Russia is running out of time and money. Even Donald Trump is bored by Moscow’s antics
World Economy Editor
Ambrose Evans-Pritchard is the The Telegraph’s International Business Editor, writing comments and articles focusing on world politics and economics – with a specific eye on monetary policy, central banks and global financial stability.
Before his current role, he served as the Washington correspondent (including being the US Bureau Chief for The Sunday Telegraph in the 1990s) and the Europe correspondent (based in Brussels) for The Telegraph. He has also written for The Spectator and The Economist
Published 17 July 2026
The four-year stalemate in Ukraine has suddenly broken. For the first time in modern memory, Russia is having to import fuel to keep its economy and society afloat.
The speed of events is extraordinarily rapid and portends a tectonic shift in the global balance of power, dramatically improving the strategic fortunes of Europe.
Ukraine’s drone force of “Magyar’s Birds” has struck 30 oil and gas tankers in the Black Sea region since Wednesday. It claims to have hit 147 vessels linked to Russia in 10 days, effectively closing the Sea of Azov and tightening the blockade of the Crimean peninsula.
It is attacking refineries at will, continuously, from St Petersburg to Siberia, crippling Russia’s biggest plant some 2,250km into the interior at Omsk. The range has jumped fivefold since early last year. “Russia no longer has a safe rear, and distance is no longer protection,” said Sergiy Makogon, from the Centre for European Policy Analysis.
Ukraine’s hi-tech counter-punch has echoes of the final months of the First World War when Allied armour smashed through the trenches, exploiting the breakdown on the German home front already well underway.
“The Ukrainians have figured out how to target the refraction facilities of the plants,” said Prof Alan Riley, an energy expert at the Atlantic Council and an adviser to the Ukrainian military.
“Once you take out the most complex parts of the refinery, replacements have to come mostly from China. That can take a year or 18 months.
“Russia’s air defences are around Moscow and St Petersburg, and they are designed to intercept missiles, not mass drone attacks. Refineries around the country are basically undefended,” he said. Private companies are desperately putting up wire mesh to defend their plants, sauve qui peut.
“The attacks on coastal terminals are aimed at cutting off Russia’s export revenues: the strikes on inland refineries are to bring the economy to a standstill and undermine Russia’s ability to wage war. Vladimir Putin is in very serious trouble,” said Prof Riley.
S&P Global Energy estimates that 60pc of Russia’s refining capacity may now be offline, cutting supply by four million barrels a day in the week ending June 10. The volumes are staggering, with immediate knock-on effects through the global economy.
Russia was the world’s second-biggest exporter of refined fuel earlier this year. It has now imposed an export ban and is to import fuel from Kazakhstan and India in an extremely tight global market.
Crude prices are not the relevant marker for stress in the international energy system today. The trouble has switched to the key distillates – gasoline, diesel and jet fuel – that people actually consume. The diesel “crack spread” in Rotterdam is hovering near record highs at $70 a barrel. It is normally $10 to $20.
Mykhailo Fedorov, Ukraine’s outgoing defence minister, led this creative drone warfare before being sacked this week in another episode of wearisome cronyism by Volodymyr Zelensky’s venal circle. His exit will not derail the winning strategy.
Russia’s energy crisis is bringing to a head a long-simmering economic crisis. Data from the finance ministry show that adjusted budget revenues from oil and gas were down 23pc during the January-to-June period from a year earlier despite the Iran war. They are now in free-fall.
The Kremlin has raised refining subsidies sixfold to hold down costs at the pump and head off popular anger – already smouldering as fuel queues reach 12 hours and the ration is cut to 20 litres in some cities. The Duma has torn up the legal budget code. Fiscal discipline is collapsing.
The liquid reserves of the Kremlin’s rainy-day fund are exhausted. The country cannot easily borrow on the capital markets. China has refused to allow the sale of sovereign rouble bonds on Chinese platforms. Russian banks are being pressured into funding the military-industrial apparatus and plugging the budget deficit via short-term loans.
