Tag: Economic Sanctions On Russia

Belarus and Russia’s Gasoline Crisis

Posted on November 9, 2026 | Policy Brief

This policy brief examines how Russia’s gasoline crisis, triggered by Ukrainian drone strikes on Russian refineries, has affected Belarus and its oil-refining industry. The strikes cut Russian refining by about a quarter and gasoline output by about a fifth. Export bans, imports and lower fuel standards offset most of the shortfall, yet a residual deficit persisted, feeding inflation, halting monetary easing and somewhat straining the budget. Belarus became an important short-term buffer: running its refineries close to full capacity, largely through tolling arrangements, it covered roughly 30% of Russia’s gasoline underproduction. For Belarus, this was a sizeable but short-lived positive macroeconomic shock. Its benefits are already fading, while the secondary negative effects of the fuel shortage on the Russian economy are likely to grow. The case also shows that Russia’s capacity to absorb shocks to its core industries through its orbit of influence is limited.

Russia’s Gasoline Crisis: The Scope, Global and Domestic Effects

In 2026, Ukrainian drone strikes on Russian oil-refining facilities intensified markedly. In June- July, Russia’s refinery throughput fell to 3.7-3.8 mb/d, roughly 30% below a year earlier and the lowest level in more than 20 years (Martin and Vatman, 2026; KSE, 2026). OPEC (2026) estimates that refinery runs in Q2–Q3 2026 were roughly 20% below the 2025 average. According to Rosstat (2026a), the output of oil products fell by 18-22% year on year in June-August.

However, a loss of refining capacity does not translate into a fully proportional decline in all oil products. Refineries differ in their product specialization, so the impact depends on which plants are hit. In addition, refiners can increase utilization at undamaged plants and prioritize the most sensitive products. Gasoline output declined by about 20%, compared with nearly 30% for diesel (Martin & Vatman, 2026), partly because the hardest-hit refineries were diesel-oriented and partly because authorities prioritized gasoline supplies.

Gasoline is nonetheless where the crisis has been most acute. With domestic consumption of about 3.2 million tonnes (Mt) per month (Makarchuk, 2026c), a 20% decline in output implies a gasoline underproduction of about 0.7 Mt per month. By the end of August, gasoline output had fallen to about 70% of domestic demand (Reuters, 2026). Retail gasoline prices rose 21.1% between January and September 2026, while overall consumer inflation over the same period was 5.0% (Rosstat, 2026b).

The situation with diesel is different. Russia traditionally exported roughly half of its diesel output (Martin & Vatman, 2026), so a 30% decline in production brought supply close to domestic needs rather than into a deep deficit. Nevertheless, in July Russia introduced its first-ever ban on diesel exports, partially lifted only in October as part of a politically motivated agreement with the United States (Bloomberg News, 2026).

Figure 1. Russia: Production Index of Refined Petroleum Products and Coke, 2021 = 100 (seasonally adjusted)

Russia’s refined petroleum products and coke production index, 2013–2026, showing a sharp decline to approximately 81 in Q3 2026 (estimate); seasonally adjusted, 2021 = 100.

Source: Own calculations based on Rosstat data.

To keep the production shortfall from turning into an equally large market shortage, the Russian authorities relied on three main instruments (Martin & Vatman, 2026). First, exports were cut: a full gasoline export ban has been in force since April 2026. Before 2024, Russia exported about 10–13% of its gasoline, or roughly 0.36 Mt per month (Makarchuk, 2026c). However, since gasoline exports had already been banned for most of the second half of 2025 (Interfax, 2025), the additional relief from this channel, relative to 2025 levels, was limited. Second, imports were increased by rail from Belarus and Kazakhstan and by sea from India, South Korea, Morocco and Türkiye; in August, imports of oil products through Russian ports exceeded 300 thousand tonnes (Makarchuk, 2026c). Third, product standards were relaxed: more polluting Euro 2–4 gasoline was temporarily allowed until July 2027.

