Two NABU detectives remain imprisoned four months after organizing the Operation Midas that exposed Ukraine’s $100 million nuclear corruption scandal. Both face espionage charges filed in July, four months before their investigation toppled ministers and triggered Ukraine’s governmental crisis. Neither case has produced evidence.

Detective Ruslan Mahamedrasulov organized the operational information gathering that led to the raids exposing systematic kickbacks at Energoatom. Detective Viktor Gusarov worked alongside him on cases targeting officials close to President Zelenskyy. Security services arrested both in July’s crackdown.

Her brother, Oleksandr Levandovskyi, voluntarily obtained Russian citizenship on 4 April 2014—immediately after Russia’s occupation of Crimea—and began working in Russia’s military prosecutor’s office. Court documents from Russia’s Bashkortostan Republic confirm that Levandovskyi continues to work in the Military Prosecutor’s Office of the Central Military District as of early 2025.

Her father, Serhii Levandovskyi, also voluntarily obtained Russian citizenship in 2014 and operates businesses in occupied Crimea, including partial ownership of the “Kamelia-Kafa” hotel. The hotel’s VKontakte page publishes posts supporting Russia and celebrating “9 May” (Russia’s Victory Day). Four companies controlled by Serhii Levandovskyi paid at least 797,019 rubles ($9,894) in taxes to the Russian budget in 2024, according to data from the List-org website.

The Centre filed criminal complaints on 13 November for treason (against the brother) and collaborationist activity (against the father). Prosecutor General Ruslan Kravchenko has issued no response. Vdovychenko continues handling Mahamedrasulov’s case.

Pattern: All detained detectives investigated Zelenskyy’s circle

The July crackdown didn’t target random NABU employees. Security services arrested investigators handling cases involving officials close to President Zelenskyy.

Detective Mahamedrasulov documented Tymur Mindich, Zelenskyy’s business partner. Detective Ivan Kravchuk handled the case against former Agriculture Minister Mykola Solskyi. Detective Oleksandr Skomar investigated former Deputy Prime Minister Oleksiy Chernyshov, photographed as a guest at Zelenskyy’s birthday party during the COVID lockdown.

Four months of silence

Mahamedrasulov’s interview, published by Suspilne on 18 November, revealed the cost of his detention. Throughout four months of court hearings, journalists repeatedly asked whether he had been documenting Mindich.

“Not once, not once did the NABU detective confirm this, so as not to put the investigation at risk,” wrote anti-corruption activist Vitaliy Shabunin on Facebook.

Mahamedrasulov confirmed he “was involved in installing the necessary equipment in the right places so my colleagues could document all the scheme’s participants.” The investigation succeeded spectacularly—exposing schemes worth $100 million, toppling ministers, and triggering a governmental crisis. The detective who helped make it possible remains imprisoned.

July’s fabricated “Russian infiltration” claims

On 21 July 2025, Ukraine’s Security Service made dramatic claims about Russian infiltrators in NABU, justifying Law No. 12414, which brought anti-corruption agencies under the control of the Prosecutor General.

An Ukrainska Pravda investigation found the espionage claims fell apart under scrutiny. The Security Service claimed “at least 60 instances” of information transfer, but when NABU requested evidence, “they haven’t received an answer to this day.”

Mass demonstrations forced parliament to reverse the law after 10 days. But Mahamedrasulov and Gusarov remain imprisoned four months later, with no evidence presented against them.

“I became SBU’s target because of several cases”

Mahamedrasulov explained his arrest stemmed from multiple investigations threatening Security Service officials, not just Operation Midas.

“I was involved in documenting schemes that were essentially covered by SBU employees, particularly the wing of ‘kashniki,’ or the so-called political part of SBU,” he stated. These officials work “under the patronage of SBU head Vasyl Maliuk and his associate Serhii Duka.”

“Kashniki” refers to the SBU department fighting corruption—“korruptsiya” beginning with K in Ukrainian—who allegedly run corrupt schemes themselves. “Notably, the latter directly led the operation on 21 July regarding me and other NABU detectives,” Mahamedrasulov noted.

During searches, Security Service officers seized his phones, hard drives, flash drives, and laptops. “Over the past four months, SBU employees gained access to a large volume of materials I was working on,” he stated. His sources now face “systematic pressure—searches, wiretapping, and surveillance—as revenge for cooperation with NABU.”

Accountability flows only downward

Ministers fell over schemes Mahamedrasulov helped expose. But no Security Service officials faced consequences for fabricating espionage charges. No investigation examined the “Russian infiltration” claims that justified July’s crackdown. Prosecutor General Kravchenko, appointed one month before the crackdown, has not responded to criminal complaints about Vdovychenko’s family ties to Russia.

Zelenskyy’s reliance on loyal personal networks—solidified during wartime—conflicts with Ukrainian society’s demands for transparent, accountable institutions. Ukrainians have shown they’ll stand with Zelenskyy until victory, but not with his allies’ corruption.

The contradiction challenges claims of “functioning institutions”: ministers fell for corruption, but the detectives who exposed them remain imprisoned on fabricated charges, prosecuted by an official whose family serves Russia.

Until accountability extends to those who fabricated charges, to prosecutors whose families serve Russia, and to the political leadership that authorized institutional capture, Ukraine’s anti-corruption success remains fragile—threatening the very EU accession prospects that depend on demonstrating sustainable reform.

Ukraine’s National Anti-Corruption Bureau raided 10 locations on 10 November, exposing systematic corruption worth at least $100 million in the country’s nuclear energy sector, triggering a governmental crisis that has left the ruling majority reeling.

The revelations documented systematic kickbacks at Energoatom—Ukraine’s state nuclear power operator. Contractors paid 10-15% of contract values to officials in exchange for protection and security contracts.

Investigators used codenames for suspects. Recordings identified “Carlson”—allegedly Tymur Mindich, Zelenskyy’s business partner from Kvartal-95 studio—as performing “the function of a top manager,” though investigators say he “was not the main beneficiary.”

Mindich fled Ukraine hours before NABU detectives arrived. The scandal left parliament “torn apart” as MPs fielded offers to defect to other factions, Ukrainska Pravda reported.

Ministers dismissed, government in crisis

The parliament dismissed Energy Minister Svitlana Hrynchuk and Justice Minister Herman Halushchenko on 19 November. The European Solidarity party initiated procedures to dismiss the entire Cabinet, with 51 MPs signing a no-confidence motion.

“When millions of Ukrainians were left without electricity during shelling, when the best were dying every day at the front, another ‘battery’ was working in the rear—the one that charged the pockets of the chosen ones,” the party stated. “One hundred million dollars that could have gone to protect the energy infrastructure turned up in Energoatom’s schemes.”

The scale and cynicism of the scheme—enriching officials connected to the president while civilians froze and soldiers died—crossed a red line even wartime unity couldn’t protect.

The scheme operated like a bank—with its own accounting, currency operations, and a geography spanning from Kyiv to Atlanta, Georgia, and Moscow. The money-laundering office operated from central Kyiv, belonging to the family of Andriy Derkach, a former Ukrainian MP now serving as a Russian senator.

The operation processed approximately $100 million using cryptocurrency and collected cash at 30 different locations across Kyiv to avoid detection.

Zelenskyy’s careful response

Zelenskyy addressed Operation Midas in his evening address on 10 November, hours after the raids. “Any effective action against corruption is very much needed. The inevitability of punishment is essential,” he stated. “Energoatom currently provides Ukraine with the largest share of power generation. Integrity within the company is a priority.”

“The energy sector and every branch, everyone who has constructed corrupt schemes, must face a clear procedural response. There must be convictions,” Zelenskyy continued. “And government officials must work together with NABU and law enforcement bodies—and do it in a way that delivers real results.”

His administration faced mass protests in July after attempting to subordinate NABU through Law 12414. Parliament reversed the law after 10 days.

EU: functioning institutions, but concerns remain

European Union officials praised Ukraine’s anti-corruption institutions after the revelations—but only once the dismissals started. EU High Representative Kaja Kallas called the corruption scandal “deeply regrettable” at the G7 foreign ministers’ summit, stressing “there is no place for corruption, especially not now.” “It is literally the people’s money that should go to the front lines,” she stated.

European Commission spokesperson Guillaume Mercier emphasized,

Operation Midas succeeded because of a 15-month investigation led by NABU detectives. Detective Ruslan Mahamedrasulov organized the operational information gathering that made the raids possible.

Detective Viktor Gusarov also remains behind bars. Both face espionage charges that investigators have yet to substantiate with evidence. Whether Ukraine’s anti-corruption success proves sustainable depends on holding accountable not just corrupt ministers, but those who targeted the investigators who exposed them.

Oil prices fell on Wednesday as US sanctions forced Russia’s Lukoil into a $22 billion global fire sale—yet markets focused on rising inventories rather than the dismantling of one of Russia’s largest international empires.

Brent crude dropped 0.3% to $64.67 per barrel by midday, with traders watching weekly supply reports while missing the strategic story: Russia permanently losing three decades of international expansion.

Trump’s sanctions, imposed on 22 October after nine months of unsuccessful negotiations with Putin, are forcing Russia’s second-largest oil producer to abandon assets from Iraq to Europe. Iraq already stopped all payments on Lukoil’s biggest foreign asset. European nations are seizing refineries outright.

