Slava Sobetski

One of Russia’s Largest Metallurgical Plants Halts Part of Production Due to Slumping Demand

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The management of the Chelyabinsk Electrometallurgical Combine (ChEMC), Russia’s largest producer of ferroalloys, has decided to suspend operations in one of its key smelting shops for three months. The enterprise, which was nationalized in early 2024, is unable to find buyers for its products. Details of the Situation at ChEMC: Analytical Summary: The crisis at ChEMC is a verdict on the myth that nationalization and military orders can save civilian industry. Industrial Death Indicator: Ferroalloys are the “bread” of metallurgy, essential for steel production. If ChEMC cannot sell ferroalloys, it means the Russian steel industry (including giants like MMK and Severstal) is sharply cutting production. This confirms previous reports of falling demand in construction and machinery. Warning for Europe: The idling of giants like ChEMC is a sign that the Russian regime is losing economic levers of civilian management. When the state is left with “unnecessary” metallurgical plants and thousands of idle workers, the Kremlin faces a growing temptation to funnel these resources into the “furnace” of a new military escalation. The “war-time laws” mentioned by Senator Klishas provide the legal framework to convert these stagnant factories into repair bases or shell shops, laying the groundwork for aggression beyond Ukraine’s borders.

Living by “War Laws” Permanently: Senator Klishas Announces Post-War Retention of Restrictions

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Andrey Klishas, head of the Federation Council Committee on Constitutional Legislation, delivered a programmatic statement in an interview with RBC: a significant portion of the repressive norms and restrictions introduced in Russia after 2022 will remain in force for years, perhaps forever. According to Klishas, the authorities do not plan an automatic return to peacetime legal standards. Every restriction will be tested for “relevance” and “usefulness.” Key points from Klishas’s statement: Analytical Summary: Klishas’s statement is more than a legal commentary; it is a strategic warning to Europe. Russia is officially codifying a model of “permanent mobilization.” The “Useful Norms” Trap: When the government labels the restriction of citizens’ rights as “useful,” it means the repressive apparatus developed during the war has become the bedrock of state governance. This “emergency state” is becoming the new normal. It is a clear signal that the Kremlin has no intention of returning to a global system of checks, balances, and legal guarantees. The Threat of Latent Aggression: Maintaining military laws even if the conflict in Ukraine is formally concluded (or frozen) is a classic preparation for a new round of aggression. A military machine and a legal field adapted for war do not “disarm” for no reason. If the legislation remains on a war footing, it implies that the regime’s objectives extend far beyond current borders. A Warning for the West: Europe must realize that any verbal “de-escalation” from the RF will be accompanied by further internal hardening of the regime. This creates a “coiled spring” scenario: an economy shifted to 12-hour workdays (as proposed by Deripaska) and a society living by martial law will eventually require new external enemies to justify continued hardships. This makes the risk of aggression against the Baltic states or Poland not just possible, but a logical extension of the Kremlin’s domestic policy in the medium term.

Georgia’s Only Refinery to Dump Russian Crude Over EU Sanction Threats

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The Kulevi Oil Refinery, the only refinery in Georgia, will stop accepting and processing Russian crude oil. David Potskhveria, CEO of Black Sea Petroleum (the plant’s operator), announced that the company intends to fully replace Russian supplies with raw materials from Turkmenistan, Kazakhstan, and “other alternative sources.” Key Reasons for the Pivot: Analytical Summary: The decision by the Kulevi Refinery is another symptom of Russia’s growing “energy isolation,” which is now spreading even to traditionally dependent neighbors. Loss of Regional Influence: Despite a complex political context, Georgia is demonstrating pragmatism. The choice between “cheap” Russian oil and access to the European market has been made in favor of the latter. For Russia, this means the loss of another sales channel that was previously used to partially bypass restrictions. The Caspian Vector: Reorienting toward Turkmenistan and Kazakhstan strengthens the role of the Trans-Caspian route. This weakens Russia’s position as a monopoly transit hub and energy supplier in the Black Sea region. Caspian crude is becoming the primary beneficiary of the “toxicity” of the Russian Urals brand. A Signal to Others: The Kulevi example shows that EU secondary sanctions are becoming an effective tool of enforcement. Even smaller players prefer to sever long-standing ties with Russian suppliers to maintain the ability to operate within the dollar and euro zones.

