The Decisive | Season 4 Ep.8 - Evolving Military Strategies: Insights from the Middle East and Ukraine

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Kristen Hallam: 

You're listening to the Decisive Podcast. Insights and analysis to empower confident decision making. Welcome to another episode of the Decisive Podcast. I'm your host, Kristen Hallam. In this episode, I'm joined by my S&P Global Market Intelligence colleagues, Jack Kennedy, head of Middle East North Africa Country Risk, and Sascha Ostenina, Principal Analyst for Europe CIS Country Risk. Jack and Sascha are going to be speaking at S&P Global's Definitive Risk Conference in London on October 14. See the episode description for a registration link. They'll be giving us a taste of what they'll be talking about at the conference and updating us on their respective regions. 

Jack, Sascha, welcome to the Decisive. 

 

Jack Kennedy: 

Thank you. It's a pleasure to be here. 

 

Sascha Ostenina: 

Thank you for having us, Kristen. 

 

Kristen Hallam: 

So let's get our conversation started. The first question I have for you is what are the key military strategies being deployed in your respective regions? And Jack, why don't we start with you? 

 

Jack Kennedy: 

Yeah, well. So if we look at the MENA region, the main military strategies and responses to conflict that our team has been tracking really for about two years now has been the very real scenario of a regional war escalation following the October 7 attacks in Israel. And most directly, we've seen this totally upend the previous Israeli security doctrine and its strategy based around deterrence. The Israeli government and military have developed a far more interventionist policy towards regional security over this almost two-year period, and it's one that's predicated on a relatively zero tolerance approach to any kind of perceived threats around its border or vicinity. So, if we look at how that's played out, Israel's still engaged in a war with Hamas in Gaza. It's largely destroyed Hamas's capabilities to launch rockets into Israel. If we look at Lebanon, Hezbollah there has been extremely weakened. Most of its senior leadership were assassinated or killed by Israel over the course of its war with Hezbollah and they again have been pushed back from the border with Israel. 

If we look at Syria, the Assad government was weakened by Israeli strikes and then overthrown by domestic opposition and its strategic weapons stockpiles or any threat to Israel has been destroyed, and that's weakened Iran's presence in Lebanon and in Syria. And then with Iran, most notably, there have been several rounds of confrontation culminating in a very significant war escalation in June this year where Israel, with the coordination, collaboration with the US bombed most of Iran's nuclear facilities and managed to damage or destroy about two-thirds of its medium range ballistic missile stockpile—what was being used to primarily attack Israel. So this kind of paradigm has really changed the offensive picture in MENA, but it's also significantly increased the risks on our outlook for successive rounds of regional confrontation. 

 

Kristen Hallam: 

All right, thank you, Jack, for that really comprehensive look at what's happening in the region. Sascha, same question for you. What would you say are the key military strategies being deployed in your region? 

 

Sascha Ostenina: 

My work focuses on the Russia-Ukrainian war and its wide implications. So for my region, we see three distinct strategies that are used by Russia, Ukraine and Ukrainian allies. Russia is pursuing a war of attrition, and this strategy is applied not only against Ukraine, but also against its European allies. So in Ukraine itself, Russia is leveraging its larger pool of personnel and equipment to gradually wear down a smaller Ukrainian army and, specifically, thinner defenses that Ukraine has. That's nothing new that this is the strategy Russia has been pursuing for the past two or three years. But at the same time, we see how Russia is now extending this attritional strategy, attritional pressure, to Europe by, for instance, violating NATO airspace. And so these incursions are also attritional because they are forcing Ukrainian allies to lock air defenses, lock those resources inside Europe, rather than transferring them to Ukraine. And this further strains Ukraine's military capacity. 

In its turn, Ukraine is pursuing a strategy of promoting rapid technological innovation to offset Russia's manpower and resource advantage. And alongside this approach, Ukraine is also looking into ways to shift back to a more dynamic phase of the war, similar to late 2022, when Ukrainian counteroffensives in the south of the country allowed it to regain some territory from Russian forces. So it's in a way, a dual track approach of using innovations against the superior opponent to sustain the war now and also to change the format of this fighting to Ukraine's advantage in the future. And when it comes to NATO, its approach remains centered on deterrence. The idea is to dissuade Russia from pursuing military actions against its members. NATO is not in a conflict with Russia, but at the same time, because of those military air incursions into NATO airspace, NATO is now accentuating and intensifying this deterrent approach towards Russia. 

