Vladimir Putin. Reuters/Carlos Barria Are little green men about to appear on the North Pole?

Russia's claim last week, using an extremely creative interpretation of international law, to exclusive economic rights to nearly half a million square miles of the Arctic Sea was certainly a head-scratcher.

Sure, the territory is valuable due to its untapped reserves of fossil fuels and for the shipping lanes that will open as Arctic ice melts. But the claim is likely to ultimately be rejected by the United Nations.

Still, sparking a manufactured international crisis over the Arctic, one that pits Russia against the United States and Canada, might be just what the doctor ordered.

Why? Because Vladimir Putin needs to make a new action movie to distract his people. The Kremlin leader is boxed in on so many fronts right now that he badly needs to change the subject.

For starters, Putin has no good options in eastern Ukraine. The old fantasies about seizing so-called Novorossiya, the strip of land from Kharkiv to Odessa, and establishing a land bridge to Crimea are dead. And the more modest goal of expanding the territory Russia and its proxies currently hold, perhaps with a push to Mariupol, is probably out of the question too.

Either campaign would be costly in terms of blood and treasure, certainly spark a fresh round of sanctions, and involve occupying hostile territory. The uptick in fighting in the region this week reeks more of desperation than of a serious move to acquire more territory.

Russia could, of course, just annex the territories controlled by Moscow's proxies; or it could freeze the conflict and establish a Russian protectorate there. But in this case, Moscow would be shouldered with the burden of financing an economically unproductive enclave whose infrastructure has been destroyed.

And it would have to do so while Russia's economy is sinking into an ever deeper recession. Moreover, Russia would lose any leverage over the remainder of Ukraine, which would quickly move toward the West. Sanctions would be continued, and possibly escalated.

The Kremlin's preferred option, given these limitations, is to force the territories back into Ukraine on Moscow's terms — with broad autonomy and the ability to veto decisions by the Ukrainian government in Kiev. But Ukraine and the West appear unwilling to let this happen. Putin has boxed himself into a corner in Ukraine, and it is difficult to see how he is going to get out of the quagmire he has created. It's also difficult to imagine how Putin is going to extract himself from the quagmire he has created at home. The Kremlin leader is caught in a trap of his own making, between economic and political imperatives. With the economy sinking deeper into recession, inflation spiking, oil prices dipping below $50 a barrel, and the ruble approaching the lows it reached earlier in the year, Putin badly needs sanctions eased to give the economy breathing space. But for that to happen, he would need to climb down in Ukraine—a move that would undermine the whole rationale for his rule and infuriate the nationalist supporters who make up his base. "Putin's return to the presidential seat heralded a rather sudden pivot towards a deep-seated domestic nationalism," Moscow-based journalist Anna Arutunyan wrote recently. "Yet nationalism as a state policy and identity, initially implemented to shore up Kremlin power, now has the Kremlin itself trapped and threatened by forces that it initially nurtured, but can no longer fully control."