Information on the current losses of Russia due to sanctions as of 07.10.2026.
1. The Volgograd Refinery in Russia, which produces about 5% of Russia’s gasoline, has completely stopped.
– The Volgograd Oil Refinery “Volgogradneftepererabotka,” owned by “Lukoil,” has completely ceased oil processing after a drone attack on October 2. Due to equipment damage, the plant has not been operational since that date.
– The Volgograd Refinery can process about 14 million tons of oil per year — approximately 5% of all Russian oil refining. In 2024, the plant processed 13.5 million tons of oil and produced about 1.9 million tons of gasoline, 6 million tons of diesel fuel, and 700 thousand tons of fuel oil.
– This is the third attack on the facility this year. Previous hits occurred on May 29 and July 31. After those, the plant also suffered damage. The complete shutdown of the Volgograd Refinery exacerbates Russia’s problems with fuel production.
– In recent months, attacks on refineries have forced Moscow to restrict gasoline and diesel fuel exports and increase imports of petroleum products.
2. Russia increased its military spending in 2026 by 40% — to a record 17 trillion rubles.
– Russian military spending in 2026 could reach a record 17 trillion rubles ($199 billion) — about 40% more than the initial plan. At the beginning of 2026, 12.9 trillion rubles were allocated for the war budget. Additional expenses increased the amount by almost 4.1 trillion rubles.
– The government began to ramp up advance payments to the defense industry and other war-related expenditures after the Kremlin concluded that negotiations with the US would not lead to an end to the war on terms acceptable to Russia.
– The rise in military spending was one of the reasons for the sharp increase in Russia’s budget deficit. Its forecast for 2026 rose from the initial 3.8 trillion to over 7 trillion rubles. Additional spending is financed, among other things, by domestic borrowing and gold sales.
– Meanwhile, 17 trillion rubles almost match the amount Russia plans to spend on defense in 2027. The draft budget for the next year includes 17.1 trillion rubles, 16.6 trillion in 2028, and 16.3 trillion rubles in 2029.
– Actual military spending by Russia in 2027 may also exceed the planned level.
3. The number of loss-making industries in Russia has nearly quadrupled.
– From January to July 2026, the number of unprofitable sectors in Russian business increased from three to 11. In addition to the coal industry, passenger transportation, and postal services, metallurgy, woodworking, and the automotive industry were added. Overall, every third Russian company ended seven months with a loss.
– The total profit of businesses, after deducting losses, amounted to 13 trillion rubles — 16% less than the previous year.
– The financial result of metallurgy worsened the most — by 269 billion rubles, followed by the financial and insurance sectors — by 247 billion, and the coal industry — by 178 billion.
– The deterioration in the financial results of Russian businesses is occurring under conditions of expensive loans, reduced investments, and rising costs. The expansion of the list of unprofitable sectors increases pressure on companies and narrows the tax base of the Russian budget.
4. In Russia, real estate investments fell by a third over the year.
– The volume of investments in commercial and residential real estate in Russia from January to September 2026 decreased by a third — to 565 billion rubles. Over nine months, investors made 168 deals, which is 28% less than in the same period last year.
– One of the main reasons for the decline remains the high cost of loans. The average payback period for projects increased from nine to 12–15 years. Due to expensive loans, some investors prefer bank deposits, whose returns are currently higher than those of real estate investments.
– The reduction in investments indicates a deterioration in conditions for the Russian construction and development sectors: high rates make new projects less attractive, and capital more expensive.
5. Russia increases currency and gold purchases fivefold due to additional oil and gas revenues.
– From October 7, the Russian Ministry of Finance significantly increases daily purchases of foreign currency and gold. The volume of operations will rise to 12.7 billion rubles per day compared to 2.5 billion in the previous month — more than five times.
– The Ministry of Finance expects that additional oil and gas revenues of the Russian budget in October will amount to 289.46 billion rubles. Of this, 279.42 billion rubles are planned to be spent on buying currency and gold under the budget rule.
– The Central Bank will simultaneously sell currency on the domestic market at 0.58 billion rubles per day. As a result, the net volume of purchases by the state will increase from 1.92 billion to 12.12 billion rubles per day — by 6.3 times. The sharp increase in purchases creates additional demand for foreign currency in the domestic market.
