Information on current losses of the Russian Federation due to sanctions as of 02/06/2026.
1. Russia’s actual military expenditures significantly exceed the officially declared ones and have effectively reached half of the federal budget.
– This conclusion was reached by Germany’s Federal Intelligence Service (BND) following an analysis of the Russian Federation’s budget. According to BND estimates, actual spending on war and defense in recent years was approximately 66% higher than official figures, even considering classified items.
– If NATO’s classification, which includes construction projects, IT services, and social security for the military as defense expenditures, is applied, then in 2025 Russia spent about 250 billion euros instead of the declared 150 billion.
– Thus, the military machine absorbed about half of Russia’s budget and about 10% of GDP.
– For comparison, in 2024, real military expenditures, based on NATO standards, amounted to about 200 billion euros — 62 billion more than according to the Russian budget classification. In 2023, with official expenditures at 82 billion euros, the real ones reached 136 billion, and in 2022 — 106 billion euros against the declared 64 billion.
– The BND emphasizes that these funds are directed not only to the war against Ukraine but also to the further buildup and modernization of Russia’s military potential, particularly near NATO’s eastern flank.
2. Russia was warned of the risk of an economic crisis by summer.
– The financial sector of the Russian government warned Putin of a possible economic crisis in the next 3-4 months.
– Among the key risks are the decline in oil and gas revenues, an increase in budget deficit, pressure on the banking system due to high rates and war loans. Real inflation, according to interlocutors of the publication, significantly exceeds official figures.
– The growth rate of Russia’s economy has slowed to about 1%, with over 10 trillion rubles of loans becoming problematic.
– The budget deficit this year could reach 10 trillion rubles, and to cover it, almost all free funds of the Russian National Welfare Fund would have to be spent.
3. A noticeable slowdown in activity in the exploration and production segment is observed in the Russian oil industry, undermining prospects for maintaining current production volumes. This is warned by experts from the Energy Intelligence Group, emphasizing the reduction in the pace of work at the initial stages of the oil cycle.
– There is a reduction in investments in geological exploration, drilling, and launching new fields. Russia maintains the current level of production primarily through assets introduced in previous years without properly updating the resource base.
– Against this backdrop, sanctions, technology deficits, and rising operational costs gradually weaken the industry.
– The current stability in production is inertia-driven and does not reflect the real state of affairs.
– If current trends persist, Russia risks facing not just a one-time decline but a prolonged and structural decrease in oil production in the medium term, which will affect export revenues and budget stability.
4. Russia’s forestry industry is on the brink of a systemic crisis that could last for years and end in mass bankruptcies.
– The industry has experienced a sharp revenue drop, rapid debt growth, and has effectively exhausted financial reserves accumulated in previous years. Meanwhile, access to new liquidity to support operations is limited due to high credit rates.
– Over three years, the total revenue of forestry companies decreased by 5.2%, and considering inflation, the real decline was 28.6%. In 2021, the sector earned 24.3 billion rubles in net profit, but by 2024 it ended the year with an 11.1 billion ruble loss.
– The total debt of companies during this period increased by 1.6 times. The forestry industry became one of the first victims of sanctions: in April 2022, the EU banned the import of Russian timber and its products. The biggest hit was on enterprises in Northwest Russia, focused on the European market.
– According to Rosstat, in 2022, production in the industry fell by almost 10%, and recovery has not occurred since. In the first 11 months of 2025, forestry companies reduced wood harvesting by another 4% and incurred a 1.5 billion ruble net loss.
– According to official statistics, every second enterprise in the industry became unprofitable, confirming the deepening crisis and lack of prospects for quick recovery.
5. Russia recorded a sharp increase in wage arrears — the highest in the past nine years.
– By the end of 2025, overdue payments increased 2.3 times, reaching 2.077 billion rubles, according to Rosstat data.
– As of the end of the year, 14,700 workers had not received their salary — 6,500 more than the previous year. In monetary terms, the annual debt increase amounted to 1.134 billion rubles — the maximum since 2016. In relative terms, the 127% growth was unprecedented in the available twenty-year statistics.
– About 87% of the debt is related to the lack of employers’ own funds. Over the year, this amount almost doubled, reaching 1.763 billion rubles. Another 13% accounts for the budgetary sector — 263.9 million rubles.
– One reason was the deterioration of companies’ financial condition amid economic slowdown and the high key rate of the Central Bank of Russia, which effectively blocked access to short-term lending. Businesses previously used such loans to cover cash gaps and pay salaries.
