Information on current Russian losses due to sanctions as of 05.03.2026.
1. Ukrainian drones attacked a key enterprise of “Uralchem” in the Kirov region.
– Ukrainian Defense Forces carried out a successful attack on the production facilities of JSC “Uralchem” in the city of Kirovo-Chepetsk. The facility is located about 1300 km from the Ukrainian border, indicating further expansion of the strike zone on strategic enterprises in Russia.
– The Kirovo-Chepetsk Chemical Plant (KCHP), one of the largest producers of ammonium nitrate — a critically important component for the production of explosives — was hit. Preliminary data recorded impacts in the plant’s ammonia workshop. At least eight drones were involved in the attack.
– This is the second large-scale strike on Russian chemical industry within the last week following a similar operation at the “Dorogobuzh” plant in the Smolensk region.
– Despite attempts by local authorities to downplay the consequences, the attack caused significant disruptions in the production cycle of the plant, which supplies the needs of the Russian military-industrial complex. The incident once again highlights the vulnerability of Russian rear logistics and the inability of air defense systems to protect critical industrial facilities deep in the rear.
2. Ukrainian drones attacked the Saratov region of Russia on the evening of March 4.
– The likely target of the attack was the Rosneft oil refinery in Saratov — one of the key producers of gasoline and diesel fuel for the European part of Russia with a design capacity of about 140,000 barrels per day.
– According to local residents, more than 60 explosions were heard during the raid. Rosaviation closed the Saratov airport for several hours.
– The Saratov refinery has repeatedly been targeted: during 2025 alone, it was attacked at least nine times.
– Regular strikes on Russian oil refining infrastructure create additional risks for the domestic fuel market in Russia and force authorities to spend resources on restoration and strengthening the protection of energy facilities.
3. The war in the Middle East has not significantly improved the position of Russian oil on the global market.
– Despite the rise in global quotes following the escalation of the situation around Iran, buyers continue to demand significant discounts on Russian raw materials.
– According to Argus Media, the discount on the Russian Urals crude in western ports exceeded $30 per barrel and is approximately $30.9 in relation to the benchmark Brent crude. For comparison, in mid-February, the discount was about $28.6 per barrel.
– Since the beginning of the escalation in the Middle East, Brent prices have risen by more than 11% to $80.65 per barrel during Wednesday’s day trading. At its peak, the quotes rose to $84.39 per barrel. Meanwhile, even amid the rise in global prices, Russian oil is trading at an increasing discount.
– This indicates the persistence of heightened risks for buyers of Russian raw materials and limited demand for it in the international market.
4. At the beginning of 2026, Russia’s economy fell into contraction for the first time in almost two years.
– According to the assessment by Russia’s Ministry of Economic Development, in January, GDP decreased by 2.1% year-on-year — the first decline since March 2023. The sharpest deterioration was recorded in construction: work volumes plummeted by 16%. Authorities attribute this to cold weather and fewer working days in January compared to the previous year. However, even without these factors, the economy is essentially in a state of stagnation.
– Negative dynamics are also observed in industry and transport. Manufacturing shrank by 3%, and freight volumes fell by 5.8% year-on-year.
– This indicates a weakening of business activity and a decrease in demand in the real sector.
– The only segment with slight growth remains retail trade, which added 1.9%. However, consumer demand cannot long compensate for the downturn in production, construction, and logistics, which traditionally serve as early indicators of deeper economic problems.
– The situation indicates the gradual exhaustion of the recovery growth effect of the Russian economy amid sanction pressures and structural imbalances.
5. In March, Russia’s Ministry of Finance suspended all currency and gold operations under the fiscal rule.
– The agency explains the pause by reviewing key parameters, particularly reducing the so-called “cut-off price” for oil from the current $59 to approximately $45-50 per barrel.
– The budgetary rule is a mechanism for managing oil and gas revenues. It stipulates that part of the income from selling oil at a price above the defined “cut-off price” is directed to reserves, primarily to the National Wealth Fund. If the actual oil price is below this level, the state is forced to cover the budget deficit through reserves or borrowings.
– The decision to review the rule’s parameters reflects the worsening situation with Russian budget oil revenues. With current prices for Russian Urals oil at $40-45, the rate of using the National Wealth Fund’s funds remains so high that its reserves may last about a year.
– This forces the authorities to effectively adapt budget policy to the new reality of a sharp decline in energy revenues. At the same time, even strengthening the rule does not solve the key problem.
– The mechanism for accumulating reserves works only when the oil price exceeds the established threshold. At the beginning of the year, Urals was trading around $41 per barrel — even below the lowest discussed ranges.
