How effective are Ukraine’s drone strikes at destroying Russian refinery production?

Ukraine has been incessantly attacking Russian refineries with long-range drones, but reports on how effective these attacks are paint a mixed picture. / bne IntelliNewsFacebook

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By Ben Aris in Berlin May 29, 2026

Wrangling over how effective Ukraine’s drone strikes of Russian refineries has broken out amidst conflicting reports of just how much damage is being done to Russia’s key oil infrastructure.

Since last summer, Ukraine has stepped up its campaign against Russia’s cash cow industry in an effort to cut the Kremlin off from one of its main sources of income. This year Ukraine is firing more drones at Russia than Russia fires at Ukraine for the first time ever.

As the campaign reached a crescendo last month with sustained attacks on Russia’s Baltic Sea oil terminals at Primorsk and Ust-Luga that handle a fifth of Russia’s oil traffic, Reuters reported that Russia’s oil exports were down by 40%.

However, later reports based on government figures said that while production at refineries was down by some 10-15%, exports had been largely unaffected and the damage at the two ports was largely superficial and had been repaired.

Ukraine has ramped up its drone production and is on course to make some 7mn drones this year, according to Ukrainian President Volodymyr Zelenskiy. At the same time it has introduced a new class of long-range drones that can reach deep into Russia’s interior to hit the far flung oil refineries scattered across the country. At issue is to fly the thousands of kilometres needed to reach their targets, the payload of the drones is restricted by fuel consumption concerns. Consequently, while the drones can do a lot of damage, typically causing major fires, the explosive package is not enough to destroy a refinery. As one analyst put it: “There is a big difference between hitting a refinery six times with 50kg of explosive and hitting it once with 300kg.”

Conflicting reports

On May 20 Reuters reported “Exclusive: Oil refining at a standstill in central Russia after Ukrainian drone strikes, sources say,” that key refineries at Kirishi, Moscow, Nizhny Novgorod, Ryazan, Yaroslavl, that produce some 30% of Russian petrol and a quarter of its diesel, had all gone offline.

“Virtually all major oil refineries in central Russia ‌have been forced to halt or scale back fuel output following Ukrainian drone attacks in recent days, according to official data and sources,” Reuters reported. “Moscow has already introduced a gasoline exports ban starting ​from April until the end of July.”

The combined capacity of refineries ​that have fully or partially halted operations exceeds 83mn metric ⁠tonnes per year, or around 238,000 tonnes per day. That accounts ​for around one quarter of Russia's total refining capacity, according to Reuters.

However, a follow up report by Russian Forbes reported that the impact of the attacks was a lot less damaging.

“Such losses during the peak fuel season could have been a serious blow to the country's economy, but experts interviewed by Forbes do not believe the damage is that significant. Forbes investigated why gasoline shortages occur on the exchange but not at gas stations, how long it typically takes to restore damaged refineries, and how Belarus can help,” Forbes reported.

There is no doubt that the attacks have reduced the throughput at Russian refineries and as IntelliNews reported, Russia has been forced to turn to Belarus to top up supplies to meet domestic demand. But the imports from Belarus are limited.

Russia's domestic consumption of gasoline runs at over 100,000 tonnes per day, which makes the 17,000 tonnes bought from Belarus in early May a significant share, but not a crisis. "Volumes remain small compared with Russia's daily consumption of over 100,000 tonnes," noted energy expert Sergei Vakulenko. “This is not yet a crisis of supply, but it is a signal of the strain on the system.”

On May 21, the Ministry of Energy said that the domestic motor fuel market in Russia remains stable, and the industry is prepared for seasonal demand growth.

"Currently, the domestic market is sufficiently supplied with light petroleum product reserves, the logistics infrastructure is functioning reliably, and there have been no disruptions in regional supply," the Ministry of Energy stated, without specifying reserve volumes, Forbes reports.

Following a meeting on the fuel market on May 26, Deputy Prime Minister Alexander Novak said that the government's priority remains "the reliable and uninterrupted supply of fuel to domestic consumers in the required quantities" and the need to develop additional response measures in the event of disruptions.

Domestic fuel costs have risen, but only modestly, suggesting the impact of the drone strikes is limited. From May 20 to 26, prices for AI-92 gasoline on the St. Petersburg Exchange rose by 2%, from RUB66,136 to RUB67,443 per tonne, and for AI-95, by 3%, from RUB72,833 to RUB74,954 per ton.

