Winning & Losing the Economic War Over Ukraine

Not only has Russia withstood the economic assault, but the sanctions have boomeranged — hitting the very countries that imposed them, write Medea Benjamin and Nicolas J. S. Davies. 

Gazprom headquarters in the Lakhta Center skyscraper in Saint Petersburg, Russia, February 2021. (CC BY-SA 4.0, Wikimedia Commons)

By Medea Benjamin and Nicolas J. S. Davies
Common Dreams

With the Ukraine war now reaching its one-year mark on Feb. 24, the Russians have not achieved a military victory but neither has the West achieved its goals on the economic front. When Russia invaded Ukraine, the United States and its European allies vowed to impose crippling sanctions that would bring Russia to its knees and force it to withdraw.

Western sanctions would erect a new Iron Curtain, hundreds of miles to the east of the old one, separating an isolated, defeated, bankrupt Russia from a reunited, triumphant and prosperous West. Not only has Russia withstood the economic assault, but the sanctions have boomeranged — hitting the very countries that imposed them.

Western sanctions on Russia reduced the global supply of oil and natural gas, but also pushed up prices. So, Russia profited from the higher prices, even as its export volume decreased. The International Monetary Fund (IMF) reports that Russia’s economy only contracted by 2.2 percent in 2022, compared with the 8.5 percent contraction it had forecast, and it predicts that the Russian economy will actually grow by 0.3 percent in 2023.

On the other hand, Ukraine’s economy has shrunk by 35 percent or more, despite $46 billion in economic aid from generous U.S. taxpayers, on top of $67 billion in military aid.

European economies are also taking a hit. After growing by 3.5 percent in 2022, the Euro area economy is expected to stagnate and grow only 0.7 percent in 2023, while the British economy is projected to actually contract by 0.6 percent. Germany was more dependent on imported Russian energy than other large European countries so, after growing a meager 1.9 percent in 2022, it is predicted to have negligible 0.1 percent growth in 2023. German industry is set to pay about 40 percent more for energy in 2023 than it did in 2021.

The United States is less directly impacted than Europe, but its growth shrank from 5.9 percent in 2021 to 2 percent in 2022, and is projected to keep shrinking, to 1.4 percent in 2023 and 1 percent in 2024. Meanwhile India, which has remained neutral while buying oil from Russia at a discounted price, is projected to maintain its 2022 growth rate of over 6 percent per year all through 2023 and 2024. China has also benefited from buying discounted Russian oil and from an overall trade increase with Russia of 30 percent in 2022. China’s economy is expected to grow at 5 percent this year.

European Commission President Ursula von der Leyen on March 24, 2022, during a session that MPs used to condemn Russia’s attack on Ukraine, urge further sanctions on Moscow and “protect the European economy.” (European Parliament, Flickr, CC-BY-4.0)

Other oil and gas producers reaped windfall profits from the effects of the sanctions. Saudi Arabia’s GDP grew by 8.7 percent, the fastest of all large economies, while Western oil companies laughed all the way to the bank to deposit $200 billion in profits: ExxonMobil made $56 billion, an all-time record for an oil company, while Shell made $40 billion and Chevron and Total gained $36 billion each. BP made “only” $28 billion, as it closed down its operations in Russia, but it still doubled its 2021 profits.

As for natural gas, U.S. LNG (liquefied natural gas) suppliers like Cheniere and companies like Total that distribute the gas in Europe are replacing Europe’s supply of Russian natural gas with fracked gas from the United States, at about four times the prices U.S. customers pay, and with the dreadful climate impacts of fracking. A mild winter in Europe and a whopping $850 billion in European government subsidies to households and companies brought retail energy prices back down to 2021 levels, but only after they spiked five times higher over the summer of 2022.

