Sanctions hit key sector of Russia's economy, intelligence reveals details
Photo: Sanctions hit a key sector of the Russian economy (Getty Images)
Russia's forestry industry is sliding into a deep crisis under the pressure of European and American sanctions, according to a statement from Ukraine's Foreign Intelligence Service.
"Sanctions imposed by the West after Russia's full-scale invasion of Ukraine continue to strangle key sectors of the Russian economy, turning export-oriented industries into victims of global isolation," the intelligence service said.
Among them, the forestry sector — once one of Moscow's key pillars of raw material exports — is facing a catastrophic decline that is expected to accelerate in the coming months.
Russia's Deputy Minister of Industry and Trade, Mikhail Yurin, acknowledged that if current economic conditions persist or worsen, the downward trend will intensify sharply, turning the sector into yet another symbol of the Kremlin’s economic degradation.
Under the worst-case scenario — with the current key interest rate, tighter monetary policy, and sanctions — production is expected to collapse by another 20–30 percent. Segments such as lumber, plywood, and pulp are already in decline due to shortages of raw materials, technology, and markets.
Secondary and tertiary sanctions are closing loopholes in China and Asia, forcing companies to cut capacity and lay off workers.
According to intelligence data, the sector's exports have fallen to 9.8 billion dollars, compared to a peak in 2021, reflecting widespread boycotts and logistical barriers. Logging is barely holding on: in 2025, output is expected to reach a maximum of 180 million cubic meters, compared to 188 million in 2023 and 194.6 million in 2022. This decline signals a deepening recession in Russia’s resource-dependent economic model.
EU sanctions against Russia
As a reminder, in October the European Union officially approved a new — the 19th — package of sanctions against Russia. The restrictions aim to reduce the Kremlin’s revenue and prevent sanctions evasion through third countries.
In addition, the EU has already begun preparing another sanctions package against Russia. Among other measures, restrictions against the Belarusian regime allied with Moscow are being considered.
It was also recently reported that the EU is examining new measures targeting those who support the operations of Russia’s so-called "shadow fleet" of oil tankers. The goal is to further reduce Moscow’s revenue used to finance its war against Ukraine.