These measures offset most, but not all, of the shortfall. The residual gasoline deficit is estimated at about 5–15% of normal demand (Makarchuk, 2026c), with much higher shortfalls in some regions; at the end of August, domestic output and imports together covered about 85% of demand (Reuters, 2026). The burden was concentrated in the free market segment. Vertically integrated oil companies prioritized their own filling stations, while independent stations faced shortages: between January and mid-July, AI-92 retail prices rose by 5.0% at the stations of vertically integrated companies, but by 39.6% at independent ones (Ozemblovskaya, 2026). Hence the queues, purchase limits, and empty filling stations widely reported in the media.

The macroeconomic effect for Russia is unambiguously negative. The decline in refining has become a significant drag on GDP: industrial production stagnated in January–August 2026 and fell by 0.6% year on year in August (Rosstat, 2026a). Higher crude oil exports can only partly compensate, as freed-up crude cannot be fully redirected abroad: in August, Russia’s crude production fell to 8.72 mb/d, about 5% below a year earlier (Makarchuk, 2026c); total crude and product exports fell to 6.4 mb/d in August, the lowest level since 2018 (KSE, 2026). The decline in refining also spills over to related industries, such as transport. Inflation picked up again, reaching 6.35% year on year in September (Rosstat, 2026b), and the Bank of Russia paused its easing cycle, keeping the key rate at 14% and noting that motor fuel prices had fed into underlying inflation (Bank of Russia, 2026). Damper payments, which compensate oil companies for the gap between export and domestic fuel prices, surged during the crisis period: in April–September 2026 they reached RUB 1.24 trillion (about USD 15.8 billion), four times the amount a year earlier. Higher global prices lifted oil and gas revenues before damper payments by about 23% year on year, but roughly 94% of this windfall was absorbed by the damper, leaving net oil and gas revenues virtually unchanged (+1.5% in ruble terms; Minfin of Russia, 2026). This left little room to narrow the budget deficit or provide additional fiscal stimulus.

The Role of Belarus amid Russia’s Gasoline Shortage

To cover the shortfall, Russia had to attract imports at import-parity prices. For instance, in August, seaborne gasoline from India was offered at about RUB 150 thousand per tonne, roughly twice the Russian oil exchange price, with purchases supported by an import damper (Makarchuk, 2026c). As a nearby supplier with direct rail access, Belarus was well placed to capture this premium and redirected a large share of its oil-product exports from third markets to Russia (Beleconomy, 2026a; Makarchuk, 2026a).

Belarus became the most important external supplier of gasoline to the Russian market. Open-source data, which likely understate actual volumes, show that Belarus delivered more than 1 million tonnes of gasoline to Russia in January–September 2026 (Makarchuk, 2026d).Supplies accelerated sharply in summer, to around 200 thousand tonnes of gasoline per month: in July, gasoline supplies reached a record 212 thousand tonnes (Makarchuk, 2026b; see Figure 2).

Figure 2. Estimated Exports of Belarusian Gasoline by Destination, 2025-2026, thousand tonnes per month

Estimated monthly Belarusian gasoline exports to Russia and third countries, May 2025–September 2026, showing a shift almost entirely to Russia in July 2026; thousand tonnes.

Source: Own estimates based on various open sources, including Makarshuk (2026b, 2026d).

An important channel of these supplies has been so-called tolling. Under contracts in force since 2025, Russian oil companies supply crude oil to Belarusian refineries and receive back the refined products, while Belarus earns only a processing fee, also called a “tolling fee”. Initially, such schemes were meant to shield Belarusian refiners from volatile market conditions and margin risks. In the new environment, they turned into an attractive instrument for Russia: it can refine its crude in Belarus while limiting the share of profits captured by Belarusian refineries. From autumn 2025, tolling volumes surged. According to the balance-of-payments adjustments of the National Bank of Belarus, the value of goods returned after processing rose from about USD 50–60 million per month until mid-2025 to USD 400 million in December 2025 and USD 400–570 million per month in March–July 2026. In physical terms, around 1 Mt of crude oil was refined under tolling arrangements in June, yielding roughly 200–250 thousand tonnes of gasoline. Limited statistics do not show unambiguously whether, and to what extent, tolling flows are included in the available data on Belarusian supplies to Russia. Most likely, they are included fully or partly, so the available figures should be treated as a lower bound.

