Inside Russia, the elite are counting the devastating cost of war as Putin escalates

But some senior Russian officials and business elites are exhausted and depressed — and expectations are for a worsening political and economic climate. If Putin’s military escalation was in part intended to quell unrest brewing over the mismanagement of the war, then its impact may be only temporary, several officials and businessmen said in interviews.

“There are other problems on the battlefield,” said an influential Moscow businessman who, like others interviewed for this report, spoke on condition of anonymity because of personal security concerns. “I don’t think it’s going to lift the pressure,” referring to the missile strikes.

In addition, business leaders and officials said that even if the strikes manage to damage more than Ukraine’s power and energy grids as the battle drags into the frigid winter, there are questions about how many missiles Russia has left and how long it can sustain a bombardment. The missiles “are being produced. But in single units. And the old reserves are running out,” said one government official.

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Since the Ukrainian army began seizing swaths of territory in southern and eastern Ukraine, Putin has struggled, forced to send hundreds of thousands of barely trained reservists to try to shore up Russia’s depleted army, a move that sparked protests across Russia and sent at least 300,000 Russian men flee across the country’s borders to avoid conscription.

As signs of dissent began to emerge in Putin’s inner circle, Saturday’s humiliating attack on the Kremlin’s prized Kerch bridge to Crimea appeared to be the final straw.

“No one is happy with the status quo,” the Russian government official said. “It is clear that a military or political victory will not be possible. But loss is also not possible. This becomes the situation in chess known as zugzwang, where each move is worse than the next and yet it is impossible not to move.”

The optimism of the summer, when, according to a second government official, many in the country’s elite believed that “we will turn it around and find a way” has completely evaporated. “People see that there is no future,” he said.

The forced mobilization has already hit Putin’s popularity, one of the main foundations of his legitimacy as president, and when the bodies of reservists start returning from the front, the situation could worsen, the Moscow businessman said.

“In a few months, there will be a very negative dynamic in Russia: a worsening of the mood in society,” he said. “It all depends on the front.”

“Putin’s arsenal of possible actions is very limited,” said Sergei Aleksashenko, a former deputy governor of Russia’s central bank who now lives in exile in the United States. “Besides hitting civilian infrastructure, he only has the ability to use a tactical nuclear weapon.” If the Ukrainian counterattack continues, the question of what to do next remains before Putin.

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But few in Moscow say Putin will resort to deploying a tactical nuclear strike, despite the Kremlin’s claims, the Moscow businessman said, because “then he won’t have any cards left” while China can block that kind of escalation. “This is Pandora’s box [the Chinese] I don’t want an opening,” he said.

Saudi Arabia’s support for cutting oil production this winter appears to have emboldened the Russian president, said the same Moscow-based executive who maintains contacts with political officials. Even if energy prices remain at the same level, Putin “thinks that Europe will be in crisis and there will be no time for Ukraine.”

“It is still a war of attrition until one side is unable to continue the war,” he said.

Gazprom’s chief executive, Alexei Miller, warned on Wednesday that “whole cities” in Europe could freeze and said there were no guarantees that Europe could survive the winter with current levels of gas reserves.

Economists and business executives say the sanctions are starting to hit the Russian economy harder, with budget cuts already in place – while the proposed price ceiling will be imposed from the Group of Seven Nations on the sales of Russian oil from December will be an additional blow. The Russian president “is going to run out of money… He needs money to pay Iran and North Korea for weapons. But in December, we will see a completely new reality,” said Sergey Guriev, rector of Sciences Po University in Paris.

Amid expectations of more and tougher sanctions, any bad news from the frontline is another blow to the Russian economy, a second representative of Moscow’s business elite said.

“The whole business is suffering from what is happening. Everyone has frozen their investment plans,” he said. The earlier belief that Russia could divert trade flows from the West through China, Kazakhstan and India is quickly melting away, two of the business executives said. Kazakhstan has begun blocking cargo carrying European goods to Russia, while the Chinese have also begun halting certain supplies.

“Everyone is completely disappointed. The mood is very bad,” said a third senior Russian businessman.

Members of Moscow’s elite are beginning to talk about a potential leadership change in a way they have never done before in Putin’s more than 20 years of rule – although no one can say how or when that might happen.

“We have begun to enter a revolutionary situation,” said the first civil servant. “Everyone is waiting for something different from what is happening now: a different leadership, a different war. Hawks want tougher action. Pigeons don’t want war at all. The time is ripe for a change in the political system. But how it will be, I do not know.”