 

Kristen Hallam: 

All right, thank you for that update, Sascha. Now, you've both kind of touched on this in your responses, but I'm just wondering how these strategies have evolved over time in these respective regions. And Sascha, since you've got the mic, so to speak, how would you say these strategies have evolved? 

 

Sascha Ostenina: 

We definitely see a significant change in, kind of, in the format of strategies that have been pursued at the outset of the conflict. So initially, Russia's approach was to conduct a very quick war, replace Ukraine's government through a rapid advance on the capital, capture it, install a compliant authority, and then withdraw from the country. Russia's plan definitely didn't include a three plus year conflict that would drain a lot of resources and equipment into it. But once this plan failed and in the face of Ukraine's successful counteroffensive, Russia shifted to this attritional strategy and entrenched its forces in occupied territories. And this became evident, this shift in Russia's strategy became evident in 2023 when Ukraine's counteroffensive was unable to penetrate Russia's territories. And that was a sign for Ukraine that it needs to adjust its strategy to the conflict as well. For its part, Ukraine began the war with high expectations that allied support will allow it to push Russia relatively quickly back from its occupied territories. 

Despite numerical disadvantages, this strategy initially worked. However, as the conflict dragged on, Ukraine faced increasing delays in foreign military aid, along with restrictions on the type and timing and permitted use of weapons. Because of these delays, and because Ukraine got clear signals that it will not get a fast-track NATO membership, the country's government reduced its reliance on external assistance. And from this shift emerged Ukraine's current strategy that relies on rapid technological innovation. Ukraine is investing in this innovation domestically and also expanding indigenous weapons production that would allow it to sustain the fight and offset Russia's material superiority. 

 

Kristen Hallam: 

Thanks, Sascha and Jack, same question for you. How have strategies evolved over time in the MENA region conflicts that you described? 

 

Jack Kennedy: 

Yeah, we've seen a big focus on the utilization and the adoption of technology and how exactly that interlinks with advanced warfighting capabilities. And this has been particularly the case with Israel and the US's interventions over the past couple of years. But it's also started to expose, I think, the relative limits of what we might call conventional military ground operations without a clear political direction to an end state. Now, this is something that's been quite apparent in the ongoing situation in Gaza. How exactly that war and the goals within it are to be communicated both domestically within Israel, but also how that that's being perceived externally on a wider global level. But it's also been quite apparent in the ongoing confrontation with the Houthi in Yemen and their ongoing capacity to disrupt and target shipping in the Red Sea. There was a period of US intervention against the Houthi, a very significant naval deployment whereby its positions within the Yemeni territory that it controls came under successive airstrikes. This was a very expensive operation for the US, but it's been wound down with a ceasefire between the US and the Houthi. 

But ultimately it hasn't diminished the Houthi's capability to continue these kind of operations. And the Houthi have continued targeting Israel with missile and UAV attacks over this period, despite the fact that Israel has also been carrying out successive rounds of airstrikes on Houthi positions in Hodeidah and in the capital, Sanaa. So without having a clearly defined endpoint to these kind of missions, I guess what we've been seeing develop over time is the capacity for non-state armed groups to continue to manifest their own capabilities and in some cases actually expand them. 

 

Kristen Hallam: 

Speaking of endpoints, Jack, what is our outlook for these conflicts? Do you see any potential pathways to resolution? 

