Russian economist warns of social crisis as Ukraine's strikes cripple economy

The war in Ukraine has entered a new phase—one where the battlefield extends into fuel depots and power plants, where economic collapse becomes a weapon as consequential as any missile. On a Tuesday in mid-August, Russian ballistic missiles killed at least ten people in Pechenihy, a town forty kilometers east of Kharkiv. Two days later, they struck Kyiv, killing fifteen more, then Zhytomyr, then a border crossing near Odesa. Russia claimed it was targeting weapons factories. President Volodymyr Zelenskyy countered that the strikes had hit thirty residential buildings, a school, and a children's hospital. The pattern is now familiar enough to measure: in July alone, Russian missiles killed 437 Ukrainian civilians and wounded 2,610—a thirty percent increase over June's toll. August has brought no reprieve. Ukraine's Patriot air defense systems have run dry of interceptors, leaving the country unable to stop incoming ballistic missiles since the start of the month.

But Ukraine has found its own way to strike back, and it is proving devastatingly effective. Since late June, Ukrainian forces have waged a campaign of long-range strikes aimed not at soldiers but at the sinews of Russian logistics and supply. By mid-August, Ukraine's Unmanned Systems Forces had disabled 228 supply ships across the Black Sea and Sea of Azov, destroyed 243 power stations and gas distribution nodes in Crimea, and systematically dismantled the relay antennas and radar stations that guide Russian drone operations. The cumulative effect has been territorial: Ukraine has gained 233 square kilometers this year, a direct result of degrading Russian ability to sustain its forward positions.

The strikes have gone deeper still, targeting Russia's economic capacity to wage war. On August 15, two Flamingo cruise missiles penetrated eight hundred kilometers of Russian airspace to strike the Progress Rocket and Space Centre, igniting a fire across half a hectare of an engine assembly workshop. The facility produces engines for Soyuz rockets, which Russia now relies upon to launch its Rassvet satellite constellation—a replacement for the Starlink access Ukraine severed in February. Each Soyuz can place twenty satellites in orbit. Russia needs twelve to fifteen launches to establish a functional constellation. Without it, the precision and speed of Russian counter-battery fire degrades measurably. The next day, Ukraine set ablaze a twenty-five-hectare warehouse belonging to Wildberries, Russia's largest online retailer, destroying seven of its ten major logistical hubs. Kremlin spokesman Dmitry Peskov acknowledged the damage. Putin himself hinted at government reconstruction funds.

The most visible damage, however, has been to Russia's fuel supply. Ukraine has repeatedly struck the Ust-Luga refinery, the Taneco facility in Tatarstan, and the Perm refinery, which sits fifteen hundred kilometers from Ukraine's border. The cumulative effect has been stark: by late August, only twenty-eight percent of petrol stations across Russia could supply fuel, according to data from GdeBENZ, a mobile application that monitors real-time availability. In Moscow, only five stations were selling high-octane fuel. Videos circulated online showing Rosgvardia police units stationed outside petrol stations to prevent fights between motorists. Deputy Prime Minister Alexander Novak acknowledged that Russia was now importing refined fuel for domestic consumption and promised that maintenance work at damaged refineries would soon ease the crisis. Yet Ukraine has struck those same refineries repeatedly—on August 19, it hit a refining unit at Ufa that was itself undergoing repairs from a previous strike.

This economic pressure has begun to surface in Russian political discourse. On August 18, Andrey Klepach, chief economist at Vnesheconombank, a state bank that finances Kremlin national projects, warned during a discussion at the Moscow Exchange that Ukrainian strikes were becoming a significant macroeconomic barrier to Russian growth. He went further: "I believe Russia won't collapse, but I'm almost certain we'll reach a social crisis." Within hours, he was removed from his post. The warning, however, reflected observable reality. Russians have begun withdrawing savings at accelerating rates. Businesses face mounting pressure to make "voluntary" donations to the state defense budget while simultaneously funding their own air defenses. Putin, addressing the Council for Strategic Development and National Projects, acknowledged that Ukrainian strikes were "certainly" causing damage, though he characterized overall economic performance as "modest but positive." He released $1.18 billion in emergency aid to regional budgets, with fifty-two million earmarked for Crimea.

Ukraine's defense ministry has calculated that every dollar spent on drone strikes costs the Russian economy five times that amount. It is a calculus that transforms the economics of the conflict itself—one where precision strikes on infrastructure impose asymmetric costs, where the destruction of fuel depots and power plants ripples outward into civilian shortages and political pressure. The removal of Klepach suggests that Moscow understands the stakes. A top economist's warning of social crisis, delivered publicly and then silenced, is its own kind of damage—evidence that the war's economic toll is becoming difficult to contain, even within the circles of power.