Rather than losing a quarter of its production, expert calculations suggest the volume of unsatisfied orders on May 26 was 41,000 tonnes for AI-92 and 34,000 tonnes for AI-95. And even those shortages could be merely market demand triggered not by physical shortages, but from traders anticipating a surge in demand.

Another factor affecting demand calculation is the possibility that the main suppliers such as Lukoil, Rosneft, and Gazpromneft have stopped selling fuel on the exchange and are instead supplying it to their own gas stations.

Another point of contention is that Reuters’ calculation uses the refineries entire production capacity as a basis for its projection, but experts interviewed by Forbes say that is an exaggeration as even if a refinery is hit, most are still continuing to work albeit at reduced levels. Some facilities can be repaired in a matter of days, while others will require more time, experts say.

"Experience shows that in previous years, there were no attacks on Russian refineries that would have caused damage requiring lengthy repairs," Stanislav Mitrakhovich, an expert at the Financial University and the National Energy Security Fund told Forbes. "I believe that even now, there's no way to disable large refining facilities for long periods, although attacks can reduce production for a short period."

The bottom line is that Russia is not yet suffering from a fuel crisis and any shortfall caused by Ukraine’s attacks can be covered by imports from Belarus for now. Russia consumes over 3mn tonnes of gasoline monthly, according to Maxim Shevyrenkov, head of the Commodity Market Analysis Center at the Institute of Energy and Finance. Belarus is capable of shipping over 200,000 tonnes of gasoline per month, and Belarusian petroleum products are imported into Russia duty-free, Shevyrenkov points out.

A similar investigation by independent Russian outlet Meduza came to similar conclusions: Ukrainian drones are being fired more frequently and penetrating deeper into Russian territory, but Russia’s refineries’ production bounces back quickly.

The main conclusions of Meduza’s investigation included:

• The frequency and depth of UAF strikes on Russian territory have risen substantially since mid-2025 and have held at a stable level — more than 30 verified attacks per month.
• There has been no surge in strike intensity in 2026, despite a number of high-profile attacks on Moscow, Tuapse, Perm, and other major cities.
• Strikes on oil infrastructure represent approximately one-third of Ukraine’s long-range campaign in 2026, consistent with the second half of 2025. Ukraine’s military has likely learned in recent months to target the refinery equipment that is particularly difficult to repair.
• The average range of UAF strikes against targets deep inside Russia has increased recently: in May, the figure doubled y/y, from 400 kilometers (249 miles) to 800 kilometers (497 miles).
• This may indicate that Russia’s air defences are being depleted, but we don’t yet have enough data to verify.
• The UAF’s long-range campaign was most effective in its first phase, in late summer and early fall of 2025, when Russian refineries suffered their greatest capacity losses.
• By mid-fall of that same year, oil industry operators had adapted — judging by available data — to the more intensive strikes on their facilities, and had learned to repair damaged equipment quickly or draw on spare capacity.

EMBRACING UKRAINIAN FASCISM

RAGOZIN: Melnyk reburial signals ideological shift in Ukraine

Ukrainian President Volodymyr Zelenskiy attended the reburial of Andriy Melnyk, one of the leaders of the Organisation of Ukrainian Nationalists (OUN). / Volodymyr Zelenskiy via XFacebook

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By Leonid Ragozin in Riga May 29, 2026

Last week, Ukrainian President Volodymyr Zelenskiy went to the National Military Memorial Cemetery to take part in the reburial of Andriy Melnyk, Adolf Hitler’s ally in World War II and one of the leaders of the Organisation of Ukrainian Nationalists (OUN). Next to Zelenskiy, stood his chief of staff Kyrylo Budanov, who has been overseeing a visible ideological shift in Ukraine since assuming office early this year. 

In a tweet published on the occasion, Budanov wrote that the reburial heralds the creation of the “Pantheon of Prominent Ukrainians”. The choice of Melnyk’s ashes as an object of national veneration sends a clear signal about the direction of that shift.

Over seven years in the presidential seat, Zelenskiy has undergone a remarkable transformation from a dove seeking rapprochement with Russia to a defiant wartime leader and the Kremlin’s sworn enemy. His attitude to Ukraine’s history has changed just as radically.

Soon after he was elected in 2019 on the promise of peace, Zelensky made a point about celebrating May 9, the Soviet Victory Day, by visiting the grave of his grandfather who fought in the Red Army.

