Ukraine-Russia News
LAST UPDATE: June 11, 2025
EU to target Nord Stream and Russian oil cap in new sanctions
EU is preparing a new sanctions package to lower the Russian oil price cap from $60 to $45 per barrel and ban use of Nord Stream 1 and 2 pipelines.
Insight
The proposal marks a sharp escalation in EU economic pressure, directly targeting the energy pathways and revenue that sustain Russia’s war effort. Lowering the cap to $45 would further constrain Kremlin finances and reduce oil export earnings. Banning Nord Stream pipelines signals a strategic break from reliance on Russian infrastructure and allies. If implemented, these measures may accelerate shifts in global energy trade and reinforce EU unity on Ukraine. However, unanimous approval among member states will be critical to avoid delays or dilution.
Ukraine’s May inflation at 15.9% due to rising food prices
In May 2025, Ukraine recorded a 15.9% year-on-year inflation rate, driven largely by a 22.1% jump in food prices amid a weak harvest and cold spring weather.
Insight
Food-driven inflation has peaked, prompting the central bank to hold rates at 15.5%. While symptomatic of short-term weather and agricultural disruption, base effects may mean rapid disinflation later in the year. The forecasted drop to roughly 8.7% by end‑2025 aligns with the expected summer harvest recovery. Maintaining high interest rates underscores Kyiv’s priority to stabilize inflation expectations and anchor monetary credibility in a fragile wartime economy.
Ukraine’s trade deficit widens to $8.5 billion in Q1
Ukraine’s trade deficit widened to $8.51 bn in Q1 2025 from $5.4 bn a year earlier, reflecting weaker exports and strong import demand.
Insight
The growing trade imbalance denotes Ukraine’s struggle to ramp up reconstruction-related imports while export recovery lags due to logistical and conflict-driven constraints. A falling deficit would require expanding food processing and value-added exports, especially given preferential EU trade shifts. Without improvement, persistent current account and fiscal pressures may complicate international aid flows and monetary policy planning.
Ukrainian refugees give Poland big economic boost
UNHCR and Deloitte report that Ukrainian refugees in Poland raised GDP by approximately 2.7% in 2024 without harming employment or wage levels.
Insight
The findings challenge conventional concerns that large refugee influxes displace domestic workers. Instead, refugees have bolstered Poland’s labor supply, productivity, and economic specialization. Yet underemployment and language barriers remain common, suggesting untapped potential with better integration. Proposals to scale vocational training and credential recognition may translate this success into sustained growth and labor enrichment.
Russia’s budget revenue falls for first time in over two years
In May, Russia’s oil and gas budget revenues dropped 35% year-on-year to 512.7 billion roubles ($6.55 bn), the first significant monthly decline in two years.
Insight
The steep drop reveals the vulnerability of Russia’s fiscal health to falling energy markets and lingering sanctions. A 35% decline suggests widening budget deficits, prompting reliance on sovereign funds or borrowing. The Kremlin’s resistance to OPEC+ output hikes underscores strategy tension between revenue preservation and global cooperation. Continued decline may force fiscal consolidation, impacting domestic investment or military spending.
