia will fail to capture Pokrovsk within the next month, likely meaning a stalemate in the Donbas until spring.
KSG continues to assess that US permission for Ukraine to use long-range missiles is likely to be granted before the end of 2024 but will not occur in the next month due to the change in Russia’s nuclear doctrine. While numerous Russian red lines have been crossed in the past, they have usually significantly delayed Western pledges of support.
Potential for Negotiations
KSG assesses that negotiations between Ukraine and Russia are highly unlikely until Spring 2025 at earliest. Both sides are expected to continue advocating their own peace frameworks while shifting blame for the lack of meaningful progress.
The previous KSG assessment holds notwithstanding the outcome of the US presidential election. If Harris wins, the Ukrainian government would likely be able to rally its citizens to support another military campaign in the spring. If Trump wins, Russia is likely to see its military strategy of wearing Ukrainian defences down achieve success. This is reinforced by the recent Zelensky-Trump meeting, where Trump reiterated that his priority is ending the war as soon as possible.
Indo-Pacific
Direct North Korean involvement in the war will almost certainly lead to an increase in South Korean support for Ukraine so long as North Korean troops remain on Russian (or Ukrainian) territory. This will likely contribute to a deterioration of the security environment in the Indo-Pacific, with North Korea potentially increasing the frequency of weapons tests in response.
Defence Sector
Defence companies will likely be presented with additional investment opportunities in 2025 as Ukraine plans to ramp up domestic military production and government-sanctioned initiatives such as the Drone Coalition.
Political Stability in Russia
KSG assesses that the Russian economy will likely remain stable over the next year despite the government facing a military (and increasingly, civilian) manpower shortage. The draft budget for 2025 will likely increase economic inequality, especially between those profiting from heightened military spending and those who only feel its effects (persistent inflation and low social spending), such as low-paid workers and pensioners.
Caucasus
KSG considers Armenia’s criticism of the CSTO a signal for the reorientation of Russian priorities in the Caucasus. However, it is highly unlikely to have any military impact on the war as the CSTO is largely operationally inactive and uninvolved in the Ukraine war.