Hello from the Bear Market Brief.
This week in the news:
A Russian IL-76 plane crashed in the Belgorod region. Russia claims that the plane was shot down by Ukraine, killing 65 Ukrainian POWs on board.
Boris Nadezhdin collected more than 150,000 signatures of endorsement for his pro-peace presidential campaign.
Ukraine continues to target Russian oil infrastructure with drone attacks as far away as the Leningrad region.
26-year-old Daria Trepova was sentenced to 27 years in prison in relation to the murder of pro-war military blogger Vladlen Tatarsky last April.
Russian military plane crashes in Belgorod oblast
On Wednesday, a Russian IL-76 plane crashed near the village of Yablonovo in the Korocha district of the Belgorod region. According to Governor of Belgorod Vyacheslav Gladkov, all 74 people on board the plane died. Russia claims that among those dead are 65 Ukrainian service members who were being flown to Belgorod ahead of a prisoner exchange. The Russian Ministry of Defense blamed Ukraine for downing the plane, saying the IL-76 was likely shot down either with American Patriot anti-aircraft missile systems or with German-made IRIS. Additionally, the head of the Russian State Duma Defense Committee Andrey Kartapolov commented that Ukrainians were aware of how the POWs would be transported.
This information contradicts Kyiv’s assertion that the plane was carrying missiles for the S-300 air defense system. The General Staff of Ukraine’s Armed Forces published a statement to Facebook on Wednesday saying that recent attacks on Kharkiv have been facilitated by Russian cargo planes transporting weapons closer to the border. “The recorded intensity of the shelling is directly related to the increase in the number of military transport aircraft that have recently been heading to the Belgorod airfield. With this in mind, the Armed Forces of Ukraine will continue to take measures to destroy delivery means and control the airspace to eliminate the terrorist threat, including on the Belgorod-Kharkiv direction,” the statement reads. The General Staff, however, did not take responsibility for shooting down the plane.
In his nightly address, President Zelensky did not confirm that Ukrainian prisoners were on board the plane. Instead, he said that Ukraine’s military intelligence agency is working to clarify what happened to the service members that were supposed to be exchanged on Wednesday. “It is obvious that the Russians are playing with the lives of Ukrainian prisoners, with the feelings of their relatives and with the emotions of our society,” he added. Zelensky canceled his upcoming visit to the central regions of Ukraine in order to further investigate the circumstances of the Russian plane crash with the appropriate ministries and government bodies. Ukraine’s leader also said that Kyiv will insist on an international investigation into the crash.
U.S. National Security Council spokesperson John Kirby commented on Wednesday that the White House could not confirm whether Ukrainian POWs were on board the Russian plane.
— Lisa Noskova
Pro-peace presidential candidate Boris Nadezhdin collected more than 150,000 signatures of endorsement for his campaign. The anti-war presidential hopeful experienced a recent swell of support, with Russians across the country lining up to endorse him. However, whether or not the Kremlin will allow Nadezhdin’s name to appear on the ballot in March remains to be seen. Nadezhdin is pictured here speaking to journalists at the Civic Initiative party congress in Moscow on December 23. (photo: Yulia Morozova / Reuters)
Nadezhdin on a roll
The team of Boris Nadezhdin, a presidential candidate who is running on a pro-peace ticket, announced that Nadezhdin collected more than 150,000 signatures in support of his candidacy from 75 regions of Russia. Although he has already reached the 100,000 benchmark required by Russian electoral law, Nadezhdin said he will keep collecting signatures for fear that the Central Electoral Committee might invalidate many of the existing ones. Nadezhdin called himself a “principled opposition” to Putin and met with many constituents over the past few weeks, including soldiers’ mothers.
Nadezhdin is a former lawmaker of the now-defunct Union of Right Forces party and worked closely with former Prime Minister Sergey Kiriyenko (now the deputy head of the Presidential Administration) as well as with murdered opposition politician Boris Nemtsov. In his long career as a second-tier opposition politician, Nadezhdin was involved with other “systemic” opposition parties too, including the Party of Growth. This time he was nominated to run for president by the Civic Initiative party, another party linked to pro-government politicians. In 2018, the Civic Initiative party nominated Ksenia Sobchak, socialite and daughter of late St. Petersburg mayor Anatoly Sobchak.
Candidates not nominated by parliamentary parties need to collect at least 100,000 signatures from at least 40 regions of the country, with no region providing more than 2,500 signatures. Media reports over the past week have shown Russians queuing up to support Nadezhdin’s run in several cities as well as abroad. This is partly due to the fact that over the past few weeks a series of public personalities have come out in support of Nadezhdin’s candidacy, including Ivan Zhdanov, the head of Alexey Navalny’s Anti-Corruption Foundation, Mikhail Khodorkovsky, a businessman and former oligarch, and Moscow opposition personality Maxim Katz.
