A major component of recent and very misguided Western celebration over what it deems to be a major “turning point” in the NATO war to fragment the Russian Federation (using Western proxy Ukraine as pretext) is represented by the former Minister of Defense’s drone strikes on Russian energy facilities. Pro-Russian critics of the war have tended to dismiss the success of these strikes as “pin-pricks” that can be quickly repaired and whose consequences are far less grave than Ukraine and its Western sponsors like to claim. While I think these
Evidence for a Stabilization of the Fuel Crisis in Russia
Evidence for a partial stabilization of Russia’s domestic fuel market includes the lifting of purchase limits in several regions, the resumption of operations at key repaired oil refineries, and easing wait times at many retail gas stations.
Deputy Prime Minister Alexander Novak reported that several major oil refineries (including sites in Omsk, Volgograd, and Moscow) have resumed full or partial operations following emergency repairs.
The Russian government extended strict bans on gasoline and diesel exports through January 2027 to ensure local consumption takes priority.
Emergency import shipments of AI-92 gasoline have been routed from international partners like Belarus and Morocco (such as a 30,000-ton cargo unloaded in Murmansk) to supplement domestic stock.
Major chains like Gazprom rolled back purchase caps in southern and central regions including Krasnodar, Rostov, and Volgograd, alongside sections of the M-4 highway.
Local authorities and officials note that physical queues at retail petrol stations have noticeably shortened outside of chronically strained areas in Siberia and the Far East.
Resilience and Threat in Energy Situation in Ukraine
Ukraine’s energy supply is severely constrained, heavily damaged, and deeply challenged by ongoing conflict, featuring widespread destruction of thermal power and gas production infrastructure, increased reliance on decentralized renewables, and permanent integration with the European electricity grid.
Relentless Russian missile and drone strikes have severely impacted conventional thermal plants and domestic gas production facilities. Nuclear power generation remains the backbone of the country’s electricity supply, compensating for massive losses in fossil-fuel and hydro capacity.
Ukraine has actively turned to decentralized power sources, including smaller gas turbines, rooftop solar, and localized battery storage systems to build resilience. Ukraine’s power grid remains permanently synchronized with the European Union network, allowing for vital emergency electricity imports.
International partners, including the EU, the U.S., and global financial institutions, continue to supply large-scale grants, repair equipment, and funds to stabilize the grid and restore damaged heating plant
Ukraine faces a severe electricity deficit of up to 6 gigawatts (GW) heading into the upcoming 2026–2027 winter. Persistent and evolving missile and drone strikes targeting generation, transmission, and substation infrastructure have severely depleted the country’s energy cushion. Ukrainian leadership and energy experts warn of a highly vulnerable winter ahead.
Current assessments show Ukraine has roughly 12 GW of available generation against a projected peak winter demand of 18 to 18.5 GW. The grid remains overwhelmingly reliant on nuclear power plants running at maximum capacity. It also relies on the maximum utilization of a 1.7 GW electricity import limit from European neighbors, which leaves very little margin for error. Since late 2025, continuous coordinated strikes have damaged over 9 GW of generation. While utility workers have aggressively repaired and restored about 4 to 6 GW, repeated strikes on already-repaired assets have depleted spare equipment stocks.
Beyond electricity, intelligence assessments indicate a high probability of widespread disruptions to urban heating and water supplies. State officials note that Ukraine’s energy sector still faces an unmet funding gap of approximately €650 million to €900 million needed specifically for winter preparations, grid stabilizing components, and Naftogaz facilities. The UNCHR expects rolling blackouts lasting 14 hours or more in major cities during peak cold snaps, which continues to drive civilian displacement.
To prevent a total systemic collapse, Ukraine is working to rapidly build out a decentralized network of smaller, gas-fired generation units and localized solar-plus-storage setups that are harder for long-range missiles to target. Concurrently, the government is prioritizing the acquisition of specialized air defense interceptors to protect critical transmission substations surrounding its nuclear facilities.