Reuters reports that a leaked intelligence document entitled “on the probability of a banking crisis in Russia in 2026” warns that the banking system is buckling behind a veneer of illusory stability.
Russia’s internet controls have failed to scotch rumours of a coming confiscation of bank savings, which is what happened to deposits at the Soviet Sberbank in 1990. It is perilous for a regime when such feverish suspicions take hold.
On the military front, Putin is running out of human drone fodder. He has deployed more troops than the entire British Army in a nine-month battle to capture the small town of Kostiantynivka in the Donbas, so far without clear success.
The Centre for Strategic and International Studies estimates that Russia has suffered 1.4 million casualties. It is losing 30,000 to 35,000 a month in the kill zone. This, too, drains the budget. The family payout per death is £90,000. A lost leg costs £28,000.
A rush of recruits signed up last year to lock in the enlistment bonus – betting on easy barracks duty – when Donald Trump seemed eager to betray Ukraine.
The online investigative journal Verstka, run by diaspora journalists with clandestine sources inside Russia, says recruitment since then has plummeted. “It’s as if we’ve run out of people. There are no more fools for money,” said one soldier, claiming units in his regiment were below 40pc strength.
Another told Verstka that the 2026 intake is “unfit to fight” and often press-ganged. “Some are taken from prison, others from the streets, literally homeless, already so old and ill that they can barely stand.” They are put through three days of “training” and sent straight into the kill zone.
The mood is mutinous. “It’s already hatred, but not yet rage, and that’s where it’s all heading. Honestly, I’m scared for the country,” he said.
Putin faces the choice of military failure or rolling the dice on a general mobilisation, which would be politically explosive. Verstka reports that the army is already preparing camps to train tens of thousands at a time.
“Everybody knows it’s a meatgrinder. If Putin goes for mobilisation, there could be half a million people protesting on the streets,” said Prof Riley. “You could see a situation like 1917, when Russian troops refused to go to the front.”
The status quo is equally dangerous. Putin’s hopes of splitting European Nato or seducing Trump have come to nothing. The US Senate wants to impose ferocious secondary sanctions on buyers of Russian hydrocarbons.
Trump is bored and no longer sniffs a winner in Putin. The “spirit of Anchorage” is today a sick joke in Moscow.
These fast-moving events are pregnant with risk. Putin’s reflex is to escalate when his back is against the wall. Although if he tried to launch a hybrid attack on Lithuania’s 60-mile Suwalki Corridor – as some fear – he would run today into the teeth of Germany’s 45th Panzer Brigade.
Events are also pregnant with opportunity. If the Russian invasion of Ukraine ends in a miserable whimper, it would be an undisguisable defeat for the Sino-Russian authoritarian axis, forcing opportunistic fence-sitters across the Global South to rethink their assumptions.
It would be a potent shot in the arm for a resurgent Europe, further devalue the coin of Trump’s bluster and restore the trans-Atlantic relationship to dignified balance. The West might live on yet.
“Mykhailo Fedorov, Ukraine’s outgoing defence minister, led this creative drone warfare before being sacked this week in another episode of wearisome cronyism by Volodymyr Zelensky’s venal circle. His exit will not derail the winning strategy.”
Ambrose Evans-Pritchard is a money man, not a Ukraine specialist or war commentator and I thought this para was a bit harsh.
Events seem to show he was right, unfortunately.
“The Ukrainians have figured out how to target the refraction facilities of the plants,” said Prof Alan Riley, an energy expert at the Atlantic Council and an adviser to the Ukrainian military.
“Once you take out the most complex parts of the refinery, replacements have to come mostly from China. That can take a year or 18 months.”
That is absolutely wonderful and gives great hope.
Comment from :
Major Bonkers
Regardless of the rest of the article, this country ought to recruit Mr. Fedorov, ‘Ukraine’s outgoing defence minister’ who seems to be at a bit of a loose end at the moment, give him an immediate promotion to brigadier, and invite him to write a defence review.
David Hussell
Knocking out Russia’s refineries is very useful in this war, but beyond that, it surely only becomes a short term advantage, for as long as there’s oil in the ground, it can be extracted.
