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As the Ukrainian military’s well-armed southern offensive winds down, initially kicking off over six months ago, few tactically significant gains have been made and security assistance is beginning to dry up. Some data indicates that new provisions for Ukraine’s war effort fell by -90% YoY in in the late summer to autumn period, and funding could continue to be subdued by difficult and drawn-out budget negotiations in the US Congress. Difficulties in terms of both manpower and material support come just as Russia is shifting its own battlefield orientation toward a more offensive posture, already turning back a significant portion of the recent territorial gains Ukraine was able to make.

The White House has remained committed to Kyiv’s lofty objectives, rolling out more than $61 billion in new planned spending for Ukraine. However, even an incremental $1 billion package, derived from allocations left over in fiscal 2023’s budget, may face a tough road through Congress. The White House has openly warned that a failure to provide new support in a timely manner could cause a breakdown of Ukraine’s defense, and President Biden has gone so far as to voice his concern that such a situation might spiral into a direct confrontation between NATO and Russia.

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

As the Russian armed forces have shifted into an offensive posture, likely in preparation for a winterslong assault throughout the eastern portion of Ukraine, security assistance for Kyiv’s armed forces from the US is running dry. Winter is closing in on the country, with snow already falling throughout many parts of the sprawling 1,200km frontline. The onset of cold weather and frozen ground will set the stage for more aggressive offensive operations with heavy vehicles, now less encumbered by the dense, muddy soil that narrowed military capabilities in the autumn.

Data from the Kiel Institute for the World Economy, released last week, showed newly-committed aid for Ukraine’s war effort fell by almost -90% between August and October from the same period a year ago, totaling just over €2.1 billion (or $2.3 billion). That was the smallest amount of new support provided to Ukraine since the start of Russia’s formal invasion of the country in February 2022. Following the disclosure of up to $175 million in new distributions to Ukraine, which included 155mm and 105mm artillery rounds, ammunition for High Mobility Artillery Rocket Systems (HIMARS), and Javelin and AT-4 anti-armor systems, the US has now provided the equivalent of $44.2 billion in equipment and weaponry to Ukraine throughout the past 22 months. The Pentagon is working with Congress to ensure the flow of  $1 billion in munitions, vehicles, and equipment to Ukraine (left over from fiscal 2023’s budget) before the end of the year, but his would only serve as a bridge to sustain the Ukrainian military until Congress can agree on new allocations as part of fiscal 2024’s eventual budget.

Funds for assistance to Ukraine, along with NATO-trained personnel, were plentiful heading into the Spring and Summer seasons of 2023, and a grand offensive was planned in the southern portion of Ukraine, spanning portions of the Zaporizhzhia and Donetsk Oblasts. However, as MRP covered in detail throughout our recent coverage on the war and its implications for US and European defense contractors, this maneuver was not successful. Massive minefields and trench networks, further defended by a much higher rate of sustained artillery fire from the Russian side, neutralized the…

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