Oil & Gas

More than 1,600 days after Russia launched its full-scale invasion of Ukraine, the Kremlin is facing growing military and economic pressure. Ukraine has strengthened its battlefield capabilities, particularly through expanded drone operations, while intensifying strikes on Russia's oil and gas infrastructure, increasing pressure on one of Moscow's key sources of revenue.

Western allies are also tightening economic restrictions. In July 2026, the European Union adopted its 21st sanctions package, extending the oil price cap and expanding measures against Russia's shadow fleet. The new sanctions target vessels that help evade restrictions and are intended to further weaken Russia's ability to finance the war.

The United States is considering additional measures through the proposed Lindsey O. Graham Sanctioning Russia and Iran Act of 2026. The legislation would impose tougher tariffs on countries purchasing Russian energy, restrict new investment in Russia's energy sector, and strengthen enforcement against sanctions evasion.

Analysts say the combined impact of military setbacks, declining energy revenues, and tougher sanctions is placing increasing strain on Russia's economy. With growth slowing and financial reserves shrinking, expectations are rising that the Kremlin may expand military conscription after the September 2026 elections, potentially increasing domestic pressure over the war.