This populist gesture was designed to appeal an overwhelming majority of Ukrainians, in both the east and west of the country, whose ancestors fought on the Soviet side in WWII and who gave their votes to the new president. A memo published by Ukraine’s ministry of foreign affairs in October 2014 cites the figure of 7mn residents of Ukraine who fought in the Soviet army during WWII versus only 240-250 thousand who collaborated with the Nazis.

As his 57th Guard Division was pushing the Germans out of Mairupol, Sloviansk and Kramatorsk, lieutenant Semyon Zelenskiy was avenging the deaths of his father (President Zelenskiy’s great-grandfather) and three brothers, all of whom perished in the Holocaust.

Meanwhile, Melnyk was attempting to set up a fascist Ukrainian puppet state in Ukraine with a constitution, authored by his friend Mykola Stsiborsky, which described future Ukraine as “authoritarian and totalitarian state”. In a letter to Hitler in 1941, Melnyk pleaded that anti-Soviet Ukrainians be “allowed to march shoulder to shoulder with the legions of Europe and with our liberator, the German Wermacht”. Meanwhile, his subordinates in Ukraine took part in Jewish pogroms in Bukovyna and assisted the Germans in killing the Jews elsewhere around the country.

Melnyk’s pleas fell on deaf ears in Berlin since Hitler saw Slavs as an inferior race subject to enslavement and extermination. He was interned by the Nazis in a camp for foreign VIPs, who were treated humanely and respectfully, and released in 1944 when Hitler felt Ukrainian fascists could help him stall the Red Army’s onslaught in western Ukraine. Failing to receive guarantees of a pro-Nazi Ukrainian state, Melnyk ended up offering his services to Western allies in the US-occupied zone.

The World Holocaust Remembrance Centre, Yad Vashem, stated that it was deeply troubled by Melnyk’s reburial in Kyiv. “Honouring the leader of a movement [OUN] that supported and collaborated with Nazi Germany during the persecution and murder of millions of Jews undermines the moral integrity essential to Holocaust remembrance,” its press release said.

OUN’s dream Ukraine

Melnyk died in 1964 and was buried in Luxembourg where his remains were lying peacefully until Zelenskiy’s administration decided to repatriate them in May this year. “Colonel Andriy Melnyk returned to a different Ukraine – not the one he had been forced to leave, but the one he had dreamed of,” Zelenskiy said at the reburial ceremony.

Today’s Ukraine is indeed much closer to Melnyk’s ideals than those Zelenskiy’s grandfather was fighting for.

Built in 1974 and topped with the 102m-tall Motherland statue, Kyiv’s WWII History Museum was designed to commemorate Soviet war heroes like Semyon Zelenskiy. In the WWII cult developed under the Ukraine-born Soviet leader Leonid Brezhnev, this was one of the three most sacred sites in the entire Soviet country.

In 2026 however, it housed an exhibition dedicated to the Russian Volunteer Corps (RVC), a military unit formed by fugitive Russian neo-Nazis who believe that today’s Ukraine is much closer to their ideals than Russian President Vladimir Putin’s authoritarian regime. They see Putin’s Russia as a continuation of the Bolshevik internationalist project, citing Putin’s tolerance to mass immigration from Central Asian countries as proof.

In its propaganda and symbols, RVC draws inspiration from Gen. Andrey Vlasov’s Russian Liberation Army which fought on Hitler’s side in WWII. Featuring prominently in the exhibition, RVC’s symbol is called Spayka, best translated as fascia. It was designed in the 1930s by the Russian emigre organisation White Cause which later joined the Russian Fascist Party. 

The exhibition was officially curated by RVC’s khorunzhy (ideological officer), Aleksey Lyovkin. Having served a sentence for racially motivated attacks on migrants in his native Tver in Russia, Lyovkin founded a band called M8L8TH (which translates as Hitler’s Hammer and contains the numerical symbol 88 that stands for Heil Hitler in skinhead jargon) before moving to Ukraine in 2015.

Although it existed in Russian imperial forces, khorunzhy is not an official rank in the Ukrainian army. It originally meant flag-bearer in the Cossack troops, but it resurfaced in the Russo-Ukrainian war as an equivalent of the Soviet politruk, a political officer. 

