KYIV, Ukraine—As Russia’s war against Ukraine approaches its third year, Moscow holds the advantage on the military, political and economic fronts.

Russia has far more men to replenish its battered army than the Ukrainians, who are running short of well-trained infantry. President Vladimir Putin is militarizing the Russian economy, using strong oil revenues to pay for rising weapons production. Meanwhile, political paralysis in the U.S. and Europe is threatening the supply of arms and money that Ukrainian survival depends on.

Western disarray and Russia’s growing commitment of its human and industrial resources to the war point to a bitter year on the defensive for Ukraine. But the Russian army’s limitations on the offensive—on display in the grueling fight for the city of Avdiivka—suggest it is more likely to grind out small gains than to achieve a breakthrough.

Putin is still a long way from conquering the Ukrainian regions Russia has claimed—let alone from achieving his bigger goal of subjugating Ukraine, whose existence as an independent nation-state he has called a historical anomaly.

“The material advantages in 2024 are principally on Russia’s side, but they don’t appear decisive enough that Russia will be able to achieve its political aims,” said Michael Kofman, a senior fellow at the Carnegie Endowment for International Peace, a Washington, D.C.-based think tank.

“It’s inaccurate to suggest that Russia is winning the war,” Kofman said. “However, if the right choices are not made next year on Ukraine’s approach and Western resourcing, then Ukraine’s prospects for success look dim.”

Economies at war

The U.S., European Union and U.K. have a combined annual economic output of about $45 trillion—20 times the size of Russia’s economy—and superior technology. On paper, Ukraine’s backers are much stronger than its attacker. But Russia is making far more effort.

The Russian government’s budget plan for 2024-26, approved earlier this month, shows the country devoting an ever-larger share of resources to the war. Military spending is set to rise to more than $100 billion next year, the highest level since Soviet times. Factories are switching production from civilian goods to tanks and drones. Civilian sectors are paying the price, with shortages of capacity and workers pushing up inflation. But the stimulus from massive military spending is propping up the Russian economy, offsetting the effect of Western sanctions.

Moscow is using trade with third countries to import the sanctioned Western technologies that its arms producers need. It has also found a way to circumvent the West’s price cap on its oil exports, by building up its own fleet of oil tankers that aren’t subject to Western regulations.

Mass production has allowed Russia to catch up with Ukraine in making small battlefield drones, an area where Ukrainian innovation previously gave it an edge, but where Ukraine’s reliance on small workshops and volunteers is showing its limits.

The West has implemented only limited steps to boost military production. The U.S. is increasing its output of artillery shells, but EU countries are failing to coordinate to place orders and motivate investment in new defense production. The EU promised Ukraine a million artillery shells by next March, but officials say the bloc will fall far short. In contrast, North Korea provided Russia with a million shells in a short time this fall, according to South Korean intelligence.

European countries are running out of stockpiled arms and ammunition they can give Ukraine. Political divisions in Washington have already slowed U.S. deliveries. Shells from South Korea helped Ukrainian artillery to achieve parity with Russian forces for a part of this year. Now Ukrainian troops say they are at a disadvantage again.

Ukraine’s economy has withstood the Russian onslaught better than expected, even growing slightly this year after a deep crash when Russia invaded in early 2022. But Ukraine relies on Western money to cover civilian budget costs such as education and healthcare, allowing Kyiv to use its tax revenues to pay for the war.

“Military and financial assistance are critical for Ukraine to be successful, but we also need to become more self-reliant in weapons production and in economic resilience,” said Pavlo Klimkin, a former Ukrainian foreign minister.

Political confusion

Putin’s regime was shaken in June when paramilitary group Wagner revolted against the Russian government. But the revolt fizzled and Wagner’s leaders were killed when their plane exploded. No one has dared to mount a serious challenge to Putin’s authority since.

Instead, political tremors are currently stronger in the West and Ukraine.

The bipartisan consensus in Washington for supporting Ukraine has gradually unraveled as the U.S. presidential election cycle approaches, with objections to further aid growing among Republicans in the House of Representatives.

