On 11 December 2024, we held a press conference together with our partners from ANTS on the topic “The cost of aggression. Why the Russian economy cannot sustain the war”. We discussed the consequences of sanctions pressure on Russia, including a significant reduction in oil and gas export revenues, and stressed the importance of further strengthening sanctions to limit the financing of the war and ensure Ukraine’s victory.

Among the speakers were:

• Olena Halushka, Head of the Board at the International center for Ukrainian victory (ICUV), Member of the Board at Anti-Corruption Action Center;
• Volodymyr Vlasiuk, PhD in Economics, Head of the Committee on Industrial Modernization at the Ukrainian Chamber of Commerce and Industry (UCCI);
• Michael Gonchar, President of the Centre for Global Studies “Strategy XXI”;
• Ilya Neskhodovskyi, the head of the National Interests Advocacy Network “ANTS”.

The experts discussed the state of the Russian economy and highlighted its difficult situation due to the prioritization of military spending. In reality, the country is experiencing inflation, which could reach significant levels in the first half of next year.

It is important to note that the Russian economy continues to generate significant revenue from energy exports in 2024. In 2022, oil and gas export revenues reached $286 billion. However, by 2023, these revenues had dropped to approximately $90 billion. Sanctions are already working and having an effect, yet Russia still has sufficient funds to finance its war against Ukraine. If the current pace continues, pressure on the Russian economy could last for years.

“We shall spare no expense” — this principle has been at the core of Russia’s policy since 2014. It continues to hold despite sanctions and economic losses.

Michael Gonchar, President of the Centre for Global Studies “Strategy XXI”

The speakers emphasized that in order to significantly weaken the Russian economy by the 2nd or 3rd quarter of 2025, the following steps must be taken:

1. Close all the backdoors for Russian exports:
   It is essential to strengthen enforcement of sanctions and monitor gas sales through intermediary countries. 
2. Create a “low-price plateau” for oil:
   Sustained low energy prices over several years will destroy the foundations of Russia’s budget, reducing its ability to finance the war.
3. Confiscation of frozen Russian assets:
   Frozen $300bn Russia’s Central Bank assets must be used for Ukraine’s recovery. These funds could be invested to increase annual returns from $4 billion to $15-20 billion.

russia understands only strength, and the only way to communicate with it is from a position of power. Speaking from a position of power means fully equipping Ukraine with everything necessary for our victory.

Olena Halushka, Head of the Board at the International center for Ukrainian victory (ICUV), Member of the Board at Anti-Corruption Action Center

Sanctions are already working, but their full implementation could significantly accelerate the weakening of Russia’s war machine. We persistently continue to emphasize to our partners the importance of decisive actions. They must act bolder, increase pressure on key sectors of the Russian economy, close all backdoors, and utilize all available mechanisms. Without these steps, Russia could prolong the war for years. Partners must impose sanctions at “maximum level” now to bring Russia’s defeat closer.