Despite a supposed truce, Monday pro-Russia troops launched an intensive attack, including the use of tanks and rockets, in what looks like an effort to take the town of Starohnativka. The town lies strategically in the land route that Russia wants to Crimea, which Putin engineered the annexation of in September 2014.
Since the agreement was signed, some 200 Ukrainian solders have been killed and 2,000 wounded, which basically means that there is no truce. Further, Ukraine has captured Russian soldiers, which exposes Russia’s lies that only “pro-Russian separatists” are involved in the conflict.
Making the land route to Crimea important to Russia is that Sevastopol, which is now part of Crimea because of the annexation, is the base for Russia’s Black Sea Fleet. Sevastopol is vitally important to the Russians because it is their only warm port.
The renewed fighting increases the likelihood of western nations involvement. Britain’s defense secretary, on visiting Ukraine recently, promised to double up to 2,000 troops that train Ukrainian forces. Congress is debating giving “defensive” weapons to Ukraine.
Meanwhile, the European Leadership Network, an NGO made up of formerly powerful military figures, politicians and policy makers, is saying that Russia and NATO are training for a full-blown conflict with each other, that each side is “preparing for the worst.” ELN points to this year’s NATO Allied Shield exercises and Russia’s “snap” military drills. “Each side is clearly training with the other side’s capabilities and war plans in mind,” an ELN report says.
Compounding the problem is that oil is involved.
According to a May 17, 2014 article in the New York Times, with the annexation of Crimea Russia gained about 36,000 square miles of Black Sea offshore holdings, which had already been explored by major western oil companies. Some petroleum analysts say the area’s potential may rival that of the North Sea. (For more on this, see The Ukrainian conflict and gold prices.)
Fighting in Ukraine is a Black Swan that deserves watching. Gold and silver prices most certainly will see upside movement if fighting heats up there–and especially if it looks like the West will get more involved.