– In the budget sector, delays are related to financial problems in the regions: in 2025, local budget deficits reached a record 1.5 trillion rubles, the highest since 2011.
6. Sanctions against Russian oil began to take effect at the end of 2025.
– Most of the production — up to 80% — fell under restrictions, the ability to bypass through refining is practically closed, and external demand continues to decline. Against this backdrop, the discount of Urals to global prices has sharply increased.
– Export flows, which until recently remained relatively legal and manageable, increasingly face logistical constraints. The main bottlenecks are a shortage of ships, reliance on the “shadow fleet,” and limited offshore oil storage capabilities.
– A significant portion of Russian oil was already being transported in 2025 circumventing the G7 price cap, which sharply increased costs and risks for exporters.
– Even eastern grades, including ESPO supplied to China, are sold at a significant discount to Brent, undermining the Kremlin’s foreign currency revenues.
– A key risk for the industry remains forced production shutdowns in Siberia during the winter period. Oil companies are trying to delay this scenario since well conservation in freezing conditions threatens with irreversible productivity losses.
– If this scenario unfolds, the Russian oil industry could face a long-term decline in production and a further narrowing of export opportunities.
7. The US Treasury directly linked further sanctions against Russia to the course of negotiations on Ukraine and made it clear that in the event of their failure, the pressure will be increased.
– US Treasury Secretary Scott Bessent stated that Washington’s decision to impose new restrictions would depend on the results of the peace process. According to him, additional sanctions could affect, among others, ships involved in transporting Russian oil.
– Bessent emphasized that recent restrictions against the Russian oil sector have already had an effect and became one of the factors that forced Moscow to the negotiating table. This indicates the vulnerability of the Russian economy to sanction pressure.
8. The largest buyer of Russian oil in India has begun to replace it with Venezuelan oil.
– India’s Reliance Industries, the country’s largest private company and a key importer of Russian oil, has begun purchasing raw materials from Venezuela.
– The oil refining conglomerate purchased a supertanker with a cargo of about 2 million barrels of Venezuelan oil, indicating a search for alternatives to Russian supplies. After the start of the full-scale war against Ukraine, Reliance Industries became the largest importer of Russian oil in India, accounting for about 50% of all Indian purchases from Russia by the end of 2025.
– In December 2024, the company even signed a 25-year contract with Rosneft to supply up to 500,000 barrels per day. However, the situation changed drastically after the US imposed sanctions on Lukoil and Rosneft at the end of October. Following this, Reliance publicly announced the cessation of purchases of Russian oil.
– The shift of India’s largest buyer to alternative sources of supply is another signal that even long-term contracts with Russian companies do not withstand sanction pressure, and Russia’s positions in key Asian markets continue to weaken.
9. The European Commission presented the 20th package of EU sanctions against Russia.
– President of the European Commission Ursula von der Leyen presented the draft of the 20th EU sanctions package against Russia, which covers energy, financial services, and trade.
– Among the key measures are a complete ban on maritime services for Russian crude oil, expanded sanctions against Russia’s shadow fleet, and restrictions on the maintenance of LNG tankers and icebreakers.
– In the financial sector, the EU proposes imposing sanctions on 20 more Russian regional banks and strengthening control over cryptocurrency transactions to prevent circumvention of restrictions.
– New trade bans will cover goods and services worth over 360 million euros, as well as the import of metals, chemicals, and critical minerals worth an additional 570 million euros. Additional export restrictions on military-related technologies are also foreseen.
– The sanctions draft must be unanimously approved by all 27 EU countries.
10. The cost of transporting refined petroleum products from Russian ports sharply increased by 24–33% on key routes during the week from January 26 to February 1.
– The market is increasingly feeling the effects of sanctions and logistical constraints. Industry participants link the rate hike to worsening ice conditions in the Baltic Sea, the rising cost of insuring tankers with Russian cargo, and a sharp shortage of available fleet. The number of ships in ballast at the end of January nearly halved, further narrowing export opportunities.
– The EU ban on importing fuel made from Russian oil dealt an additional blow. As a result, tankers lost the ability to reload in India and other countries, dramatically increasing transportation costs.
– The situation was also complicated by an increase in January shipments compared to December. The industry admits that companies are unable to compensate for the rise in freight and insurance costs.
– Strengthening EU control over the “shadow fleet” only increases risks, tariffs, and further undermines the export capabilities of the Russian fuel sector.