American oil majors circle for acquisitions at sanctions-forced discounts. Yet prices reflect supply concerns rather than Moscow’s permanent loss of strategic positioning—an irony intensified by China’s earlier stockpiling, which now suppresses prices precisely as Russia bleeds.

Iraq is bleeding Russia’s largest foreign asset

Lukoil’s crown jewel—a 75% stake in Iraq’s West Qurna 2 oilfield producing over 480,000 barrels daily—stopped generating revenue for Moscow in early November. Iraq suspended all cash and crude payments to Lukoil immediately after US sanctions hit, with the state oil company SOMO canceling shipments.

By 10 November, Lukoil declared force majeure—a legal notification that it cannot fulfill its contractual obligations due to circumstances beyond its control, thereby protecting the company from penalties while signaling that operations have effectively stopped. Iraqi officials confirmed two Western firms and one Chinese company are now negotiating to acquire the Russian stake.

Russian oil prices hit multi-year lows following the sanctions, with nearly a dozen prominent Indian and Chinese purchasers pausing December deliveries.

American majors position for spoils

Exxon Mobil has joined Chevron in pursuing parts of Lukoil’s international portfolio, according to Investing.com. Both US oil giants are eyeing stakes in Kazakhstan’s Karachaganak and Tengiz fields, where they already operate alongside Lukoil—positioning themselves to acquire strategic assets at what amounts to a sanctions-forced discount.

Exxon is also studying a potential bid for West Qurna 2 north of Basra in southern Iraq, where it previously operated the neighboring West Qurna 1 project before exiting last year. US private equity firm Carlyle and Abu Dhabi National Oil Company are also exploring options.

The US Treasury cleared potential buyers to negotiate with Lukoil until 13 December, with a 21 November deadline for companies to cease all dealings with the sanctioned Russian firm or face secondary sanctions cutting them off from the dollar-based financial system.

European seizures add pressure

Bulgaria and Romania are moving to seize rather than purchase Lukoil refineries on their territory. Bulgaria’s government made legal changes to expropriate the 190,000-barrel-per-day Neftohim Burgas refinery, the largest in the Balkans.

Romania’s president indicated the country could take over the 48,600 bpd Petrotel refinery. These seizures mean Russia may receive nothing for some of Europe's most valuable energy infrastructure assets.

Lukoil spent decades building them to gain political leverage and hard-currency revenue. The Netherlands facility, which holds a 45% stake in the 180,000 bpd Zeeland refinery, operated in conjunction with France’s TotalEnergies, faces similar pressures.

Lukoil’s international portfolio spans refineries, over 2,000 filling stations, and oil field stakes across Europe, Central Asia, the Middle East, Africa, and the Americas. The company produces 500,000 barrels of oil daily outside Russia—0.5% of global output—generating an estimated $4-5 billion annually in revenue from its foreign operations.

Ukrainian strikes compound Russian woes

While sanctions force asset sales, Ukrainian long-range strikes have systematically targeted Russian refining capacity. Ukrainian forces struck the Novokuybyshevsk refinery in Samara Oblast on 16 November—the sixth attack on that facility alone this year. The plant, which processes 5.74 million tons of crude annually, had just resumed operations in early November after an 18 October strike forced a complete shutdown.

Ukraine’s Main Directorate of Intelligence struck the Moscow region’s Koltsevoye pipeline on 1 November, destroying all three lines of the 400-kilometer system. The pipeline transports 3 million tonnes of jet fuel, 2.8 million tonnes of diesel, and 1.6 million tonnes of petrol annually from refineries across multiple regions.

Ukrainian attacks have struck more than 50% of Russia’s 38 major refineries since early 2025, according to Russian sources. The campaign aims to disrupt military fuel logistics and undermine export revenues funding the war.

The oversupply paradox

Despite this coordinated military and economic pressure, oil prices fell on Wednesday, 19 November, as the American Petroleum Institute reported US crude stocks rose 4.45 million barrels in the week ended 14 November, while gasoline inventories climbed 1.55 million barrels.

“Overall, the report was relatively bearish,” said ING commodities strategists, signaling expectations for continued price declines. But they cautioned that “market participants appear more concerned about supply risks than the odds of a surplus going forward.”

Commerzbank analyst Barbara Lambrecht explained that oversupply hasn’t materialized yet because “large quantities of crude oil have flowed into building oil reserves, especially in China.” She warned that this cushion is diminishing, and if recent sanctions on Russian oil producers take full effect, “oversupply on the world market should increase.”

The irony: China’s earlier stockpiling—which gave Russia a crucial buyer as Western sanctions intensified—now suppresses global prices precisely as Moscow’s energy empire crumbles. Beijing bought heavily when Russia needed sales, building reserves that now flood the market and keep prices low even as Russia loses revenue-generating assets permanently.

Late pressure finally working

The Trump administration’s October sanctions on Rosneft and Lukoil marked the first significant US restrictions on Russia’s energy sector since the president took office in January. The timing came nine months into Trump’s presidency, following his unsuccessful attempt to negotiate directly with Putin.

US Treasury Secretary Scott Bessent said the measures aim to change Moscow’s behavior after Putin’s “refusal to end this senseless war.” The two companies together account for roughly 55% of Russia’s oil output.

What was once Russia’s most internationally integrated energy firm is retreating into a smaller, regionally constrained operator dependent on state backing at home. The company retains five major domestic refineries processing tens of millions of barrels annually to supply Russia’s wartime logistics, but loses the external cushion that provided financial resilience.

The fire sale shows economic warfare at the structural level—Russia permanently losing strategic footholds in Kazakhstan, Iraq, and Europe, with Western companies positioned to acquire key assets at discounts.

Iraq’s West Qurna 2 alone represents 480,000 barrels daily, shifting from Moscow’s control. European refineries change hands. Kazakhstan’s partnerships dissolve. Within months, assets Moscow spent thirty years acquiring will operate under new ownership.

The paradox reveals competing timeframes: traders watching weekly inventory reports while Lukoil loses revenue streams, refineries, and international leverage built over decades. The structural shift is permanent. The price movement is noise.

“Iranization” describes a country that is stuck with limited modernization, long-term stagnation, and a deepening dependence on China. It’s the first major Western institutional attempt to define Russia’s trajectory as structurally comparable to Iran’s decades-long isolation.

Russia’s reserves are depleting and deficits mounting through October. Moscow retains the capacity to sustain its invasion through 2026, but the economic model is collapsing into stagflation.

What “Iranization” means

The French Institute of International Relations (IFRI) report, “Europe-Russia: Balance of Power Review,” supervised by nine European think tank directors, defines the term precisely.

Like Iran after decades of sanctions, Russia faces structural isolation from Western markets, financial systems, and technology transfers.

June predictions, October reality

IFRI’s mid-year assessment saw trouble coming. Russia’s economic momentum had peaked by year-end 2024 and was drifting into stagflation. The warning signs included rising inflation, a projected budget deficit of 2.6% in 2025, and the National Wealth Fund’s liquid portion shrinking to $31.5 billion by June 2025.

Russia’s budget deficit hit 4.2 trillion rubles ($48.2 billion) in the first eight months of 2025—four times higher than the previous year, per Russian Finance Ministry data. The National Wealth Fund now stands at roughly $40 billion, continuing its decline despite a modest uptick from June.

Russia entered stagflation exactly when IFRI predicted, with deterioration accelerating through autumn.

The €160 billion gas reckoning

Russia’s isolation shows most starkly in the energy. IFRI calculates Russia’s gas sector won’t recover from losing the European market—€160 ($185) billion in lost Gazprom export revenue over 2025-2030.

Yet, as IFRI points out, Europe absorbed the shock. Fossil-fuel import bills halved compared to 2022 levels—over €250 ($288) billion in annual savings for European countries.

The IFRI report notes Europe has implemented an unprecedented industrial policy shift, strengthening resilience and competitiveness while positioning itself to become the world’s most electrified economy and global climate leader by 2030.

War capacity persists

The critical caveat: Russia’s ability to sustain the war effort isn’t exhausted, particularly if oil prices remain stable. Lower oil prices or additional strict sanctions would create precarious conditions, but Moscow retains operational capacity for now.

The IFRI assessment notes that while Russia retains war-fighting capacity, Europe holds clear advantages in air, naval, space, and cyber domains. Russia dominates only land warfare through mass and firepower, plus nuclear intimidation, but cannot project power across all domains at once. Outside Ukraine’s ground war, the military balance remains decisively in Europe’s favor.

Nine European think tank directors supervised this assessment—the first formal Western research framework to treat Russia’s trajectory as permanent structural isolation rather than a recoverable disruption. European planners aren’t asking whether Russia’s economy will recover after the war ends. They’re analyzing how Moscow will function as a sanctioned, isolated state dependent on China for survival, mirroring Tehran’s trajectory over four decades.

Russia’s Black Sea port of Tuapse has suspended fuel exports and halted crude oil processing following a Ukrainian drone strike, forcing three tankers to anchor offshore empty while a 3.6-kilometer (2.2-mile) oil slick spreads into the sea.

The Tuapse oil refinery suspended crude processing after the strike damaged port infrastructure. At the same time, three tankers conducting loading operations sit anchored, unable to complete their scheduled exports to Asian buyers, according to Reuters, citing industry sources and LSEG vessel tracking data.