Belarusian refining expanded rapidly. In 2024–2025, the two refineries operated at around 60% of capacity. In the first months of 2026, the physical volume of Belarusian oil-product exports was about 60% higher than in the first half of 2025, and by July–August the refineries were operating close to maximum capacity, mainly owing to supplies to Russia (Beleconomy, 2026a). Belarus has no spare capacity left; moreover, major repairs at several Naftan units in September–October are temporarily constraining supplies (Makarchuk, 2026d).

In gasoline, Belarus reoriented almost entirely towards Russia in July: virtually all Belarusian gasoline exports went to the Russian market, which has become a premium market for Belarusian producers. From August, however, Belarus resumed gasoline exports to third countries, which reached 50–60 thousand tonnes per month, or roughly a quarter of its gasoline exports. These flows were themselves a by-product of Russia’s gasoline crisis: they went mainly to Afghanistan and Central Asian markets, partly via Turkmenistan; these markets had traditionally relied on Russian fuel and were now forced to seek alternative suppliers amid shortages and rising prices. Gasoline output approached its historical peaks, supported by the completion of reforming unit upgrades at Naftan in June–August (Makarchuk, 2026b).

With diesel and other products, the picture has been somewhat different. Belarus began increasing diesel supplies to Russia as early as spring, before the acute phase of the crisis (Beleconomy, 2026a). Part of the diesel and other products also continued to go to third markets, as Russia’s diesel deficit was much less pronounced. According to our estimates, Russia’s share in total Belarusian oil-product exports rose from roughly 15–25% in 2025 and early 2026 to over 50% in summer 2026, peaking at around 60–70% in July.

How large was Belarus’s contribution from Russia’s perspective? Belarus accounted for about half of Russia’s gasoline imports (Makarchuk, 2026c). Against a gasoline underproduction of about 0.7 Mt per month, Belarusian supplies of about 0.2 Mt per month covered roughly 30% of the shortfall. At the same time, these supplies correspond to only about 6% of Russia’s domestic gasoline consumption.

Macroeconomic Implications for Belarus

For Belarus, Russia’s gasoline crisis was a significant positive macroeconomic shock. It largely shaped the favorable output dynamics in the second quarter of 2026: after a small decline of 0.25% year on year in Q1, GDP grew by around 3.2% in Q2 (Macroby, 2026).

The shock affected output through several channels. On the production side, it directly boosted oil refining, allowing manufacturing to exit the recession it had been in since late 2024 (+1.8% year on year in Q2). Strong inter-industry linkages amplified the effect: transport and wholesale trade, which serve refining flows, became the most important contributors to GDP growth. In August, for instance, value added in transport grew by 5.7% year on year and freight turnover by 8.3% (Macroby, 2026). On the demand side, the shock was reflected in exports of goods and, through tolling fees, in exports of services, which grew by 27% in nominal terms in H1 2026.

Additional export revenue also laid the foundation for a new wave of domestic demand. Facing a structural labor shortage, firms were able to accelerate wage growth again: real wages grew by 7.9% in Q2. Firms also found it easier to finance investment. This pushed domestic demand growth to 5.9% year on year in Q2, up from 1.3% in Q1. However, much of this demand was ‘eaten up’ by imports: overheated consumer and investment demand led to faster import growth, and the contribution of net exports to GDP growth remained negative.