Officially non-existent in the Ukrainian army, khorunzhy is used as a rank in politically autonomous units that form what its members call the “Azov family” or “movement”. Born out of the original Azov battalion, this far right mega-group currently controls Ukraine’s 3rd Army Corps commanded by Andriy Biletsky, its founder and political leader. 

The 3rd Corps runs its own school of political officers which is named after Yevhen Konovalets, Melnyk’s predecessor as the OUN leader. Its political bible is Natiocracy, an ethnonationalist teaching of OUN ideologist and Melnyk’s ally, Mykola Stsiborsky.

The Azov battalion in its original forms had a significant presence of Russian neo-Nazis, like Lyovkin or the most prominent living Russian neo-Nazi leader Sergey “Malyuta” Korotkikh, who was in charge of the battalion’s intelligence. 

These Russians (though not Korotkikh) eventually formed the core of RVC, which ideologically is a part of the Azov family but operates under the auspices of Ukraine’s military intelligence, the HUR. The latter was headed by Zelenskiy’s chief of staff Budanov from 2020 to 2026.

An ideology for New Europe

Melnyk’s reburial would be hard to imagine under Zelenskiy’s previous chief of staff, Andriy Yermak, who graduated from secondary school in the Soviet times and whose father served at the USSR’s embassy in Kabul during the Soviet occupation of Afghanistan. His Russian-born mother grew up in Leningrad. Hardly famous for political restraint, he still displayed some ethical red lines when it comes to history and politics.

But Yermak took upon himself the role of chief scapegoat in a massive anti-corruption investigation that targets Zelenskiy’s immediate entourage. He has been formally charged in a multilayered corruption case which involves four mansions, one of which belongs to him and another one likely to Zelenskiy himself. 

Budanov is another story. Born in 1986, he is largely a product of post-independence Ukraine with all of its geopolitical ambivalences and mafia state realities. An ideological orphan, he was provided with a social lift when he joined unit A2245 of the HUR whose members were trained by the CIA. 

A Washington Post investigation, published in 2023, revealed that the military intelligence agency Budanov would become the head of was created under the CIA’s supervision from scratch and hermetically sealed from other Ukrainian spy agencies to avoid Russian interference. The HUR is “our baby”, the newspaper’s CIA source boasted. Since the end of WWII, the CIA’s Ukrainian operation has been defined by the influx of OUN cadres who previously worked for the Germans. 

Ideology is a swear word with the liberal-democratic paradigm which Ukraine is still ostensibly pursuing, but Zelenskiy’s chief of staff is not shy about using the word. 

“Ukraine today embodies true Europe — both geographically and, above all, ideologically,” he wrote on May 9, the day of the Soviet victory over the Nazis, also marked as Europe Day in the EU. “We are defending the security and values of the entire continent: freedom, respect and the right to one’s identity,” he continued, adding the word “identity” where centrist politicians would normally mention human rights or social justice. 

His ideology reveals itself in commemorative events like Melnyk’s reburial, which he organised. Zelenskiy named Budanov first when listing officials who helped to make it happen. It also spills into his sometimes surprising statements, like when he mused on the meaning of Rus, the Kyiv-centred medieval state which gave its name to Russia. “Rus is Ukraine. But Rus is more, much more and Ukraine is the motherland of everything, even of those who we are fighting against,” he told the audience at the Kyiv Stratcom Forum this month. “You see where is the issue: We have handed over much of our history to them, we did it voluntarily. They privatised it, although they are nobody. We are the Rus, we should rule them.”

These imperial sentiments hark back to the ideas first expressed by Azov Movement ideologists back in 2014-16. They boil down to recreating the Russian Empire, only with the capital in Kyiv rather than Moscow.

Budanov’s effort to build the pantheon of Ukrainian heroes is expected to bring more results in the coming months and years. Negotiations are underway with the US and European countries about the repatriation of prominent Ukrainians who died in exile, prominently featuring OUN leader Stepan Bandera and Simon Petlyura who led Ukrainian nationalists in the Russian civil war. 

But Zelenskiy mentioned only one figure who is going to be reburied for sure. It is Yevhen Konovalets, who headed the OUN before Bander and Melnyk and after whose name the Azov Movement’s ideological school bears.

Leonid Ragozin is a freelance journalist based in Riga. He covered Russia, Ukraine and other countries for leading global media, including the BBC, Bloomberg and Al Jazeera. Leonid co-authored “En eiropeisk tragedie”, a book about the roots of Russo-Ukranian conflict published in Norway.