Cumulative campaign

The Tuapse halt exemplifies how Ukraine’s systematic strikes are translating into measurable economic retreat. Ukrainian forces have conducted more than 160 precision strikes on Russian oil refineries and energy facilities in 2025, according to Security Service of Ukraine chief Vasyl Malyuk, who described the operations as “kinetic sanctions.”

BBC Verify documented 21 of Russia’s 38 large refineries struck since January 2025, with attacks reaching record levels in August and remaining elevated through October—already 48% more than all of 2024.

The economic consequences are now appearing: Russia’s fossil fuel revenues in September fell to €546 million ($580 million) per day—half of September 2022 levels—while seaborne oil product exports saw a steep 13% month-on-month decline, which the Centre for Research on Energy and Clean Air attributed directly to “Ukrainian drone strikes on Russian oil refineries and ports.”

Sanctions amplify strike campaign impact

The timing compounds the pressure: three weeks before the Tuapse strike, the US Treasury sanctioned Rosneft and Lukoil, including the RN Tuapse Oil Refinery subsidiary. Major buyers simultaneously pulled back: Indian state refineries reduced their Russian crude imports to the lowest level since May 2022, while Chinese state processors canceled cargoes, potentially affecting 400,000 barrels per day.

BBC satellite imagery analysis captured the damage in Tuapse, revealing an oil slick extending 3.6 kilometers into the Black Sea from a terminal that handles 12 million tons annually and exports 90% of its production, primarily to China, Malaysia, Singapore, and Türkiye—markets central to Russia’s sanctions-evasion network.

From tactical strikes to strategic paralysis

Ukraine’s strategy targets both refining capacity, which produces high-margin products, and export terminals, which generate revenue. SBU chief Malyuk stated on 31 October that strikes have forced a 37% idle rate of refining capacity. By disrupting both processing and export infrastructure, the campaign forces Russia to sell lower-margin crude while reducing absolute volumes.

However, some analysts believe that disruption is temporary. “Down the line, you will see that more and more of the disrupted Russian oil, one way or another, finds its way to the market,” Gunvor Group CEO Torbjörn Törnqvist told Bloomberg. “It always does somehow.”

Facilities that survived previous strikes with temporary disruptions now face operational paralysis as damage accumulates, buyers retreat, and repairs require sanctioned equipment that is unavailable under international restrictions—turning repeated tactical strikes into a strategic economic retreat.

Ukrainians withdrew 67.7 billion hryvnias ($1.61 billion) in the third quarter—an 8.2% increase since January—as Russia destroyed half of the country’s generating capacity and triggered complete blackouts that halted digital payments for days.

The National Bank’s data captures a behavioral shift playing out in millions of Ukrainian households as Russia destroyed more than half of Ukraine’s pre-war generating capacity in the first six months of 2025. Cash in circulation reached 890.1 billion hryvnias ($21.2 billion) by 1 October, with officials explicitly linking the acceleration to “increased uncertainty about war ending and intensified air attacks that may cause prolonged power outages.”

High-denomination notes

Ukrainians shifted toward larger bills, with 1,000-hryvnia notes growing 3.6 percentage points as a share of total circulation—the fastest growth of any denomination. The pattern shows households consolidating wealth into easily portable forms rather than simply withdrawing emergency cash for daily transactions.

The 500-hryvnia note remains most common at 26.6% of total circulation, while 50-hryvnia bills comprise just 4.5%.

Nearly worthless coins

The National Bank simultaneously began phasing out 10-kopeck coins on 1 October, citing their 27.4% share of circulation despite “no longer playing a substantial role in cash transactions.”

Ukraine is withdrawing them to reduce state costs for production, processing, transportation, and storage during wartime. At the same time, 50-kopeck coins remain in demand from the retail and service sectors, accounting for 9.1% of circulation.

Digital economy adapting to war

The cash surge marks a sharp reversal for Ukrainian consumers. A May 2025 Visa study found 95% of Ukrainians use digital payment methods, with 68% no longer carrying cash or visiting ATMs under normal circumstances.

Recent attacks demonstrate the threat’s persistence. On 2 November, Russian strikes left the entire Ukraine-controlled portion of Donetsk Oblast without power, with partial outages in Zaporizhzhia, Kharkiv, and Chernihiv.

On 30 October, the barrage deployed 653 drones and 52 missiles targeting the grid. According to Vice Prime Minister Oleksiy Kuleba, Ukraine plans to fortify 100 critical energy sites by the end of this year. At the same time, Russia has adapted tactics to use heavier warheads and more sophisticated drone guidance systems.

European worry becomes policy

The cash hoarding pattern isn’t unique to Ukraine, but the motivation is. European Central Bank researchers documented extraordinary spikes in countries bordering Ukraine as early as spring 2022. Estonia, Lithuania, Slovakia, and Finland saw euro cash demand jump six to ten standard deviations above historical averages in March 2022.

That uncertainty translated into official policy. The ECB research, titled “Keep calm and carry cash,” established physical currency as a “spare tire” for payment systems during crises—a finding CNN reported prompted governments across Europe to formalize cash reserve recommendations. The Netherlands, Austria, and Finland now advise citizens to keep €70-€100 per person for 72-hour emergencies. Sweden recommends enough for a week “if digital payment methods have been interrupted.”

Ukrainians stockpile currency because digital payments actually stop working when Russian missiles destroy substations. The National Bank’s data shows first-quarter cash withdrawals reversed in quarters two and three—a seasonal pattern, officials noted, but amplified by infrastructure vulnerability that has made physical currency a necessity rather than merely a precaution.

The floating oil glut marks a turning point for sanctions enforcement. Russia can still pump crude and load tankers, but every barrel trapped at sea delays revenue funding Russia’s war effort.

Buyers representing more than 95% of Moscow’s seaborne exports now calculate that purchasing from sanctioned Rosneft and Lukoil risks secondary penalties—creating the kind of cash-flow pressure analysts warned could test Moscow’s ability to sustain military operations.

US sanctions trigger steep shipment drop

Russia’s seaborne crude shipments crashed to 3.58 million barrels per day in the four weeks ending 2 November, down 190,000 barrels from the previous period—the sharpest decline since January 2024, according to vessel-tracking data compiled by Bloomberg.

The collapse followed the 22 October US sanctions targeting Rosneft and Lukoil, Russia’s two largest oil exporters. Together, they account for roughly half of the country’s 10.6 million barrels per day output and nearly a third of federal tax revenue.

Russian exporters continued filling tankers at port terminals, yet refiners in India, China, and Türkiye—buyers representing more than 95% of Moscow’s seaborne crude exports—increasingly refused to accept deliveries. The result: 380 million barrels are now floating at sea, up 27 million barrels or 8% since early September, Bloomberg reported.

At current prices near $60 per barrel, that floating inventory represents approximately $1.6 billion in crude that cannot generate immediate revenue for Russia’s war machine.

Chinese state firms cancel orders

The most significant buyer retreat came from China, long considered Moscow’s economic safety net after Western sanctions redirected Russian oil trade from Europe to Asia.

State-owned giants Sinopec and PetroChina stayed on the sidelines after the US sanctioned Rosneft and Lukoil in October, canceling some Russian cargoes, Bloomberg reported on 3 November. Smaller private refiners also held off purchases, fearful of attracting penalties similar to those faced by Shandong Yulong Petrochemical, which the UK and EU recently blacklisted.

Rystad Energy estimates the buyer pullback affects approximately 400,000 barrels per day—nearly 45% of China’s total seaborne oil imports from Russia.

Shipments to Chinese ports fell to 970,000 barrels per day in the four weeks to 2 November, while deliveries showing no final destination surged to more than 1.3 million barrels per day—oil loaded onto tankers but with buyers yet to materialize.

India, which had absorbed nearly 1 million barrels per day of Russian crude, saw deliveries drop from 1.16 million to 940,000 barrels per day. Indian state-run refiners paused purchases, calculating whether they could continue sourcing from smaller suppliers rather than sanctioned Russian energy giants while avoiding secondary sanctions exposure.

Türkiye, Russia’s third-largest buyer, cut purchases to approximately 320,000 barrels per day as refiners sought alternative supplies from Iraq, Libya, Saudi Arabia, and Kazakhstan.

Oil revenue plunges

Buyer after buyer abandoned Russian cargoes. Bloomberg reported that the gross value of Moscow’s crude exports fell by approximately $90 million weekly to $1.36 billion in the 28 days ending 2 November, with both export quantities and prices declining.

The revenue squeeze comes as Russia faces mounting economic strain across multiple fronts. The country’s budget deficit hit 4.2 trillion rubles ($48.2 billion) in the first eight months of 2025—four times higher than the previous year, according to analysis by Ukrainian economist Volodymyr Vlasiuk.

With real inflation around 25-26% rather than the official 8.2%, and civilian sectors declining, the Kremlin faces what Vlasiuk described as classic stagflation—stalling growth with accelerating prices.

Combined with Ukrainian drone strikes that have reduced Russia’s refining output by up to 90% at targeted facilities, the sanctions-driven revenue loss creates a double squeeze on Moscow’s war funding.

Floating storage reveals sanctions working

The 380 million barrels trapped at sea represent more than delayed revenue—they reveal how sanctions work through incremental strangulation rather than immediate blockade. Russian oil companies can still pump crude and load tankers, but cannot convert that crude into usable war revenue without buyers willing to risk secondary sanctions.

