AGP Executive Report

Energy Under Strain: Russia cut western crude exports to about 1.7m bpd in June (from 2.5m in May) as Ukrainian drone strikes hit oil infrastructure, domestic fuel shortages bite, and output falls. Ukraine-Russia War & Industry: New long-range strikes reportedly hit a major refinery fire in Krasnodar’s Afipsky and targets deep in Russia, including a drone-component plant in Cheboksary. Monetary Policy: Putin urged the Central Bank to cut rates as inflation slips to just over 5%, signaling a shift after the economy cooled. Sanctions & Trade: An AmCham Russia chief said more US sanctions won’t resolve the Ukraine conflict, while the EU prepares further measures targeting Russia’s financial and crypto channels. Armenia-EAEU Tensions: Lavrov and Zakharova warned Armenia that EU pivot plans clash with EAEU membership, with Moscow pressing for a quick decision. Business & Finance: NOVIKOM Bank expanded its salary-card program for Rostec-linked industrial workers, while Rosatom began construction of a small modular nuclear plant in Uzbekistan. Digital Controls: Roskomnadzor’s Telegram blocks are reportedly driving audience losses as users shift to VPNs and alternatives.

Ukraine-Russia Talks Stalemate: Putin told reporters at SPIEF he sees “no point” in meeting Zelensky after the Ukrainian leader’s open letter calling for direct talks and a ceasefire. Energy Under Pressure: Reuters calculations say Russia cut western crude exports to ~1.7m bpd in June from ~2.5m in May as Ukrainian drone strikes hit oil infrastructure and domestic supply tightens. EU Sanctions Push: The European Commission unveiled its 21st package, moving to fully ban Russian cod and tighten fisheries, while also targeting banks, shadow-fleet activity and crypto-linked evasion routes. Budget Strain, Official Tone: Russia’s finance ministry says the federal deficit (over 6tn rubles) is not a crisis despite weaker oil-and-gas revenue and faster spending. Satellite Internet Crackdown: Russia’s Duma approved rules banning sales of satellite-comm equipment not authorized for Russian frequencies, aimed at Starlink terminals. Global Deals Watch: SPIEF delivered 1,127 deals worth $94bn, but major international breakthroughs largely failed to materialize. Pakistan-Russia Roadmap: Pakistan and Russia agreed on an economic cooperation program through 2030 covering trade, energy and connectivity.

EU Sanctions Escalation: The EU unveiled its 21st Russia package, adding new limits across energy, finance and crypto, plus trade and fishing, and Russia vowed an “effective and firm” response. Crypto Crackdown: The same day, Brussels moved to ban crypto-asset services in third countries tied to evasion, while Russia’s deputy finance minister said fees of up to 3% could hit Western-linked stablecoins like USDT and USDC. Moscow Under Drone Pressure: Russian air defenses reported downing at least 12 Ukrainian drones toward Moscow overnight, with officials citing hundreds intercepted across a wider wave. Banking Update: Sberbank reported net profit of 827.2bn rubles for the first five months of 2026, up 21.1% year-on-year. Trade & Politics in Focus: Armenia is accelerating a shift toward the EU after Russia tightened import rules, while SPIEF continued to spotlight Global South representation and BRICS-style cooperation. Energy & Markets: Germany faces recession risk as an Iran-linked energy shock derails growth, while Russian stocks slid to fresh lows amid geopolitical uncertainty.

EU Sanctions Push: The EU unveiled its 21st Russia package, including a proposed ban on imports of Russian cod and other fish measures, plus tighter curbs on banks, crypto firms and Kremlin-linked oil revenues. Ireland Alumina Fallout: Dublin is fighting EU pressure to sanction Aughinish Alumina after claims its alumina is reaching Russian military supply chains, with EU officials saying the bloc must “close loopholes.” Defense Spending Reality Check: A new analysis argues Germany is shifting from shock to sustained high-intensity readiness, as drone warfare and hybrid threats force faster capability and stockpile build-outs. Moscow Drone Spillover: Reports describe drones straying into NATO countries and the Baltic region, highlighting how navigation deception and air defenses complicate cross-border risk. Russia Economy Narrative: Dmitry Medvedev said Russia’s GDP has grown over 10% in three years, driven mainly by manufacturing. Bangladesh-Russia Trade & Labor: Dhaka and Moscow discussed expanding manpower ties toward 100,000 workers in Russia and boosting trade, including AI cooperation. Ukraine Strikes, Fuel Pressure: Fresh attacks in Ukraine and retaliatory drone strikes are again linked to fuel disruption concerns, including in Crimea.

