Russia can fight on in Ukraine for at least two years, Lithuania says

High oil prices, sanctions evasion and state investment are providing Russia with enough resources to fight on in Ukraine at the current intensity for at least two more years, Lithuanian intelligence agencies said in a report on Thursday.

Russia reformed and strengthened its battle-torn army in Ukraine in 2023 and is on track to expand its military capabilities along its border with NATO, including next to Finland, which joined the alliance last year, the agencies said in their annual assessment of threats facing the Baltic country.

“Moscow is able to evaluate the lessons learned and improve its combat effectiveness”, the Lithuanian agencies added in the report that was embargoed for release on Thursday morning.

The joint report is the work of two agencies: the counter-intelligence State Security Department and the military’s Defence Intelligence and Security Service under the Ministry of National Defence.

Russia’s defence minister said on Tuesday that the country has strengthened its military forces in the north and west of the country in response to a perceived build-up of NATO forces on its borders.

Lithuania, neighbour to both Russia and its ally Belarus, was once ruled from Moscow but is now a member of NATO and the European Union.

The agencies wrote that Russian intelligence is driving efforts to evade the sanctions imposed on the country’s defence industry after it invaded Ukraine.

While Russia is openly supplied with weapons and ammo by only Iran and North Korea, China has become its largest supplier of microchips and the yuan has become the main currency for Russia’s international transactions, Lithuania’s agencies said.

They added that since Russia deployed military warheads in Belarus in 2023, it has been steadily building infrastructure for their use there.

The report said Russian and Belarusian intelligence agencies have increased their efforts to recruit Lithuanians crossing the border and Lithuania detained several of its own citizens in 2023 whom it accused of providing data for Belarus intelligence for cash.

Turning to China, the agencies said the country increased its spying efforts in Lithuania in 2023, following Lithuania’s decision to allow Taiwan to open a de facto embassy on its soil in 2021.

The report said that cyber actors “affiliated with China” have been found regularly probing Lithuanian government institutions for vulnerabilities “with the aim of penetrating their networks and exfiltrating data”.