More than 1.2 million barrels per day sit on ships showing destinations as Port Said or the Suez Canal, or vessels from Pacific ports with no clear delivery point. Another 140,000 barrels per day float on tankers yet to signal any destination whatsoever.

Together, these three buyers represented more than 95% of Moscow’s seaborne crude exports—and there is no fourth market capable of absorbing equivalent volumes.

As one tanker after another joins the floating inventory, unable to deliver cargoes, Russia faces an impossible choice: continue loading crude that generates no immediate revenue while paying storage costs and ship rentals, or cut production and accept permanent market share loss.

The floating blockade, invisible to most observers but precisely measured by vessel-tracking systems, may prove the clearest indicator of when economic pressure on Russia’s war machine reaches unsustainable levels.

Belgium is blocking a €140 ($160.7) billion loan mechanism to finance Ukraine’s war effort—despite Brussels holding €193 ($221.5) billion in frozen Russian central bank reserves.

The breakdown comes as Ukraine faces a spring 2026 budget crisis. The country’s Finance Ministry projects needing $74.8 billion over 2026-2027, with only half that amount currently covered by confirmed international support.

The frozen assets loan mechanism is the primary tool to close the financing gap. Without it, EU member states would need to finance Ukraine’s budget shortfall directly from national treasuries—a politically toxic option after pandemic spending strained government budgets.

The standoff tests whether Western democracies can sustain Ukraine support when it requires political risk-sharing, not just symbolic commitments. Belgium holds the leverage because Euroclear, the Brussels-based clearinghouse, controls the frozen Russian funds.

Negotiations reach an impasse

The loan mechanism uses windfall profits from frozen Russian assets as collateral, but Belgium wants guarantees that it won’t bear liability if Russia ever reclaims the funds.

Deputy finance ministers from EU member states met on Tuesday but made no progress resolving Belgium’s demands for liability protection, according to two senior EU officials who spoke to Politico.

The Commission will present Belgium with a memo outlining alternative funding scenarios involving EU borrowing. One frustrated deputy finance minister questioned whether €140 billion could materialize from national budgets: “There’s no way.”

What Belgium demands

Belgium holds the €193 billion in frozen Russian central bank reserves through Brussels-based Euroclear. Prime Minister Bart De Wever has outlined three conditions before supporting the asset-backed loan.

De Wever’s three conditions:

• Shared liability: Belgium demands guarantees that “every member state will share responsibility for the consequences” if the money must be returned to Russia. De Wever insists liability “cannot fall solely on Belgium.”
• Other countries participate: He requires that “every country holding immobilized assets must move with us, because we are the only ones doing this.” France holds about €19 billion ($21.8 billion) in frozen Russian funds, Luxembourg €10 billion ($11.5 billion)—but both have stayed silent about participating in the mechanism.
• Legal transparency: Belgium seeks “transparency about that risk and about the legal basis for this decision.”

De Wever faces his own budget crisis at home. Belgium has yet to pass its 2026 budget and must cut at least €10 billion, and De Wever warns he may resign if no deal emerges by Thursday, one day before the emergency Commission meeting.

The impasse reveals a deeper problem: Western democracies structured Russia sanctions to avoid political risk at home. Freezing assets looked cost-free. Using those assets to help Ukraine requires someone to accept potential liability—nobody wants to go first.

Ukraine’s government collected $1.3 billion more in revenue than budgeted through October, despite recent findings that 94 business sectors increased earnings while simultaneously cutting tax payments.

While businesses optimized their tax bills, other revenue sources—particularly import taxes and personal income levies—performed slightly better than projected. The modest overperformance provides marginally more fiscal breathing room, though Ukraine remains heavily dependent on external financing to cover its massive budget deficit.

“There are currently no risks regarding the implementation of planned defense expenditures,” Roksolana Pidlasa, who chairs the Verkhovna Rada’s budget committee, wrote on Facebook on 3 November, sharing operational budget data showing total revenue of 1.76 trillion hryvnias ($42.8 billion)—53.3 ($1.27) billion hryvnias above the ten-month target.

How Ukraine collected more while businesses paid less

The revenue contradiction stems from Ukraine’s diversified tax base performing unevenly across sectors. Import VAT generated $10.7 billion—the largest single revenue source and well above targets as wartime consumption patterns shifted toward imported goods.

Corporate profit tax yielded $5.5 billion, also above the ten-month target, even though 94 business sectors reported higher revenues alongside lower tax payments. The gap suggests that while some companies optimized their tax positions, the overall corporate base expanded enough to offset individual reductions, or other companies substantially increased their contributions.

Domestic VAT after refunds added $6.2 billion, and import excise taxes contributed $3.3 billion. Only two categories—import VAT and domestic excise—failed to exceed their adjusted targets, indicating broad-based fiscal resilience rather than dependence on a few revenue streams.

Defense spending dominates domestic resources

Ukraine allocated 2 trillion hryvnias ($48.7 billion) to defense over the ten-month period, representing 63.3% of all general fund expenditures. This figure confirms a critical point for Western policymakers: Ukraine finances its war effort predominantly from domestic revenue, not international aid.

Total general fund expenditures reached 3.2 trillion hryvnias ($77.9 billion)—73.7% of the annual plan. Beyond defense, major spending categories included debt repayment ($10.7 billion), social protection for veterans ($7.8 billion), debt servicing ($6.8 billion), medical guarantees ($3.4 billion), and teachers’ salaries ($2.3 billion).

Ukraine supplemented tax revenue with $11.5 billion from domestic bond placements to finance the budget deficit.

What this means for Western aid calculations

The revenue overperformance arrives as Ukraine faces a projected budget deficit of 25% of GDP in 2025, requiring $51.5 billion in external financing. The 3.1% beat provides slightly more fiscal headroom than budgeted, though the fundamental financing gap remains.

The National Bank of Ukraine estimates the country needs declining external support through 2027—from $51.5 billion this year to $45 billion in 2026 and $39 billion in 2027.

Business optimism holds despite energy attacks

The revenue figures align with Ukrainian businesses maintaining cautiously optimistic outlooks despite intensifying Russian attacks. The National Bank of Ukraine’s business activity expectations index reached 50.3 in October—slightly above the neutral threshold of 50—according to a survey published on 3 November.

Trading companies showed the strongest optimism with an index of 54.3, driven by robust consumer demand and decelerating inflation. Construction firms reached 53.3, boosted by budgetary spending on infrastructure restoration and road construction.

Industrial companies reported more guarded expectations at 48.8, citing ongoing destruction of production facilities, high restoration costs, and power cuts. Services companies registered 48.7, affected by damaged railway infrastructure and persistent labor shortages.

The business activity data explains part of the revenue resilience: companies operating and consumers spending generate tax revenue even when individual sectors optimize their tax bills. The National Bank noted that intensifying Russian attacks on energy infrastructure constrain growth, but haven’t derailed economic activity—explaining how Ukraine exceeded revenue targets despite the tax optimization paradox.

The European Commission told Kyiv that “recent negative trends” in corruption enforcement must be “decisively reversed” or risk billions in European funding and accession progress.

The warning marks a decisive turn from July, when Brussels had secretly planned to fast-track Ukraine’s first EU negotiating cluster—until President Zelenskyy’s government stripped anti-corruption agencies of independence, forcing Brussels to abandon the plan entirely. Four months later, Ukraine missed critical reform deadlines, watched its security agencies fight publicly, and saw Brussels go from ally to skeptic.

The Commission’s draft enlargement report, obtained by the Kyiv Independent before Tuesday’s release, acknowledges Ukraine met conditions to open three of six accession clusters—but makes clear institutional stability matters more than checking reform boxes.

“Recent negative trends, including a growing pressure on the specialised anti-corruption agencies and civil society, must be decisively reversed,” the Commission stated in the draft report.

What Brussels is actually worried about

Four months after that July crisis, the institutional damage persists. The question isn’t whether Ukraine can pass reforms. It’s whether those reforms survive when investigations reach politically sensitive targets.

Since July, Ukraine’s National Anti-Corruption Bureau (NABU) and Security Service have been locked into an escalating confrontation involving raids, arrests, and mutual investigations. At the same time, both agencies acknowledge that only Russia benefits from their public standoff.

• 2 September: NABU charges the former head of the Security Service’s cybersecurity unit with illicit enrichment.
• 10 September: The Security Service responds by charging a NABU detective with false declarations.
• 25 September: Security Service searches property belonging to a former NABU detective.

The pattern extends beyond inter-agency warfare. On 28 October, authorities detained former Ukrenergo chief Volodymyr Kudrytskyi—fourteen months after Western board members quit the state energy company in protest, calling his earlier dismissal “politically motivated.” Anti-corruption lawyer Daria Kaleniuk wrote on Facebook that “persecution of government critics through transparently fabricated criminal cases is already a trend,” reversing Ukraine’s European path.

How Ukraine got here

The crisis dates back to ten days in July that nearly killed Ukraine’s accession prospects.

On 21 July, President Zelenskyy signed legislation subordinating NABU and the Specialized Anti-Corruption Prosecutor’s Office (SAPO) to the Prosecutor General—a political appointee. This came one day after authorities conducted over 70 raids against NABU offices, arresting detectives on espionage charges critics called pretextual.

