Over the winter, Russia’s political leadership repeatedly stated its readiness to continue to fight a war against Ukraine and, by extension, Europe. At the same time, the U.S. administration is trying to increase pressure on Russia through measures such as efforts to push India to halt purchases of Russian oil or the seizure of a tanker linked to the shadow fleet. As a result, Moscow became more engaged in negotiations with Ukraine and the United States and put forward its own conditions for ending the war. One of these conditions is Ukraine’s withdrawal from the Donetsk region, which Kyiv cannot accept. Despite the slowdown in territorial gains in January, internal dynamics within Russia, battlefield trends and technologies, and external partnerships enable Moscow to advance such demands.

Russia’s manpower drive

Under the amendments to Russian Federal Law No. 412-FZ of November 4, 2025, ‘On Amendments to the Federal Law “On Military Duty and Military Service” and Article 11 of the Federal Law “On Alternative Civilian Service,”’ which entered into force in January 2026, men outside the military reserves may be conscripted year-round. This replaces the previous draft periods of 1 April to 15 July and 1 October to 31 December. Draft boards now operate year round, conducting medical, psychological, and administrative procedures. Human rights groups argue this change decreases the military red tape and reduces opportunities for draft evasion by eliminating gaps between conscription periods. While the timing of troop deployment to units remains unchanged twice a year, draft decisions are now valid for a full year, making delays and legal appeals less effective. To maintain a steady flow of recruits, Russia is targeting Kenyans and other Africans, who are promised civilian or “safe” security work, given minimal training, and deployed to high-risk combat roles, with heavy casualties. The recruitment pipeline extends across Africa and reflects Russia’s effort to sustain manpower with limited mobilization of its own citizens, exploiting economic hardship and weak oversight in source countries. Under the October 2025 legislation on military reservists, citizens are now undergoing counter-drone training following Putin’s decree to protect critical infrastructure. These mobile fireteam sessions, held at a combined arms training range in February, prepare reservists for assignments at key facilities across Russia without sending them to the frontline.

Energy infrastructure destruction

Following the organizational and legal measures outlined above, Russia also intensified attacks on Ukraine’s power grid, targeting major cities across the country and following the strategy of making Ukraine unlivable. President Zelenskyy stated that in January alone, Russia launched over 6,000 strike drones, about 5,500 guided aerial bombs, and 158 missiles of various types. Almost all of these attacks targeted the country’s energy systems, railways, and critical infrastructure. According to weekly updates from the Ukrainian energy think tank Dixi Group based on government data, since October 2025, Russian strikes have damaged approximately 8.5 gigawatts (GW) of generating capacity of Ukraine leaving about 11 GW available while national electricity demand remains around 18 GW. These attacks caused widespread disruptions to electricity, heating, and gas supplies across many regions of Ukraine, prompting Kyiv and Kharkiv to declare a state of emergency, and the mayor of the Ukrainian capital city calling to leave the city and temporarily move into suburbs. 

This type of strategy has psychological and military aspects. The first aims to weaken the Ukrainian will to resist. Some people protest to demand electricity be restored to their homes, but even so, surveys (which should be treated cautiously during war time as the respondents may be afraid to answer honestly and wartime polling often relies on limited or non-representative samples) show that 52% of respondents reject handing over all of Donbas to Russian control in exchange for security guarantees, while 40% would accept it and 65% are prepared to live through the war as long as necessary (62% in December 2025, 62% in September 2025).

The second aspect is purely military. The economy and production, including military production, depend on electricity. Also, by forcing the evacuation of the cities, Russian forces remove the main obstacles to maneuver warfare. An abandoned Kharkiv is easier to bypass or encircle than a populated, resisting city. This reduces the cost of entry for Russian ground forces, who no longer face prolonged urban combat supported by the local population. According to the inflation report published in January, by the National Bank of Ukraine (NBU), up to 200,000 more people could leave the country during 2026.

DefTech innovation: the “Lightning Shahed” and limiting Starlink 

Alongside the attacks on electrical greed Russia is expanding the technological use of the Shahed–Molniya (“lightning”) drone platform. This includes integrating the R-60 air-to-air missile (AA-8 Aphid according to NATO classification), deploying Starlink-guided Molniya/Shahed drones and, as of January 2026, using the Gerbera drone as a carrier platform for FPV drones. Ukrainian authorities, in coordination with SpaceX, imposed restrictions on Starlink to limit its use by Russian drones, including disabling unverified terminals and blocking operation on devices moving above 90 km/h. While Kyiv reported quick tactical gains, the measures also affected Ukrainian systems (decreasing the Ukrainian military operations in Crimea, according to Russian sources), required a nationwide identification of all Starlink terminals to avoid blocking, and diverted resources. Russian commentators and analysts noted that these limits are temporary and technically manageable by adjusting flight profiles, activating satellite links only at later stages of an attack, or getting back to alternative communications methods such as mesh relays and domestically developed navigation systems. In their view, Russian forces are less dependent on Starlink than Ukraine and are therefore better positioned to adjust.

Russian economy: follow the money

Gold reserves

Russia has benefited significantly from the sharp rise in global gold prices since the start of the war in Ukraine. The increase in bullion prices has generated gains comparable in scale to the sovereign assets frozen in Europe after the invasion. Around €210 billion, or roughly $244 billion, of Russian state reserves remain immobilised in the European Union. Although these funds cannot be sold or used as collateral, the growing value of gold has restored much of Russia’s financial capacity.