Macron calls Lukashenko as US withdraws from Ukraine ceasefire talks

French President Emmanuel Macron put in a rare call to Belarus president Alexander Lukashenko the day after Russia fired two Oreshnik cruise missiles at Kyiv and warned him not to get dragged into Russia’s war in Ukraine. / bne IntelliNewsFacebook

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By Ben Aris in Berlin May 25, 2026

French President Emmanuel Macron took the unusual step of calling Belarus president Alexander Lukashenko on May 24, which is now housing Russian nuclear weapons.

The French President warned Lukashenko against involving Belarus in Russia’s war against Ukraine during their first phone call since 2022, Swiss outlet Le Temps reported on May 24, citing sources close to Macron.

Tensions on the Ukraine-Belarus border have been rising recently. President Volodymyr Zelenskiy said on May 15 that he had instructed the Security Service of Ukraine (SBU) to prepare a response plan for threats from Belarus. Zelenskiy specifically mentioned strengthening the Chernihiv-Kyiv sector.

That followed Lukashenko's statement on May 12 that he planned a limited mobilization of specific military units to “prepare for possible combat operations,” but also claimed Belarus was “committed to peace.”

Macron's call also came a day after Russia reportedly fired two Oreshnik IRCM cruise missiles at Kyiv, which have nuclear capability and can hit most European capitals. Last year, Russia moved several of these missiles to Belarus in an escalatory role. Lukashenko boasted that he has operational control over the missiles, but the Kremlin said it remains in full control of the missiles and the ability to launch them.

The call comes in the context of improved relations between Belarus and the Western allies. Lukashenko has recently been flirting with the White House and agreed to a string of political prisoner releases as the Belarus strong man goes back to his old ways of trying to play the West off against the Kremlin on which he is now entirely dependent.

"A phone call between the presidents of Belarus and France, Alexander Lukashenko and Emmanuel Macron, has taken place today at the initiative of the French side," the Belarusian foreign ministry said in a statement. Macron and Lukashenko discussed "regional issues and Belarus's relations with the EU and France in particular".

In December, Macron suggested that the Europeans should resume direct talks with Putin – a call that has been since joined by half a dozen other EU leaders. European leaders have become increasingly frustrated at being excluded from peace talks led by the US administration under Donald Trump, who said last week that the US would no longer participate in the negotiations.

US Secretary of State Marco Rubio admitted that US efforts to bring the Ukraine conflict to a halt have stalled and no talks are currently taking place.

"But we hope that will change because that war can only end with a negotiated settlement. It will not end with a military victory by one side or the other, at least from a traditional standpoint of how military victories are defined," he noted.

The secretary of state added that there appears to be no one else in the world currently capable of facilitating a settlement between Ukraine and Russia. However, he noted that "if someone else would like to handle it, they should".

The failure of the US efforts to broker a ceasefire has knocked the ball into Europe’s court and Marcon’s outreach to Lukashenko is a play to bring Lukashenko in on the EU’s side as he continues to have some leverage over Putin, at least as a possible mediator – a role Lukashenko would love to take up.

Europe is currently searching for a European leader to lead a negotiating team to talk to the Kremlin, which also appears to have given up on a US-brokered breakthrough. On May 9, Putin suggested that the Kremlin would be willing to negotiate with Europe, if a suitable interlocutor can be found.

 As part of his new dovish stance towards the Ukraine conflict, Lukashenko said that Minsk would not join the war in Ukraine and is ready to meet with President Zelenskyy.

"I am ready to meet with him anywhere - in Ukraine, in Belarus - and discuss the problems of Belarusian-Ukrainian relations," Lukashenko said. Previously, Minsk was the venue for two rounds of peace talks between president Vladimir Putin and former German Chancellor Angela Merkel, which produced the Minsk I and II accords under the presidency of former Ukrainian President Petro Poroshenko after a proxy war between Ukraine and Russia broke out in the Donbas in 2014.

Lukashenko’s comments were a response to the Ukrainian president's statement last week that Russia was trying to further drag Minsk into the war and was considering plans for operations in the south and north of Belarus. The accusation is not without merit after Lukashenko gave Russia permission to launch an assault on Kyiv from Belarusian territory in February 2022 at the very start of the war that ultimately ended in disaster.