Rare wartime protests forced parliament to restore the agencies’ independence by 31 July, but the institutional damage remained. The Commission’s report reflects what European officials watched unfold: Ukraine’s challenge isn’t implementing reforms but ensuring institutions can function independently under political pressure.

The deadline problem

In September, Ukraine’s parliament rejected draft law №13150—legislation that would have let citizens sue local officials for illegal decisions—with only 206 of 226 votes needed. The missed 31 March deadline was a specific condition for continued Ukraine Facility payments.

Since March 2024, the EU has disbursed over €12 billion in funding for teacher salaries, healthcare workers, and essential government operations, while Ukraine allocates domestic resources to defense. Each missed deadline jeopardizes future tranches.

What Ukraine says it can do

Ukraine has informed EU officials it aims to complete accession negotiations by the end of 2028. The Commission called this “ambitious but attainable” only with faster reforms, though Ukrainian officials privately acknowledge 2030 as more realistic.

“The Commission is committed to support this ambitious objective but considers that to meet it an acceleration of the pace of reforms is required, notably with regards to the fundamentals, in particular rule of law,” the draft report states.

Hungary continues blocking Ukraine from formally opening any negotiation clusters, despite the Commission ruling that Ukraine is technically ready. European Council President António Costa proposed allowing cluster openings by qualified majority rather than unanimous consent, but the Netherlands defended Hungary’s veto rights at October’s Copenhagen summit.

What the warning means

Brussels’ assessment is calculated: Even if mechanisms existed to bypass Hungary, Ukraine’s institutional fragility provides substantive grounds for skepticism about accelerated accession. The Commission praised Ukraine’s “remarkable commitment” to EU membership despite Russia’s war—then immediately warned about “pressure on specialised anti-corruption agencies and civil society.”

Yet, for a country seeking EU membership while fighting an existential war, building institutions that survive political interference when investigations reach sensitive targets may prove harder than any legislative checklist.

The shift from July’s planned fast-track to November’s formal warnings tells you what Brussels really thinks about Ukraine’s trajectory. The question now is whether Kyiv can reverse it before the next tranche deadline.

Belgium collected €1.7 billion ($1.77 billion) in taxes from frozen Russian assets in 2024 while blocking a €140 billion ($145.6 billion) loan mechanism that would redirect those earnings straight to Ukraine. The standoff comes as falling interest rates slash potential aid annually by nearly €2 billion ($2.08 billion).

Belgium’s objection traps Ukraine’s $8 billion IMF loan over three years. The fund requires proof of financial viability that depends on the EU mechanism, which Belgium refuses to approve. According to the National Bank of Ukraine, Ukraine’s 2025 budget deficit stands at 25% of GDP, requiring $51.5 billion in external financing this year alone.

Belgium’s profitable objection

Belgium opposes the €140 billion ($145.6 billion) “reparations loan”—which would use frozen Russian state assets as collateral—citing concerns about financial liability if an international court rules the use of Moscow’s reserves illegal. Most frozen assets sit in Brussels-based Euroclear.

Under the current system, Belgium collects these taxes and decides how, when, and whether to spend that money on Ukraine, maintaining revenue and leverage. Under the proposed EU loan mechanism, earnings flow directly to Ukraine through EU frameworks, cutting Belgium out entirely.

Belgian Prime Minister Bart De Wever has pledged €1 billion ($1.04 billion) annually in defense aid to Ukraine. Belgium claims tax revenue from frozen assets funds, though no independent verification exists of whether the full €1.7 billion ($1.77 billion) reaches Ukraine or funds other Belgian priorities.

The disappearing pot

The delay carries a concrete cost: falling European interest rates mean frozen Russian assets will likely generate €5 billion ($5.2 billion) in 2025, down from €6.9 billion ($7.18 billion) last year, Euroclear reported.

When interest rates climbed in 2022, those frozen assets earned just €821 million ($854 million). By 2023, they earned €4.4 billion ($4.58 billion); in 2024, €6.9 billion ($7.18 billion). That peak has passed. Euroclear warns the decline will continue as central banks cut rates further, meaning every month the EU spends arguing means less money reaches Ukraine’s defense.

The timeline trap

The International Monetary Fund is considering an $8 billion loan to Ukraine over three years. Still, IMF approval hinges on whether the EU can finalize its own €140 billion ($145.6 billion) loan using frozen Russian assets, Politico reported. One European Commission official and diplomats from three member countries told Politico that securing the EU agreement would convince the IMF of Ukraine’s financial viability—a requirement for the Washington-based institution to lend to any country.

EU leaders stripped the €140 billion ($145.6 billion) reference from official conclusions, instead asking the European Commission to present “options for financial support”—language considerably weaker than the concrete proposal Germany and Poland had pushed.

The next EU leaders summit is scheduled for December 18-19, while the crucial IMF meeting determining Ukraine’s loan will likely occur in December, creating a structural impossibility even if Belgium reverses course. Polish Prime Minister Donald Tusk insisted December’s summit must be the “final deadline for a decision: yes or no.”

The ownership question

Belgium’s objection centers on potential Russian legal challenges if Moscow demands asset return after a peace deal or sanctions lift. The Belgian government fears bearing sole financial responsibility if an international court rules against asset use.

When Russia launched its full-scale invasion in February 2022, Europe restricted two of three. Freezing €193 billion ($200.7 billion) in Russian central bank assets denied Moscow exclusivity and enforceability. Russia can’t access the money or sue to recover it. Only transferability remains technically intact—though meaningless without the other rights.

Europe had compelling grounds for these restrictions: a state waging a war of conquest against its neighbor faces consequences under international law. The question now is whether Europe will exercise its authority over the final element of ownership by redirecting those assets to Ukraine’s defense.

Belgian Prime Minister De Wever cites Japan as a precedent, noting that Tokyo holds €50 billion ($52 billion) in frozen Russian reserves and is cautious about direct lending. However, Japan is providing $3.3 billion to Ukraine through the G7’s ERA loan mechanism backed by asset earnings, which is not the type of reparations loan the EU proposes.

What’s at stake

Ukraine’s National Bank projects the country needs $51.5 billion in external financing in 2025, declining to $45 billion in 2026 and $39 billion in 2027. The existing G7 loan program, using only windfall profits from frozen assets, provides a total of $50 billion—far short of the requirements.

While the IMF’s $8 billion program is relatively small, its approval signals to investors that Ukraine is financially viable and on track with reforms, which one Ukrainian official called “a benchmark for other countries and institutions to evaluate whether Ukraine is doing proper governance.”

Without the frozen assets mechanism, European defense support would continue through annual national budgets subject to parliamentary approval and six-month sanctions renewal cycles that Hungary or other member states can threaten to veto.

On the night of 30 October, Russia launched 653 drones and 52 missiles at Ukraine in a single coordinated assault. The primary target wasn’t military infrastructure—it was the power grid. As winter approaches, Moscow systematically dismantles the energy network that Ukraine has spent three years integrating with Europe.

The past that doesn’t want to let go

For Ukraine, it’s the third winter of a calculated campaign to weaponize darkness and cold. Not only that: the energy infrastructure Russia is targeting isn’t just keeping Ukrainian lights on. It’s the same grid now linked to substations in Romania and distribution networks in Poland, and through that to the whole ENTSO-E system that connects all of Europe.

But to Ukraine, attacks on energy infrastructure were no surprise—they were inevitable. In this country, Soviet legacy surrounds: from brutalist facades to statues of Communist heroes, reminders of the country’s recent past as part of the Empire are inescapable.

When the Iron Curtain fell across Europe, the Warsaw Pact countries were tied into a single energy grid controlled centrally by Moscow. Across the Soviet Bloc, resistance to the state was repeatedly met with energy blockades and economic hardship. The Kremlin said it best in an internal memo: “He who controls energy controls obedience.”

With the fall of the Soviet Union in 1991, those legacy systems of energy interdependence did not disappear but evolved into new agreements and partnerships. After all, Russia still controlled vast oil and liquid natural gas deposits, had decades of expertise, and built a vast functioning shipment network feeding into Eastern Europe. Even as post-Soviet states scrambled to gain energy and strategic independence, they remained linked to Moscow through sheer inertia.

Against the inertia

Fighting against that inertia is ENTSO-E, the coordinating body for Europe’s energy grid. They are responsible for linking Ukraine to the Continent’s energy resources and have enabled countries across the region to decouple from the Kremlin.

The ENTSO-E performed an emergency integration with Ukrenergo, Ukraine’s energy utility, and granted emergency import rights to meet critical needs. As other countries along the Russian European border watched Moscow’s military struggles, they were emboldened to build their own energy projects connecting to the European grid. However, while Soviet-era legacy systems were hardened and secure, each new project gave Russia a fresh target.

Visible pattern

In September 2023, debris from Russian drone attacks was found not near Romanian government buildings, but near power substations along the Romanian side of the Danube River. Those substations were supplied, in part, by recent natural gas partnerships with Greece and Serbia. These incursions represented some of the first drone flyovers outside the Ukrainian battlespace. They would not be the last.

This is precisely what the assault on 30 October demonstrated. The 705 aerial threats didn’t randomly scatter across Ukraine—they concentrated on energy infrastructure, particularly the integration points connecting Ukraine to neighboring countries. The emergency shutdowns weren’t just about domestic blackouts but also about protecting the interconnected system.