Gas Stations
Russian forces have systematically attacked some 300-400 Ukrainian gas stations in a deadly campaign over recent months, averaging three attacks a day, primarily as retaliation for Ukrainian long-range drone strikes on Russian oil refineries. These assaults have turned vital civilian and logistical pit stops into dangerous front-line targets. Recent attacks continue to kill and injure civilians. An August 3 strike on an Ukrnafta station in Shyroke (near Kryvyi Rih in the Dnipropetrovsk region) killed three people, including an eight-year-old boy and a station attendant. Entire stretches of major highways, such as the 140-kilometer Kharkiv-Poltava route, have been left completely devoid of operating fuel stations due to repeated destruction. Frontline and regional areas like Kharkiv, Sumy, Zaporizhzhia, and Dnipropetrovsk bear the brunt of the drone and missile onslaught. In Zaporizhzhia, over 50 strikes targeted city gas stations over a short three-week window in July. The deliberate targeting disrupts civilian mobility, local power generation (via fuel canisters for backup generators), and military logistics. Routine tasks like pumping gas or grabbing coffee now require immediate proximity to bomb shelters and strict adherence to closing stations during air-raid alerts
European Energy Security
European energy security is stable regarding physical supply, but remains economically vulnerable due to high global prices, geopolitical conflicts, and weather disruptions. There are no immediate shortages of oil or gas, but structural challenges persist.
The closure of the Strait of Hormuz following two US and Israeli, unprovoked attacks on the sovereign nation of 2025-2026, has disrupted global shipping, at various times pushing crude oil above $100 per barrel and straining refined product supplies. Although gas and electricity prices fell from 2022 peaks, they remain roughly 50% and 38% above pre-war levels, intensifying industrial pressures and deindustrialization risks. Severe summer heatwaves and record-low water levels on rivers like the Danube have constrained cooling capabilities at central and eastern European nuclear plants and reduced hydropower output.
Clean energy investments reached €418 billion in 2025 as part of the ongoing REPowerEU push to phase out Russian fossil fuels (Imports of Russian LNG last month reached record levels, although the EC aims to phase these out during 2027). and build local generation capacity. Grids and subsea cables face escalating cyber and hybrid threats, prompting utilities to prioritize physical protection and cross-border system integration.
Ukrainian Terror Attacks on Russia (Moscow Restaurant, Kherson Beach)
Moscow Restaurant Bombing
This event occurred on Saturday evening, August 1, 2026, at the upscale Balzi Rossi Italian restaurant located in a Stalin-era skyscraper on Kudrinskaya Square in central Moscow. An unidentified woman carrying an improvised explosive device attempted to enter the restaurant during a private event. She was stopped by a security guard, and the device detonated at the entrance. Five people were killed (including the female bomber, the security guard, and a customer) and 19 to 21 others were injured. Russian officials and diplomats blamed Kyiv for the explosion, alleging it was an act of intimidation, with unconfirmed speculation that a senior Russian military commander, his daughter and his daughter’s husband, may have been the intended target.
Black Sea Beach Incident (Arkhipo-Osipovka)
This event occurred early August 2026, on a crowded beach in the seaside resort town of Arkhipo-Osipovka in Russia’s southern Krasnodar region. Russian authorities stated that drone debris or a direct drone strike hit the busy beach area while tourists were present. Ukrainian officials countered that the drone fell on the area only after being intercepted and shot down by Russian air defenses. The drone may have been intended for a nearby military or energy facility. Seven to ten people, including multiple children, were killed, and 60 to 100 others were wounded. Russia labeled the incident a deliberate terrorist attack on civilians, while Ukraine maintained that its operations target military and economic infrastructure rather than civilians
Media Coverage
The coverage of the Balzi Rossi restaurant bombing and the Arkhipo-Osipovka beach strike reveals a stark divide in framing, terminology, and narrative focus between Russian state media and Western mainstream media. Russian state-controlled outlets and pro-war channels have framed both incidents as direct, state-sponsored terrorism orchestrated by Kyiv. Outlets like TASS and RIA Novosti quickly highlighted statements from the National Anti-Terrorist Committee and Moscow Mayor Sergei Sobyanin, branding the events as “brutal terrorist acts.” Regarding the beach incident, regional officials like Krasnodar Governor Veniamin Kondratyev heavily emphasized that Ukraine carried out a “deliberate strike on civilians” enjoying a holiday. Russian state media used the high civilian toll—specifically the deaths of three children—to reinforce this point. Early Russian regional alerts mentioned “drone debris”, but broader state coverage quickly shifted toward characterizing the event as an aggressive, direct hostile strike rather than an accidental intercept fallout.
