How much will it cost Russia to fight this Russia-Ukraine war? Many people must have talked about this issue, but most of don’t know it clearly, because Russia has used so many troops and equipment in this war plus the sanctions it has received, and the funds spent are simply unpredictable. So, what is Russia going to do for this? How much did the war cost? How can Russia make up for these losses? In this issue, we will tell you about the sky-high price war in Russia.
First of all, we must understand one thing. It is said that wars cost money. How much does a medium-sized war (Russia-Ukraine war) cost? Although Russia has temporarily refused to announce its military spending, we can predict the approx amount by looking at history. During the Iraq War in 2003, the United States offensive strike was last about 2 months, and the war expenditure reached more than 28 billion US dollars. On average, it spent more than 400 million US dollars a day. Now even if Russia’s attack on Ukraine is not as good as that of the United States, it will not be too far behind, but this leads to the next question, where did all the money go?
A Russian Iskander missile destroyed a Ukrainian 9K37 Buk air defense system near Kyiv. #UkraineWar #RussiaUkraineWar pic.twitter.com/bzK0odfYOW
— Defence View (@IndiandefenceNS) March 27, 2022
There are two main expenses in the war. The first is the cost of arms and personnel. In this battle, Russia directly used more than 100,000 troops to carry out a large-scale ground attack, but according to the statement released by the Ukrainian side, Russia actually dispatched nearly 20 Thousands of elite troops via sea, land, and air, since it is an all-round attack, a large number of Russian-made weapons of all kinds are naturally indispensable. Only the known Russian army is equipped with 1,300 tanks, 3,400 armored vehicles of various types, and ground satellites. Thirty-four headquarters, more than 1,600 artillery pieces of various types, as well as 2,000 aircraft, six submarines, and 91 ships.
Although such a huge lineup can give the enemy the most violent blow, the cost is also huge. The cost of a single missile can easily cost millions or even tens of millions of dollars. Therefore, the Russian army has decided to catch the enemy by surprise in time. Till the date more than 165 missiles were launched, and still, they able strikes on some Ukrainian military targets. According to USA up to 60% of Russian missiles miss their targets.
With the continuous delay of the war, the Russian military will inevitably spend more and more, although the Russian side is reluctant to disclose the truth. According to the data released by Russia itself, Russia spends $2.6 million in less than half a year on more than 5,000 troops. Therefore, Western experts calculated this way and believed that the conservative situation of the Russian military is that it costs 1.5 to 2 billion US dollars a day, and a month’s military expenditure is 30 billion to 60 billion US dollars plus the expense for welfare subsidies and pensions for casualty soldiers.
These are the indicative estimates of Russia’s combat losses as of March 28, according to the Armed Forces of Ukraine. pic.twitter.com/qYjC4E0nas
— The Kyiv Independent (@KyivIndependent) March 28, 2022
While according to Ukrainian media Russia combat losses as of March 28 “17,000 troops, 95 MLRS, 586 tanks, 302 artillery, 1,694 armored vehicles, 4 SRBM, 54 air defence system, 66 UAV, 123 aircraft, 1200 transport trucks, 7 Navy ship and 21 special types of equipment.
According to European media Consultancy the direct losses from the war alone – including liquidated military equipment and casualties among personnel – have in the first 5 days cost Russia about $7 billion. Of this, the loss of human lives alone is forecast to account for $2.7 billion in lost GDP over the coming years.
Beyond this, the scale of the mobilisation – including its logistics, personnel, ammunition, fuel, rocket launches, and so on – will cost more money each day. As a result, according to the researchers, the daily cost of war for Russia is “likely to exceed $20 billion” as the invasion scales.
So by this calculation to this date Russian armed forces may lose more than $50 Billion of weapons and equipment and don’t forgot fuel and maintenance cost. For example a Russian T-72 tank burn 1200 L of fuel to drive 490 km. A Su-30 costs Around USD 10,000 per hour.
Russian President Vladimir Putin announced that all the families of soldiers killed in special military operations will receive a pension of 7.421 million rubles. As for soldiers who cannot continue to serve due to injuries, they will receive a one-time subsidy of 2.968 million rubles. In addition, each family member of these soldiers will also receive cash subsidies every month. A rough estimate based on life expectancy and GDP per capita suggests that a death toll of 10,000 Russian soldiers would correspond to a cost of more than US$4 billion. To this, one would need to add the huge mental health toll on their families, and on all the soldiers who took part in an active war. But these are only the direct costs visible to the naked eye during the war, and the invisible costs outside the battlefield are actually the most painful for Russia and will cause damage to the national economy.
After the Russian-Ukrainian war, the NATO countries led by the United States decided to launch stormy sanctions against Russia in various fields, especially from three aspects, which hit Russia’s economy hard. The first is Russia’s foreign exchange market.