“No Money for Salaries”: Experts Predict a Wave of Mass Layoffs in Russia

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The Russian labor market is entering a phase of severe turbulence. A combination of falling consumer demand, rising tax burdens, and a shortage of working capital is forcing businesses — from micro-enterprises to state giants — to prepare for large-scale staff reductions. Experts and market participants state bluntly: “there is simply nothing left to pay salaries with.” Scale of the Problem by Segment: Analytical Summary: The current labor market situation marks the end of the era of “hidden unemployment” and a transition to an open employment crisis. Working Capital Collapse: The main point from experts is the lack of turnover. With the Central Bank’s ultra-high rates, businesses cannot borrow to cover payroll during cash flow gaps. Summer 2026 promises to be a “hungry time” as the seasonal drop in business activity hits accumulated losses. Hit to the Management Vertical: The fact that RZD and MMK are starting cuts specifically with management indicates an attempt to “slash costs” on the most expensive employees. However, this will inevitably be followed by the optimization of frontline staff; with capacity at 60%, maintaining a full workforce is economically impossible. Tax Suffocation: The 2026 tax increases have proven fatal for SMEs. The mass closure of small businesses is not just a statistic; it is the destruction of the service and self-employment sector that always acted as a buffer in crisis years. Now that buffer is gone, and hundreds of thousands will hit the job market just as big business is busy firing. This creates a volatile mix of social tension and falling purchasing power.

Russian Oil Exports Plunge 43% Following Ukrainian Strikes on Baltic Ports

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Drone strikes on Russian oil ports have triggered the sharpest collapse in crude exports since the beginning of the war. According to Bloomberg data based on tanker tracking, Russian oil shipments fell by 43% in a single week (March 22–29), dropping from 4.072 million to 2.318 million barrels per day. The “Black Week” in Figures: Analytical Summary: The situation in the Baltic demonstrates the critical vulnerability of Russia’s export model to drone warfare. The Price Paradox: The $1 billion loss occurred despite a sharp rise in global oil prices. While the average price for Russian Urals rose to $73.24 per barrel, the physical destruction of infrastructure prevented Russia from capitalizing on this trend. Paper gains cannot compensate for charred reservoirs and shattered pumping stations. Infrastructure Deadlock: The damage to Transneft terminals is a systemic issue. Replacing or repairing complex Western-designed equipment under sanctions is a daunting task. The Baltic Sea, which handles nearly half of Russia’s oil exports, has been transformed from a “safe haven” into a combat zone, creating a “risk premium” that will permanently eat into the state’s budget margins.

Leningrad Region Industrial Downturn: Over 20 Enterprises Halt Operations or Cut Work Hours

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Dozens of enterprises in St. Petersburg and the Leningrad region have reduced operations or come to a standstill due to financial difficulties, reports Delovoy Petersburg. The economic “cooling” has transitioned from financial reports to the physical idling of factory floors. Geography and Scale of the Regional Crisis: Analytical Summary: The situation in the Northwestern Federal District is a mirror of the nationwide liquidity crisis. The problem has shifted from the banking sector directly into the real production hall. Non-Payment Crisis 2.0: The shutdown of the Tikhvin plant due to “payment delays” is a classic sign of a broken payment chain. When one major customer fails to pay, dozens of suppliers down the line are paralyzed. Under skyrocketing interest rates (Monetary Policy), companies cannot bridge the gap with bank loans, making downtime the only way to “freeze” losses. Investment Deadlock: Problems at IZ-KARTEKS (excavators) and metallurgical giants (MMK, TMK) indicate a deep slump in the mining and construction sectors. If mining companies stop buying machinery and pipes, it means they are scrapping development programs. This confirms the previously stated thesis regarding the “freeze” of capital construction across the country. Hidden Unemployment: The transition to shortened work weeks and downtime is an attempt by authorities and businesses to avoid mass, instantaneous layoffs that could trigger social unrest. However, in practice, this means a sharp drop in household income. When giants like RZD and MMK begin cutting thousands of jobs, it signals that the “safety margin” has been exhausted even for systemic corporations.

