Oleh Luhovskyi, First Deputy Head of the Foreign Intelligence Service of Ukraine

Negotiations over the terms for ending the war have been underway since late November. In recent days, meetings in a new format have been taking place in the United Arab Emirates, involving representatives of Ukraine, the United States, and Russia.

Ukrinform spoke with Oleh Luhovskyi, First Deputy Head of the Foreign Intelligence Service of Ukraine, to understand what lies behind Russia’s carefully constructed façade. The discussion covered Moscow’s objectives to be achieved on the battlefield, its actual military capabilities, the state of the Russian economy, how long Russia can continue financing the war, and the role played by its key partners—China and Belarus. We also asked questions about the Oreshnik missile, which Russia has once again launched against Ukraine, and whether the threat of a Russian attack on NATO countries persists.

RUSSIA IS PURSUING A STRATEGY OF RUNNING OUT THE CLOCK

Q: Mr. Luhovskyi, is Russia genuinely interested in ending the war, or is this merely a simulation of negotiations?

A: Our intelligence indicates that the Kremlin leadership is not currently prepared for genuine talks on ending the war. Instead, Russia is implementing a strategy of deliberate delay. The Kremlin believes that continued offensive operations at the front, combined with blackouts and pressure on rear areas, will eventually break Ukraine and allow Moscow to achieve its objectives through military force.

Q: What are Russia’s “red lines” in negotiations?

A: At present, there are several, and they are updated from time to time. A fundamental one is Ukraine’s non-membership in any security alliances and the absence of foreign military contingents on Ukrainian territory.

That is the situation as of today. At any moment, however, Russia may set out new “red lines” in order to slow down the negotiating process.

Q: What is the intelligence regarding Russia’s foreign policy objectives for near-term future? And what is Russian special envoy Kirill Dmitriev negotiating about?

A: In the foreign policy domain, Russia’s diplomatic and intelligence services have been tasked with extracting the maximum possible dividends from the processes currently unfolding globally.

The tactical objective is to facilitate the creation of a so-called “coalition of the unwilling”—a bloc of countries and individual political forces that would jointly oppose, at all levels within the European Union, the plans of the “coalition of the willing” with regard to assistance for Ukraine.

As for Kirill Dmitriev, the Kremlin has placed its bet on him because it believes that, in an era of what it calls “busieness deal-based diplomacy,” he is better suited than others to negotiating bilateral commercial projects. Through such initiatives, Moscow hopes to rekindle Western interest in restoring economic cooperation with Russia.

Dmitriev is proposing similar projects to China as well, particularly in the extraction and processing of energy resources and rare earth minerals.

Without such projects, Russia lacks both free capital for investment and access to modern technologies for deep-resource extraction, given that the average cost of a single project in the Arctic region alone ranges between USD 15 billion and 20 billion.

Q: How is China assisting Russia, given that Beijing, through its Ministry of Foreign Affairs, consistently denies any involvement in the war against Ukraine?

A: We identify two main avenues of assistance provided by China.

The first is economic support. China has evolved into Russia’s key trading partner, while Russia is growing critically dependent on China for exports of oil, natural gas, and metals, as well as for imports of machine tools, UAV components, and pharmaceuticals.

Readily available data suggests that more than six dozen collaborative projects between China and Russia are currently underway, with a combined value exceeding USD 100 billion. They span a wide range of sectors—from mineral extraction and transport infrastructure development to mechanical engineering, innovation, and even the defense-industrial sector, including the construction of a pulp-and-paper plant.

China is also assisting Russia in establishing alternatives to the SWIFT payment system to circumvent sanctions, including through the use of cryptocurrencies, clearing platforms, and the mutual integration of banks into Russia’s and China’s payment systems, SPFS and CIPS.

The defense sector is the second strategic area of cooperation. It is precisely China’s support that enables Russia’s defense industrial base enterprises to increase the production of artillery ammunition, mines, cruise and ballistic missiles, as well as missiles for air defense systems.

Russia integrates Chinese-supplied electronic components into Kh-101 cruise missiles, 3M-14 Kalibr missiles, Geran kamikaze drones, and onboard systems of Su-57 fighter jets and Ka-52 attack helicopters.

In 2025 alone, we documented that Russia procured approximately 40,000 different items of electronic component base from more than 80 companies registered in China, for use by its defense industries. These include capacitors, microchips, and alternating-current generators essential for serial production in missile manufacturing, radio-electronic systems, and aircraft construction.

China also remains a strategic partner for Russia in supplying high-tech equipment, primarily computer numerical control (CNC) machine tools. In 2025, Chinese equipment accounted for roughly 35 percent of Russia’s total imports of such machinery.

Finally, as we have previously reported, China provides Russia with high- and ultra-high-resolution satellite imagery of civilian sites in Ukraine, which are subsequently targeted in missile and drone strikes.

Q: And how does Russia’s other strategic partner, Belarus, assist Moscow?

A: Belarus remains Russia’s principal—and effectively its only—ally on the western flank. It continues to serve as Russia’s rear area, supplying ammunition and unmanned systems, and repairing Russian military equipment.

Since the start of the full-scale invasion, Belarusian defense industrial base has been integrated into Russia’s. More than 80 percent of Belarusian enterprises are now involved in fulfilling Russia’s State Defense Order and the State Armaments Program for 2025–2034. Belarusian territory is being actively used to channel technologies and products to Russia’s defense industries in order to circumvent international sanctions.

Belarusian companies repair armored vehicles, rocket and artillery systems, communications equipment, automated command-and-control systems, and aircraft.