 

The hunt for a European mediator in Russia-Ukraine talks continues, but no talks are likely yet

Finnish President Alexander Stubb has said he would be willing to lead a European delegation on Ukraine peace talks with the Kremlin, but insists on an immediate ceasefire first that will rule out negotiations for the Kremlin. / bne IntelliNewsFacebook

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By Ben Aris in Berlin Ben Aris in Berlin May 25, 2026

Finnish President Alexander Stubb has put himself forward to represent the EU in possible ceasefire talks with Russia now the US has fully withdrawn from the process, but immediately ruled out any talks starting unless Russia agreed to a full ceasefire in Ukraine.

This position is a return to the hard line position Ukraine and its European allies adopted at the London conference last April, and was immediately rejected by the Kremlin, which has rejected any talk to ceasefire and insisted on a longer more difficult process of reaching a lasting peace deal, which presumably includes territorial concessions from Ukraine in the Donbas.

Stubb said that he doesn’t rule out that Europe may engage in dialogue with Russia already this year, but if he sticks to an insistence on a ceasefire as a prelude to any talks, the Kremlin is almost certain to refuse.

"I can imagine that Europe will engage in dialogue with Russia this or that way this year. However, it is impossible to say right now when this happens," Stubb said, answering questions from the audience of the Yle broadcaster on May 24.

When asked whether he can act as a mediator, he said that if he is asked, "it will probably be difficult to say ‘no’."

Stubb’s name has come up as one of several candidates for a European mediator at potential talks with Moscow. Other candidates include former Italian Prime Minister Mario Draghi and Stubb’s predecessor as Finnish president Sauli Niinistö. Angela Merkel’s name was also put forward, but she has already said no and recommended someone active in service. German President Frank-Walter Steinmeier is also considered to be a possible candidate.

The discussion on finding a European mediator began after president Vladimir Putin said in a press conference following the  Victory Day parade that the end of the war in Ukraine was “close” and suggested he was open to talking to an EU representative, suggesting someone like his old friend and former German Chancellor Gerhard Schroeder, who is widely seen as a Russian stodge after he went to work for Gazprom after he left office. However, Putin also said that the Kremlin would not deal with anyone that has been “spitting insults at us.” That immediately ruled out one obvious candidate – the head of the European Commission foreign policy Kaja Kallas, who has been extremely critical of Russia.

It seems that the Kremlin will have the same objections to Stubb: commenting on his candidature, Russian Foreign Ministry Spokeswoman Maria Zakharova noted that the Finnish leader “tops the list of Western elites’ representatives who use the language of hatred when speaking about Russia.”

Stubb is a proponent of continuing the war and says Ukraine is in its “best military position of the war thanks to ‘math’” — one Ukrainian soldier lost for every eight Russians.

Western analysts have pointed to Armed Forces of Ukraine (AFU) gains on the battlefield and an apparent slowing of Russian advances since the start of this year. But these are still counted in a few hundred kilometres at best and the Armed Force of Russia (AFR) remains firmly in control of around 20% of Ukrainian territory.

Moreover, the relative disparity in the size of the population of the two countries means Russia can sustain considerably higher casualty losses than Ukraine for longer.

“I seriously doubt both this approach and the numbers; and the strategy is far from winning or even realistic. Russia has 143mn people. Ukraine’s population has collapsed dramatically — from over 40mn pre-war to roughly 25mn or even lower today, with more than 10mn refugees abroad, heavy civilian deaths, and the country bleeding out demographically in a brutal war of attrition,” former Ukrainian presidential press spokesperson Iulia Mendel said in a post. “Raw kill ratios (especially obviously dubious) ignore the hard truth of sustainability and the vastly different sizes of our nations.”

Latvia: Standing with Ukraine

Issued on: 22/05/2026 - 
12:43 min From the show

Since Russia's full-scale invasion of Ukraine in February 2022, Latvia has been providing massive support to war-torn Ukraine. Like Estonia and Lithuania, this small Baltic state is among the European countries hosting the highest number of Ukrainian refugees relative to its population. Our reporters Valentine Patry and Hugo Laridon went to Latvia to meet some of those who are helping Ukrainians.

BY:
Valentine PATRY
Hugo Laridon

Ukraine overtakes Moldova in income race to the title of Europe's poorest country

The two countries that long shared the unwanted title of Europe's poorest have diverged sharply — and the direction of travel tells a grim story about what three years of war does to an economy / bne IntelliNews

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By Ben Aris in Berlin May 25, 2026

For years, Ukraine and Moldova have vied for the dubious honour of being the poorest country in Europe. The contest was close enough to be largely academic and they regularly traded last and second to last places for years. That symmetry is over. The average Moldovan today earns approximately 1.5 times more in dollar terms than the average Ukrainian. Ukraine is now officially the poorest country in Europe.

