Moscow under drone attack for third consecutive night, well, that’s certainly a headline that grabs your attention, doesn’t it? It seems the situation has escalated, or at the very least, become more frequent. The whole “special military operation” narrative, as some put it, is taking on a rather ironic hue when the capital city itself is under attack. The phrase “going according to plan” is certainly being tested, and it’s interesting to see how the narrative adjusts with these developments.
Moscow under drone attack for third consecutive night is generating a range of reactions, and it’s pretty clear people are feeling a whole lot of different things.… Continue reading
The United States imposed sanctions on major Russian oil producers Rosneft and Lukoil, aiming to curb the Kremlin’s oil revenues and pressure Putin to negotiate an end to the war in Ukraine. In response, Putin stated that Russia would not bow to US pressure but acknowledged some economic losses. China and India, major consumers of Russian oil, were reportedly scaling back imports due to the sanctions. While some Russian officials acknowledged potential economic impact, others predicted Moscow would adapt to the new restrictions.
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Fuel shortages in Russia continue to worsen, leading to the implementation of gasoline sales restrictions in a fourth region, with Tyumen and Sverdlovsk joining annexed Crimea and Chelyabinsk in limiting purchases. Gas station chains in these regions have capped sales at 20-30 liters per customer, citing measures to discourage bulk purchases, though some stations are experiencing complete outages. These limitations are attributed to disruptions in fuel supplies, stemming from Ukrainian drone attacks on Russian oil refineries, which have taken out nearly 40% of the country’s refining capacity and caused prices to increase.
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Ukrainian forces reportedly struck the Saratov oil refinery overnight, causing explosions and a fire at the facility, which produces over 20 types of petroleum products and supplies the Russian military. This attack, carried out in cooperation between Ukrainian forces, is part of Kyiv’s escalating campaign against Russian oil infrastructure. The refinery, located in southwestern Russia, has been targeted previously, and its destruction comes as Russia faces a mounting gasoline shortage. While Russia’s Defense Ministry claimed to have intercepted numerous drones, the Kyiv Independent could not verify the claims.
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A significant portion of Russian property developers are facing financial distress, with approximately 20% on the brink of bankruptcy due to declining sales and high interest rates, and the share could exceed 30%. This is exacerbated by low demand, limited state support, and the diversion of resources to the war in Ukraine, resulting in shrinking sales and increasing debt burdens. The real estate sector is experiencing the sharpest deterioration, with a substantial rise in non-performing loans. Russian authorities are considering measures such as a moratorium on developer bankruptcies.
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Russia’s economic growth has sharply decelerated, entering a phase of “technical stagnation” from April-June 2025, according to Sberbank’s head, German Gref. This slowdown, driven by record defense spending, is hampered by weak private consumption and shrinking civilian investment, with the Central Bank expecting near-zero growth in late 2025. Economy Minister Maxim Reshetnikov noted a concerning trend of underutilized factories and cost optimization, along with a July GDP growth of 0.4%, indicating insufficient demand. High inflation and the Central Bank’s key interest rate are contributing to a challenging economic situation, reflecting the limits of Russia’s war-fueled expansion.
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Ukraine’s GenStaff says its deep strikes have erased 4% of Russia’s GDP this year, and that figure certainly grabs your attention. Four percent might not seem like a colossal figure at first glance, but when you’re talking about the entire economic output of a country, it represents a significant dent, a real punch to the gut. It’s a substantial sum of money, and you have to wonder, just how much damage needs to be inflicted before it becomes truly unsustainable for Russia to keep up the fight?
This brings up the million-dollar question: What percentage point of economic damage would it take to make the war unfeasible for Russia to continue?… Continue reading
By the end of July, Russia’s federal budget deficit surged to 4.9 trillion rubles ($61.4 billion), exceeding the government’s full-year target by over 30%. This increase is largely attributed to reduced oil prices, which significantly impacted revenues. While expenditures grew substantially, outpacing revenue growth, leading to a decline in real terms. Several experts attribute the economic challenges to sanctions and trade disruptions, while some suggest the falling oil revenues could potentially impact Russia’s ongoing war efforts.
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The Russian economy is facing a deteriorating outlook, with potential risks extending beyond public acknowledgments. Banking officials express growing concern regarding the level of bad debt within their financial institutions. These concerns are primarily fueled by the increasing number of corporate and retail clients failing to meet their loan obligations. High interest rates are significantly contributing to these payment defaults, raising the risk of a potential systemic banking crisis within the next year.
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Despite positive GDP growth (1.5% in the first four months), driven primarily by defense spending, business sentiment indicates an impending recession. This economic downturn is exacerbated by falling global oil prices and the government’s ending of subsidy programs, creating tension between the central bank, which is raising interest rates to combat inflation, and businesses. Putin, while praising the central bank’s efforts, emphasized the need for balanced economic growth, yet offered no concessions regarding the conflict in Ukraine.
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Matt Underwood 
John Q. Hosedrinker