So far, the impact on inflation in Belarus has been limited. With export revenues supporting refiners’ finances, the authorities felt comfortable maintaining price controls, as higher revenues from Russia offset refiners’ losses from low regulated domestic prices. According to Belstat, since the start of the year, domestic fuel prices have risen by only around 4.3%, slightly above overall consumer inflation of 3.6% over the same period, whereas retail gasoline prices in Russia have risen by 21.1% (Rosstat, 2026b). In September, gasoline cost about USD 0.80 per liter in Belarus (Trading Economics, 2026a), compared with USD 0.88 in Russia (Trading Economics, 2026b).

However, the favorable effect of the shock will be limited and short-lived (Beleconomy, 2026b). First, with refineries already at full capacity, the oil sector can no longer contribute to further growth acceleration. Exports of services have already reached a plateau, and GDP growth slowed to 0.7% year on year in August, with manufacturing growth falling to 0.8% (Macroby, 2026). Moreover, if Russian demand for Belarusian fuel declines, the effect may reverse abruptly. Second, the inflationary impulse is set to strengthen through pass-through from Russia; inflation is expected to reach 5–6% in 2026 and 6–7% in 2027 (Macroby, 2026). Third, the negative effects of Russia’s economic situation, including higher interest rates and weaker demand for Belarusian goods, are likely to soon outweigh Belarus’ economic gains from the gasoline crisis.

Conclusions and Policy Implications

Belarus has played a sizable role in mitigating Russia’s gasoline shock. Operating at the limit of its refining capacity, it covered about 30% of the shortfall and accounted for about half of Russia’s gasoline imports. While this was enough to smooth the Russian market for a few months, Belarus cannot warrant a full-fledged permanent buffer. Belarus’ supplies accounted for only about 6% of Russian gasoline consumption, and the country has no spare capacity left to increase them. Its contribution was driven by a mix of commercial windfall and tolling arrangements favoring Russian oil companies, rather than by any deliberate effort to stabilize the Russian market. It can slow and smooth, but not offset, the negative trends in Russia associated with the loss of refining capacity.

For Belarus, the gains were tangible but transient. They supported growth for one or two quarters and are likely to be outweighed by the adverse spillovers from Russia’s slowdown and rising inflation, especially if Russia’s fuel shortage persists in the coming months. In the bigger picture, they are marginal and should not be overinterpreted politically, neither as evidence of Belarus’s strategic value to Russia nor as a durable windfall for the Belarusian authorities.

More broadly, the case reveals the limits of Russia’s orbit of influence in closing specific gaps. Belarus could only partly offset the gasoline shortfall, while Kazakhstan’s major refineries reportedly did not start deliveries at all (Makarchuk, 2026c). Russia’s ability to absorb shocks to its core industries is therefore limited, and it can smooth them only for relatively short periods.

This has a clear policy implication. Economic pressure on Russia is likely to be more effective the more directly it targets Russia’s critical vulnerabilities, rather than relying on indirect and long transmission chains. Instruments designed as ‘smart’ pressure, such as the oil price cap, have delivered far less than intended where enforcement remained weak (KSE Institute, 2025). Pressure exerted through third countries, including Belarus, offers even less leverage over Russia itself. Measures that directly constrain Russia’s capacity to produce and sell its key products, such as refined fuels, promise considerably more impact.

References

Disclaimer: Opinions expressed in policy briefs and other publications are those of the authors; they do not necessarily reflect those of the FREE Network and its research institutes. AI tools may have been used in the preparation of this brief. Where used, they were applied responsibly and in accordance with appropriate scientific and ethical standards. The authors and editor remain fully responsible for their respective contributions to the brief.

How Polarised Is Support for Ukraine Across Europe?