While Nadezhdin has cleared the first (and potentially the second) hurdle to run for president, it is still rather unlikely that his name will be on the ballot in March. In 2018, the purpose of allowing Sobchak’s candidacy was likely to showcase how little support there was for liberal opposition to Putin (Sobchak received less than 2% of the vote according to the official count). This time, the situation—and the risk perception of the Kremlin—is different. Allowing a candidate to run on an openly anti-war platform would counter the Kremlin’s intention to stage a campaign suggesting business as usual. Electoral authorities have already disqualified another anti-war candidate, Yekaterina Duntsova, on a technicality.
Following Nadezhdin’s successful collection of signatures, a debate started in the circles of the Russian opposition and intelligentsia over Nadezhdin’s background. The discussion centered on whether he is fully a “Kremlin project” or if his candidacy is simply tolerated by the Kremlin. One thing that both sides of this debate (and likely also the Kremlin) would agree on is that supporting Nadezhdin is, at this point, a low-cost, low-risk form of anti-war activism in Russia at a time when more active alternatives remain intolerably risky for most. Time will tell if it is also low-impact: opposition arguments in support of Nadezhdin say that he could collect the vote of the frustrated, much like Navalny’s “Smart Voting” initiative hoped to do. However, it may also allow the Kremlin to measure the size of the anti-war camp.
— Andras Toth-Czifra
Have I been droned?
On January 24, the Novatek energy company reportedly resumed loading at its fuel terminal in Ust-Luga in the Leningrad Region near St. Petersburg. The terminal was damaged three days prior in what Ukrainian (and some local) media reported as a drone attack. The Security Service of Ukraine later took responsibility for the attack. Novatek has not restarted the operations of a nearby fuel processing complex, which may take weeks.
The incident at Ust-Luga came just days after an oil depot in Bryansk and an oil terminal in St. Petersburg also suffered what seemed to have been drone attacks (albeit Russian authorities denied that the St. Petersburg terminal was damaged). Also on January 24, an oil refinery owned by Rosneft in the city of Tuapse in the Krasnodar Territory caught fire. Residents reported seeing drones in the area.
The attacks might mark a concerted effort by Ukraine to damage fuel depots in regions close to the war zone and Russia’s larger oil and fuel export infrastructure. While the ports resumed operations relatively quickly, the purpose could simply have been to indicate that Ukraine can reach targets in the Leningrad region. An attack or a series of attacks on Russia’s Baltic seaports potent enough to halt operations could complicate the shipping of up to 40% of Russia’s seaborne oil exports, according to Bloomberg’s calculations. Russia is currently ill-equipped to redirect a large amount of oil and fuel exports to its Far Eastern or Arctic ports; Arctic port infrastructure is underdeveloped and transit routes leading to Far Eastern ports are at capacity as a result of Russia’s forced trade pivot to Asia.
— Andras Toth-Czifra
The story of a cat who was thrown off of a train has sparked outrage in Russia. When Twix the cat escaped his carrier during a train journey from Yekaterinburg to St. Petersburg, he was mistaken for a stray and removed by a conductor in Kirov. Sadly, Twix was found dead by volunteers nine days later. Twix’s story went viral online, with over 300,000 people signing a petition for the conductor to be dismissed. In response, Russian Railways promised to change their policies around removing animals from trains and suspended the conductor involved. Additionally, Chairman of the Investigative Committee Alexander Bastrykin ordered an animal cruelty investigation into the case. (Photo: The Moscow Times)
Daria Trepova sentenced
Daria Trepova was sentenced to 27 years in prison for the assassination of pro-war military blogger Maxim Fomin, known as Vladlen Tatarsky.
On April 2, 2023, 26-year-old Trepova gave Tatarsky a figurine at his event in a St. Petersburg cafe. Minutes later, the figurine exploded, killing Tatarsky and injuring 52 others. As a result, Trepova was charged with terrorism, illegal trafficking of explosive devices, and illegal document forgery. She pleaded guilty to the charge of forgery but maintained her innocence on the other two charges, claiming that she did not know there were explosives inside the figurine. She said that she was told by Ukraine-based journalist Roman Popkov and a man she knew as “Gestalt” that the figurine contained a microphone and tracking device. “I was always sure that there was just a microphone in the bust,” she told the court on Monday, “In reality, I was sent with a bomb to my death.” Prosecutors said that Trepova was aware of the explosives in the figurine and was acting as part of a plan to kill Tatarsky organized by Ukrainian Yuri Denisov.