According to Bloomberg calculations, the value of the Bank of Russia’s gold holdings has increased by more than $216 billion since February 2022. During this period, the central bank avoided major gold purchases and did not significantly use its reserves, despite losing access to foreign securities and currencies held abroad under sanctions. By the end of 2025, Russia’s international reserves reached $755 billion, including $326.5 billion in gold. Gold now accounts for 43 percent of total reserves, compared with 21 percent before the war. Since then, prices have risen by more than 8 percent, exceeding $4,700 per ounce. In 2025 alone, gold gained around 65 percent, its strongest annual performance since 1979.

Russia is the world’s second-largest gold producer, mining more than 300 tonnes per year. However, since 2022 Russian bullion has been excluded from Western markets and is no longer accepted by the London Bullion Market Association. This limits access to the largest global over-the-counter gold market and complicates large-scale sales, particularly to Asian buyers. 

From February 2022 to December 2025, the value of Russia’s gold reserves more than doubled, while reserves held in foreign assets and currencies declined by about 14 percent. As of 1 January, foreign currency and other non-gold assets totalled $399 billion. Since the start of the war, Russia has stopped publishing detailed data on the composition of its foreign currency reserves.

The Bank of Russia began drawing on its gold holdings toward the end of last year. Reserves fell by 0.2 million troy ounces to 74.8 million ounces, reflecting Finance Ministry operations linked to sales of National Wealth Fund assets to finance the budget deficit. On 16 January 2026, the government accelerated withdrawals from the Fund and sold gold at a record pace to offset a 24 percent decline in oil revenues. Since the invasion began, about 60 percent of the Fund’s gold holdings have reportedly been liquidated.

High gold prices have therefore provided a substantial buffer against sanctions. However, gold reserves are finite, frozen assets remain inaccessible, so the alternative revenue sources such as LNG and uranium exports are coming into play. 

LNG

The European Union has remained the primary financial and logistical enabler of Russia’s Yamal LNG project, one of the world largest Fossil Extraction Megaprojects, effectively funneling €7.2 billion into the Kremlin’s war chest over the past year. Despite a public commitment to phase out Russian gas by 2027, the EU actually increased its share of imports from Yamal’s global by 76% compared to 2025. 

France and Belgium are the main hubs, importing 10.5 million tonnes of Russian LNG combined last year. The EU formally adopted a regulation to ban all Russian pipeline gas and LNG. The policy aims to eliminate the remaining 13% of EU gas imports from Russia, which cost the Union €15 billion in 2025. While the ban begins in six weeks, a transition period for existing contracts means the total prohibition only takes full effect for LNG in early 2027 and pipeline gas in autumn 2027. Companies face massive fines for non-compliance, including penalties up to 3.5% of their global turnover. This legislation closes the Yamal loophole but allows Russia to continue collecting significant European energy revenues for at least one more year.

Enriched Uranium and Nuclear fuel

Russia remains a major supplier of enriched uranium to the EU, providing nearly 25% of Europe’s needs. Rosatom, Russia’s state nuclear company, controls around 44 percent of global enrichment capacity, giving Moscow a strong position in the market.

Western producers Urenco and Orano are expanding their enrichment capacity to reduce dependence on Russian supply. Orano is investing in its Tricastin site in France to increase capacity by about 30 percent and is also building a new enrichment facility in the United States. Urenco is expanding operations in the Netherlands. However, much of the future capacity has already been reserved by US companies in response to an American ban on Russian enriched uranium that will fully apply in 2028. Most of the new capacity will not be available until after 2032.

Replacing Russian enriched uranium will take time because new enrichment facilities require years of investment and construction. Cost is another factor, as Russian enrichment services are often cheaper than Western alternatives. Some European utilities hesitate to sign long-term contracts with Western suppliers, partly because they believe relations with Russia could improve in the future.

Nuclear fuel is another strategic European import from Russia. Several Central and Eastern European countries operate Soviet-designed reactors that use Russian fuel assemblies. Hungary, Slovakia and the Czech Republic have stockpiled Russian nuclear fuel to secure supplies. Hungary is also building new nuclear plants designed by Rosatom, which increases long-term reliance on Russian technology and fuel.

Russian oil: India, China and Venezuela

Russia’s international cooperation has become increasingly uneven. Deliveries of Russian crude to Indian ports continued to decline last month, as Indian refiners reacted to U.S. sanctions and pressure linked to a broader trade deal with Washington, falling to around 1.12 million barrels per day from 1.2 million in December 2025. As a result, January imports dropped to their lowest level since November 2022. 

At the same time, Russia’s and China’s political and economic support for Venezuela’s government has not prevented instability in Caracas.  Over the past two decades, Beijing has built deep economic ties with Caracas, giving more loans to Venezuela than to any other Latin American country and buying the majority of Venezuelan oil, which accounts for more than half of the country’s fiscal revenue, despite U.S. sanctions. This relationship is now under strain as the United States move to control Venezuelan oil flows. Following these developments in other markets, China has once again become the largest buyer of Russian crude, as its imports from Moscow increase.

Uncertainty is also surrounding Russia’s second key ally – Iran. The United States is building up its military presence in the Middle East. While closed expert discussions suggest that a strike on Iran is “inevitable”, talk in Oman aim to avert further escalation. 

These developments from Caracas to Teheran have disrupted established oil supply chains, with China replacing some of its crude imports from Venezuela with more imports from Russian and Iran. In case of a broader conflict in the Middle East, the political situation in Tehran could increase Russia’s oil exports to China, while weakening Iran as an economic and military partner of Russia, thus adding strategic uncertainty with Moscow’s regional alliances.

Considering domestic developments, Russian war effort, the economic and international context, the negotiations involving Russia, the United States, and Ukraine in Abu Dhabi may serve as a diplomatic cover for Moscow to continue a war of attrition. Sustained attacks on Ukrainian energy grid despite the Trump-brokering truce aim to weaken Ukraine’s negotiating position by raising internal pressure.