Ukraine War & Energy Disruption: Russia’s drone and missile strikes on Ukraine’s Kharkiv region killed a pregnant woman and others, with dozens injured, while Kyiv’s long-range drone campaign hit Russian oil facilities and Crimea fuel sites, forcing Moscow to admit fuel supply problems. Sanctions & Shadow Fleet: EU moves to let navies board suspected “shadow fleet” tankers in the Mediterranean signal tighter enforcement as investigations keep exposing how sanctioned shipping stays afloat. Crypto Crackdown: Russia is preparing new fees, trading limits and safeguards aimed at “unfriendly” crypto assets, with the Central Bank restricting retail access to BTC, ETH and USDT from July 1. Armenia Political Shift: Armenia’s Pashinyan claimed victory in parliamentary elections seen as a referendum on Russia’s influence, drawing Western praise and Moscow criticism. Defense Funding Debate: Zelenskyy says UK-linked proceeds from the Chelsea sale could be redirected to air defense, arguing “Why not use Russian money?” BRICS Expansion Talk: Lavrov said Russia would welcome Bangladesh’s BRICS candidature once the admission pause ends. Business & Markets: SPIEF continues to frame Russia’s war-economy deals, while analysts flag risks for the Moscow Exchange and note ongoing currency and inflation pressures.

Armenia’s Election Fallout: Armenia’s ruling Civil Contract won 49.8% in June 7 parliamentary polls, but Russia alleged “unprecedented” pressure and interference while observers cited arrests, selective prosecutions, and unequal campaign conditions—signaling a sharper Westward tilt for Yerevan. EU Sanctions Push: EU foreign policy chief Kaja Kallas said the bloc is weighing a further $1.5 trillion sanctions expansion, with 80 new listings aimed at Russia’s war economy, human-rights violators, and propagandists. Ukraine War Diplomacy: Zelensky published an open letter proposing a direct meeting with Putin and a full ceasefire during talks, as fighting continues and Russia rejects the idea. Public Trust Signals: Russia’s state pollster VCIOM reportedly stopped publishing Putin’s “open” trust ratings after a steep slide, while “closed” approval remains much higher—an unusual split that hints at growing public fatigue. Human Rights Pressure: UN human rights chief Volker Turk urged the immediate lifting of US sanctions on Cuba, saying they are harming vulnerable people, including children. Trade & Supply Chain Friction: Ireland launched an investigation into claims that alumina exports may be reaching Russia-linked military supply chains. China-North Korea Economics: Xi Jinping’s rare Pyongyang visit stressed deeper trade and technology cooperation with Kim, while avoiding nuclear talk—amid closer Russia ties. Russia-Ukraine Strikes: Russian attacks killed four civilians in Zaporizhzhia and hit other regions, while Ukraine continues drone and energy strikes.

Armenia’s Election Pivot: Nikol Pashinyan’s Civil Contract party is leading in parliamentary voting (about 49.8%), a result widely framed as a referendum on Armenia’s shift toward the EU despite heavy Russian pressure and export restrictions. Ukraine War Spillover: A Ukrainian drone hit a passenger train in Russia-annexed Crimea, while attacks on Ukraine’s infrastructure and energy systems continued, underscoring how the conflict is disrupting regional business and travel. Russia-Linked Energy Deals: Indonesia is set to import 150 million barrels of Russian crude through Lemigas, aiming to streamline procurement under a new regulation. India-Russia Trade Push: India is negotiating to ease export rules and expand bilateral trade toward $100B by 2030, with “Make in Russia for India” fertilizer and critical-minerals joint ventures back on the table. Sanctions and Supply Chains: Kyrgyzstan warned Cyprus that EU sanctions on Russia could hurt Kyrgyz trade and finance, highlighting how secondary routes keep getting tested. North Korea-Russia Trade Risk: Reports say North Korea is importing refined oil from China and Russia far above UN caps, tied to illegal mineral exports and military cooperation. Oil Market Watch: OPEC+ approved another July output increase despite Middle East disruption and Strait of Hormuz uncertainty, keeping price volatility in focus.

