Eastern Europe

Russia’s energy revenues underperformed in the year leading up to the second quarter owing to tighter export sanctions and infrastructure disruption. At the same time, the country’s physical export volumes dropped partly because of Ukrainian drone strikes targeting Russian refineries and its export infrastructure. However, high energy prices owing to the Middle East conflict offset the loss in physical volumes.

Budget revenues from oil and gas recorded a massive 32.4% year-on-year increase in May, according to Russia’s Ministry of Finance. Domestic retail prices for gasoline have broken records and more than two-thirds of Russia’s regions have been forced to implement fuel rationing.

July 25 will bring an end to the grace period for Russia exporting previously contracted volumes of non-ferrous metals to Europe. Copper exports are being redirected away from Europe towards Asia, while traditional nickel routes via Rotterdam have been heavily disrupted. Massive volumes of metal are currently stuck at sea or are in transit, and there is also a significant build-up of unsold metal inventories - all creating a heavy financial burden on top of logistics difficulties.

While the scrap export ban implemented by Ukraine in January this year is pleasing large domestic consumers, recyclers have warned in recent press conferences that the ban has slowed local collections of metal and has forced multiple collection sites to close down. They are suggesting replacement of the ban with a 200,000-tonne quota to the EU to salvage foreign currency earnings.

Following the Ukraine Recovery Conference in late June, agreements were signed to integrate Ukrainian titanium mining directly into European aerospace and dual-use supply chains, with the explicit aim of helping the West decouple from Russian titanium. Despite massive reserves, actual processing inside Ukraine remains low because high-tech smelting requires massive and consistent loads of electricity - something Ukraine’s grid cannot guarantee.

Because Russia continues to target large thermal power plants, Ukraine is aggressively pivoting to decentralised energy. Huge private deals signed in the second quarter of 2026 - including the RISE project - are rolling out solar panels and roof-mounted energy storage systems nationwide.