Regarding the restaurant bombing, commentators and state figures actively expressed skepticism over quick Western attempts to deflect blame away from Ukraine, specifically rejecting early suggestions of an Islamic State link.
Western reports consistently use distancing language, using terms like “Russia says,” “allegedly,” or “according to local authorities” when citing the death tolls or the “terrorist” classification. They treat allegations of Ukrainian state involvement as claims requiring independent verification. Instead of framing the beach incident as a deliberate attack on tourists, Western reports explicitly introduced military context. Broadcasters like Euronews and The Telegraph noted that the drone may have been targeting the Russian naval base in Novorossiysk, roughly 40 kilometers away, or other economic infrastructure.
For the Balzi Rossi blast, Western journalists looked into reports from independent Russian Telegram channels (like ASTRA) indicating a private banquet for a high-ranking Russian military general was happening at the time. Outlets like The Guardian and Al Jazeera framed the blast as a potentially botched or narrow assassination attempt on military figures, comparing it to the 2022 car bombing of Darya Dugina. Western reports frequently noted the Russian newspaper Kommersant’s theory that the female bomber might have been a regular courier carrying a remotely detonated package without knowing it contained an IED.
Reports almost always conclude by noting, uncritically and against the overall evidence of multiple assassination attempts, invasions and acts of terror, that Ukraine maintains a strict policy of targeting military and economic logistics rather than civilians, while acknowledging that Ukraine’s military has declined to comment directly on these specific instances.
Losing Faith in Zel
I surmise that Ben Aris of IntelliNews basically favors the survival of the Political West but even he is beginning to lose confidence in the ability of Zelenskyi to resolve the combined problems of domestic unrest (as over his recent dismissal of Defense Minister Fedorov and Commander-in-Chief Syrski), critical manpower shortages for defense, Russian reaction (in the form of its massive attacks on Odessa ports) to Ukrainian drone attacks on its oil refineries and against oil tankers and grain cargo vessels in the Sea of Azov and the eastern Black Sea, US shortages of weapons and inability to continue to provide further air defense (the US reserve is down to 759 Patriot missiles) or even the licenses for Ukraine to build its own Patriots, and Elon Musk’s refusal to meet with Zelenskiy while he was in Washington asking for permission to use Starlink over Russian territory this autumn.
So Ukraine is running badly short of weapons and there are scarcely no weapons for his sponsors to send him, while there is no dent in Russian weaponry and its production capability to keep producing them, doubling the number of its ballistic missiles in the past year. Aris comments:
“The EU still has not distributed the €45bn from the €90bn EU loan agreed in December, as no one has any money, and the Ministry of Finance says that would still leave a $20bn hole in the budget. But a drop in Russia’s oil and gas revenues gets widely reported, although July’s increase in oil and gas revenues got widely ignored.”
Aris thinks Ukraine has some (faint?) hope in its Flamingo cruise missile and Fire Point hopes to roll out the F-9, Ukraine’s first true ballistic missile, before the end of the year. Aris notes that Russia has repurposed its famous S-300 and S-400 SAM air defense systems to surface-to-surface mode and is using them offensively in Ukraine which may have stripped Russia of air defenses. While I have no evidence to the contrary at hand, I find this extraordinarily unlikely in view of the continuing Russian ability to shoot down massive numbers of Ukrainian drones since the beginning of this year. Aris himself notes that even if the F-9 goes into production in December, there won’t be enough time to collapse the Russian economy.
“And in the meantime, the situation with the Armed Forces of Russia (AFR) progress in the Donbas against the Fortress Belt is very worrying. There it is not so much about ballistic missiles, but the even more powerful FAB Glide bombs. Reportedly, Russian fighter jets are now in range of the heavily fortified cities and Ukraine has no defences against glide bombs whatsoever – not even PAC-3 interceptors can bring them down.”
Gulf and Red Sea Crisies
Over the past day of the conflict with Iran, diplomatic leverage and military pressures have shifted dynamically, marked by US Central Command completing a heavy wave of retaliatory strikes on Iranian IRGC targets, while indirect talks between Iran and Oman and Qatar have advanced toward potentially reopening the Strait of Hormuz on the basis of a joint Iranian-Omani authority.
