The unexpected ‘winners’ of the war in Ukraine: The people, companies and countries that have benefited from the turmoil

Joshua Keating

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The losses from a year of war in Ukraine have been almost incalculable. Tens of thousands of Ukrainian civilians and soldiers have been killed, millions have been displaced, large portions of the country are under a brutal Russian occupation and the country’s infrastructure has been shattered. The war has contributed to a global food and energy crisis that has plunged many of the world’s most vulnerable people into a state of desperation. Hundreds of thousands of young Russian men have been sent off to fight in what some feel is a pointless and self-defeating war — and whatever they may feel, it’s a war from which many won’t return. The Kremlin’s rule has become far more brutal and autocratic, and hopes of peaceful coexistence between Russia and the West have been dashed for the foreseeable future.

On the global stage, Russia’s invasion has shattered long-standing geopolitical norms, diverted scarce financial resources from other pressing issues and renewed dormant fears of nuclear conflict. All told, the world is a more frightening and less stable place than it was a year ago.

But any event as globally disruptive as this war will have unexpected ripple effects and beneficiaries. The war in Ukraine is no exception. A number of companies, countries and individuals have profited financially or gained political advantage as a result of the war and its secondary effects — and are in a much stronger position than they were a year ago. That’s not to say they have cheered the events of the past year or pressed either side to continue fighting, only that they have reaped windfalls as a result of the Russian invasion and what has followed.

Economics and energy: When war is good for business

For the non-Russian oil and gas industry, it has been a banner year. A war involving the world’s second largest oil producer kept prices high as European countries sought to transition away from Russian supplies. As Grid has reported, ExxonMobil finished 2022 with $56 billion in earnings, beating the previous year’s record haul of $45.2 billion; Chevron posted a $35.5 billion profit, even as governments continued to stress the need to transition away from fossil fuels.

And when it comes to the business of energy, several countries have benefited as well.

“The relative winners, at least in terms of their positioning, are some of the countries in the Middle East,” Rachel Ziemba, adjunct senior fellow at the Center for a New American Security, told Grid.

Saudi Arabia’s state-controlled oil company had a particularly good year, including $42.4 billion in profits in the third quarter of 2022 alone. The ongoing geopolitical importance of the world’s largest oil exporter was demonstrated in June when President Joe Biden, who had once vowed to make Saudi Crown Prince Mohammed bin Salman a “pariah” because of his human rights record, made a controversial visit to Riyadh in hopes of convincing the Saudis to boost oil production. (It didn’t work.) The United Arab Emirates has also pushed forward with an ambitious plan to increase its production capacity while oil prices remain high. And the halt in pipeline exports of Russian natural gas to Europe has allowed gas giant Qatar to increase its dominance of the global natural gas market; Qatar signed a 15-year gas supply deal with Germany in November.

“The war has led countries like Germany to say, ‘Look, we do need different pathways for natural gas, and we’re not ready to just use renewables,’” said Ziemba.

It’s not only Middle Eastern producers who are benefiting. Norway — Europe’s leading oil producer — booked $114 billion in oil and gas sales last year. That prompted debate in the climate-conscious country over what some activists called “war profits.” Norwegian lawmakers responded by highlighting the more than $1.63 billion in financial support Norway has poured into Ukraine.

The countries still willing to purchase Russian oil, either because they don’t see a problem with buying from Russia or they don’t mind taking advantage of Moscow’s desperation, have also benefited. With Russian oil selling at $20-$30 dollars a barrel below market rates, India, to use one prominent example, is now buying 33 times more Russian oil than it did a year ago. Given that India was buying 1.4 million barrels of Russian oil a day last month, that translates into a daily savings in the tens of millions of dollars.

Of course, energy isn’t the only commodity impacted by the war — and oil and gas traders haven’t been the only beneficiaries of the wartime commerce. The Financial Times recently reported that Morocco’s OCP Group, the world’s leading producer of phosphate fertilizer, saw record earnings last year, as the drop in Russian gas exports devastated producers of nitrogen fertilizers, which use gas as a feedstock. OCP made $3.65 billion in the first nine months of 2022, up from $1.99 billion in the same period the year before.

A windfall — sort of — for the defense industry

Given that billions of dollars in arms are being sent to Ukraine and countries around the world are boosting their defense budgets in anticipation of a new era of global conflict, you might think this past year would have been a boom time for the weapons business. Indeed, defense stocks spiked following Russia’s invasion, and from a public relations perspective, major Western defense firms have been happy to be associated with the Ukrainian cause. In that sense, the industry has been a winner.

But the big U.S. defense contractors haven’t had as good a year as you might think. Lockheed Martin, which makes the Javelin anti-tank missile and HIMARS rocket launcher — both key weapons systems in the war in Ukraine — actually saw sales shrink last year. Raytheon, producer of the NASAMS and Patriot air defense systems — two other prized items for the Ukrainians — doesn’t expect sales to increase until next year.

How can that be?

The problem, industry analysts say, is that arms sales work on multiyear contracts, and firms haven’t yet seen indications that demand will persist long enough to make it worth their while to ramp up production. The low-tech, artillery-heavy warfare that’s taking place in Ukraine hasn’t been a major area of focus for Western defense firms in recent years, and it will take time and money to ramp up production. As Dan Grazier, a defense policy fellow at the Project on Government Oversight, told Grid, “Look, 155-millimeter artillery rounds aren’t sexy. The money is in developing the next new thing.” Of course, there is demand for more sophisticated systems as well, but analysts say the Pentagon’s ambitious aid pledges haven’t been backed up by actual orders with the companies making these systems.