During the Russian-Ukrainian War, the joint efforts of the United States and the European Union led to a continuous decline in the exchange rate of the ruble, with an overall depreciation of about 50%. Originally, one US dollar was worth 75 rubles before the war, but on the day of the conflict it turned into 83 rubles per dollar, and it continued to fall to a terrible level of 95 rubles per US dollar. The ruble has become waste paper, and the huge domestic assets of Russia have shrunk greatly.
Fragments of a downed Ukrainian Tochka-U in a field near Berdyansk #Russia #Ukraine️ pic.twitter.com/8zuzWyO0T9
— Defence View (@IndiandefenceNS) March 20, 2022
The property of many Russian rich people has lost tens of billions of dollars in one blow, which directly accounts for half or even more of their original wealth. The company also had to choose bankruptcy because of its inability to repay. However, it is not that Russia has not considered these. It has increased its foreign exchange reserves long before the war, and has 640 billion US dollars of reserves for financial intervention.
However, the most surprising thing the west did to Putin is, the United States and other countries then announced that they would freeze Russia’s trillions of overseas assets, even Switzerland, which has always claimed to be a permanent neutral country, has destroyed its brand this time, intending to freeze all Russian accounts in Swiss banks.
Without sufficient funds, financial intervention is naturally out of the question. Russia’s foreign exchange market is on the verge of collapse, which in turn affects the second aspect, the Russian stock market. In order to further bring down the Russian economy, the United States asked European countries to jointly suppress the stocks of Russian banks. For example, the United Kingdom used compulsory measures to require the country to clear the checks of the Sberbank within a fixed period of time, otherwise it will be automatically canceled. Sberbank is the largest state-owned bank, with a huge share of 25% of the Russian financial market, with a market value of US$110 billion. Because of its good investment prospects, it is very popular in European stock markets. The stock price before the war was as high as US$21.63 per share. After some tossing, the stock price fell directly to 0.11 US dollars a share, and the drop was so outrageous that it was unbelievable.
Russian Special forces with AK-12 in Mariupol. #RussiaInvadedUkraine #Russia #RussianUkrainianWar #Ukraine️ #UkraineRussiaWar pic.twitter.com/gPx0ZmtjtG
— Defence View (@IndiandefenceNS) March 20, 2022
What is even more surprising is that although the United States has been dealing with Russia in Europe, it has been hiding behind it to make a fortune. Those European investors frantically sold Russian stocks, in order to obtain a large amount of foreign exchange to stabilize the ruble. Acquisition of stocks of high-quality Russian companies at super cheap prices, As a result, Wall Street in the United States spent less than $100 million to buy 40% of the top Russian banks, and the United States also understands that the war will end one day. When the economy recovers, the acquired Russian companies will soon be Profits will be realized, and the United States will be able to take the opportunity to make a fortune and gain hundreds of billions of dollars in profits.
But in the final analysis, these two tricks are not fatal to Russia, because the mainstay of Russia’s economy is actually energy exports. Russia’s domestic oil reserves rank eighth in the world, and its natural gas reserves rank first. Both export volumes It ranks among the top three in the world, bringing Russia hundreds of billions of dollars in annual revenue. Therefore, the United States decided to directly attack Russia from the third aspect and use the U.S. dollar as a weapon to cut off Russia’s financial path, but soon the Americans understood what it means to shoot themselves in the foot, and the United States decided to submit some Russian banks to the international Fund clearing system Swift, the Swift system is one of the most important financial infrastructures in the world. More than 200 countries and regions in the world rely on this system to transmit financial information. Different currency transactions in the world also go through this system to Complete foreign exchange settlements.
Wreckage of Russian Su-34 that was shoot down by Ukraine #RussiaUkraineWar #UkraineUnderAttaсk #Ukraine pic.twitter.com/r3PZeVftZe
— Defence View (@IndiandefenceNS) March 5, 2022
This is undoubtedly a heavy blow to Russia. Without the Swift system, it will be difficult to carry out cross-border receipts and payments, which means the loss of important foreign trade channels. According to the estimation of the former Russian finance minister, this will cost $500 billion to Russia in revenue and the overall economy fell by more than 5%. But this is also bad news for European countries, because the buyers of Russian energy are European countries. The EU is the world’s largest importer of natural gas, with more than 40% of its natural gas imports coming in every year. Russia was originally affected by the international energy crisis, and the international natural gas price has soared by 600%. Fortunately, Russia’s natural gas is abundant and the price is relatively favorable, but if the Russian banks are kicked out, the whole of Europe will enter into nowhere status. Therefore, even the EU is sanctioning Russia, It tries to keep the natural gas out of this war.