Russia knows this. Moscow can no longer turn the lights on and off through mere political pressure, as it could during the Soviet era. But by attacking these new nodes systematically, it can attempt to sever them permanently—or, at minimum, make the cost of energy independence unbearably high.

New attack surfaces

These energy assets also present a new cyber attack surface that Moscow can and will use. Russian-linked cybercriminal organizations have already demonstrated the ability to infiltrate and disrupt energy control systems. In 2015 and 2016, cyberattacks on Ukraine’s power grid caused widespread blackouts—the first known instance of malware-induced power loss. Cybersecurity experts have warned that similar tactics could be employed against national grid operators in Eastern Europe or even the entire ENTSO-E network.

A disabled LNG terminal, sabotaged substation, or blackout during a cyberattack could cripple a country’s ability to mobilize troops, support NATO operations, or maintain public order. Such attacks are an immediate concern for the ENTSO-E grid and the Ukrainian war effort relying on that grid. Russia has taken steps thus far to avoid provoking a broader war with NATO, but as the war in Ukraine drags on, the Kremlin’s decision calculus may change.

Recognizing this, NATO has begun to take energy resilience more seriously. Article 3 of the NATO treaty commits members to self-help and resilience, which is increasingly interpreted to include critical energy infrastructure. The NATO Energy Security Centre of Excellence, based in Lithuania, has led efforts to study how energy vulnerabilities intersect with military readiness.

Joint exercises increasingly simulate blackout scenarios and hybrid attacks. For its part, the EU is advancing cooperation through Permanent Structured Cooperation (PESCO) initiatives, such as military mobility and critical infrastructure protection.

These advances have come despite demonstrated Russian willingness to exploit every vulnerability below the threshold of all-out war with NATO. Ukraine approaches its energy decoupling efforts with security at the forefront to ensure these hard-won gains aren’t reversed. Hardening existing infrastructure and entrenching new partnerships in Eastern Europe should be job number one for NATO. For the world’s greatest military alliance, getting this right is important. For Ukraine, it is existential.

Energy infrastructure has always been essential to national survival—but in Ukraine, it’s also become a litmus test of resilience and deterrence. Russia’s long-standing energy dominance is fading, but its ability to strike, disrupt, or destabilize remains. For Ukraine, sovereignty isn’t just about what flows through a pipeline or power line—it’s about ensuring those lines can’t be severed at a moment’s notice.

Thirty-four years after the Berlin Wall fell, Kyiv is finally allowed to fully share in the promise of that moment: a life free from Moscow’s clutches. It has been thirty-four years of hard-fought battles, with many more to come, but strategic energy independence for Ukraine is within reach, and it is worth the fight.

Editor's note. The opinions expressed in our Opinion section belong to their authors. Euromaidan Press' editorial team may or may not share them.

Submit an opinion to Euromaidan Press

Since the Ukraine-Russia gas transit agreement expired in early 2025, Russian strikes have intensified against Ukrainian gas production and infrastructure. The strategy is deliberate: disrupt Ukraine’s heating season and freeze millions of Ukrainians out of their homes—a tactic that constitutes genocide under international law.

The numbers tell the story. According to Naftogaz of Ukraine, Ukrgasvydobuvannya, and the Razumkov Centre, Russia’s targeted attacks in late 2024 and early 2025 cut Ukraine’s gas production by 40%—approximately 8 billion cubic meters annually. Direct damages: €2-4 billion. In autumn 2025, Russian strikes on gas production facilities in the Kharkiv, Poltava, and Sumy regions caused devastating damage to production capacities in these critically important areas.

Russia has attacked Ukraine’s civilian gas infrastructure seven times in October. “I am addressing everyone with a request to use gas as sparingly as possible. Today, every cubic metre saved counts,” CEO of Naftogaz Sergii Koretskyi noted.

From self-sufficiency to dependency

Ukraine’s normal production of 20 billion cubic meters annually covers domestic demand. Russia’s systematic attacks have shattered this self-sufficiency.

Russia’s targeting of gas fields, storage facilities, pipelines, compressor stations, and distribution centers has forced Ukraine into critical dependence on EU imports. Worse, Ukraine must now make emergency purchases during winter—when European gas prices peak.

Russia’s attacks extend beyond production to import routes. In August 2025, Russia damaged the Orlivka gas compressor station near Romania twice. The station is critical for alternative gas supplies from Azerbaijan and energy security across the Ukraine-Moldova-Romania triangle.

Despite the attacks, Ukraine’s gas transmission system continues operating normally. September production reached 45 million cubic meters daily, supplemented by imports from Poland, Hungary, and Slovakia—including a third through Naftogaz’s partnership with Polish energy company ORLEN. For the 2025-2026 winter, Ukraine has contracted 450 million cubic meters of American LNG for delivery through terminals in Poland and Lithuania.

A race against time

Russia’s attacks on production, combined with low reserves and cold weather, forced Ukraine into emergency gas imports in February to cover the deficit at the end of the 2024-2025 heating season. According to ExPro data, Ukraine imported nearly 2.1 billion cubic meters in the first half of 2025—more than twelve times the volume from the same period in 2024, and the largest first-half import since 2020.

In September, Ukraine injected 45-50 million cubic meters of gas daily into underground storage, increasing reserves by 26% from the previous month. Since the injection season began, nearly 6.7 billion cubic meters have been stored—1.7 times more than in 2024.

To reach the target of 13.2 billion cubic meters by 1 November, Naftogaz must import an additional 500 million to 1.5 billion cubic meters to compensate for damaged production. By September 2025, Ukraine had imported 3.3 billion cubic meters—compared to just 275 million in the first nine months of 2024.

Naftogaz secured over €1 billion in international support from the European Investment Bank, European Bank for Reconstruction and Development, and Norwegian grants, supplemented by Ukrainian state bank credits to finance these emergency imports.

On 23 October, the Ukrainian Cabinet of Ministers allocated €174 million to Naftogaz for gas imports to purchase 430 million cubic meters of natural gas. Norway will provide an additional $150 million for gas purchases in early 2026.

The EBRD is preparing an additional €500 million loan to cover gas imports made necessary by Russia’s infrastructure strikes.

The infrastructure protection crisis

While securing sufficient gas volumes is crucial, a critical vulnerability remains: Ukraine lacks adequate protection for gas compressors and distribution stations. Having gas in storage means nothing if transmission infrastructure is destroyed.

Further Russian strikes could fragment Ukraine’s gas system into isolated islands—production remnants in the northeast, storage facilities in the west, and import pipelines along the western border, unable to connect.

Ukraine needs effective anti-drone and anti-missile protection for gas extraction, transportation, and distribution infrastructure, air defense for cities, and physical protection of critical facilities.

Government response and price controls

The Ukrainian government is attempting to balance market stability with consumer protection. In October, authorities raised fixed gas prices for gas-fired producers while freezing residential rates to protect 12.4 million consumers.

The government extended obligations requiring state producers to sell gas at fixed, below-market prices through March 2026 to keep Naftogaz functioning. The Gas Transmission System Operator must purchase a minimum of 340 million cubic meters of imported gas to ensure supply security and diversification.

The international imperative

Russia is deploying full-scale energy terror against Ukraine, weaponizing winter to create a humanitarian crisis. The international community must recognize this strategy for what it is: systematic targeting of civilian infrastructure designed to make Ukrainian territory uninhabitable.

The cost of prevention is measured in millions. The cost of failure will be measured in Ukrainian lives and a humanitarian catastrophe that reverberates across Europe.

As temperatures drop, the question is not whether Russia will continue these attacks, but whether the international community will provide the tools Ukraine needs to defend its people.

Editor's note. The opinions expressed in our Opinion section belong to their authors. Euromaidan Press' editorial team may or may not share them.

Submit an opinion to Euromaidan Press

The Ilsky oil refinery in southern Russia is the latest to join a growing list of oil plants stuck offline because sanctions block access to repair equipment.

By late October 2025, drone attacks have damaged 16 of Russia’s 38 refineries, and now Western companies like UOP and ABB, which supplied technology to Russia’s 40 largest refineries, have stopped providing the specialized parts and expertise needed for repairs.

Each new breakdown—whether from combat damage or routine failures—becomes difficult and time-consuming to repair, systematically dismantling the fuel production that finances Russia’s war.

Repairs become nearly impossible

The Ilsky facility, operated by KNGK-Holding, officially cited “scheduled maintenance,” but industry sources told Azerbaijani outlet Vesti.az the plant faced sales difficulties and production cuts driven by sanctions, stalled modernization, and market instability.

As Sergei Vakulenko, a Carnegie Endowment energy analyst, put it: “Just like you can’t replace a faulty clutch in a BMW with a similar part from a Russian-made Lada, the same applies in industry.”

Even refineries that haven’t been hit by Ukrainian drones run at reduced capacity because spare parts and specialist repair crews remain scarce under sanctions. Russia’s few resources are being redirected to repair strike-damaged facilities, meaning undamaged plants cannot maintain full production.

Fuel shortage spreads

The International Energy Agency says Ukrainian drone strikes have already cut Russia’s refining output by 500,000 barrels per day and will keep processing rates suppressed until at least mid-2026—a timeline that doesn’t account for additional shutdowns like Ilsky.