While the war restored Europe’s subservience to U.S. hegemony in the short term, these real-world impacts of the war could have quite different results in the long term. French President Emmanuel Macron remarked,

“In today’s geopolitical context, among countries that support Ukraine, there are two categories being created in the gas market: those who are paying dearly and those who are selling at very high prices… The United States is a producer of cheap gas that they are selling at a high price… I don’t think that’s friendly.”

An even more unfriendly act was the sabotage of the Nord Stream undersea gas pipelines that brought Russian gas to Germany. Seymour Hersh reported that the pipelines were blown up by the United States, with the help of Norway — the two countries that have displaced Russia as Europe’s two largest natural gas suppliers. Coupled with the high price of U.S. fracked gas, this has fueled anger among the European public. In the long term, European leaders may well conclude that the region’s future lies in political and economic independence from countries that launch military attacks on it, and that would include the United States as well as Russia.

[Related: German Lawmaker Calls for Nord Stream Probe]

The other big winners of the war in Ukraine will of course be the weapons makers, dominated globally by the U.S. “big five”: Lockheed Martin, Boeing, Northrop Grumman, Raytheon and General Dynamics. Most of the weapons so far sent to Ukraine have come from existing stockpiles in the United States and NATO countries. Authorization to build even bigger new stockpiles flew through Congress in December, but the resulting contracts have not yet shown up in the arms firms’ sales figures or profit statements.

President Joe Biden delivering “stand with Ukraine” remarks on May 3, 2022, at the Lockheed Martin facility in Troy, Alabama. (White House, Adam Schultz)

The Reed-Inhofe substitute amendment to the FY2023 National Defense Authorization Act authorized “wartime” multi-year, no-bid contracts to “replenish” stocks of weapons sent to Ukraine, but the quantities of weapons to be procured outstrip the amounts shipped to Ukraine by up to 500-to-1. Former senior OMB official Marc Cancian commented, “This isn’t replacing what we’ve given [Ukraine]. It’s building stockpiles for a major ground war [with Russia] in the future.”

Since weapons have only just started rolling off production lines to build these stockpiles, the scale of war profits anticipated by the arms industry is best reflected, for now, in the 2022 increases in their stock prices: Lockheed Martin, up 37 percent; Northrop Grumman, up 41 percent; Raytheon, up 17 percent; and General Dynamics, up 19 percent.

While a few countries and companies have profited from the war, countries far from the scene of the conflict have been reeling from the economic fallout. Russia and Ukraine have been critical suppliers of wheat, corn, cooking oil and fertilizers to much of the world. The war and sanctions have caused shortages in all these commodities, as well as fuel to transport them, pushing global food prices to all-time highs.

So the other big losers in this war are people in the Global South who depend on imports of food and fertilizers from Russia and Ukraine simply to feed their families. Egypt and Turkey are the largest importers of Russian and Ukrainian wheat, while a dozen other highly vulnerable countries depend almost entirely on Russia and Ukraine for their wheat supply, from Bangladesh, Pakistan and Laos to Benin, Rwanda and Somalia. Fifteen African countries imported more than half their supply of wheat from Russia and Ukraine in 2020.

International Maritime Organization’s Secretary-General Kitack Lim, back to camera, visiting port of Odessa as part of the implementation of the Black Sea Grain Initiative, Sept. 2, 2022. (IMO, Flickr, CC BY 2.0)

The Black Sea Grain Initiative brokered by the U.N. and Turkey has eased the food crisis for some countries, but the agreement remains precarious. It must be renewed by the U.N. Security Council before it expires on March 18, but Western sanctions are still blocking Russian fertilizer exports, which are supposed to be exempt from sanctions under the grain initiative. U.N. humanitarian chief Martin Griffiths told Agence France-Presse on Feb. 15 that freeing up Russian fertilizer exports is “of the highest priority.”

After a year of slaughter and destruction in Ukraine, we can declare that the economic winners of this war are: Saudi Arabia, ExxonMobil and its fellow oil giants, Lockheed Martin, and Northrop Grumman.

