US Military Aid to Ukraine Continues Bolstering Defense Contractors as Funds will Flow for “As Long as it Takes”

Ukrainian President Zelensky’s first international trip since Russia’s invasion of his country was to the US, culminating in an address to Congress, as well as an assurance from President Biden that the American support for the Ukrainian war effort will continue indefinitely. As part of that commitment, the White House signed off on another $1.85 billion in weapons, equipment, and ammunition for Ukraine, which included the first Patriot missile defense system deployed to the country thus far.

The Patriot is the most advanced surface to air missile defense system the US utilizes in combat, and among the most expensive as well. This provision likely indicates a new milestone for how far the US will go to shatter Russia’s ambitions in Eastern Europe, similar to the deployment of HIMARS in Ukraine last spring. The further the US goes in their dedication of arms to Ukraine, the longer the order sheets of defense contractors will be in the months and years ahead.

Related ETF: SPDR S&P Aerospace & Defense ETF (XAR)

Ukrainian President Volodymyr Zelensky visited the United States yesterday to meet with President Biden and address Congress, vowing to “never surrender” to Russia. To fulfill that goal, however, Zelensky made it clear that further financial assistance is “critically important”. Biden has responded to this call for aid by stating the US will provide support to Ukraine for “as long as it takes”. The Russo-Ukrainian war has had, and will continue to have, significant implications for the earnings of defense contractors who are receiving a stream of direct orders for new equipment bound for Ukraine, as well as contracts meant to re-fill increasingly depleted US stockpiles.

Following the most recent package of pledged support for Ukraine, worth $1.85 billion, the United States has committed approximately $21.2 billion in military aid to the country since February 24, 2022, utilizing 28 drawdowns of equipment from Department of Defense (DoD) inventories and an array of new orders with various defense contractors. That total is up from $19 billion in our last update on November 30. The fiscal 2023 omnibus spending bill, now in Congress, will authorize an additional $27.9 billion in emergency DoD spending for Ukraine if passed.

Along with 215,000 rounds of GRAD rockets and assorted artillery and tank munitions, the US’s most recent support package will include dozens of mortar systems, an undisclosed amount of ammunition for Lockheed Martin’s High Mobility Artillery Rocket Systems (HIMARS), and the first Patriot air defense battery thus far dedicated to the conflict. As GRID writes, the United States had provided more than 1 million rounds of artillery shells and more than 115,000 mortar rounds to Ukraine through October.

MRP noted last month that US government was considering…