“A Steady Negative Trend”: Russia’s Civilian Economy Accelerates Its Decline

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Russia’s civilian industrial sectors accelerated their decline in early 2026, according to a report by CMASF (Center for Macroeconomic Analysis and Short-term Forecasting), an analytical center close to the Kremlin. Key Indicators of Degradation: Analytical Summary: The CMASF report captures a dangerous imbalance: the Russian economy is turning into a “military abscess,” where the growth of the defense industry masks deep stagnation and the destruction of civilian sectors. Investment Paralysis: The drop in construction materials is a direct marker of a halt in capital construction. High interest rates and a lack of imported equipment have made new civilian projects unprofitable. Developers and industrialists are “freezing” sites, which will hit the labor market in the coming quarters. Machinery Collapse: Reducing equipment output to 75% of last year’s level means the import substitution process in critical sectors has not just stalled but reversed. Without its own tools and units, industry loses the ability to reproduce itself, becoming entirely dependent on “grey” supply schemes from China, which are also under threat from secondary sanctions. “Steady Negativity”: The analysts’ term for a “negative trend” is a mild euphemism for a full-scale recession in the civilian sector. While military plants work three shifts, the civilian economy—which ensures consumption and long-term development—is rapidly shrinking. This creates a long-term threat: when military orders inevitably decrease, the civilian industrial landscape will be a scorched field. Polski „Utrwala się negatywny trend”: Cywilna gospodarka Rosji przyspiesza spadki Cywilne gałęzie rosyjskiego przemysłu na początku 2026 roku przyspieszyły spadki — wynika z raportu bliskiego Kremlowi centrum analitycznego CMASF. Kluczowe wskaźniki degradacji: Podsumowanie analityczne: Raport CMASF dokumentuje niebezpieczną asymetrię: rosyjska gospodarka przekształca się w „wojenny nowotwór”, gdzie wzrost zbrojeniówki maskuje głęboką stagnację i niszczenie sektorów cywilnych. Paraliż inwestycyjny: Spadek produkcji materiałów budowlanych to bezpośredni sygnał wstrzymania inwestycji kapitałowych. Wysoka stopa procentowa i brak importowanego sprzętu sprawiły, że nowe projekty cywilne stały się nierentowne. Deweloperzy i przemysłowcy „zamrażają” budowy, co w najbliższych kwartałach uderzy w rynek pracy. Zapaść maszynowa: Ograniczenie produkcji maszyn do 75% poziomu z zeszłego roku oznacza, że proces substytucji importu w krytycznych sektorach nie tylko utknął w martwym punkcie, ale zaczął się cofać. Bez własnych obrabiarek i agregatów przemysł traci zdolność do samoodtwarzania, stając się całkowicie zależnym od „szarych” schematów dostaw z Chin, które również są zagrożone sankcjami wtórnymi. „Trwały negatyw”: Używane przez analityków określenie o „negatywnym trendzie” to łagodne sformułowanie oznaczające pełnowymiarową recesję w sektorze cywilnym. Podczas gdy zakłady wojskowe pracują na trzy zmiany, gospodarka cywilna, zapewniająca konsumpcję i długofalowy rozwój, gwałtownie się kurczy. Stwarza to zagrożenie, że gdy zamówienia wojskowe nieuchronnie spadną, w miejscu przemysłu cywilnego pozostanie spalone pole.