As recently as 2021, the two neighbours had nearly identical income levels — two small, post-Soviet economies stuck at the bottom of the European table, each struggling with corruption, emigration and the chronic underinvestment that comes with geopolitical limbo. Indeed, in the early years following the Maidan revolution in 2014, an influx of investment lubricated with a dollop of optimism even saw Ukrainian wages grow and start to close the gap with the much richer and more prosperous Russia.

Since then economic chaos and political instability has now given way to full scale war, the destruction of infrastructure, the displacement of millions of working-age citizens. Private investment has collapsed and hollowed out an economy that, before February 2022, had shown genuine signs of modernisation.

Moldova's relative rise is not a story of transformation. Chisinau remains poor by any European measure, and its own challenges — Russian energy dependence, a shrinking population, the unresolved frozen conflict in Transnistria — have not disappeared. Indeed, Moldova's economic situation is so dire that President Maria Sandu has even suggested reunifying with Romania, with which Moldova has close historical ties.

The demographic dimension compounds the economic one. Ukraine has lost millions of people to emigration since the invasion — many of them young, educated and unlikely to return quickly regardless of how the war ends. Ukraine has the worst demographics in the world with mortality three-times higher than fertility. And the drain on labour caused by the forced conscription of any man of military age that has not fled the country has led to a slow strangulation of industry. The tax base shrinks, the labour force thins, and the fiscal dependence on foreign aid for fully half the budget has already sent debt to GDP to over 100% and rising.

For European policymakers watching from Brussels, the income reversal is a data point that sharpens an already difficult question: what does post-war Ukrainian recovery actually look like, at what cost, and who will pay for it? The €90bn support package the EU has mobilised addresses the immediate financing gap. But two thirds of that money is earmarked for defence spending and the rest is for wages. Nothing significant is being spent on reconstruction; what is being spent is rebuilding energy assets destroyed by Russian missiles last winter.

Millions of Ukrainians may remain in EU for years even after war ends

The central bus station in Odesa, Ukraine. / IntelliNewsFacebook

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By IntelliNews May 25, 2026

Millions of Ukrainian refugees are likely to remain in the European Union for years – and possibly permanently – even if the war with Russia ends, according to a new report by Dutch think-tank Clingendael Institute that warns European governments must prepare for long-term integration rather than assume a rapid mass return home.

The report, "Between War and Return: Scenarios for the Future of Ukraine and Its Refugees", outlines four possible futures for Ukraine between 2026 and 2030 and analyses how each could reshape migration flows across Europe.

“The report concludes that in all scenarios a large number of Ukrainian refugees – including those in continued need of protection or in need of an alternative status after TPD ends – will likely remain in the EU for many years, if not permanently,” the study said, referring to the EU’s Temporary Protection Directive (TPD).

“Russia’s full-scale invasion of Ukraine in February 2022 not only led to the largest and most destructive war in Europe since World War II, but also led to the continent’s biggest displacement crisis since that time,” the report said. More than 5.9mn Ukrainian refugees were recorded outside the country by January 2026, according to figures cited in the report.

The Clingendael study was published as uncertainty grows over the future trajectory of the war and the prospects for refugee return. US President Donald Trump has pushed diplomatic initiatives aimed at ending the conflict, but the report noted that “Donald Trump’s fervent diplomatic offensive” had produced “few tangible results”.

The authors said policymakers needed to prepare for multiple possible futures rather than rely on assumptions about a quick end to the conflict or a swift repatriation of refugees.

“As such, this report is an exercise in strategic foresight, which is a systematic analysis of plausible futures,” the paper said.

The study presents four scenarios ranging from continued war with Ukrainian territorial gains to a Russian military advance, and from fragile ceasefires to a more stable post-war recovery backed by Western security guarantees.

In the first scenario, Ukraine manages to regain parts of the east and south while the war drags on. Economic recovery remains weak, but the improved security situation encourages many displaced Ukrainians to return.

Under this outcome, the number of Ukrainians requiring protection in the EU would fall from around 4.3mn to between 2.4mn and 2.7mn.