Ukraine-Russia Talks & Air Defences: Zelensky asked sanctioned oligarch Roman Abramovich to pass a message to Putin that Kyiv is ready for direct talks, while European leaders met at Downing Street with Zelensky to press for an immediate ceasefire and faster missile and drone-defence production after Russian strikes. Nuclear Safety Shock: Russia hit Ukraine’s spent-fuel storage near Chernobyl with a Shahed drone; Ukraine says radiation stayed within normal limits and the IAEA will inspect. SPIEF Under Fire: Ukraine launched a major drone wave during the St Petersburg International Economic Forum, with Russia claiming most drones were intercepted, raising fresh doubts about Moscow’s ability to protect major events. Energy Deal in Balkans: Serbia agreed a further three-month extension of its Gazprom gas contract, keeping deliveries “affordable” and stable while discussing storage expansion. Armenia Election Crossroads: Armenians voted in a high-stakes parliamentary election seen as a referendum on Pashinyan’s pivot toward the EU versus closer ties with Russia, amid arrests and new Russian pressure. Russia-Linked Legal Case: Georgia, with FBI cooperation, arrested a Russian citizen accused of sanctions evasion. Business & Tech Links: Uzbekistan and Russia expanded digital cooperation, while Rosatom said it wants more IT and digital business in Serbia.

SPIEF Deals & Energy Pitch: At St. Petersburg’s SPIEF, Russia’s investment chief said the country offers the world’s “cheapest energy,” including for data centers, as the forum logged $90B+ in signed contracts. Critical Minerals Push: Saudi Arabia’s industry minister said the kingdom wants deeper joint investment with Russia in rare earths and critical minerals to strengthen supply chains. Myanmar Power Project: Inter RAO and Myanmar’s Launglon Economic Development signed an MoU for a Dawei deep-sea port power plant during a Russia visit. Digital Ruble Rollout: The Bank of Russia says 12 major banks are ready for digital ruble services starting September 1. Armenia Election Fallout: Armenian authorities arrested a Russia-based business figure accused of using Telegram to arrange free transport for voters ahead of June 7 polls, as Yerevan weighs EU integration versus closer ties with Moscow. War Spillover to Business Hubs: Ukraine struck around St. Petersburg during SPIEF’s final day; Russia reported large drone interceptions and urged residents to shelter indoors. Defense & Security Signals: Russia air-lifted a Pantsir air-defense system onto a Moscow residential high-rise, underscoring heightened protection of civilian areas.

SPIEF Dealflow & Energy Signals: Russia’s St. Petersburg economic forum wrapped with 1,084 agreements worth about 6.6 trillion rubles (89.6bn USD), while Moscow used the event to project stability amid war and sanctions. Drone War Hits Business Backdrop: On the forum’s final day, Ukraine fired hundreds of drones at St. Petersburg and nearby regions, with Russia reporting 376 intercepted and a fire at an oil depot; officials urged residents to stay indoors. Arms-Industry & Sanctions Pressure: Rosneft CEO Igor Sechin said US oil firms benefit most from the Iran war and warned Strait of Hormuz closure would reshape markets in Washington’s favor. Russia-Ukraine Talks Stalemate: Putin again said there’s “no point” meeting Zelenskyy, as the US backs direct talks without American mediation. Regional Influence & Elections: Armenia’s election is framed as a choice between Brussels and Moscow, with Russia warning against “pro-European” forces. Trade & Connectivity Deals: Tanzania announced direct Air Tanzania flights to Moscow and Zanzibar from July 2, aiming to boost trade and tourism with Russia. EU Energy Reality Check: Despite a planned LNG phase-out, EU purchases of Russian LNG rose in early 2026, underscoring continued dependence. Finance & Crypto Rule Change: Russia’s central bank moved to limit retail crypto access to BTC, ETH and USDT.