“Work 8 to 8”: Billionaire Deripaska Proposes 12-Hour Workday to Save the Economy

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Russian billionaire Oleg Deripaska has come forward with a radical initiative: to overcome the “heavy transformation” of the Russian economy, citizens should switch to a 12-hour workday (from 08:00 to 20:00) and introduce a six-day work week (including Saturdays). According to the businessman, labor enthusiasm is the only remaining resource the country has in the face of a global crisis. Deripaska’s Main Arguments: Analytical Summary: Deripaska’s proposal is a tacit admission that market mechanisms in Russia have finally ceased to function, leaving the extensive exploitation of human resources as the only way to support GDP. Capitulation to Reality: Hearing one of the country’s top oligarchs speak of the “destruction of legal institutions by security forces” is an open confirmation that business in Russia is no longer protected by law. Investments—both domestic and foreign—have hit zero, and Deripaska now suggests compensating for the lack of capital and technology with the “sweat and blood” of the workers. Economic Anachronism: Moving to a 72-hour work week (instead of the standard 40) is an attempt to drag the economy back to the industrial era of the early 20th century. However, in a modern technological economy, labor productivity depends not on hours spent at a machine, but on access to chips, software, and advanced equipment—all of which are currently under sanctions. Finding a Scapegoat: Deripaska skillfully shifts the blame: it’s the “Central Bank macroeconomists” with their interest rates and the “security forces” (siloviki) who broke the courts. Yet, according to the billionaire’s logic, ordinary Russians must pay for these mistakes by sacrificing their weekends and personal time. This is a symptom that the elites see no way out of this “transformation” other than turning the country into a massive labor camp.

“A Huge Problem”: Russia Faces Gasoline Production Crisis Due to Ukrainian Strikes on Baltic Ports

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The suspension of oil product exports through the Baltic port of Ust-Luga following drone attacks on March 25 may force major refineries in the European part of Russia to slash production. According to Reuters, damaged infrastructure has made it impossible to export fuel, pushing the country’s largest plants toward a total shutdown. The Logistics Deadlock: Analytical Summary: The situation in the Baltic is evolving into the “economic strangulation” of the Russian fuel market through its refinery byproducts. The Domino Effect on Gasoline: The primary issue is not a shortage of fuel oil itself, but the technological interconnectedness of the refining process. You cannot produce gasoline without producing mazut. To reduce fuel oil output, refineries must proportionally cut total crude processing. This is happening during a seasonal peak in gasoline demand, which will inevitably lead to shortages at gas stations and a sharp spike in domestic prices. The “Mazut Clot”: Unlike diesel or gasoline, which can be temporarily diverted to the domestic market, Russia does not need fuel oil in such quantities. Rerouting it to southern ports is impossible due to the logistical overload of the railways (RZD is already operating at its limit). The Baltic was the only effective sales channel for “heavy” fractions for refineries in central Russia. Technological Dead End: Repairing damaged overpasses and terminals in Ust-Luga under the constant threat of new UAV strikes is becoming a Sisyphus task. If the ports do not return to full capacity within a week, the country’s largest refineries will begin to “douse” their furnaces. This isn’t just a loss of export revenue; it’s a direct hit to mobility within Russia — from the spring sowing season to military logistics.

Novatek Halts Baltic Gas Plant Following Drone Strikes

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Russia’s largest independent gas producer, Novatek, has fully suspended stable gas condensate (SGC) processing and naphtha exports at its key terminal in the port of Ust-Luga. The shutdown follows a massive fire triggered by a drone attack on the night of March 25, according to Reuters. Scale of Damage and Impact: Analytical Summary: The shutdown of the Novatek plant is a critical blow to high-tech petroleum product exports that cannot be compensated for in the short term. Disabling the “Currency Workshop”: The Ust-Luga plant produces naphtha—a key feedstock for the petrochemical industry destined for Asian markets. In 2025, the complex processed 8 million tons of condensate. Its stoppage means an immediate loss of hundreds of millions of dollars in export revenue and a rupture in supply chains for foreign contractors. Technological Vulnerability: Fractionation units consist of complex, imported equipment. Under current sanctions, repairs could take months, as replacing specific components requires unique parts to which Russia’s access is restricted. For Novatek, this translates into a long-term loss of market share. Domino Effect: The condensate processed at Ust-Luga comes from Yamal fields. Closing the plant will force the company to either find alternative (and more expensive) logistics routes or reduce production at gas condensate fields, hitting the entire corporation’s operational performance. The Baltic has finally shifted from a “safe rear” to a frontline, where key Russian energy assets are being destroyed faster than they can be repaired.