The second scenario paints a far darker picture. Russian forces achieve major territorial advances, recapturing the entire Donbas region and pushing closer to major Ukrainian cities including Kharkiv, Dnipro and Zaporizhzhia. The report said this would trigger a new wave of mass migration into Europe.

“This scenario leads to large new displacements of Ukrainians, with 7.1 to 11.7mn more Ukrainians fleeing to the EU,” the study said. Under that scenario, the number of Ukrainians needing protection inside the EU could rise to between 9.3mn and 13.9mn people.

The third scenario envisages a ceasefire without a meaningful peace settlement or major economic recovery. Fighting decreases substantially, but Russia continues hybrid pressure on Ukraine while political conditions inside the country deteriorate. As a result, many refugees would remain reluctant to return despite the reduction in violence.

“This scenario leads to limited further displacement,” the study said, while warning that “the disappointing economic and political situation in Ukraine leads to limited return migration”.

Around 2.4mn Ukrainians would still require protection in the EU under this outcome, while many others would shift from temporary protection to permanent or longer-term residency arrangements.

The fourth and most optimistic scenario assumes a stable ceasefire combined with strong Western security guarantees and deep institutional reform inside Ukraine. “In this scenario, there is no new displacement of Ukrainians nor forced emigration out of Ukraine,” the report said. 

The study estimates that around 2.5mn Ukrainians currently under temporary protection in the EU would return home in that case. However, the report said large numbers would still stay in Europe permanently.

“Even in the most positive scenario, in which the war ends with a robust ceasefire and Ukraine achieves a substantial economic recovery … no more than 2.5mn BTPs are expected to return, while more than a million Ukrainians whose TPD status has expired are expected to remain in the EU,” the study said.

The report stressed that ending active fighting alone would not be enough to trigger mass refugee returns. “A third key conclusion of this report is that an end to the active fighting through a ceasefire is an insufficient condition for Ukrainian refugees to return in large numbers,” the authors wrote.

Instead, return decisions would depend heavily on the durability of any ceasefire, Ukraine’s security environment, economic opportunities and political trajectory after the war.

“Once the war ends, the prospects for refugee return will also be determined by the nature of the ceasefire and the robustness of Ukraine’s resulting security, the level of economic recovery that will take place, and the political developments in post-war Ukraine,” the report said.

The study warned that Ukraine’s demographic challenges were becoming increasingly severe after years of war, migration and population decline.

Before Russia’s full-scale invasion, Ukraine’s population was estimated at around 41mn. By the end of 2025, only about 31mn people remained in government-controlled areas, according to figures cited in the report.

The authors said many of the war’s demographic effects were likely irreversible. “The war against Russia is transforming Ukraine’s economy, geography, demographics, politics, and society,” the report said.

“Key features of this change are the country’s demographic decline, forced international migration, the demographic and economic shift from the east to the west of the country, the decline of traditional industries and employment models … and the rise of new industries.”

The report also highlighted the risk that some of the most vulnerable Ukrainians could become trapped in dangerous frontline areas because they lack the means to leave.

“Contrary to what one might expect, those Ukrainians who are hit the hardest by adverse and deteriorating conditions … are typically the least mobile,” the study said.

Demographic forecasts cited in the report suggest Ukraine’s population could shrink to between 24mn and 35mn by 2050 depending on how the war develops and how much migration continues.

The study cited Ukrainian demographer Ella Libanova as saying Ukraine would require hundreds of thousands of immigrants annually just to stabilise its population.

Against that backdrop, the authors argued that EU governments needed to shift towards long-term planning for Ukrainian refugees already living in Europe.

“This means that EU member states, including the Netherlands, need to start planning to facilitate the longer stay of Ukrainian refugees who cannot return in the near future,” the report said.

The paper also warned that if legal protections expire without replacement arrangements, many refugees could struggle to remain legally inside the EU.

“The end of the TPD (without similar alternatives), for example, would lead many Ukrainian refugees to apply for alternative statuses in their respective host countries,” the study said.

“If they are unable to do so, the refugees in question would more likely move out of the EU and towards other host countries … or resort to illegality rather than return en masse to Ukraine.”

The report concluded that European governments needed clearer long-term strategies both for integration and for legal residency pathways.

“In order to avoid such a turn towards illegality,” the authors wrote, “the EU member states should develop specific plans to allow Ukrainians who are unable to return to remain in their host countries for a longer period of time.”