The losers are, first and foremost, the sacrificed people of Ukraine, on both sides of the front lines, all the soldiers who have lost their lives and families who have lost their loved ones. But also in the losing column are working and poor people everywhere, especially in the countries in the Global South that are most dependent on imported food and energy. Last but not least is the Earth, its atmosphere and its climate — all sacrificed to the God of War.

That is why, as the war enters its second year, there is a mounting global outcry for the parties to the conflict to find solutions. The words of Brazil’s President Lula da Silva reflect that growing sentiment. When pressured by President Joe Biden to send weapons to Ukraine, he said, “I don’t want to join this war, I want to end it.”

Medea Benjamin is co-founder of Global Exchange and CODEPINK: Women for Peace. She is the co-author, with Nicolas J.S. Davies, of War in Ukraine: Making Sense of a Senseless Conflict, available from OR Books in November 2022. Other books include, Inside Iran: The Real History and Politics of the Islamic Republic of Iran (2018); Kingdom of the Unjust: Behind the U.S.-Saudi Connection (2016); Drone Warfare: Killing by Remote Control (2013); Don’t Be Afraid Gringo: A Honduran Woman Speaks from the Heart (1989), and with Jodie Evans, Stop the Next War Now (2005).

Nicolas J. S. Davies is an independent journalist and a researcher with CODEPINK. He is the co-author, with Medea Benjamin, of War in Ukraine: Making Sense of a Senseless Conflict, available from OR Books and the author of Blood On Our Hands: the American Invasion and Destruction of Iraq.

This article is from  Common Dreams.

Views expressed in this article and may or may not reflect those of Consortium News.

15 comments for “Winning & Losing the Economic War Over Ukraine

  1. February 24, 2023 at 18:23

    Medea and co. lay out a more accurate picture than the one our MSM provides of who is gaining by the US war on Russia, and it certainly is not Ukraine or Europe or working people all over the planet, or the entire swath of mankind along with other living things. The primary winners are the death dealing arms manufacturers and oil companies that cause the extensive climate change that is now costing vast groups of innocent people all over the earth to struggle for existence. But it is necessary to understand, and I need to point out, that it is the US, led by senile liar Joseph Biden who is the immediate cause of all this, and it could be stopped tomorrow if he wanted – but he doesn’t want to!
    It takes an unthinkable amount of arrogant stupidity to not want to stop the destruction and killing along with the massive lies our government puts out. The world would bless you President Biden, if you ceased this insanity, but you don’t want to be blessed; you want to be feared and bowed to. Well, you’ve got that. Can we stop now? Or must we go on until we are all dead?

  2. Vera Gottlieb
    February 24, 2023 at 11:39

    From the very beginning I said that sanctions would have the effect of boomerangs. But obviously shooting ones self in both feet…the pain doesn’t register until it is really insufferable. Going deaf, dumb and blind….what a sorry sight.

  3. James McFadden
    February 23, 2023 at 22:20

    For a different perspective on the Ukraine war see the excellent interview with French historian Emmanuel Todd on youtube.
    Quoting Emmanuel Todd:
    “The strategy of the United States was clearly to destroy the Europe of Maastricht, a Europe of Maastricht that was no longer Franco-German but had become a Europe dominated by Germany. The strategy was successful, but succeeded almost too easily. I’m a little surprised by how quickly we went from NATO is dead to a Europe dominated by NATO. … how did they let themselves be screwed so easily?”