And while Western governments have made a lot of noise about mobilizing the “defense industrial base” to produce more armaments, Bill Greenwalt, a senior follow in defense policy at the American Enterprise Institute, told Grid, “A lot of public companies are looking at this and saying, ‘How serious are they?’ If peace is declared tomorrow, they’re going to be left holding the bag, so there’s no incentive to ramp up.”

Things are a bit different in Europe, where companies like Germany’s Rheinmetall, producer of the Leopard battle tank, and Norwegian-Finnish ammunition manufacturer NAMMO have benefited from an uptick in orders after years of flat or declining defense spending on the continent.

And if — as many experts believe — the war in Ukraine drags on, the current levels of tension persist and the U.S. continues to be involved, the big U.S. firms are likely to benefit as well.

Politics and power

During the past year, the U.S. government has often sought to portray the war as a global struggle, with Russia and its autocratic enablers on one side and Ukraine and its democratic allies on the other. But a number of countries have benefited from the conflict by refusing to pick a side.

China and Russia famously declared a “no-limits friendship” just a few weeks prior to the war. In truth, there have been limits: China has not formally backed the invasion or provided Russia with any direct military support. But it has moved quickly to fill the void left by Russian sanctions. China’s bilateral trade with Russia grew 31 percent in the first eight months of 2022. Like India, China has benefited from buying Russian oil at a discount, while Russia is increasingly reliant on China for electronics and consumer goods. Strategically, China has undoubtedly benefited from a somewhat distracted U.S., which, absent the war, would likely have spent much of the year focused on countering China’s global ambitions. Meanwhile, Russia’s increasing economic dependence on China means that Beijing may ultimately reap benefits no matter how this war turns out.

As Yun Sun, director of the China program at the Stimson Center, told Grid in November, “For China, if Russia wins, that’s great because China gains a stronger ally. If Russia loses, that is also great because China gains a vassal state, which is the second largest nuclear power in the world.”

Few world leaders have turned the war to their own advantage as much as Turkish President Recep Tayyip Erdogan. Turkey has sold Ukraine a significant amount of weaponry, including the now-iconic Bayraktar drone, manufactured by a company owned by Erdogan’s son-in-law. At the same time, Turkey has refused to join its NATO allies in sanctioning Russia, maintaining both trade and political ties with Moscow. Erdogan has also shown his political clout — playing a pivotal role in negotiating the deal to reopen the Black Sea to grain exports and playing hardball with NATO by refusing to approve membership for Sweden and Finland.

Despite that unresolved dispute, it’s been a good year for NATO, which in addition to the two new prospective members, has seen a number of existing members finally announce they are raising their defense spending levels to match the alliance’s targets. NATO’s ability to continue supplying Ukraine with almost no interference from Russia attests to the ongoing relevance of its Article 5 mutual defense guarantee, which states that an attack on any one member state will be considered an attack on all. Generally speaking, the war has also provided NATO with a clear sense of purpose after years of strategic drift.

The war has also made winners — in a sense — of the formerly Communist Eastern European nations of Poland and the Baltic Countries. These nations have been wary of Putin’s Russia since he took power — and wary of Russian expansionism for centuries — and in the past year, they have often seemed to be setting the tone for the European Union’s response to the Russian invasion, pulling more reluctant Western powers along with them. “I think Eastern Europe’s voice is stronger in this debate than it used to be on this topic,” said a senior EU official in a recent press briefing. “When you see what the Baltics or Poland have been saying about Russia, I think it was much closer to the reality than what you heard from the Western European countries.” As German Chancellor Olaf Scholz conceded in August, “The center of Europe is moving eastward.”

Then there’s the United States. The Biden administration generally doesn’t talk about the war in Ukraine in terms of U.S. interests and rejects the notion it is fighting any sort of proxy war with Russia. But Defense Secretary Lloyd Austin came closer than most of his colleagues to articulating these interests in April when he said that the U.S. aimed to see “Russia weakened to the degree that it can’t do the kinds of things that it has done in invading Ukraine.”

If those were the aims, the U.S. could also be counted among nations that have benefited in some ways from the war. Over the past year, the U.S. has seen the military of a nuclear-armed superpower rival decimated and humiliated without a single American soldier being put in harm’s way. And while the money the U.S. has poured into Ukraine has been substantial, the total is still less than what Washington spent in Afghanistan during many years of the two-decades-long American presence in that country.

Over the past year, the U.S. also managed to cobble together the sort of global coalition it has rarely been able to build over the past decades, even in the immediate aftermath of the 9/11 attacks.

This may not last. Even the Biden administration doesn’t think global support for Ukraine will continue indefinitely and that such support will be even harder to come by if the Ukrainians don’t make gains in the coming months. And while the prospects of a wider war or the use of nuclear weapons don’t seem as likely as they did a few months ago, they haven’t gone away entirely.

For the past year, the U.S. has succeeded in its twin goals of giving Ukraine the support it needs to resist the Russian invasion while avoiding a wider global conflict. Neither task is likely to get easier in the year to come.

As for others who may have benefited in some fashion from what has happened since Russian forces invaded Ukraine, that same cautionary note applies. Given the risks inherent in such a large-scale, devastating and unpredictable war, even the countries, companies and individuals who are in a stronger position now than they were a year ago shouldn’t count on that continuing.