 

Jack Kennedy: 

So our main assessment is that there remains a severe risk of interstate war between Israel and Iran in the 12-month outlook unless there's an alternative agreement on Iran's nuclear program between the US and Iran, which we consider to be unlikely unless the Iranian government concedes in its demand to maintain a domestic Iranian enrichment program. So this increases the probability of further rounds of Israel-Iran hostilities. We think that the significant damage caused to Iran's enrichment site in the June war probably reduces the likelihood that the US administration is going to agree to concessions that would allow for a minimal level of Iranian enrichment. And there's also been no reported progress in the negotiations between European partners to the original 2015 nuclear agreement and Iran. That was really part of the issue why the snapback mechanism was invoked back in August to impose all pre-JCPOA nuclear deal UN sanctions on Iran in October. And our assessment is that triggering this process, it doesn't increase the likelihood of strikes from Israel or from the US but we have identified three plausible triggers that could lead to that kind of a conflict escalation scenario. So Iran rebuilding its damaged Iranian enrichment program, rearming its ballistic missile and advanced air defense capabilities, or withdrawing from the nonproliferation treaty. Now those are not mutually exclusive trigger points, but if they are triggered on an individual or a collective level, we think it would significantly increase the likelihood of a resumption of Israeli strikes on Iran. 

And following on from that with Iranian retaliation, another pathway towards regional conflict escalation. 

 

Kristen Hallam: 

All right. And Sascha, how about you? What's our outlook for the Russia Ukraine war and do you see any potential pathways to resolution there at the current. 

 

Sascha Ostenina: 

At the current stage of the conflict, we continue to assess that a ceasefire between Ukraine and Russia is very unlikely within the next six months and a peace agreement is very unlikely within the next year. Judging by the influx of various political initiatives being driven largely by the US, it might sound confusing because there is a clear political momentum to help the two countries resolve their differences. However, when we look at the battlefield conditions, neither Russia nor Ukraine at the moment are facing severe enough conditions that would compel them for political negotiations. Yes, we see Russia's limited gains in the east of Ukraine. We see Ukraine's long-range strikes against Russian energy infrastructure that impact the country's fuel availability on domestic market as well as its ability to sell fuel abroad. But none of those factors is sufficient to alter either side's military strategy. We do also look into potential indicators that in the case of the Russia-Ukrainian war can change our conflict resolution forecast. And one of such indicators is Europe's response to Russian airspace incursions. 

Depending on how exactly Europe or NATO decides to respond to those incursions, this has a potential of reshaping Europe's aid posture towards Ukraine and in turn influence Ukrainian military calculations. We expect these dynamics to take clear shape in the coming month. And so for now we maintain our assessment that no decisive shift suggests imminent political breakthrough in resolving the Russia-Ukrainian war. 

 

Kristen Hallam: 

All right, well, shifting from the Russia-Ukraine war to a trend that may be forming here, there seems to be an uptick in mini conflicts compared with full scale, years long wars like the Russia Ukraine war. Jack, what would you say is driving that trend? 

 

Jack Kennedy: 

It's a great question and it's probably a combination of multiple factors. We've identified, in particular, shifts in geopolitics and very significant and continuous advances in technology are probably right at the heart of this. Lessons that have been learned from conflicts in the Middle East and in Ukraine and then shifts in defense technology availability are very likely to continue to influence and inform limited conflicts by state or non-state actors in the years ahead. We're looking at comparatively cheap UAVs and autonomous weapons systems, AI-supported decision making and access to advanced satellite communication systems are going to allow politically motivated actors or criminally motivated actors to maintain relatively low level conflicts. We're seeing this in the Sahel, in the Horn of Africa and the Middle East, and drug routes from Latin America into North America and Europe. So the relative ease that militaries, state or non-state, will have in taking existing weapon systems and retrofitting them with autonomous capabilities because of AI proliferation is probably going to continue lowering the barriers for securing the kind of advanced capabilities that previously would really just have been available to major states and major militaries. And this means that the influence and increasing availability of technology is going to challenge the kind of long standing assumptions that we've had around inter country power dynamics and actors that are able to acquire or secure these kind of capabilities. They're probably going to favor offensive systems, UAVs or missiles, because it's a relative cost advantage compared to what we're seeing on the opposite side in the defense. 

 

Kristen Hallam: 

That certainly gives one pause. Lots to think about, lots to track there. Thanks for that, Jack. Now, how has this mini-conflicts trend informed or changed how you approach your analysis? 