    To summarize.
    WW3 has begun and Germany is once again defeated – prevented from integrating economically with Russia.
    Germany was the primary US target, not Russia, since a German dominated EU represented a threat to US hegemony.
    As Ray McGovern stated in his Feb 12 CN article, “Olaf Scholz as kind of the epitome of the abused spouse. Stands there and is abused not only by his master, Joe Biden, but also by this hack that he has as foreign minister. Her name is [Annalena] Baerbock.”
    This US proxy war is to prevent autonomy/sovereignty of US’s European colonies which help fund the twin deficits (trade and budget) as outlined by Michael Hudson.
    The Asian Pivot is about isolating autonomous countries (China and Russia) so that the US can continue to exploit the rest of the world.
    Of course the neocon’s arrogance and racist hatred of Russians plays a secondary role – mostly blinding the Biden administration to the consequences of their actions.
    And unfortunately the American public, as they did with WMDs in Iraq, are totally fooled by the corporate media’s narratives about Europe’s most corrupt country – Ukraine.

  4. CaseyG
    February 23, 2023 at 16:22

    I agree with Lula De Silva and do not find that those running Ukraine are not the least bit interested in equality of any kind, anywhere.
    And too, I do wonder about the number of nazis—- yes in Ukraine—and two—besides pretending to play the piano with his penis—-does Zylensky and that particular skill create a man who can truly lead a nation? I think not.

    I do have to say that the current Biden admin seems inordinately invested in warring against others. I do not see Biden, Blinken and Nuland adding anything positive to America. Sadly, I look at the planet and sadly wonder if in 50 years, Earth will most resemble Mars.

    But I still have some belief that someday the words, “We the P{people f he United States, in order to form a more perfect union….” I still believe that America is possible—–but—–the time for sanity is running low and I truly worry for our one and only planet.

  5. February 23, 2023 at 15:52

    I am tapped out trying to see through the Ukraine fog. I look to a bigger picture of what bullet we have to bite to change a world that still supports the unthinkable abomination that war is. We need a different sense of what humanity is and today there’s an event that should be very very good about that. It features physicist Brian Swimme who tells the Universe Story. If we saw ourselves in that understanding we would behave differently. It’s 4 pm pacific today and it’s free. Register now: hxxps://

  6. Susan Siens
    February 23, 2023 at 15:17

    I have just started reading Whitney Webb’s One Nation Under Blackmail, and she has barely touched on the connections between the weapons industry and organized crime, including ownership of large blocks of stock. Everything in the U.S. is tainted with criminality and what bothers me the most is the admiration far too many people have for criminals.

  7. February 23, 2023 at 14:50

    The Democratic Party: war profiteers love them and should. Too many purported liberals love them and shouldn’t. The same applies to European “allies” (sheep for fleecing, sort of like US taxpayers). Hunter was obviously prescient! He fleeced first.

  8. made_by_larry
    February 23, 2023 at 14:26

    Russia has won the economic war.
    It will win the military war and,
    In the process of de-militarising Ukraine is will have also de-militarised N.A.T.O which should have been disbanded some time ago. In any event, N,A,T.O simply isn’t fit for purpose, it’s simply a convenient tool to stop the U.S. feeling lonely.

    • Mikael Andersson
      February 23, 2023 at 18:39

      Hi Larry. It seems to me that the EU is dead. In the military-industrial model there is no place for democracy. The EU institutions are replaced by NATO, which has assumed ultimate power. In this way the USA controls Europe, and the MIC controls the USA. The chain of command is clear to me. I notice that the USA has occupied western Europe since 1945. I can see no way that EU countries will mutiny. Democracy in the EU is dead, as it is in Ukraine.

  9. Rudy Haugeneder
    February 23, 2023 at 12:52

    Globally, too many people too little time. Even America has too many people: 335 million who will, in the event of a super recession or global economic depression, suffer dramatically, whether from inflation or a possible great deflation, as jobs are crushed, incomes are slashed, and savings depleted, particularly if they revert to credit cards to pay the bills and buy food, both of which are already happening but haven’t yet been been “officially” recorded in the government statistics which incorrectly suggest thing are not only okay, but improving. The recession we have slowly entered and which is apt speed significantly in the coming months, will results in massive upheaval the likes of which haven’t been experienced in almost a century and which resulted in a horrible world war, something else that could again easily occur but this time between nations armed with nuclear, chemical and bacteriologic weapons, as well as cyber tools that can quickly erase all the data so-called civilized nations (virtually everybody) depend upon such as smart phones. Sound horrible, doesn’t it. Unfortunately, these scribblings are the upside of what awaits us all. It is a good time to be like me, quaintly elderly and without debt.