Despite US blockades and strikes, a cargo vessel was still struck in the Strait of Hormuz, proving Iran retains asymmetric capability to disrupt vital maritime traffic. Tehran has bypassed direct talks with Washington - publicly denying Trump’s claims of direct negotiations - while successfully negotiating through Oman to set temporary arrangements that favor Iranian lane control.
Reports have surfaced that the US has used virtually all of its long-range precision missiles (like ATACMS and PrSM) and nearly half of its global Tomahawk supply during the war, increasing strategic pressure on US stockpiles.
U.S. Central Command (CENTCOM) completed a heavy two-hour wave of airstrikes targeting Iranian command centers, coastal defenses, and missile facilities after intercepting a barrage of overnight Iranian missile attacks.
But Reuters has reported that the US has used up “virtually all” its long-range precision missiles. A report from Drop Site News (Drop Site) summarizes the report:
“The U.S. military has used up most of its stockpiles of highly accurate long-range missiles in its war with Iran, according to Reuters. The missiles are primarily surface-to-surface weapons, known as Army Tactical Missile Systems (ATACMS) and Precision Strike Missiles (PrSM), which cost over $1 million each. The U.S. has used “virtually all” of these weapons, two sources familiar with the data told Reuters.”
A blockade against Saudi shipping in the Red Sea has successfully disrupted Riyadh’s main alternative route. Multiple Saudi-operated crude oil tankers have been forced to turn off their transponders or detour completely around Africa, drastically increasing transit times and shipping insurance premiums. Houthi missile and drone threats have choked the daily volume of commodity vessels passing through the Red Sea down to single digits, and have successfully pressured Saudi Crown Prince Mohammed bin Salman to lobby Washington for restraint. The fear of regional escalation has effectively driven a wedge into a cohesive US-Saudi military campaign.
In response to the rising Houthi threat, Saudi Arabia took the initiative to form a multinational Red Sea defense alliance alongside 14 participating nations. This could provide the US with a powerful, locally anchored regional framework to secure international waters without exhausting entirely American naval resources but any evidence as to its effectiveness is currently absent.
Moving beyond purely defensive postures, Saudi forces have increased deep military coordination with the US. The alliance has executed coordinated strikes against Houthi military installations in Yemen and Iranian assets across Iraq, significantly degrading the radar infrastructure and missile stockpiles feeding the maritime blockade. But countering reports of this kind are others that say that the US is withdrawing its forces from Erbil in Iraqi Kurdistan. Evidence of the current U.S. military withdrawal from Iraq includes the removal of Patriot air defense systems and heavy equipment from bases near the Erbil international airport in the Kurdistan region, moving ahead of a finalized September 30, 2026 bilateral exit deadline.
Personnel and heavy machinery started leaving the military compound near Erbil’s airport in late July 2026. All Patriot mobile air-defense missile batteries previously stationed to protect the Erbil facility have been redeployed to undisclosed regional locations. The ongoing actions align with the agreed-upon transition timeline to remove conventional U.S. forces from Iraqi federal and regional military installations.
While western shipping remains heavily targeted, separate multilateral agreements have enhanced Iran’s leverage in favor of selected parties. China has actively pressed the Houthis to guarantee the safety of Chinese-flagged tankers, maintaining a vital economic pressure valve that prevents total global energy paralysis.
Palestine: The Board of Peace (i.e.Continuing Genocide)
Drop Site News (Drop Site) reports that Trump’s real-estate creature, the Board of Peace, now claims that Israel is set to withdraw only after Hamas disarms, completely contradicting its own roadmap. The U.S.-led “Board of Peace” put out a statement on Monday after a meeting between its envoy, Nickolay Mladenov, and Israeli Prime Minister Benjamin Netanyahu, saying that Israeli withdrawal from Gaza would come only after Hamas fully disarms. The statement said that Israeli forces would withdraw “beyond the Yellow Line…once decommissioning is complete,” and that this applied to “light weapons, heavy weapons, and the tunnels alike.”
“A roadmap previously published by the board, however, said that the disarmament process would begin only after a phased Israeli withdrawal from the Strip, as well as the decommissioning of Israeli-backed militias. The roadmap also limited disarmament to “heavy weapons, military production sites, depots of weapons, and tunnels,” but did not include “light weapons.
“Separately, documents leaked on Monday showed that the BoP is advancing plans for more than 60 infrastructure, economic, and “security” projects across the Gaza Strip, scheduled to launch between August 2026 and January 2027, according to Israel’s public broadcaster Kan.