On Thursday, the Second Western Military District Court found Trepova guilty of all three charges. She was sentenced to 27 years in a penal colony and fined 600,000 rubles ($6,750). Trepova’s friend Dmitry Kasintsev was also sentenced to one year and nine months for harboring her in his apartment after the attack. Trepova’s punishment was particularly harsh—only one year less than the 28-year sentence requested by the prosecution. According to Mediazona, it is the longest sentence a woman has received in the history of modern Russia.
“I feel great pain and shame that my gullibility and my naivety led to such catastrophic consequences. I didn't want to hurt anyone," Trepova told the court. Trepova’s lawyer, Daniil Berman, said that they will appeal the case.
— Sara Ashbaugh
On the Podcast
Almost two years after Russia’s full-scale invasion, the Bear Market Brief investigates how we got here in the first place. What does theory say about Vladimir Putin’s decision making? Seva Gunitsky joins to discuss.
Quickfire: Regions
The legislative assembly of Buryatia will discuss a proposal presented by Alexey Tsydenov, the Governor of the region, to scrap direct mayoral elections in the region’s capital, Ulan-Ude. The head of the City Council also supported the proposal, justifying it using the war, which is happening more than 4,000 miles from the region (although residents of the region have disproportionately participated). Currently, only five Russian regional capitals elect mayors directly (apart from Moscow and St. Petersburg, which are regions unto themselves). Two regional capitals, Novosibirsk and Tomsk, scrapped direct mayoral elections amid protests last year. In Tomsk, after a long back-and-forth, the local council appointed an ally of the region’s Governor from Omsk as mayor. Novosibirsk will launch a similar procedure involving a competition commission next month. Just like Novosibirsk and Tomsk, Ulan-Ude saw competitive local elections over the past decade. In 2019, supporters of the local opposition protested after what they saw as election rigging in favor of the United Russia candidate. The proposal to scrap direct mayoral elections comes after United Russia strengthened its majority in the regional legislature (which has the power to scrap mayoral elections in the regional capital) last year.
According to the Finance Ministry, the four newly-occupied regions in Ukraine received 513 billion rubles ($5.7 billion) in 2023 from Russia’s federal budget in grants, subsidies, subventions, and other federal transfers, amounting to more than 16% of all budgetary transfers planned for 2023. This shows the priority that the Kremlin accords to these regions over Russian regions. These transfers—37% above original budgetary plans—made up between 80% and 90% of the income of the occupied territories. The actual figure is likely even higher than this, since much of the occupied territories’ “own” income consists of fiscal receipts after salaries of public employees. While the government plans to reduce these transfers in 2024, this does not include the other expenditures the government plans to spend on the territories, such as direct transfers from regional budgets and expenditures under a government program for reconstruction. These other expenditures amount to hundreds of billions of rubles per year.
According to Kommersant, the government asked oil companies not to raise the price of fuel at gas stations and to reorient some fuel exports to the domestic market. This happened two weeks after an accident at a major oil refinery in Nizhny Novgorod owned by the Lukoil oil company which caused severe disruptions, allegedly because the damaged unit could not be replaced quickly enough due to international sanctions. The government seems to have taken a cautious approach; rather than banning gasoline exports outright (like last year, when several regions experienced rapid price hikes and shortages), it is putting pressure on oil companies. The fear of fuel inflation before the March presidential election remains, however, and sanctions and the war exacerbate the structural limitations on the government to react to this problem.
— Andras Toth-Czifra
Quickfire: Ukraine
Russia launched another massive missile attack on Ukraine on January 23, injuring over 100 people. Kharkiv was hit the hardest, with 10 people killed and over 70 injured as a result of the strike. The Russians damaged residential buildings, a medical facility, educational institutions, and cars in the Kyiv, Kharkiv, Dnipropetrovsk, Kharkiv, and Sumy oblasts. Kharkiv Mayor Ihor Terekhov declared January 25 to be a day of mourning.
“20 Days in Mariupol,” Mstyslav Chernov’s movie about Ukraine’s besieged city, has been nominated for best documentary at the Academy Awards. The movie was shot in early 2022, during the first three weeks of the war. The haunting images and stories—including the death of a 4-year-old girl, freshly dug mass graves, and the bombing of a maternity hospital—documented the tragedy as it unfolded in the once-vibrant Ukrainian port city.
— Lisa Noskova