The fuel shortage has forced Russia to import gasoline from Belarus, and rail deliveries from Russia’s staunchest ally have quadrupled to 49,000 tons monthly as the Kremlin scrambles to supply domestic markets and military operations.

Ukraine detained its former energy chief, Volodymyr Kudrytskyi, on 28 October, fourteen months after Western board members quit Ukrenergo in protest, calling his dismissal “politically motivated.” The charges stem from a 2018 contractor dispute where court documents show the state recovered all funds and suffered no losses.

The detention follows a troubling pattern. Ukraine has targeted the National Anti-Corruption Bureau, pursued anti-corruption leader Vitalyi Shabunin on questionable charges, and stripped citizenship to remove Odesa’s corrupt but elected mayor—all moves critics say silence government opponents.

Between 2020 and 2024, Kudrytskyi secured $1.5 billion for Ukrenergo from Western partners—triple what Ukraine’s entire Energy Ministry obtained.

The Western board members who helped him get that funding—Daniel Dobbeni and Peder Andreasen—quit when he was fired. Now he’s in detention.

His real offense? Publicly blaming Energy Minister Herman Halushchenko for failing to protect infrastructure from Russian strikes.

Judge Kristina Konstantinova, who has a record of targeting pro-Ukrainian activists, set bail at 13 million hryvnia ($309,000) on 29 October despite prosecutors providing no evidence that Kudrytskyi benefited personally.

The math doesn’t add up

The charges stem from a 2018 contractor dispute in which Ukrenergo sued to recover advance payments—and won. Court documents show the state lost nothing.

Court documents reviewed by investigative journalist Tetiana Nikolaienko show what happened when contractor LLC “Vizyn Rich” failed to complete substation fence work in 2018-2019:

• Ukrenergo filed formal objections to substandard work.
• Ukrenergo sued in the commercial court.
• Ukrenergo recovered 4.8 million hryvnia ($114,000) in advance payments.
• Ukrenergo collected 8 million hryvnia ($190,000) in bank guarantees.

“The state suffered no losses. This is confirmed by court decisions,” Nikolaienko wrote. The actual mistake? A Concordia Bank employee issued guarantees to an unreliable contractor—a due diligence failure by the bank, not fraud by Kudrytskyi.

No evidence of personal financial gain. Just testimony from that bank employee claiming Kudrytskyi intended to seize guarantee funds—despite Ukrenergo’s documented legal battle to recover the money.

Who is Judge Konstantinova?

Lawyer Mykhailo Zhernakov detailed her record, which reveals a pattern of siding with the government against activists:

She authorized unlawful searches of Euromaidan activists in 2013-2014, allowing pro-Russian President Yanukovych to crack down on the leaders of the democratic protests.

In 2021, she ordered house arrest for activists who protested at the Presidential Office supporting imprisoned activist Serhiy Sternenko.

“Our judicial system is still, to a large extent, a genuine, undisguised, hostile agency. A branch of the FSB in the very heart of the capital,” Zhernakov wrote on Facebook.

What Kudrytskyi actually did

Between 2020 and 2024, Ukrenergo under Kudrytskyi secured $1.5 billion in Western grants and loans, of which $500 million came from the Ukrainian Ministry of Energy.

Energy analyst Volodymyr Omelchenko told the BBC that Kudrytsktyi synchronized Ukraine’s power grid with Europe in March 2022 during active combat. Using international funds, he built over 60 drone shelters at substations—more protective structures than all other Ukrainian energy companies combined.

The result was foreseeable. As Kaleniuk explains it: “Instead of punishing saboteur [Energy Minister] Halushchenko, who failed to prepare facilities, they decided to shut up Kudrytskyi, who understands energy and knows who really did what to protect against strikes.”

Western partners noticed. When authorities fired him in September 2024, foreign board members quit in protest. Fourteen months later, he’s in detention over recovered funds from six years ago.

The 2018 allegations

The State Bureau of Investigation detained Kudrytskyi on 28 October. The charges date to 2018, when he was deputy director for investments—a role he left in November 2020.

Prosecutors claim 68 million hryvnia ($1.62 million) in fence reconstruction contracts involved 13.7 million hryvnia ($326,000) in embezzled advance payments. Kudrytskyi faces charges alongside businessman Ihor Hrynkevych, who separately faces charges for supplying 1 billion hryvnia ($23.8 million) in substandard military clothing.

In court, he was blunt: “For me it’s obvious this wasn’t routine investigative work—someone from above requested these actions be conducted this way,” according to the BBC.

The charges carry up to 12 years in prison and asset confiscation. Two MPs—Inna Sovsan and Roman Hlapuk—offered to guarantee Kudrytskyi’s appearance for trial and not flee personally. The court rejected the alternative to detention.

The institutional warfare

Throughout October, NABU and the Prosecutor General’s Office went after each other’s officials. NABU exposed a Prosecutor General’s Office prosecutor trying to bribe High Anti-Corruption Court judges with $3.5 million. The Prosecutor General’s Office simultaneously investigated five NABU employees for alleged corruption.

In the same article, MP Mykola Kniazhytskyi called for using Kudrytskyi’s expertise and international connections during a wartime energy crisis rather than prosecuting him.

"Persecution of government critics through transparently fabricated criminal cases is already a trend," Kaleniuk wrote on Facebook. "It's reversing Ukraine's path toward Europe and pulling us back toward Russian-style governance."

What Brussels sees

Earlier this year, the European Commission threatened to withhold billions after Ukraine tried to subordinate anti-corruption agencies to the Prosecutor General. Mass protests forced a reversal within a week.

Now Western donors watch a judge whose daughter praised Crimea’s annexation jail the official who secured more energy funding than Ukraine’s own ministry—over money the state recovered—while foreign board members who quit in protest watch from abroad.

Two questions remain: Will Western partners react, or will they watch? And does Ukraine need its people in the streets again to protect reform?

China now blocks NATO allies from supplying Ukraine with drone components, closing workarounds Kyiv used to sustain its drone warfare against Russia, according to German news outlet ntv.

The country’s drone industry depends on Chinese engines, batteries, and flight controllers for roughly 60% of components—and Beijing just cut off the Baltic and Polish supply routes that provided them.

Yurii Lomikovskyi, co-founder of the defense industry network Iron, told ntv on 28 October that Beijing began prohibiting sales to Baltic states and Poland after determining these countries funnel components to Ukraine.

Ukrainian forces use these drones to hit Russian logistics hubs and ammunition depots hundreds of kilometers inside Russian territory—operations that place Moscow “under pressure not only militarily, but above all socially, economically and politically,” according to military analyst Hendrik Remmel from the German Institute for Defence and Strategic Studies.

Chinese contradictions

The restrictions align with Beijing’s strategic calculus, which it revealed to EU foreign policy chief Kaja Kallas in July. Chinese Foreign Minister Wang Yi told her then that China could not afford a Russian defeat because the United States would then shift its full attention to Beijing.

In August alone, Russia received 328,000 miles of fiber-optic cable from China while Ukraine received just 72 miles, The Washington Post reported in October.

By early 2025, 80% of electronics in Russian drones came from Chinese sources, according to NATO’s assessment. Austrian military analyst Markus Reisner identified Chinese Telefly turbojet engines in Russia’s new glide bombs, which can strike targets from 200 kilometers away.

Lomikovskyi sees the solution in accelerated European investment in local production capacity. “Why do we source so much from China? Because China can deliver at scale—and cheaper than anything we produce locally or can buy from our Western partners,” he said.

Follow Euromaidan Press on Google News! YOUR SUPPORT = OUR VOICE

My night train from Lviv pulls into Odesa on a Friday morning at half past six. The Pearl of the Black Sea is barely awake.

Waiting for the first cafés to open, I walk the empty streets and ask myself: why is there still business—foreign business—in a city under regular attack? Why do companies from Denmark, Germany, the USA, and Italy operate here now, during a war that could easily have emptied this city on the waterline—a city within range of Russian drones and missiles just sixty kilometers away in Crimea?

Yet, while some left, others came, and some stayed. These people run software firms, logistics centers, timber factories, and engineering bureaus. They sign contracts between air raids, drink wine during blackouts, work from their basements during missile attacks, and call it normal.

I’ve come to understand what makes Odesa endure and attract people who could have an easier life elsewhere.

A safe island in the storm

Viktoriia Klimenko works for Pharmbills, a US remote workforce company that manages American clients from its Odesa office. She remembers February 2022 as a moment of panic and of opportunity.

“When the war started, lots of people lost their jobs,” she says. “Pharmbills was a safe place. We had no salary delays. Stability helps when the world gets crazy.”

Her words already hint at one answer to my question:

While local firms froze hiring and competitors fled to EU countries, Pharmbills doubled its staff. The company installed generators, built an internal bot to check employees’ safety, and paid in dollars.

“Dollar salaries became not just a benefit but a psychological anchor,” Klimenko explains. “People knew they could plan their lives. That’s rare now.”

Firms linked to Western partners suddenly have a recruiting advantage—not necessarily because they pay more, but because they symbolise reliability while those paying solely in hryvnia struggle with inflation and uncertainty.

So one reason they stay: stability itself has become a product to sell.