“Kan also reported that the board pledged to Israel that it would seek countries to receive students and patients from Gaza, in exchange for Israel dropping its displacement plan. Israel had recently renamed the forced displacement plan a “freedom of movement” plan, in an effort to make it more acceptable to foreign governments.
“During a Monday evening appearance on Piers Morgan Live, Ghazi Hamad, a senior Hamas official, said that Hamas’ planned decommissioning of weapons was an “exceptional phase” accepted out of necessity, and that the group has not changed its goal of ending Israel’s occupation of the Strip, to which it might employ “different techniques, different tools, different methods.”
The Euro-Med Human Rights Monitor (Euro-Med) reports that Israel is removing and transporting large volumes of rubble from Gaza before independent investigators and forensic teams can examine destroyed sites. The report estimates that nearly 100 truckloads leave Gaza each day, raising concerns about the possible destruction of evidence, loss of human remains, and obstacles to future accountability. It also argues that the removal of debris could complicate reconstruction, property claims, and investigations into alleged international crimes.
Yen Crisis, Hormuz and Treasury Yields
The Japanese yen crisis stems from historic currency undervaluation near 40-year lows, massive national debt, and expansionary fiscal policies. It is linked to the crisis in the Strait of Hormuz because Middle East shipping disruptions spike global oil prices, forcing Japan—which imports over 90% of its oil from the region—into severe cost-driven inflation and further currency depreciation.
The yen has slumped past 160 per U.S. dollar, hitting 40-year lows driven by wide interest rate gaps and aggressive domestic spending plans under Prime Minister, Sanae Takaichi.
Japan’s national debt exceeds 240–260% of its GDP, preventing the Bank of Japan from aggressively raising interest rates to defend the currency because higher rates would dangerously skyrocket debt-servicing costs.
The severity prompted a rare joint currency-buying rescue by Tokyo and Washington to halt market panic and crush short speculators.
Japan relies on the Middle East for roughly 94% of its crude oil, with a substantial share transiting through the choke point of the Strait of Hormuz.
Hostilities and shipping disruptions around Hormuz fracture oil supplies and at times have driven crude prices past $100
Because global oil is priced in U.S. dollars, expensive oil paired with a weak yen creates an immense trade and currency drain, forcing more yen selling, fueling domestic inflation, and leaving the Bank of Japan unable to hike interest rates due to economic instability.
The current yen crisis and Middle East oil shocks have pushed global bond yields to historic, multi-decade highs, directly driving up worldwide borrowing costs.
Japan is the largest foreign holder of U.S. government debt, holding roughly $1.1 trillion to $1.2 trillion in US Treasuries. When the yen collapses, Tokyo is historically forced to sell off these US bonds to buy yen and defend its currency. Massively flooding the market with US bonds drives bond prices down and forces Treasury yields significantly higher. To prevent a dangerous 20 to 50 basis point yield explosion, US Treasury Secretary Scott Bessent and the Federal Reserve have jointly intervened to help Japan prop up the yen. Washington is actively pushing to expand the Fed’s FIMA Repo Facility, allowing Japan to acquire U.S. dollars using their bonds as collateral without selling them outright into the open market.
The ongoing geopolitical crisis in the Strait of Hormuz has severely disrupted global crude supply chains, pushing oil prices higher. Because rising energy prices trigger global inflation fears, bond investors demand a higher “inflation premium”.
This has driven the 30-year U.S. Treasury yield past 5.2%, some of its highest levels since 2007. To naturally combat inflation and the weak yen, the Bank of Japan (BOJ) was forced to raise interest rates to a 31-year high of 1%. As domestic Japanese government bond yields rise, Japanese institutional investors - who traditionally anchor global markets by chasing yields abroad - are bringing their capital back home. This drop in international demand for foreign debt shrinks global liquidity, adding further upward pressure to European and US long-term interest rates.
For World Socialist Web Site (WSWS), Nick Beams ridicules the Bessant-created “image of Trump as some kind of benevolent guardian for the global economy and financial system, after he has spent his second term tearing down the institutions which maintained stability, not least with measures that have hit Japan, does not square with reality.”
