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Welcome to The Adversarial. Every other week, we’ll provide you with expert analysis on America’s greatest challengers: China, Russia, Iran, North Korea, and jihadists. Read more below.***RussiaIn the economic domain, new data at the beginning of 2024 brought some bad news for Russia. Account surpluses slumped in 2023, amounting to $50.2 billion from a record $238 billion at the end of 2022. This is a result of the combined effect of an unusually high base of 2022 (when the Kremlin had collected ultra-high energy revenues), the downward trend in oil prices (which have fallen about 10 percent over the past 12 months), and issues with Russian oil supplies to India, which recently started to refuse Russian oil tankers (possibly due to tightening sanctions control). Accordingly, in 2023, Urals crude oil was exported at an average price of $62.99 a barrel, down 17 percent from 2022. Still, the Kremlin retains a capacity to compensate for lagging budget revenues through ruble devaluation. That, however, comes at the risk of growing volatility in the ruble value (since 2022, it has oscillated between 50 and 100 rubles to the dollar) and inflation, which has been on the rise, running at around 7 percent a year. Another source of extra money is rainy day funds, but the national wealth fund has been steadily eroding over time: Its liquid assets fell 44 percent from January 2022 to December 2023 (albeit still sufficient to last for another 1 to 2 years under a scenario of lower oil prices). Further exacerbating economic challenges are the new reports of labor shortages: The Russian economy lacks nearly 5 million workers. Taken together, while still looking resilient, Russia’s economy shows challenges sustaining growth by massive military and government spending alone, multiplying signs of overheating, which might be a precursor to a possible recession.In the social domain, recent polls by Russian Field and Levada have shown rising support for peace talks with Ukraine,