The Battle of Teruel exhausted the resources of the Republican Army. The Spanish Republican Air Force could not replace the airplanes and arms that it had lost at the Battle of Teruel. On the other hand, the Nationalists concentrated the bulk of their forces in the east and prepared to drive through Aragon into Catalonia and the Levante. Franco had the edge on resupply, as the Nationalists now controlled the efficiently-run industrial might in the Basque Country. The Republican government, however, had to leave the armament industry in Catalonia in the hands of the anarchists. One anarchist observer reported, "Notwithstanding lavish expenditures of money on this need, our industrial organization was not able to finish a single kind of rifle or machine gun or cannon..." Franco's retaking of Teruel was a bitter blow to the Republic after the high hopes that had been engendered by the city's capture. It also removed the last obstacle to Franco's breakthrough to the Mediterranean Sea.