The EU is likewise struggling to approve funding. The bloc had promised to provide Kyiv with 50 billion euros, equivalent to around $55 billion, over the coming years, but that pledge is now in doubt. Germany’s self-imposed fiscal shackles have thrown EU spending plans into confusion, while Hungary’s leader Viktor Orban, who has long had warm relations with Russia, is threatening to veto aid for Ukraine.

“It makes the whole EU look pretty weak. It’s a big problem for us, but also for the EU,” said Klimkin. The bloc risks exhibiting “a basic inability to deliver,” he said.

In Kyiv, the failure of this summer’s counteroffensive to retake Russian-occupied regions has exacerbated frictions between military and political leaders. Armed-forces chief Valeriy Zaluzhniy’s assessment that the war is going through a phase of stalemate drew a rebuke from President Volodymyr Zelensky, who is anxious to show public opinion and Western allies that Ukraine can advance. Zelensky’s war aim of fully restoring Ukraine’s international borders is seen as unrealistic by the West.

The military deadlock is reinforcing the view in Germany, Kyiv’s most important European backer, that a cease-fire and negotiations with Moscow would be in Ukraine’s interests. Berlin doesn’t want to pressure Zelensky, however.

The problem for cease-fire hopes remains that Putin has little reason to stop his invasion at a time when Western cohesion is weakening.

Even if Putin accepted a cease-fire, Kyiv fears he would exploit it to strengthen his forces and attack again. The Russian leader has a long record of reneging on deals.

Many Western officials believe Putin is waiting to see who wins the U.S. presidential election in a year’s time. If it is Donald Trump, European governments fear he could pull the plug on U.S. military support for Ukraine and even on the North Atlantic Treaty Organization, leaving a militarily weak Europe scrambling to contain Russian expansionism.

A generation of EU politicians who for years underestimated Putin’s challenge to the continent’s post-Cold War order is struggling to adapt to the return of large-scale war between European states.

“I fear that we have not yet taken the measure of the adversary: It is not that strategic, not that intelligent, but it is very, very determined,” said Constanze Stelzenmüller, a director at the Brookings Institution in Washington.

The battlefield balance

Some European officials even fear Ukraine’s position on the battlefield could unravel this winter. The Ukrainian army is short of infantry after suffering heavy casualties in its summer counteroffensive and in the bloody defense of the city of Bakhmut last winter. Thanks to a dysfunctional draft system plagued by corruption, many of the replacements are men in their 40s and are often sent to the trenches with too little training.

Shortages of ammunition also mean Ukraine is unlikely to be able to mount another major offensive for some time. Ukrainian troops’ establishment of a bridgehead on the east bank of the Dnipro River in the Kherson region is a rare bright spot, albeit small in scale.

But the Russian army is also struggling to achieve any notable breakthroughs, despite its numerical advantages in troops and equipment. Its infantry and vehicles are often older and of lower quality than the force it began the invasion with.

Both sides are finding it hard to advance across open, heavily mined terrain beneath skies buzzing with drones, which can attack troops and vehicles or direct accurate artillery fire.

Russia has massed its available reserves in eastern Ukraine, where it is trying to break through at several points, with little success. Even at Avdiivka, Russia’s main target this fall, its forces are inching forward at a huge cost in men and materiel.

Ukraine’s weary forces can still mount an effective defense along the 600-mile front if they husband their resources, limiting Russia to local gains only, say Ukrainian officers and Western experts. The defense ministry in Kyiv is planning to build new defensive fortifications, having seen how effective Russia’s entrenched defenses in southern Ukraine were this summer.

“Next year can be put to good use as a build year to reconstitute the Ukrainian military,” said Kofman. Kyiv needs to improve troop mobilization and training, forgo major offensives and fortify its lines, he said. “If that doesn’t happen, then next year can become a turning point, after which Ukraine will increasingly become disadvantaged.”

Write to Marcus Walker at Marcus.Walker@wsj.com