Regional Finance & Investment: VTB signed cooperation agreements with 15 Russian regions at SPIEF, targeting banking infrastructure, investment projects, business support, and financing for socially significant and infrastructure work. Tech & Industry-Education Links: TMK at SPIEF pushed for faster university involvement in applied R&D, arguing legal and institutional support is needed so teams can solve industrial problems “here and now.” E-commerce Rules: RWB, Ozon and Avito agreed to equalize commissions for Russian vs foreign sellers, tighten transparency, and add AI moderation plus video recording at pick-up points. Crypto Regulation: Russia’s central bank will keep retail access limited to Bitcoin, Ethereum and USDT, with a ~300,000-ruble annual cap per broker and a mandatory knowledge test; no quick expansion beyond the three assets. SPIEF Under Fire: St. Petersburg faced a major drone attack as the forum wrapped, with officials reporting dozens shot down and temporary disruptions at key sites. Energy Trade Pressure: Russia’s Novak said the UK is buying Russian petroleum products refined in Asia after refusing direct oil purchases, while Sechin blamed Hormuz closure on attempts to reshape energy markets for US benefit. Russia-Ukraine Talks Stalemate: Putin said there’s “no point” in meeting Zelensky for now, while Ukraine kept up drone strikes during the forum.

Central Asia Energy & Finance: Uzbekistan says it could tap a Russian state export loan for a Djizak nuclear power plant, but will only proceed if terms are “favourable” and cost-optimized, with up to 85–90% expected from external debt. Russia-Ukraine Diplomacy: Vladimir Putin rejected Volodymyr Zelensky’s proposed face-to-face talks, saying he sees “no point” for now, while Russia’s SPIEF messaging stressed long-term investor risk-taking despite drone-linked damage. SPIEF Business Climate: Putin told investors Russia remains “attractive” even as key rates weigh on deals, and said oil-and-gas dependence has fallen to about 23% of GDP. Russia-China Trade & FX: The Bank of Russia bought yuan worth 1.2 bln rubles on June 4, and Russia expects mutual tourist flows with China to hit ~6 mln trips by end-2027 under extended visa-free rules. Tech & Industry: Rosaviatsia certified the Aviadvigatel PD-8 engine for the Yakovlev SJ-100, supporting Russia’s import-substitution push in aviation. Africa Investment Push: Tanzania pitched five flagship projects to global investors at SPIEF, including Bagamoyo SEZ and a new Moscow route from July 2 via Air Tanzania.

SPIEF Deal-Making: Alfa-Bank and Rostelecom signed two major finance deals at St Petersburg’s forum—RUB 20bn factoring and RUB 11.5bn in bank guarantees—highlighting how telecom and banking are tightening cashflow support. Capital Markets: MTS Bank helped place ALROSA’s 3-year RUB 30bn exchange-traded bonds, with the final spread set at 135 basis points over the Bank of Russia key rate. Armenia-EU vs. EAEU: Russia’s officials say Moscow won’t “foot the bill” for Armenia’s EU integration and warn that Yerevan’s steps create business uncertainty; Putin also said relations will stay normal “whatever” Armenia chooses, while urging a fast referendum. EU Response: EU leaders pledged over €50m in immediate support for Armenia and framed it as solidarity against “economic coercion.” Regional Trade Shift: Russia signals it will redirect some Armenian agricultural volumes to Azerbaijan as import restrictions tighten ahead of Armenia’s June 7 vote. Energy Diplomacy: Serbia’s energy minister called Russia a reliable partner on gas and infrastructure, stressing energy security amid geopolitical pressure. India-Russia Push: Putin reiterated a USD 100bn trade target with India, pointing to energy and Kudankulam nuclear cooperation. Ukraine War Spillover: Insurers are expanding optional coverage for drone and missile-related property risks, pushing up standard premiums by as much as 12%.