A Danish lesson in remote endurance

Akkermann Engineering & Software feels like a Danish enclave in Odesa: white walls, ceilings, and cupboards contrast with black height-adjustable tables, plenty of glass, everything adhering to strict Danish norms. The company’s founder, Thomas Sillesen, isn’t shy about his approach.

Sillesen’s engineers design mechanical components for Scandinavian clients. The company headquarters moved to Odesa from Luhansk in 2014, as the war in Donbas against Russian-supported separatists was starting.

Maybe that makes Sillesen, without meaning to, a veteran of endurance.

Reflecting on what the war has taught him, Sillesen reaches further into the past, to COVID times.

“COVID trained everyone to work from home,” he explains. “Clients got used to seeing our engineers on video with fake backgrounds. They just wanted the work done. When the war came, that habit saved us.”

Sillesen’s staff, scattered from Zaporizhzhia to Lviv, now collaborate online.

This is his answer to why he stays: not blind courage but deliberate fearlessness — the cool logic of someone who measures risk and decides it’s worth taking. What Thomas Sillesen misses most is seeing his team together. There hasn’t been a company party in three years.

“I miss that,” Sillesen says. “Just saying hi to fifty guys in the morning—gone. When the war is over, we’ll still work hybrid, but Fridays will be for pizza and beer again.”

He speaks like a man who already imagines that future, which may be the quietest reason of all to remain: staying here means believing there will be an “after.”

A German who came for freedom—and stayed

For Philipp Hasselbach, a German who founded the logistics company STEX GmbH, Odesa first appeared not as a business prospect but as a revelation.

“I saw videos from Arcadia during COVID,” he explains over coffee at a very-Odesan pastry shop with pink walls, neo-rococo-style cups, and cakes that look like art from pre-revolutionary France. “People dancing on the beach while Germany sat in silence. I thought: That’s where I want to live!”

He arrived in 2020 to enjoy life, but soon decided he couldn’t just hang around in the nightclubs of Arcadia—Odesa’s beach and nightlife district—doing nothing meaningful. So he rented a small office, posted job announcements, and waited to see what would happen. What happened: he never left, even after the invasion.

That sentence captures the Wild South spirit: a blend of defiance, irony, and unshakable instinct for survival.

STEX ships urgent parcels across Europe using the same model as Pharmbills or Akkermann: clients abroad, office staffed with young multilingual Ukrainians here. Still, even with the internet and phones, connections to the outside world matter for organizing daily life.

In his case, improvisation has become a business method. The risks that scare off others are what make his company competitive: cheaper staff and offices, less bureaucracy and regulations, and a city that just doesn’t let one go.

The city that works when logic says it shouldn’t

At the harbor, cranes stand mostly idle. Some ships dare to cross the perilous waters from the Dardanelles to Odesa, but not many—the port remains a regular target for Russian attacks. The night before I met with Philipp, there were missile strikes.

I hear nothing. The thick walls of my downtown Airbnb turn the explosion into silence. It’s an unsettling kind of safety—the illusion of distance where none exists. When I step outside the next morning, the city is already humming quietly, as if the night had been erased.

The café Foundation—one of the best, according to many Odessites—opens at eight. As I enter to drink tea in the place everyone else seems to visit for its impressive selection of coffee, I notice a group of fashionable youth gathered here. The up-and-coming youngsters wear sporty clothes, but it looks like they do so not to get sweaty but to look cool. They’re bent over iPhones or tablets, plotting how to take over the world—with IT startups.

I discuss this with my friend Michael Löffler, who runs a small AI software firm. Originally from Bavaria, Germany, he has lived in Odesa since 2005 and fondly calls the city’s lifestyle an “organized disarray.”

“We’re disconnected from the Ukrainian economy a bit,” he confirms Philipp’s assessment, “but we live here and see how things develop. There’s still business—just in a different shape. You fix one problem, another appears, and somehow it balances out.”

Although understanding the plight of many ordinary Ukrainians, Michael isn’t too worried about Odesa’s economic prospects in the grand scheme of things. He’s been following real estate prices for years. “And they haven’t fallen far as much as one might imagine.” Indeed, comparing prices across Ukrainian cities, Odesa holds the middle: a theoretical one-bedroom apartment costs $65,000 in Kyiv, $14,000 in Kherson, and $44,000 in Odesa.

Jörg Maus, another German (yes, there are quite a few of them here!) whose forestry company Biosol continues to export timber products, puts the situation more bluntly: “People realized nobody would save them. You keep working, or you close. Yes, there are days when you think it’s impossible to continue, but then you find a way.”

The employment situation has gotten harder, Jörg admits. Young men are afraid to leave their homes, worried about conscription. “Good workers are very difficult to find,” he says. “Most people try to find jobs where they can work from home. It’s much stronger now than people getting out.”

Despite the difficulties, he’s stayed. Like the others, he’s invested years here, built relationships, and found people he can trust.

Trust. That’s another word that keeps returning in these conversations. Those who stay do so because they have built something personal: companies, friendships, loyalties, or even families that can’t be moved just like that to Warsaw, Copenhagen, or Vienna. The war tests those ties daily, and so far, they hold.

What foreign companies mean to Odessites

Jörg sees the challenge from the employer’s side—finding workers who can and will show up. But from the worker’s perspective, Viktoriia Klimenko at Pharmbills explains what having foreign companies here actually means for young Odessites.

Yes, dollar salaries provide stability—that psychological anchor she mentioned earlier. But the deeper value lies in what the city lacks: Odesa doesn’t have many big corporations or white-collar jobs.

Foreign employers have quietly become a bridge between Odesa and the wider world. They bring not just money but a different rhythm: deadlines, video calls, performance reviews—the small rituals of global normality that remind people what ordinary life used to feel like.

For people at the beginning of their careers who want to understand how the global economy works, foreign companies offer something local firms often can’t. When Viktoriia interviews someone with experience at another foreign company, she knows that person already understands international corporate processes and mentality—a rare commodity in a city where most work is purely local.

Early in the war, hiring was easier—local companies closed and people came to Pharmbills for stability. But the ongoing challenge is different. “Lots of good professionals have moved to other countries,” Viktoriia says.

Pharmbills adapted by opening an academy—free online courses where people learn corporate skills and industry-specific terminology. People can test whether they actually want this kind of work before committing.

The office itself has transformed. During severe blackouts, every chair was occupied—people came because the office had generators. The company provided power banks, rented houses in western Ukraine during the worst periods, and allowed employees to work remotely from safer locations or even from other countries.

As for daily life in Odesa? Viktoriia has adjusted like everyone else. “It’s absolutely normal to have coffee in the morning after a sleepless night during an attack, then get some nice lunch, and after that, get the work done.”

Viktoriia adds that there’s a joke among residents:

What she describes isn’t denial but adaptation. The war has turned survival into a routine. For Odesans working with foreign companies, normality—even if partial or lasting only a few hours between air-raid sirens—is not an illusion; it’s a decision.

“But Ukrainians adjust well to whatever is happening,” Viktoriia concludes. “We’ve learned how to live in these circumstances.”

Beyond resilience

Odesa isn’t simply enduring—it’s improvising its way forward, refining a new logic of motion that is both pragmatic and absurd. In Odesa, disorder isn’t an obstacle; it’s a management style.

A city that should be paralyzed by fear runs on caffeine, improvisation, and the stubborn belief that everyday life must continue. It works not because logic says it should, but because people have decided it must. The Wild South — that’s how I keep thinking of Odesa. A place that shouldn’t work, yet somehow does.

Maybe that’s the answer I was looking for. They stay because Odesa, even under fire, offers something rarer than safety: a sense of meaning. It’s the one place where ordinary acts—running a meeting, delivering a parcel, fixing a power line—feel like defiance itself.

This is Chapter I of a series exploring how Odesa’s business community navigates Europe’s largest war since World War II. Coming up: Odesa’s population just turned over by half. New people, old debates, and the question no one wants to ask: What kind of city emerges from this?

China’s newest refinery nearly doubled its Russian crude imports to a record 370,000–405,000 barrels per day in November—not despite Western sanctions, but because of how badly they misaligned.

When Britain and the EU blacklisted Shandong Yulong Petrochemical on 16 October over its Russian oil purchases, Washington didn’t follow suit. Instead, the US sanctioned Russian producers Lukoil and Rosneft in its October package.

The refinery moved fast. According to Reuters, after Middle Eastern and Canadian suppliers cancelled shipments following the UK designation, Yulong replaced them with Russian crude. The plant—backed by Shandong’s provincial government and valued at over $20 billion—is running above 90% capacity.

Record imports fuel Kremlin’s war chest

That surge translates to roughly 12 million barrels per month flowing to Russia at current purchase rates, revenue heading straight into Moscow’s war budget.

The October sanctions were supposed to close gaps. Yet, Western allies targeted different parts of the supply chain at different times, creating legal grey zones that allowed oil to flow through new intermediaries.

Provincial player steps in where state giants won’t

China’s state importers like Sinopec’s subsidiary Unipec paused Russian trades after Washington’s designations, wary of secondary sanctions. Private and provincial refiners saw opportunity instead, and Yulong took over several East Siberian oil shipments originally earmarked for Unipec.

Yulong’s record November purchases—potentially extending into the coming months, sources say—show how coordination failures don’t reduce oil flows; they shift trade eastward. As long as Western allies sanction different links in the same supply chain without coordination and at different times, Moscow can count on someone to keep the barrels rolling.