Igor Zaytsev's blog

According to Sky News, UK is considering supplying Challenger-2 main battle tanks (MBT) to Ukraine. The article talks about 10 tanks, which are enough to equip one tank company. The article admits this is mostly a political gesture, intended to encourage other countries to supply heavy Western armor to UA.

According to official UK MoD letter, in 2016 UK had 227 Challenger-2 tanks in operational capacity. That number includes four categories: crew training, tactical training, operational and operational reserve. Additional 159 tanks there decommissioned or otherwise out of service (possibly some of them there used for spares, sold or utilized). For example, in the same 2016, 72 of those non-operational tanks there “awaiting final disposal action”, which means they would be irretrievably utilized.

That probably means UK would have to supply Challenger-2 tanks from its operational stock (either training, combat or reserve), since they would be in better condition, either immediately or short-term combat ready. The second, less probable option is to use the non-operational stock, which would require a lot of work to locate spare parts and restore them. If the first option of supplying the tanks from the operational pool is chosen, it would mean ~5% reduction in UK operational tank fleet.

Since UK is no longer producing Challenger-2 main battle tanks, and it’s in no position to start a new production line, the only remaining source of new tank would be import from abroad. The only practical candidate in the present is the US-made M1 Abrams. But, since the production capacities for M1 are busy with existing contracts for years ahead, only solution remained is supply from US Military stock. Yet, there is no real need for UK to hold a large fleet of MBTs, since they are not expecting to directly participate in land warfare, excluding some training missions or limited deployments far abroad.

In any case, I expect the UK Army command to resist the transfer of their Challenger-2 tanks to the UA in any significant numbers, since Challenger-2 is now and in the foreseeable future remains irreplaceable (unless UK Army is willing to switch to another type of imported MBT).

The only thing this gesture will do, is break the psychological barrier of supplying Western MBT to UA. But, since there are already talks about supplying heavy US and German armor, most likely this gesture is intended as “virtue signaling”, being the first to supply Western-made tanks to be used against Russian military. In operational sense, the impact of 10 British MBTs in Ukraine will be miniscule, due to them being entirely different from Ukrainian Army knows and able to service. The first serious malfunction would likely take them out of commission and require repair works to be done outside of UA.

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Poland is raising a new infantry [mechanized] division. This follows the recent Polish trend of significantly increasing the Army and making giant procurements of military hardware (multiple rocket launch systems, battle tanks, etc.). It is obvious there are preparations to take an active participation in the conflict against Russia. Having somewhat analogues military to the Ukrainian one at the start of the conflict, Polland military is planning to multiply its capabilities. This will come with a great price for Polish socio-economic situation, but they obviously are planning not to waste all that investment but to use it in foreseeable future.

On the other side, Belarus is strengthening its armed forces as well, and also being reinforced by Russian military. Though, currently, an opening of the Polish front (even without the participation of the rest of NATO), will be disastrous for Russia, which is still unwilling to take the war as a serious, existential threat, and not some political game of poddavki.

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Russian Sberbank (the largest, state-owned Russian bank) is rising mortgage to 10.9% (from previous 10.4%). This is due to the “current market conditions”. The government subsidized “family mortgage” for purchasing an apartment is starting at 5.7%.

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New Ground Forces Head of General Staff of the Russian Military is general Lapin, the same one who was taken down from his position as the “Center” group commander after the Kharkov retreat. The previous one, army general Vasiliy Petrovich Tonkoshkurov held this position until now. It is hard for me to formulate my opinion on the matter. Since this position have enormous impact on the combat readiness of the entire ground forces, the previous head, obviously, did a very poor job. And since Lapin can hardly be accused of that happened in Kharkov, which was entrusted to the magically disappeared 1-st tank army, he doesn’t seem as incompetent as his colleagues (especially from the Western Military District). So maybe it is for the best. That is interesting, I haven’t seen any news regarding (or even mentioning) the reasons for the change of commanders. Tonkoshkurov is 62 years old, so the reason for his replacement could be his age, and not his terrible performance. I’m sure additional information will follow.

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Blumberg reports that Urals crude was traded on January 6th at under $40 per barrel in Primorsk seaport. Which is about half the price of Brent crude. This is also about one third below the Western imposed oil price cap. The interesting thing to notice is that Blumberg says the crude was sold to a “tiny pool of buyers”, and at Baltic port. So, my impression is different from the one promoted by the article. Namely, what I get is that Europe can’t (for whatever reasons) buy Russian oil even at half the price and below the oil price cap. And whoever is buying that crude oil, is only buying in small quantities, which wouldn’t make a dent in European oil market.

I would expect Russia (if acting rationally) to reduce oil production in its north-western parts towards what is needed for domestical consumption only. Since this process will take time if done “gently” in order to not disrupt the oil industry and wells, there will be a period of oversupply in those parts of Russia. Northern crude can be transported by sea routs to Asia, the south-western crude can be sold to neutral countries, and the southern and eastern crude will be also flowing to Aisa. The Baltic route can still supply some neutral countries outside of Europe, but the travel time will be significantly longer, compared to other routes, resulting in lower local demand and lower local prices.