Policy Brief

20260518 How Polarised Is Support for Ukraine Image 01

Russia’s invasion of Ukraine in February 2022 triggered broad public support across Western democracies. Since then, support in the United States has declined and become sharply partisan. In this policy brief, we use Eurobarometer data from 2022 to 2024 to show that while overall support for Ukraine remains high in the European Union, it has declined over time and become more politically polarised. We introduce a polarisation index to compare trends across countries and over time. There is substantial heterogeneity: while support remains close to universal in some countries, such as Sweden, others have seen marked increases in polarisation, with support weakening particularly on the far right. We find that higher inflation is associated with greater polarisation for costly policies, such as sanctions against Russia, but not for humanitarian aid. Finally, we present suggestive evidence that polarisation in support for sanctions may reflect domestic political debate.

From Consensus to Polarisation?

Russia’s invasion of Ukraine in February 2022 prompted widespread public support for Ukraine on both sides of the Atlantic. According to a PEW survey less than one month after the invasion, only 7% of Americans (9% of Republicans and 5% of Democrats) said the US is providing too much support to Ukraine (PEW, 2022). Two years later, overall support dropped significantly and support for Ukraine became politically polarised: with 47% of Republicans but only 13% of Democrats saying that the US is providing too much support (PEW, 2024).

In this brief, we use microdata from Eurobarometer covering over 185,000 respondents to evaluate whether the same trends are present in the EU. We show that support for Ukraine remained relatively high and stable across Europe from 2022 to 2024. This finding is consistent with other surveys that report resilient support among Europeans despite pessimism about the war’s likely outcome (Krastev and Leonard 2024) and personal costs in terms of inflation (Demertzis et al. 2023). Our brief focuses specifically on political cleavages within countries. We show that policies supporting Ukraine have become increasingly polarising in some countries and evaluate potential drivers of that polarisation.

Support for Ukraine Across the Political Spectrum

Figure 1 shows support for economic sanctions against Russia (Panel A) and humanitarian aid for Ukraine (Panel B) in the EU, by respondents’ self-reported left–right political placement in the Eurobarometer (for details on this measure, see also Lehne and Zhuang, 2023b). Support for Ukraine was high across the political spectrum in the immediate aftermath of the invasion, but declined in the latest Eurobarometer data from October 2024. The sharpest declines occur on the far right, especially for economic sanctions against Russia.

Figure 1A. Support for economic sanctions against Russia

Figure 1B. Support for humanitarian aid to Ukraine

Source: Eurobarometer and authors’ calculations.
This chart shows the mean support for each measure in April 2022 (in blue) and October 2024 (in red) in the EU. Based on binary transformations of Eurobarometer questions on support for each measure; dots show means and bars indicate 95% confidence intervals.

A similar pattern holds for military aid to Ukraine, though the average level of support is lower (not shown). Support for humanitarian aid is uniformly higher and less politically polarising; even among respondents on the very far right, more than three-quarters are in favour.

This overall pattern masks large heterogeneity across countries. Figure 2 shows support for sanctions against Russia in four European countries: Sweden, Poland, Greece and France. In Sweden, support for sanctions is close to universal, broadly uniform across the political spectrum, and has changed little in the two years since the start of the war. Similarly, in Poland, support remains very high but declines in 2024 among respondents on the centre-right. Support varies more with political leaning in countries such as France and Greece. While support for sanctions was relatively high in France in 2022, especially in the centre, it has declined markedly on the right. This pattern is repeated across many other European countries, including Austria, Germany, the Netherlands, and Italy. By contrast, in Greece, support for sanctions was comparatively lower to begin with and declined further over time. In Greece, as in Bulgaria, Cyprus, Czech Republic, Latvia and Slovakia, support is particularly weak on the left.

Figure 2. Political Polarisation in Support for Sanctions across four European countries

2a. Sweden

2b. Poland

2c. France

2d. Greece

Source: Eurobarometer and authors’ calculations.
This chart shows mean support for sanctions against Russia in April 2022 (in blue) and October 2024 (in red) in (a) Sweden, (b) Poland, (c) France and (d) Greece. Based on binary transformations of Eurobarometer questions on support for each measure; dots show means and bars indicate standard deviations.

