Yves here. Our concentrated focus on the Iran conflict has meant we haven’t given the ongoing situation in Ukraine the attention it deserves. Unlike the dramatic narratives surrounding U.S. politics and the Iran crisis, the conflict in Ukraine, marked by slower attrition, fails to capture the same level of public interest. Unfortunately, the Western media often overlooks the escalating danger that Ukraine faces, particularly as Russia ramps up its military actions.
Recent reports indicate that Russia is intensifying its air assaults, particularly targeting areas like Kyiv. A notable attack recently destroyed a vital bridge over the Dnieper in Zaporozhzhia. More critically, Russia’s blockade of Odessa poses a significant threat, as it has targeted port facilities and the routes essential for Ukraine’s trade. In fact, many may be unaware that Russia has inflicted more damage on ships in this conflict than Iran in its attempts to control the Strait of Hormuz, with losses exceeding 80 vessels just a week ago, and likely higher now.
Odessa is crucial not just for Ukraine’s economy but for maintaining its independence. While Ukraine has other ports on the Black Sea, they are significantly smaller and lack essential infrastructure, like grain silos, that Odessa offers. Moreover, the low water levels this year make transporting goods via barge to these ports increasingly difficult, a trend expected to persist until at least 2027 due to the Super El Niño phenomenon.
It’s likely that Conor will highlight this new post from Simplicius in the upcoming Links section, which references an article from The Economist, ‘Russian Attacks are Doing Severe Harm to Ukraine’s Economy’. Here are some key excerpts from Simplicius’s piece titled ‘Ukraine’s Economy Braces for Disaster as Zelensky Faces New Political Challenge’:
Odessa’s ports, the heartbeat of Ukraine’s economy, were among the first to feel pressure at the outbreak of the war. Initially, a Turkish-brokered grain deal allowed the deep-sea ports to reopen, creating a protected corridor for Ukraine in 2023. However, as Russia intensified its attacks on port infrastructure, shippers continued to operate despite the risks, moving 210 million tonnes of cargo over the next three years. This situation dramatically shifted in mid-July when Russia started targeting the ships themselves. On July 19, cruise missiles struck and sank a Turkish-owned cargo vessel as it departed from Chornomorsk, resulting in ten fatalities. Since then, every ship entering or leaving Odessa has come under fire, rendering the ports commercially inactive.
The timing of this surge in violence comes as Ukraine still needs to export 50 million tonnes of harvested goods. Alternatives to shipping are not viable; “One ship of 100,000 tonnes is equivalent to 5,000 trucks, 5,000 drivers, and 5,000 border procedures,” states Dmytro Barinov, president of the Ukrport association. The overall situation is now more challenging than in 2022, a year when other ports on the Danube offered some respite. Currently, low water levels and ongoing Russian attacks severely restrict these routes as well.
It should be noted that Ukraine initially failed to uphold the terms of the grain deal, which was set for 90 days but could have been renewed. While Russia was willing to consider renewal, the deal’s core stipulation—lifting sanctions on Russian agricultural and fertilizer exports—was never addressed.
Now, let’s turn our attention to the insights of Michael Hudson. Regrettably, I do not find his perspective on foreign repudiation of the U.S. realistic. Numerous foreign investors and powerful elites have extensive dollar-based assets, not just in securities but also in manufacturing facilities and real estate across the U.S. They are unlikely to sacrifice their wealth to alleviate global poverty and hunger. The dependence on international institutions established after World War II is more pronounced than many anti-imperialists realize. As evidenced by the BRICS Kazan declarations, those nations continue to support entities like the IMF as pivotal to sovereign bailouts and underscore the importance of the World Bank. If BRICS is not yet prepared to build an alternative global financial architecture, they certainly won’t engage in a financial conflict against the U.S.
By Michael Hudson, a research professor of Economics at the University of Missouri, Kansas City, and a research associate at the Levy Economics Institute of Bard College. His latest book is The Destiny of Civilization
Russia has adopted a defensive strategy similar to Iran’s, shielding itself from U.S. and NATO aggression. As Iran has made it clear that blocking its oil exports would compel it to impede all exports through the Persian Gulf, Russia has taken similar steps. The Strait of Hormuz facilitates around 20% of the world’s oil trade, alongside significant volumes of fertilizer and helium. Concurrently, Yemen’s blockade and the destruction of Saudi oil production account for another 5% of this trade.
Like Iran, Russia recognizes that it cannot single-handedly defeat the United States or stop its allies from imposing sanctions and seizing tankers headed east. Thus, it relies on global backing to counter a looming economic and financial crisis triggered by U.S. and Israeli actions.
NATO nations, alongside South Korea and Japan, have rebuffed U.S. calls to join a new Oil War. Nevertheless, they have not advocated proactively for the U.S. to withdraw its economic attacks on Iran or to impose reciprocal sanctions on the U.S. economy.
These same countries now face another potential crisis, with an estimated 27% of global grain trade disrupted due to NATO’s support of Ukraine through arms to target Russian oil facilities and shipping vessels. Russia has retaliated by bombing ports in Odessa and other coastal points, severely hindering Ukrainian agricultural exports such as grain and sunflower seeds.
This anticipated grain shortage and soaring food prices will hit the same nations suffering from skyrocketing oil prices in the wake of U.S. depletions of petroleum reserves and stockpiles within the next month. Adding to this pressing issue, the summer’s heatwave has led to reduced crop yields across Europe and North America, compounded by rising fertilizer prices and increased interest rates affecting agricultural credit.
The coordinated U.S.-backed campaign against Russian oil and food transport threatens to deepen the economic recession and balance-of-payments crises for numerous countries. After Russia’s military campaign began in 2022, international appeals arose to prevent Ukraine from attacking Russian vessels to support Ukrainian agricultural exports. U.S. propaganda aimed to garner sympathy from countries in the Global South by asserting that Russia’s actions would worsen food shortages in Africa—yet little of it reached the continent, as most exports went to Europe.
The synchronized actions of Russia and Iran increase the stakes for nations opposed to U.S. ambitions for supremacy in conflicts against both Russia and Iran, as preparations intensify for a potential showdown with China. The reality is that the United States is ill-equipped to emerge victorious from either conflict; however, its disruptions to oil and food supplies might lead to its role as a catalyst for a new Great Depression. The repercussions will reverberate across Asia, India, Africa, and into Europe.
Thus, the responsibility now lies with these nations. Will they take a stand to control rising costs for electricity, transportation fuels, and food? Failure to act will likely force many industries to shutter, while governments will struggle to manage budget deficits and maintain economic stability amid surging living costs.
The most optimistic outcome may be that widespread anger catalyzes a united front, isolating the U.S. economy through sanctions, compelling it to cease its relentless war against the world as it strives to retain its diminished control after deindustrialization and become a prominent debtor nation.
President Trump has claimed that the U.S. economy will remain unaffected by the oil crisis stemming from his administration’s actions, while Treasury Secretary Bessent assures that the Federal Reserve can print enough money to stabilize U.S. financial markets and sustain stock and bond valuations. However, the American economy is just as susceptible to financial and trade disruptions as any other nation.
A possible initial response could be a moratorium on all foreign U.S. dollar debt and other payments to the United States. The weaponization of America’s financial system and its strategies to control global oil, maritime logistics, and technology manufacturing has been profoundly influential. These areas represent the key opportunities for other nations to break free from U.S. dominance, disrupting its capability to continue its aggressive policies aimed at subjugating the global economy.
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[1] See for instance Alexander Gaburev, “Global food security may be collateral in Ukraine War,” Financial Times, August 19, 2026.
