Russia’s recent attacks on Ukraine utilized over 630 drones, guided bombs, and missiles containing more than 50,000 foreign-made components. These attacks resulted in significant infrastructure damage and civilian casualties. President Zelensky highlighted the inadequacy of current sanctions in preventing Russia’s acquisition of these components, emphasizing the need for stronger sanctions and increased support for Ukraine’s air defenses. He specifically called for bolstering Ukraine’s long-range capabilities. The attacks demonstrate Russia’s continued reliance on global supply chains for weapons production.
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In a recent interview, President Zelenskyy criticized the West’s conditional approach to sanctions against Russia, deeming the threats of punitive measures following an invasion as ineffective. He explicitly requested preemptive sanctions from the US as a deterrent to prevent the full-scale invasion. Zelenskyy argued that such preemptive measures, alongside military aid, were crucial to deterring Russia. He felt that the West’s reliance on reactive sanctions was insufficient and ultimately provided inadequate support to Ukraine.
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Following damage to the Estlink-2 power cable connecting Finland and Estonia, the EU is preparing sanctions against Russia’s “shadow fleet,” a group of aging vessels suspected of involvement. A Russian-linked ship, the Eagle S, was detained by Finnish authorities, with its anchor suspected of causing the damage. This incident, along with previous attacks on undersea cables and pipelines in the Baltic Sea since 2022, highlights a systemic threat to regional infrastructure, prompting increased security measures and investigations. Repairs to the damaged cable are estimated to take up to seven months.
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Following a conversation between President Zelenskyy and Prime Minister Ishiba, Japan will provide an additional US$3 billion to Ukraine, sourced from frozen Russian assets. This funding will support crucial energy infrastructure repairs and shelter construction, vital given Russia’s recent attacks. Zelenskyy expressed gratitude for Japan’s ongoing commitment to Ukraine’s defense and pursuit of peace. This contribution builds upon previous aid, including a US$1 billion transfer from frozen Russian assets.
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The UK plans to allocate over £2 billion of frozen Russian assets to support Ukraine’s military and infrastructure rebuilding, a move condemned by the Russian embassy in London as a “fraudulent scheme.” This loan, part of a larger G7 initiative, utilizes Russian central bank assets held primarily within the EU. The funds are intended for military aid, potentially including the development of advanced drone technology. Russia has previously levied similar accusations against the US regarding similar asset transfers.
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Under pressure from the U.S., UAE banks are significantly restricting transactions involving Russian companies, creating major disruptions to Russian trade. This tightening of financial restrictions impacts over fifty UAE banks, including Gazprombank, causing delays and outright refusals of payments. The increased scrutiny and processing times, escalating since November, severely hamper Russian businesses’ ability to conduct international trade, particularly for goods like electronics and industrial equipment. This trend mirrors similar difficulties reported in other countries, threatening to severely limit Russia’s access to crucial financial channels.
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The European Union imposed its first comprehensive sanctions on Chinese firms and a Chinese national for supporting Russia’s war effort in Ukraine. These sanctions, targeting entities involved in supplying dual-use goods and technology to Russia’s military, prompted a rebuke from China’s Foreign Ministry, which deemed them unilateral and lacking international legal basis. The EU countered that the sanctions aim to weaken Russia’s military capabilities and those enabling it, highlighting the bloc’s unity in supporting Ukraine. Sanctions include asset freezes and travel bans for individuals.
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Rosneft and Reliance Industries have signed a $13 billion annual oil deal, undermining Western sanctions against Russia. The 10-year agreement supplies 500,000 barrels of oil daily, circumventing efforts to curb Russia’s economy. This deal highlights the effectiveness of Russia’s strategy to exploit sanctions loopholes, as evidenced by increased Indian oil imports and subsequent EU re-exports. Despite economic strain on Russia, including high inflation and a weakened ruble, the deal underscores the challenges faced by the G7 in enforcing its price cap on Russian oil.
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Vladimir Putin’s ambitious Arctic gas production project, a cornerstone of his energy strategy, is facing a significant setback, effectively grinding to a halt due to the crippling impact of Western sanctions. The Arctic LNG 2 project, boasting the Belokamenka yard designed to employ 15,000 workers, now stands largely deserted, a testament to the sanctions’ devastating effect on Russian infrastructure and its ability to maintain complex operations. Most contractors have abandoned the site, leaving behind only a skeleton crew of around 500 security guards.
The shutdown of this massive undertaking represents a considerable blow to Putin and his energy empire. The Belokamenka yard, once touted as a world-leading industrial site, was crucial for the construction of the offshore platforms necessary to process gas from the Salmanovskoye and Geofizicheskoye fields.… Continue reading
Despite sanctions and Western company withdrawals, the Russian economy surprisingly withstood the impact of the war in Ukraine for over two years. Domestic spending remained robust due to increased defense spending and government-backed loans. The MOEX stock index, after an initial decline, showed a steady recovery. This resilience was achieved despite significantly reduced access to foreign markets and rising inflation. Ultimately, Russian businesses largely adapted to the altered economic landscape.
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John Q. Hosedrinker 
Matt Underwood