  10. Jeff Harrison
    February 23, 2023 at 12:13

    Wanna end this war? Stop funneling arms into the Ukraine. As long a they are shooting, the Russians are going to shoot back. And kindly remember that it was the Ukrainians that started shooting first – at the ethnic Russians amongst them.

  11. Robert Sinuhe
    February 23, 2023 at 10:48

    First of all Benjamin and Davies need to get their facts right. The war in Ukraine started in 2014 with the Ukrainian attack on the breakaway provinces in the east which continues to this day. Scott Ritter, Douglas McGregor, etal have made this abundantly clear. Not to mention this is to ignore one of the cardinal reasons for this war and place the blame solely on Russia. This fact has been tossed upon the general public like an overturned garbage can. The value of this piece places the real blame on capitalism and only tangentially on geopolitical machinations.

  12. Packard
    February 23, 2023 at 09:00

    It would seem that the American people are mostly indifferent with regard to what goes on between Russia and Eastern Europe, to say nothing for what is now playing out in far away Ukraine.

    Beyond flying flying our virtue signaling foreign flags and posting our pro Ukrainian yard signs, or maybe wearing a Ukrainian lapel pin, the genuine support for the conflict outside of Washington DC and Wall Street appears to be very (very) thin. This is because the vast majority of Americans do not believe that they have any of their own skin in the game.

    No one in America has yet been asked to die for Ukraine. Not even in the US military. The scores of billions of dollars given to President Zelensky and his pals is an abstract concept. None of which came out of the pockets or hides of ordinary Americans…or at least, none that they were ever made aware of.

    So, up to now, most Americans have seen Ukraine as sort of a fun Hollywood movie show to watch and enjoy. If, however, a major killing event should occur that involves a few hundred dead American servicemen, the bi-partisan Washington, DC power elites now stumbling toward a nuclear WW III with Russia may quickly discover to their shock the unwillingness of their own constituents to personally participate in a real war involving no vital American strategic interests.

    Fide Nemini!

    • shmutzoid
      February 23, 2023 at 13:36

      I wonder if we’ve passed the point of ‘public outrage’ having any impact on decisions of US imperial managers. Millions took to the streets ’round the world prior to the US illegal war on Iraq. ….. made no difference.
      ———– Plus, the fiction about this war being fought for Ukraine’s ‘freedom and democracy’ against the latest Hitler (Putin) has been pounded into the public mind to such a degree by MSM that it’s thoroughly internalized by too many. I fear the public is now conditioned to be led by the nose to embrace a long war (with US/NATO troops, eventually) and would even feel righteous about the US using a nuke or two. Public disorientation arising from 24/7 propaganda might be too high to make any anti-war revolt possible.

      Indeed, this war really started in 2014, with the US orchestrated coup in Ukraine, followed by the US flooding that country with weapons. Ukie nao-Nazis slaughtered some 15,000 Russian-speaking people of Donbas between 2014 and 2022. There was a noted increase in these killing Jan/Feb of 2022. ………Russia’s reluctant intervention into Ukraine’s civil war was essential under UN article 51 – ‘Responsibility to Protect’. Matters woulda’ been settled in weeks if not for .US involvement. ………Russia didn’t even acknowledge the Donbas vote for autonomy for eight years. ———–> It wont be long before espousing this kind of analysis will get you fired from teaching or censored online, etc. Social/info control is part and parcel of fascism.

    • Susan Siens
      February 23, 2023 at 15:16

      I have decided I like seeing which houses boast Ukrainian flags because now I know where the Nazis live!

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