– This may put additional pressure on the ruble, while a weaker exchange rate increases the ruble equivalent of export earnings and oil and gas revenues of the Russian budget.
6. Russian “Rosatom” concealed problems with the contractor at the “Paks-2” nuclear power plant in Hungary.
– “Rosatom” was privately preparing to terminate contracts with the company “Orgenergostroy,” which is working on the construction of the Hungarian Paks-2 nuclear power plant, although publicly it claimed that work was proceeding according to plan.
– Documents show that in 2025, “Rosatom” transferred about €57 million in advances to “Orgenergostroy” for unfinished work. At the same time, the company owed Hungarian subcontractors about €10.6 million.
– After “Orgenergostroy” began laying off workers at the Paks-2 construction site in late 2024, “Rosatom” publicly assured that the contractor would continue work without interruption. However, internal documents reveal that later the head of “Rosatom” authorized preparations to terminate contracts with the company for all state corporation projects, including Paks-2.
– “Paks-2” is one of “Rosatom’s” key overseas nuclear projects. The revealed documents cast doubt on the Russian state corporation’s claims of no issues with the project’s implementation in Hungary.
7. A rare Arctic tanker voyage indicates deepening issues at Russian refineries.
– The sanctioned tanker “Dakar” carrying a gasoline additive from China is likely heading to Russia via the Northern Sea Route. The rare Arctic voyage is another signal of supply problems following strikes on Russian refineries.
– “Dakar” is transporting methyl tert-butyl ether (MTBE), used to enhance gasoline quality. According to Kpler, the cargo was loaded in China onto the ship “Yorik,” and in early September, it was transferred to “Dakar” off the coast of South Korea. The tanker is currently moving west along Russia’s Arctic coast. The vessel has not specified a final destination, but it is likely heading to Russia.
– “Dakar” is under EU sanctions, complicating its entry into major European ports. The tanker does not have an ice class, although such vessels have used the Northern Sea Route during warmer months.
– Russia is typically a net exporter of diesel fuel and other oil products. However, Ukrainian strikes on refineries have led to reduced refining and fuel shortages, prompting Russia to increase oil product purchases from Asia.
– In August, about 700,000 barrels of oil products were delivered from South Korea to Russia—a record monthly volume. Another 320,000 barrels came from India. In July, Asian supplies exceeded 1.2 million barrels, mostly from India.
– Previously, after the start of the full-scale war, monthly oil product supplies to Russia did not exceed 150,000 barrels.
– The sharp increase in Asian imports occurred after intensified attacks on Russian refineries and reduced domestic fuel production.
8. The EU is preparing the largest expansion of sanctions against Russia since 2022.
– On October 7, the European Union ambassadors are set to approve a large-scale expansion of sanction lists against Russia—about 1650 new individuals and entities. Most of them are linked to the Russian military-industrial complex.
– Approximately 1570 new entries concern Russian companies and individuals associated with the defense industry. Over half of these are involved in missile production. This will be the largest simultaneous expansion of the EU sanction lists since the beginning of the full-scale war in 2022.
– The package proposed by the European External Action Service includes asset freezes, travel bans to the EU, and restrictions on operations with European companies. Once approved by the ambassadors, the lists will be submitted to the foreign ministers of EU countries for final approval on October 12.
– Currently, over 3000 individuals and entities are subject to the EU’s main sanction regime against Russia.
9. The EU wants to limit member states’ veto rights on sanctions.
– The European Union is discussing limiting the rights of individual member states to block decisions on sanctions, tax violations, and the admission of new countries into the EU. Instead of mandatory unanimity on such issues, a shift to qualified majority voting is proposed, stated Enlargement Commissioner Marta Kos.
– According to her, the EU needs “more responsive mechanisms” that prevent individual governments from blocking joint decisions. Kos stated: “No more Viktor Orbáns,” referring to the former Prime Minister of Hungary who repeatedly used the veto right to block EU sanctions against Russia and demanded concessions for Budapest.
– Separately, Kos proposed strengthening mechanisms to respond when member countries deviate from the principles of the rule of law, democracy, and common EU values. According to her, the current procedure under Article 7 of the Treaty on the EU is not responsive enough, thus new tools are needed.
– The transition from unanimity to qualified majority means that an individual country cannot single-handedly block an EU decision if it is supported by the necessary number of states.