 

Jack Kennedy: 

In many ways, I think it's illuminated the extent to which we at S&P Global Market Intelligence have such access to data and the opportunities for collaboration. It represents an operating environment of acute uncertainty for us, but also for our clients. But at S&P Global Market Intelligence, you'll navigate that uncertainty with more confidence because we rely on our data to support and to drive our analysis and our forecasting. But the scope of what we're looking at and the scale of a potential commercial impact, it really goes beyond country risk, which is what we work in. And it means that it's essential for us to maximize the kind of collaboration that we have across all the teams where we have expertise. We could talk about the importance of supply chains and access to critical minerals for advanced weapon systems if we're looking at security, and how that's likely to underpin many of the developing vulnerability points that we've been talking about. And where we've benefited and where we have such a pronounced advantage is the way in which we're able to lean on all the different expertise of our teams, particularly where we have things like proprietary data models to lean on. For example, when we were looking at the potential impact of extended conflict in and around the Strait of Hormuz, we're able to work directly with our economists and our supply chain experts. 

We can collaborate with modelers to use our proprietary Global Link Model to forecast the impact of disruption and closures in the Strait of Hormuz on global GDP. Our pricing and purchasing colleagues can incorporate the impact of that into specific material sectors, and then we can unpack that with our maritime and trade data to get a fully accurate picture of what disruption for shipping will look like and how that's going to impact a wide range of different global sectors in the economy. 

 

Kristen Hallam: 

All right, and what about you, Sascha? How has this trend informed or changed how you approach your analysis? 

 

Sascha Ostenina: 

For a start, we do remain committed to our approach of analyzing geopolitical developments by systematically collecting indicators or early warning signals that help us to determine how a specific political security risk is developing in a given period. For Europe alone, we collect hundreds of such indicators on a daily basis. For violent indicators, they're also geocoded. And this especially important when it comes to such conflict as the Russo Ukrainian war. Because of the geographic scope of the conflict, the ability to track down which trend is developing in which part of the country, or how a conflict spills over to other parts of the region is very important. And so now our database includes over 3 million indicators across all countries. That allows us to be very precise and data driven in producing our security forecast and political forecast. 

At the same time, we did introduce a few important adjustments to our daily work when it comes to data as well. First, we not only track an indicator or an early warning signal itself, but we also maintain our analysis of a specific event on a longer period. For instance, in analyzing sabotage campaigns. Maintaining these data sets across extended timelines is critical to be able to not only identify underlying trends, but also to filter out short term noise. And on top of that, we also add increased data granularity to be able not only to see localized sector specific trends such as disruptions to energy infrastructure, logistics bottlenecks, defense-industrial protections, but we also want to use these national level indicators to aggregate information and to be able to have a sharper view on how risks evolve in practice and impact a wider region. And finally, we combine this granular long term data analysis with a geopolitical approach that's becoming increasingly important in the past years. The geopolitical context was always important and central to our work. But this energy between micro level data and broader strategic dynamics have been more pronounced in the past years. 

And this shift in what type of data we collect and how we handle it has led us to rely more heavily on scenario based modeling and to strengthen our cross regional collaborations that Jack talked about. 

 

Kristen Hallam: 

So let's zoom out for a moment. How are these conflicts impacting alliances at a regional or a global level? I mean, we've touched on NATO in this conversation and we've certainly touched on some regional dynamics, but I'd like to hear a little bit more on that. Sascha, how about we start with you? 

 

Sascha Ostenina: 

Yes, we definitely see continuous uncertainty that surrounds NATO's future. I mean, even before Russia's 2022 invasion of Ukraine, there were debates questioning whether NATO was brain dead or if it needed to expand its mandate to remain relevant. These questions remain very relevant, but because of the radically changed security environment, these questions became more urgent and we do not expect those questions to be resolved in the coming years. And it means that this uncertainty over NATO's capacity to deter external threats and maintain internal cohesion will very likely persist for the years to come. 

 

Kristen Hallam: 

And Jack, how about from the Middle East perspective? 