He confirms that the intervention was undertaken because of fears of the Yen crisis’ repercussions for the US financial system and the continued action by Japanese authorities to support the yen, which involved the further selling of dollars, a measure that would send down the price of US Treasury bonds and push up their yields, adding to upward pressure on US interest rates.
Concerned over the value of the dollar, the US intervention was (highly unusual) carried out using euros to make purchases of the Japanese currency.
US federal debt was $39.5 trillion in June, 2026, rising at the rate of $334 million per hour, or $93,000 per second. A trillion dollars is being added every five months, with the annual interest bill standing at more than $1 trillion.
This enormity has been supported by the foreign inflow of capital into the US, but this may not continue. Japan’s own total holding of US financial assets is almost $3 trillion. If it has to pull out large amounts of this money this could cause turbulence in US financial markets.
A major factor has been the divergence between interest rates in Japan and the rest of the world. This was OK while the interest rates of other central banks were low but these are now rising. The Japanese government has been trying to stem the fall of the yen because it boosts the prices of imports and increases inflation.
Rare Earths and Western Weapons
Adding to the issue of Western weapons (and their shrinking stockpiles), and Chinese technology advances that I discussed in a post last week concerning lithography for the production of advanced chips, and control over the supply of rare earths and other military commodities, Larry Johnson on Sonar21 (Sonar21) carries a piece on gallium - byproduct of aluminum refining.
“The United States has had no primary domestic gallium production for decades, and its net import reliance sits at 100 percent. China, by contrast, controls the overwhelming majority of global output — figures commonly cited run from 94 to 98 percent of raw production. The reason is structural, not incidental. Gallium is extracted as a byproduct of bauxite and zinc processing, industries China dominates. A country cannot simply decide to make gallium; it must first build the aluminum and zinc industries that yield it, then the extraction, refining, wafer, and packaging lines on top. That is a decade-plus undertaking, not a budget line.
This dependency became a weapon in December 2024, says Johnson, when Beijing banned exports of gallium, germanium, and antimony to the United States, explicitly prohibiting sales to US military end-users. It was retaliation for American semiconductor export controls, and it landed on a Pentagon that, by the USGS’s own accounting, had no gallium in the National Defense Stockpile to fall back on.
As a prime example, F-35s built from Lot 17 onward are being delivered with counterweights, literal ballast, in their nose cones where radars belong. This is the result of the delayed development and certification of the AN/APG-85 which is built on gallium-nitride (GaN) technology and delivers far higher power and better thermal efficiency.
China has moved its own J-20 fighter to a next-generation radar reportedly built on the same GaN technology — the qualitative gap the APG-85 was meant to open is instead narrowing. Gallium nitride underpins the high-power jammers on the EA-18G Growler, the F-35’s own electronic-warfare suite, and the large ground-based radar arrays of the kind destroyed during the fighting in the Persian Gulf.
Johnson concludes:
“Today, U.S. contractors cannot reliably put advanced radars on hundred-million-dollar aircraft, in part because China controls a metal America stopped producing forty years ago. Ten years from now, on current trajectory, anyone who wants the best phones, drones, or robots may find the critical components — and the standards they run on — routed through that same country. Supply chains are the whole game, and so are the researchers who turn raw materials into markets. That is the argument, and the uncomfortable part is how much of it is simply true.”
The Western War on Free Speech
For this, see Hannah Fernandez’s article in The Nation (Nation) on the presidential memo signed last September called the National Security Presidential Memorandum-7, or NSPM-7.
“NSPM-7 is now the administration’s sharpest tool for criminalizing left political organizing. It directs a 10-agency Joint Terrorism Task Force apparatus—including the FBI, DHS, the IRS, and the Treasury’s Terrorism and Financial Intelligence office—to investigate and prosecute what it calls “domestic terrorism and organized political violence,” with targets defined broadly enough to include anyone whose motivations involve “anti-Americanism, anti-capitalism,” or views that differ from the government’s on immigration, race, and gender. It pursues not just individuals but networks, funders, nonprofits, or even anyone who shows up to a protest.
“The FBI and IRS have created a “mission control command center”—the IRS’s wording—to examine nonprofits, and the FBI’s budget request discloses a permanent “NSPM-7 Joint Mission Center” charged to “proactively identify networks.” In other words, its goal is to wield the full power of the state to replicate the repressive tactics of the Prairieland case throughout the country.”