But as for saving the west, although our NATO based defence relationship with the US is crucial, for defence, it is our culture that is at risk. This is partly due to immigration from cultures antithetical to ours, but mainly due to western decadence, especially involving the loss of adherence to the Christian faith, upon which the west was, mainly, founded.
Mark Jones
Reply to David Hussell –
No until those refineries or smaller teapot refineries are built the Russian economy is in serious trouble. It is now a war economy running on internal combustion engines.
The late Senator John McCain once described Russia as a petrol station run by a mafia with a country attached. Not much has changed.
You cannot simply fill your car or tank with oil. It needs refined diesel or petrol. The energy transition to EVs similar to China for transport hasn’t occurred in Russia. Why would it as Russia was once the 2nd largest world exporter of diesel.
The supply lines from Chinese or Indian refineries to the invasion front are precarious. Especially if Ukraine decides to launch its growing flock of birds towards Putin’s ghost ships bringing in fuel for Moscow, St Petersburg and the occupied territories. At least two will experience major shortages. Or all three significant shortages salami sliced.
A larger mobilisation by Putin will result in a greater demand for diesel, petrol and jet fuel. China will likely demand more cash upfront as credit becomes difficult or perhaps as its citizens head north of the Amur river to fill land unpopulated, ask for land instead.
Which has a certain irony. In the quest for land and mineral resources underground in Ukraine Putin may have to give up land and unground resources in China’s Northern resources area, Siberia.
While China is losing population as it ages, Russia is now losing its people clearly on another level thru war, migration to avoid conscription and an ageing population.
Perhaps 25% – 50% of the Russian population by 2100 according to some estimates.
Why do you think Russia has been so keen to steal Ukranian children bringing them up as Russian?
John Georgeson
The knock on effect of the war is not just affecting energy. The Russian stock market is in a free fall, as the benchmark MOEX index continues its longest 19-week losing streak on record. The index dropped below the psychological mark of 2,000, which shocked many investors, expecting the government to intervene.
The foundations are creaking for Putin.
Carpe Jugulum
This isn’t even fun anymore. The apologist dross of glavset have the intellect of a marmoset and the persuasive powers of a clam. They aren’t even worth challenging and deserve little more than a ‘Nul’.
There really is only one question necessary to illustrate the utter moronic stupidity of Putin’s invasion.
Which country now has far stronger armed forces than it had at the beginning of the war?
Clue, Russia’s Black Sea fleet is now an artificial reef and its armoured forces are now burned out hulks.
The maga view :
Mark Daugherty
This op ed is disingenuous from first to last. Europe is now buying more gas from Russia than ever before. The financial center of London has been making a fortune in underwriting the Russian ghost fleet from the first day of this war. The UK continues it’s path of unilateral disarmament in fact, while talking about a defense build up ten years from now. Germany and France are teetering on the verge of pro Russian political parties seizing power. All this, and Ambrose sneers at Trump not doing enough against Russia?
We Yanks are so weary of perfidious European flim flam. Trump’s actions to defend America’s consumer market from predatory mercantilism is not a matter of bluster. The Americans finally have a President who puts his own people first. His actions to stop the threat of a nuclear Iran is straight forward and rational. His insistence that Europe must begin paying for it’s own defense is just.
Europe is a continent of dead beats. We Yanks just want to pick up our marbles, go home, and take a long hot shower.
Peter UK
Reply to Mark Daugherty
Yes some EU member states are buying Russian LNG (and Spain making € billions trading it) but it was Trump who lifted oil sanctions against Russia in an attempt to alleviate global supply shortages because his war against Iran isn’t going as planned.
In your case the pot calls the kettle black.
Michael Johnson
Reply to Mark Daugherty
I worked for US company for 10 years, Huntsman Tioxide which was an honour. You Yanks left us, we then became a British company, last year a Chinese company bought us, put us into administration and 270 of us were made redundant with only government minimum redundancy payments.
So my American friends, please do not go home, you are a million times better than the Chinese.