 

Jack Kennedy: 

Well, I mean, we've used four overlapping themes through 2025 to ground our analysis. Economic angst, domestic discontent, trade troubles and elusive alliances. And all of these influence one another and none of them develop in isolation. And I think we very much be looking at the concept of elusive alliances today and the geopolitical reordering that accompanies that. And it's one of the key aspects of global power plays. And this builds on dynamics that we've been seeing accelerated by the war in Ukraine, which obviously exacerbated pre-existing geopolitical challenges. And that means that we're really looking at a shift where the global system, and for decades we've seen that ordered along the lines of globalization and geoeconomics, it's going to become one that's oriented much more around geopolitics. So speaking to MENA, what we've been tracking over the last couple of years, particularly since the start of the war in Gaza, it's halted a lot of the forward momentum of the Abraham Accords, that is the recognition of Israel by regional states. 

 

Kristen Hallam: 

Interesting, interesting. So aside from defense companies who have an obvious interest in what we've been talking about today, what other types of industries would have an interest in these geopolitical conflicts? Jack, what would you say? 

 

Jack Kennedy: 

Well, we've already flagged the significance that the development of these kind of conflict friction points are going to have for supply chain operators. But within that, I'd also flag the, the interest, the impact that's going to happen with cybersecurity and endpoint vendors who are going to be interested in any companies that are trying to scale up their resilience against, for example, AI powered cyber attacks. And this is something where, as we see an increasing proliferation of this kind of technology that's going to be increasingly seen as major vulnerability points for commercial operators. With the insurance sector, any underwriters that are trying to refine their models to price war and terror exclusions or cyber siege risk and supply chain disruptions tied to low intensity conflicts, again, this is going to continue to be areas of very much top concern. And I think maybe just wrapping up again, we're likely to see anyone operating in financial services who are required to monitor anything like sanctions evading transactions. If we start to, and we expect to see a continuation and proliferation of these smaller and larger conflicts, it's very likely that any kind of increased compliance with sanctions regimes is going to be something that continues and has expanded as a focus. 

 

Kristen Hallam: 

All right, thanks Jack, and Sascha, any anything to add there? Any additional thoughts on what other types of industries companies would be interested? 

 

Sascha Ostenina: 

In Europe, due to the scale of the Russo Ukrainian war, we see that there is a shift to viewing the current conflict and designing responses to it on a whole of society approach. This means that defense is not only about military capabilities, but also about broader national and alliance resilience. And one of the practical examples of how this approach could be implemented with impact to civilian sectors is logistics. If a NATO member seeks to move defense equipment to a frontline ally, the infrastructure of every transit country must be able to sustain those deliveries. And the early stages of Russia's invasion of Ukraine highlights this weakness. France, for instance, wasn't able to transfer tanks to Romania through Germany due to the notoriously poor state of German infrastructure. And so NATO adopted this approach in its 2025 summit in the Hague when it decided to revise its calculation of defense spending by also including allocations for defense related projects. Such defense related projects could be related to infrastructure upgrades, civilian navigation, against cybersecurity, supply chains. 

So in my region, the evolution of the Russo Ukrainian war has broadly impacted every single industry that you can point a finger on. 

 

Kristen Hallam: 

All right, well this has been a great conversation with both of you. It is time for us to wrap up any final thoughts or takeaways for our listeners. Sascha, let's start with you. 

 

Sascha Ostenina: 

My main takeaway would be that regional security cannot be analyzed in isolation. The challenges that we're now facing are global. The risks are shared and so must be the solution. So our work is continue to be dedicated to analyzing these geopolitical trends and assessing the impact for our clients. 

 

Kristen Hallam: 

Thanks, Sascha, and Jack, how about you? Any final thoughts? 

 

Jack Kennedy: 

I think I'd have to align very closely there. Uncertainty, operational uncertainty, multidirectional challenges across the board are likely to become far more frequent in their occurrence. I think that's come clear through the kind of discussion we've been having today. So the best thing that our clients can do is really to secure as much data provision and forward-looking analysis to try and get ahead of those challenges while they can. 

 

Kristen Hallam: 

All right, well thank you so much for taking the time to share your insights with us today. That concludes this episode of the Decisive. Thank you for listening to the Decisive Podcast from S&P Global. Please subscribe and join us for next week's episode. Until then, stay curious and stay informed.