BRICS Agri-Food Agenda: At SPIEF, Russia’s FAO liaison chief Oleg Kobiakov said BRICS must shape future global trade via sustainable agri-food systems, better market access, and AI-driven innovation. Ukraine Peace Talks vs Hardline Terms: Putin told foreign media he’s open to a deal but insists on territorial demands and says Russia won’t pause the war just to negotiate; Zelensky countered with an open letter offering direct talks and a ceasefire during negotiations. Drone Pressure on Russia’s Economy Stage: Ukrainian strikes hit St. Petersburg’s oil and nearby military sites as SPIEF opened, prompting Putin to promise stronger air defences. Elite Under Pressure: A Moscow court move against billionaire Vadim Moshkovich highlights widening state pressure on Russia’s business class, with asset seizures reshaping empires. Media Fatigue: Russian state TV viewership fell sharply, with Kremlin political talk shows losing ground as audiences shift toward entertainment. Sanctions & Crypto: Russia sanctioned British teen Alexander Browder over claims tied to the A7A5 ruble-pegged stablecoin used to evade sanctions. Armenia Trade Squeeze: EU pledged more support for Armenia amid Russia’s import restrictions, while Russia warned Yerevan over EU integration.

SPIEF Under Fire: Ukrainian drones hit Saint Petersburg’s energy and military targets as Russia’s “Davos” opened, with black smoke reported near the Peter and Paul Fortress and strikes tied to the Kronstadt base and the oil terminal; Zelensky called it “fair response,” while Russia promised a “systemic” retaliation. Armenia Pressure Ahead of Vote: Moscow is ratcheting up warnings and potential supply shocks as Armenia heads to a June 7 election, with EU and EAEU tensions driving a high-stakes contest for Pashinyan’s Westward tilt. Rare Earth Push: Denis Manturov said Russia aims to build a full rare-earth supply chain by 2028, covering light to medium-heavy elements, as SPIEF spotlights critical minerals. Financial Sovereignty Claim: Finance Minister Anton Siluanov said Russia has reached “absolutely sovereign” financial status, citing low external debt and independence from third-country funding decisions. Russia-Tanzania Dealmaking: Tanzania’s President Samia Hassan met Putin in Moscow, touting trade growth and discussing minerals and a long-delayed uranium project. Markets & Rates: Russia’s central bank set the euro at 85.1243 rubles for June 4 and published June 4 precious-metals discount prices. US Seafood Ban Politics: US Senator Dan Sullivan credited extending the Russian seafood import ban to 2027, framing it as “American freedom fish” versus Russian supply.

SPIEF Under Fire: Ukrainian drones hit St. Petersburg’s oil terminal and the Kronstadt naval base as Russia’s “Russian Davos” opened, disrupting Pulkovo Airport and mobile internet; smoke and damage underscored how energy exports and military assets are becoming front-line targets. War Budget Pressure: Bloomberg reports senior officials warned Putin that keeping defence spending at current levels could blow up the deficit, with Russia projected to exceed its 2026 budget by 2 trillion rubles. FX & Gold Moves: Russia’s Finance Ministry says it will sharply increase foreign-currency and gold purchases in early June to replenish the National Wealth Fund and ease ruble strength. Central Bank Gold Trend: WGC data shows central banks bought 17 tonnes of gold in April, led by Poland and China, while Russia kept selling (6 tonnes in April). Sanctions & Trade Friction: The EU imposed new restrictions on Kyrgyzstan over suspected re-exports of sanctioned goods to Russia’s war industry; meanwhile the US is pushing new Section 301 forced-labour tariffs that include Russia among listed economies. Business Links: Sberbank plans to recruit Indian construction workers to fill a near-800,000 labour gap by 2030, while Moscow signed a deal with India’s Hetero Labs to build a pharma plant in a Moscow special economic zone.