A Political Polarisation Index

In order to compare how politicised support for Ukraine is across countries and over time, we  develop a polarisation index (see technical note for details). This measures the extent to which each self-reported ideology group’s support for a policy differs from the country-wide average (in other words, how far the dots in Figure 1 lie from a horizontal line).  The index ranges from 0 (all groups share the same position on sanctions) to 1 (groups hold opposing positions that are perfectly predicted by political ideology). Comparing the same country over time, there are two factors that change the index: (i) within an ideology group, average support for a policy may change, and (ii) the size of ideology groups (and their weight in the index) may change as the distribution of political views in the country evolves.

Comparing across countries, the index does not depend on the left-right gradient of support. While France and Greece show opposite patterns in Figure 2, they score similarly on the sanctions polarisation index in October 2024 (0.16 and 0.15, respectively). For Sweden, Figure 2 shows much greater consensus across the political spectrum, which translates into a significantly lower polarisation score: 0.05.

We find that some policies are associated with greater polarisation than others. There is widespread support in the EU for providing humanitarian aid and welcoming refugees from Ukraine, and polarisation scores are lower for these measures than for financial aid, military aid, sanctions on Russia or Ukraine becoming an EU candidate country. At the same time, looking at the EU as a whole, there has been an upwards trend in polarisation across all measures (Figure 3).

Figure 3. Political Polarisation Indices for different policies supporting Ukraine

Source: Eurobarometer and authors’ calculations.
This chart shows the EU-average political polarisation index for six different policies supporting Ukraine. The EU average is constructed using population weights. Survey waves are unevenly spaced across time. Some policies are not asked about in some waves.

Figure 4 shows which countries are driving the increase in polarisation. It plots the polarisation score for sanctions in April 2022 (shortly after the full-scale invasion) against the corresponding score in October 2024 (the latest wave for which data are available). Austria, the Czech Republic, and Slovakia show the greatest increase in polarisation over this period. Views on sanctions are also increasingly aligned with political cleavages in France, Germany, and Hungary. By contrast, Latvia shows a significant decline in polarisation while in Finland, Ireland, Poland, Portugal, and Sweden polarisation remained at very low levels more than two years into the war.

Figure 4. Political Polarisation Index for Sanctions against Russia 2022 vs 2024

Source: Eurobarometer and authors’ calculations.
This chart shows the political polarisation index for support for sanctions against Russia from the Eurobarometer data in October 2024 on the y-axis against the polarisation index in April 2022 on the x-axis. Includes all EU27 countries.

Drivers of Political Polarisation

In the next section, we show how political polarisation in support for Ukraine is related to the economy and domestic politics.

Polarisation and Price Increases

Figure 5 shows how political polarisation and inflation are related across countries in the EU. Political polarisation in support for sanctions against Russia at the end of 2024 tended to be higher in countries where prices increased faster between 2022 and 2024. As the cost of living increased, the issue of Russian sanctions became a point of contention between voters of different political leanings. Some political parties also started to capitalise on this issue to gain support. In contrast, there has been widespread agreement on the need for humanitarian aid to Ukraine and this was unaffected by the state of the economy.

Figure 5. Political Polarisation and Inflation

Source: Eurobarometer, Eurostat and authors’ calculations.
This chart shows the polarisation index for support for sanctions against Russia (in blue) and humanitarian aid for Ukraine (in red) from the Eurobarometer data in October 2024 against the average annual HICP inflation rate between 2022 and 2024 in percentage points. Includes all EU27 countries.

Polarisation and Elections

In Figure 6, we show how the polarisation index for support for sanctions against Russia (blue) and humanitarian aid for Ukraine (red) evolves around elections. Political polarisation for sanctions increases slightly around election periods, suggesting heightened debate on this issue. In contrast, polarisation in support for humanitarian aid shows little change over the election cycle.

