An alternative to Fall Blau

Prior to the launch of Fall Blau in 1942, the German line in Russia is east of Leningrad slightly, turning south, then east, up to the Rzhev salient. What happens if, instead of the Fall Blau plan, an alternative plan is proposed along the following lines:

1. Mobile forces dedicated to Fall Blau, and as much infantry as can practicably be assembled, are shifted to Army Group North and Centre, beyond Leningrad and north of Rzhev respectively.
2. These forces are ordered, in June to advance north-west from Rzhev, and south-east from the Leningrad area, to encircle soviet units holding the line in the region between Rzhev and Lake Ilmen.
3. Infantry units attempt to liquidate the surrounded units unable to escape, and occupy shorter lines, freeing up whatever units are now still capable of action to be committed to the Rzhev defence in July.

How does the operation fare? If successful, what gains will it achieve? What is the soviet reaction? How does this change the picture locally, and across the whole eastern theatre, if at all?
 
The only thing such an operation would achieve is a big pocket of Soviets, which already happened in the south. This would by no means help the Germans, as it puts them no closer to the Oil they need. And the shifting of forces from Rzhev would be impractical, as there was a raging battle on the whole frontline for most of summer. If the Germans are weaker here, then they may lose Rzhev entirely.
 
Probably Citadel a year earlier, albiet more favorable to the Germans. The fortifications, force strength (in terms of both quantity and quality), and terrain all favor the Soviets much greater in the regions around Moscow and Leningrad then they do down in Eastern Ukraine/Southern Russia. They'll lop off the most exposed part of the front that historically more limited German attacks managed to destroy just fine (like the Vladimirskoe salient), but afterwards they'll probably bog down fast upon the mass of reinforcements and fortifications in inclement terrain. The northern pincer in particular would have to cross enormous amounts of peat bogs, swamps, and hills that are the outright antithesis of the sort of terrain one wants to conduct mobile encirclement warfare in. The diversion of the mobile forces that historically destroyed Timoshenko's offensive at Kharkov probably means that the Kharkov region remains in Soviet hands.

The region is also worthless, economically speaking. Much of the region had been fought over during the autumn-winter-spring of '41/'42 and that which hadn't been evacuated or scorched by the Soviets or Germans would have been destroyed in the pitched battles. The Soviets had only restored the railroads to the bare minimum to support their armies and would certainly scorch them if pushed back, so the Germans would be forced to rely on their vastly shrunken motor pool for resupply in terrain and infrastructure even less suited for truck driving (driving on a Northern Russian swamp road in a truck built for Central Europe is not a fun experience). Compare that to Southern Russia, which had major intact industrial and resource centers around places like Voronezh, Stalingrad, and the Kuban that were disrupted or destroyed to the cost of the Soviet war economy in '42 and '43. To say nothing of the Caucasus Oil Fields that were the whole point of Blau...
 
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