– Each $1 reduction in the “cut-off price” means a loss of approximately 140-160 billion rubles in oil and gas revenues for the budget, which will have to be compensated by borrowings or further use of reserves.
– Simultaneously, the Ministry of Finance announced a complete halt to foreign currency interventions as of March. Previously, the state sold about 11.9 billion rubles worth of foreign currency daily to support the exchange rate, but now this mechanism has been suspended.
– As a result, the ruble effectively remains without additional budget support, increasing the risks of its further weakening and intensifying inflationary pressure within the country.
6. The sale of international assets by the Russian oil company Lukoil has become a symbol of the collapse of the longstanding strategy of Russian business for global expansion, during which about $800 billion in investments were moved abroad over two decades.
– After the introduction of new American sanctions in the fall of 2025, the company is forced to sell off its international portfolio, which includes assets in approximately 30 countries. The sale is overseen by the U.S. Department of the Treasury, and the total valuation of this portfolio is about $22 billion, whereas about $40 billion was spent on its formation over the last two decades.
– The company’s founder, Russian billionaire Vagit Alekperov, refused Kremlin recommendations to reduce Western presence after the annexation of Crimea in 2014. According to sources within the company, he was convinced that the global scale of Lukoil’s business would make it virtually immune to sanctions. For over ten years, this strategy seemed justified, but new U.S. sanctions in the fall of 2025 have effectively paralyzed the company’s international activities.
– As a result, one of Russia’s largest independent oil producers risks becoming almost exclusively a domestic player. If all assets are sold, the company’s profit may decrease by about 20%, and its market value has already decreased by almost half from the peak level of 2020, standing at around $50 billion.
– The history of Lukoil reflects the broader process of Russian economic withdrawal from the West following the full-scale invasion of Ukraine by Russia.
– According to the Central Bank of Russia, from 2000 to 2021, Russian companies and businessmen invested hundreds of billions of dollars abroad, but sanctions have forced many of them to sell assets at significant losses or completely write off investments.
– Earlier, major Russian entities such as Sberbank and VTB were already forced to relinquish Western assets, and some private investments of Russian businessmen in Europe were frozen. According to the European Commission, as of the end of 2025, approximately €28 billion of private Russian assets remained blocked in the EU.
– The massive sell-off of Lukoil’s assets effectively draws a line under a period of aggressive global expansion of Russian business, which began after the collapse of the USSR and ended with a sharp rollback under the pressure of sanctions and Russia’s geopolitical isolation.
7. Russian oil returns to India amid closure of the Hormuz Strait.
– Two tankers with Russian Urals oil, headed for East Asia, changed course and headed to India. According to Kpler and Vortexa, they carry about 1.4 million barrels of oil.
– The tanker Odune, with a cargo of about 730,000 barrels, has already arrived at the port of Paradip on India’s east coast. The Matari, carrying over 700,000 barrels, is expected to arrive at the port of Vadinar. Another tanker, Indri, in the Arabian Sea, sharply changed course toward India, although it previously indicated a route to Singapore.
– All three vessels — Odune, Matari, and Indri — fell under British and EU sanctions last year. Previously, Urals oil was very popular among Indian refineries, but this year its supplies decreased due to U.S. pressure on New Delhi.
8. Kremlin prepares another stage of energy blackmail: Putin threatens to prematurely stop gas supplies to the EU.
– The Russian leadership is considering the possibility of a complete severance of energy relations with Europe, without waiting for the official embargo in 2027.
– Putin has instructed the government to work out a scenario for the immediate cessation of exports, trying to use the destabilization in the Middle East as a pressure tool.
– Moscow hopes to take advantage of the critical situation in the global market: due to military actions in Iran and logistical problems in the Strait of Hormuz, gas prices in the EU have already exceeded $600 per thousand cubic meters. Amid the reduction of Qatari LNG supplies, Russia aims to artificially deepen the energy resource deficit in Europe to provoke an inflationary shock and weaken European industry.
– Currently, Russia’s role in the European market is reduced to a historical minimum. After the halt of Ukrainian transit, the only pipeline route remains the “Turkish Stream,” through which only 18.8 billion cubic meters were transported in 2025.
– Despite the Kremlin’s attempts to minimize the significance of the European market, a complete severance will lead to significant financial losses for Russia’s budget: direct revenue loss from pipeline gas: 5–6 billion euros per year; total losses from a complete EU refusal of Russian gas (including LNG): 13–15 billion euros.
– Although oil revenues currently remain the main source of financing for Russia’s military machinery, further loss of gas revenues will increase the budget deficit and force the aggressor to deplete state reserves more quickly.
– The forced “reorientation to new markets” remains declarative due to the lack of necessary infrastructure and low profitability of alternative directions.