Figure 6. Political Polarisation and Elections

Source: Eurobarometer, PPEG, Manifesto Project and authors’ calculations.
This chart shows the polarisation index for support for sanctions against Russia (blue) and humanitarian aid for Ukraine (red) in the two years before and after national parliamentary elections. Dots show means and bars indicate 95% confidence intervals. This is based on an unbalanced sample of EU countries with a lower house election between April 2022 and October 2024. For each country, only the closest election is used.

A Tale of Three Countries

Political parties play an important role in shaping the political discourse around Russia’s war on Ukraine. They are likely to both influence and be influenced by their voters’ attitudes towards supporting Ukraine.

In this section, we present a case study of three European countries that had elections between 2022 and 2024 and where parties have mentioned Russia in their manifestos according to data from the Manifesto project (see also Lehne and Zhuang, 2023a).

In Sweden, support for Ukraine in the face of Russian aggression has been consistently high along all dimensions and among voters across the political spectrum. In the Swedish elections in September 2022, six out of eight parties (including all three major parties) mentioned Russia in their party manifestos, and all supported sanctions against Russia.

Russia was also mentioned in the party manifestos of many of the parties contesting the French election in June 2022. But in France, the far-right Rassemblement Nationale broke with the other political parties and struck a more conciliatory tone towards Russia. For instance, they stated that they “… will be seeking an alliance with Russia on certain fundamental issues: European security, which cannot exist without Russia; the fight against terrorism, which Russia has fought more consistently than any other power; and convergence in the handling of major regional issues impacting France …” (Manifesto Project). This divergence is mirrored in voter attitudes. Support for sanctions against Russia has declined over time in France, especially amongst voters on the far right of the political spectrum.

In Greece, political support for sanctions against Russia is lower than in many other European countries has been declining over time. Political polarisation in support for Ukraine increased, especially around the elections in May and June 2023. Few of the political parties mentioned Russia directly in their manifestos, and then mostly in conjunction with rising prices and effects on the Greek economy.

Figure 7. Political Polarisation in Support for Ukraine

7a. Sanctions against Russia

7b. Humanitarian Aid for Ukraine

Source: Eurobarometer, Manifesto Project and authors’ calculations.
These charts show political polarisation in support for sanctions against Russia (Panel A) and humanitarian aid for Ukraine (Panel B) in France, Greece and Sweden. Vertical dashed lines show the timing of national parliamentary elections.

Conclusion

Public support for Ukraine remains high in the EU, but there are worrying signs of fragmentation. While some countries continue to exhibit broad consensus in supporting Ukraine across multiple policies, other countries have seen declining support as the debate has become aligned with domestic political cleavages. Sanctions against Russia and military aid to Ukraine have become increasingly contentious, while there is broader agreement on the need for humanitarian aid. In many countries, it is particularly voters on the far-right of the political spectrum who have become less supportive of policies supporting Ukraine.

Our analysis highlights two areas of fragility in the consensus around support for sanctions against Russia. We see some indication that the domestic political debate can drive polarisation in opinions on sanctions against Russia, with the salience of these issues increasing around elections, particularly when parties competing in the elections have different policy platforms.

Another source of fragility is the economic cost of sanctions. Countries that experienced larger increases in prices since 2022 exhibit greater political disagreement over sanctions, suggesting that economic costs can shape the political sustainability of support for Ukraine. Recent increases in energy prices, linked to the war in Iran, may further amplify political polarisation around sanctions against Russia.

Despite these pressures, clear majorities across most EU countries continue to support Ukraine, especially when it comes to humanitarian aid and welcoming refugees. European solidarity has so far proven resilient in the face of growing external pressures.

Technical note:

References

Disclaimer: Opinions expressed in policy briefs and other publications are those of the authors; they do not necessarily reflect those of the FREE Network and its research institutes.

Sweden Supports Ukraine with a Record Aid Pledge

Posted on February 20, 2026 | Videos

Torbjörn Becker speaking on stage during a European Parliament event with EU and Swedish flags in the background.

