Tag: Global Energy Markets
Torbjörn Becker: Drone Strikes Undermine Russia’s War-Funding Revenues
A surge of Ukrainian drone strikes on Russian oil refineries has triggered widespread gasoline shortages across the country. These attacks directly threaten one of Russia’s main sources of income, its energy sector.
Drone Strikes Expose Russia’s Dependence on Energy Revenues
In a report by Finland’s public broadcaster YLE, experts analyzed the coordinated assaults and their mounting economic consequences. At least 14 of Russia’s 38 refineries have been hit, disrupting roughly 20 percent of the nation’s refining capacity. The campaign represents a new stage in Ukraine’s efforts to erode Russia’s revenue base and weaken its wartime economy.
“They remind the Russian people that a war is ongoing in Ukraine, but they also strike at Russian revenues. Oil and gas income is absolutely essential for financing Russia’s offensive war against Ukraine,” said Torbjörn Becker, Director of the Stockholm Institute of Transition Economics (SITE).
Torbjörn Becker further emphasized that economic pressure has become a central pillar of Ukraine’s broader defense strategy.
Economic Fallout Deepens as Russia Faces Fuel Shortages and Export Bans
The YLE article also explored the economic and political fallout within Russia. Gasoline shortages have been reported in at least 21 regions, prompting authorities to extend export bans and enforce rationing. Analysts cautioned that prolonged attacks could force refinery closures, limit exports, and damage Russia’s image as a reliable energy supplier. Becker added that the strikes could send shockwaves through global energy markets, increasing volatility and uncertainty.
To read the full YLE report and Torbjörn Becker’s full commentary, visit the complete article. For additional expert insights from SITE, explore the institute’s official webpage.
Further Reading
Reducing Russia’s financial capacity to sustain its unjust war against Ukraine requires a comprehensive, multi-layered approach. Explore the latest research on sanctions against Russia in the Sanctions Portal Evidence Base. Learn about the major sanction packages introduced by Western allies following Russia’s full-scale invasion of Ukraine, as well as the corresponding countermeasures, by visiting the Timeline of Western Sanctions and Russian Counteractions.
To read more policy briefs on sanctions and the Russian economy, visit the FREE Network website.
Russian War Economy Faces Slowdown Despite Resilience
Since 2022, the Russian economy has surprised many with its resilience under Western sanctions. Growth was fueled by wartime spending and high energy revenues. Now, signs suggest this “war bump” is fading. In a recent Financial Times interview, Elina Ribakova explains why the Russian war economy faces serious challenges ahead. Elina Ribakova is vice-president for foreign policy at the Kyiv School of Economics. She spoke with Sam Fleming, economics editor at the Financial Times.
Sanctions and Short-Term Resilience
When Western nations imposed sanctions on Russia, many expected a collapse. Instead, wartime spending and high oil revenues propped up growth. Ribakova notes that Russia’s ability to redirect resources into military production created a temporary boom. But this resilience came at the cost of long-term growth in the Russian war economy.
Why the Russian War Economy Is Slowing
Russia is now hitting hard limits. Labor shortages, soaring inflation, and overstretched industrial capacity are beginning to bite. Ribakova points out that unemployment has fallen to unsustainably low levels, while non-military sectors are stagnating. Even the defense industry, once booming, is showing signs of strain across the Russian war economy.
China’s Critical Role
One reason Russia has endured sanctions is its growing reliance on China. Ribakova highlights how Chinese exports—from consumer goods to vital military components—have allowed Moscow to sustain its war economy. Yet this partnership is highly lopsided: for China, Russia is a marginal partner; for Russia, China is a lifeline.
The Postwar Challenge
Looking ahead, Ribakova warns that ending the war will not mean an easy recovery. Russia faces deep demographic challenges, heavy reliance on military production, and decades of failed economic diversification. Rebuilding a sustainable postwar economy may prove “devastatingly hard” for the Russian war economy.
Listen to the Original Interview
The slowdown of the Russian war economy is more than an economic story; it shapes global energy markets, security, and geopolitics. To hear the full conversation and Ribakova’s detailed analysis, listen to the original Financial Times interview here.
Learn More About the Russian War Economy and Sanctions
To learn more about Western sanctions and Russia’s countermeasures, visit the Sanctions Timeline. And for details on sanctions imposed on Russia and their effects, see the Evidence Base section of the sanctions portal. Explore more policy briefs on sanctioning Russia here.