Sweden supports Ukraine with €10.7 billion in aid, marking the largest pledge to another country in modern Swedish history. Four years after Russia’s full-scale invasion, Swedish political, military, and economic leaders met at Kulturhuset in Stockholm on February 16, 2026. Their message was clear: backing Ukraine strengthens Sweden’s own security and Europe’s stability.

Torbjörn Becker, Director of the Stockholm Institute of Transition Economics (SITE), joined senior officials to discuss how military innovation and economic endurance shape the war and might impact its outcome. As Sweden’s support for Ukraine continues, attention is shifting to both battlefield technology and financial resilience.

Technology Transforming Ukraine’s Front Lines

The war has evolved at a remarkable speed. Sweden’s Minister for Defence, Pål Jonson, described a battlefield defined by drones, satellites, and electronic warfare. As a result, troops can no longer hide easily. Innovation cycles that once took years now unfold within months.

Vice Admiral Eva Skoog Haslum warned that the front lines remain extremely dangerous. She described parts of the battlefield as “kill zones,” where constant surveillance and precision strikes limit movement. Meanwhile, Ukraine has weakened Russia’s naval presence in the Black Sea by using smaller, flexible systems instead of traditional large warships.

Swedish military equipment has played a significant role. The CV90 combat vehicle and Archer artillery system have performed effectively in combat. Designed for harsh northern conditions and to counter Russian systems, they have proven highly relevant in Ukraine.

Economic Pressure and Long-Term Advantage

Although military developments matter, economic endurance may decide the war. Becker emphasized that while Russia’s economy is much larger than Ukraine’s, the combined economic power of the EU and the United States far outweighs Russia.

“Russia’s economy is roughly ten times the size of Ukraine’s. But compared to the EU and the United States together, it is closer to 1 to 20. If political support holds, the resources are there to sustain Ukraine over time,” Becker explained.

Russia depends heavily on oil revenues. Therefore, when oil prices fall or sanctions tighten, state income drops. At the same time, Russia relies increasingly on China for advanced technology components. According to Becker, this dependence creates long-term vulnerability.

Interest rates in Russia have climbed to around 20–25 percent. Such high rates strain banks and businesses. Over time, financial instability could weaken Russia’s ability to finance the war.

Planning for Ukraine’s Economic Recovery

Ukraine also faces serious fiscal challenges. The country spends more than half of its state budget on defense. Public debt now exceeds 100 percent of GDP. As a result, debt restructuring will likely be necessary.

Becker pointed to roughly USD 300 billion in frozen Russian central bank reserves held abroad. Using these funds could provide a stronger financial foundation for rebuilding Ukraine. “The main obstacle is not technical or legal,” Becker said. “It is about political coordination and will.”

As Sweden’s support for Ukraine continues, European leaders are rethinking both defense strategy and economic resilience. The lessons learned from this war will likely shape European security policy for years to come.

Key Conclusions on Sweden’s Support for Ukraine

  • Russia’s war economy faces mounting pressure from high interest rates and shrinking reserves.
  • Western economic strength gives Ukraine a structural long-term advantage.
  • Oil revenues remain central to Russia’s fiscal stability.
  • Frozen Russian central bank assets could help fund Ukraine’s reconstruction.

Further Reading on Sanctions Against Russia and Economic Pressure

Energy exports remain the backbone of Russia’s economy and a tool of geopolitical leverage. Sanctions targeting this sector aim to reduce state revenue and limit Moscow’s influence abroad.

Visit the Sanctions Portal Evidence Base to explore research on energy sanctions against Russia. You can also review the Timeline of Western Sanctions and Russian Countermeasures to see how both sides have adapted since the full-scale invasion.

Explore SITE’s research articles, policy briefs, datasets, reports, and additional publications on the SITE website, and subscribe to the newsletter to stay informed about important updates.