THE KREMLIN IS BETTING ON MAXIMUM ADVANCES DEEP INTO UKRAINIAN TERRITORY

Q: Let us talk about battlefield objectives. In May last year, the former head of Ukraine’s Foreign Intelligence Service, Oleh Ivashchenko, said in an interview with Ukrinform that Russia’s plans at the time were to establish full control over the Luhansk, Donetsk, Zaporizhzhia, and Kherson regions. Have these plans been adjusted in light of current realities?

A: Since May last year, the Kremlin’s policy towards Ukraine has not changed. Moreover, in the near term it has no intention of revising its strategic objectives on the Ukrainian front, and, accordingly, its vision of how the war should end.

How does Moscow plan to achieve this goal? The Kremlin continues to bet on maximum advance deep into Ukrainian territory, convinced that both the front line and the home front can be made to collapse.

A crucial point is that Russia places no limits on its territorial ambitions. It has set itself the task of advancing as far as circumstances allow, believing this will strengthen its negotiating position.

It is worth recalling that on the eve of the New Year, Vladimir Putin publicly instructed the military command not only to continue the offensive toward Zaporizhzhia, but also to press ahead in the Sumy and Kharkiv regions, under the pretext of expanding a so-called “security buffer zone.”

In the Kremlin, there is an expectation that strikes on Ukraine’s energy infrastructure at the height of winter, combined with perceived battlefield advantages, will have a cumulative effect and ultimately force Ukraine to surrender.

Q: What is your assessment of Russia’s war waging capabilities? What is the state of its military equipment and armaments?

A: Russia’s military capabilities remain, to put it mildly, limited, even though it has committed virtually all combat-ready forces to the fighting. This is evidenced by the constant postponement of operational deadlines.

By way of example, in 2025 Russia’s Ministry of Defense planned to organize 15 new divisions. By the end of the year, however, it had managed to deploy only four, and even those were below establishment in manpower. The problem is not limited to manpower alone; it also concerns weapons and military equipment.

The most acute constraints are in the production of armored vehicles and artillery systems. With Soviet-era stockpiles largely depleted, Russia is now relying on the manufacture of new equipment—a far more time-consuming and costly process. Tanks offer a clear illustration. This year, Russia plans to increase the production of new tanks by 20 percent, bringing output to about 260 units. At the same time, refurbishment and restoration rates are expected to fall by at least 40 percent. As a result, the total number of tanks delivered to the battlefield will be roughly one-third lower than last year.

There are categories of weaponry where the adversary sets annual targets for increased production—namely cruise and ballistic missiles, strike UAVs, artillery ammunition, and aerial bombs. Yet even here, output is constrained by industrial capacity and a shortage of imported electronic components. In most cases, expanding production of one type of weapon is possible only at the expense of cutting back on another.

Q: What is the situation with mobilization in Russia?

A: Overall, Russia is meeting its mobilization targets to full extent. Some regions are even exceeding their quotas—notably the Far Eastern, Ural, and Volga federal districts. At the same time, there are regions that consistently fall short, particularly the Central Federal District and the North Caucasus.

Russia recruits around 420,000 personnel into contract military service annually, along with an additional approximately 30,000 personnel recruited into so-called volunteer units, which are not included in the official statistics.

Russian military command shows little regard for personnel losses. It operates on the assumption that generous financial incentives and benefits packages for contract soldiers are sufficient to offset casualties.

One figure illustrates this clearly: around 90 percent of those who signed contracts in 2025 were deployed specifically to replace battlefield casualties.

Available intelligence suggests that Russia has no intention of slowing the pace of this covert, financially driven mobilization in the current year. The overall target set by the Russian authorities stands at 409,000 personnel.

The key focus is on staffing unmanned systems units. Annual demand in this segment is estimated at nearly 80,000 service members. Unlike assault units, where quantity is paramount, the emphasis will be on quality rather than sheer numbers. Candidates are expected to be drawn primarily from students of technical universities and other specialized educational institutions across Russia, with financial incentives again serving as the main motivator.

Q: Russia has recently struck Ukraine with the Oreshnik missile for the second time. Is there information on how many such missiles Russia has, and what the current production rates are?

A: Based on our assessments, Russia has no more than three or four Oreshnik missiles available for use. We are aware that Russia’s Ministry of Defense intends to launch the Oreshnik missile into full-rate production in 2026 and to acquire the capacity to manufacture five or more missiles per year.

Q: What should we expect, then?

A: It should be appreciated that the Oreshnik carries more political than military significance. It is primarily an instrument of intimidation aimed at Ukraine’s partners in Europe. Its actual combat effectiveness is questionable. The system is built on technologies from the previous century and requires constant technical maintenance and the rapid troubleshooting to address recurring malfunctions.

Q: What signals is the Foreign Intelligence Service receiving from partner intelligence agencies regarding the deployment of the Oreshnik in Belarus?

A: It would be inappropriate for me to disclose information provided by our partners. That said, there is active cooperation on this issue. This interaction allows us to maintain a shared, objective situational picture and to counter Russian and Belarusian disinformation.

Q: More broadly, how would you describe the Foreign Intelligence Service’s cooperation with leading intelligence agencies worldwide, particularly the United States? Do they share intelligence with Ukraine?

A: Our cooperation with all partners is developing positively and has long since moved into the practical realm.

There are several domains where we have outpaced our partners. Today, we are sharing the expertise we have gained and helping them develop their own capabilities.

RUSSIAN ARMS MANUFACTURERS ARE FACING GROWING WAGE CRISIS

Q: How does the Foreign Intelligence Service of Ukraine assess the state of Russia’s economy? How long will Russia be able to finance the war?

A: Russia entered 2026 economically weaker than at any point since the start of its full-scale invasion of Ukraine.

A 24% drop in oil and gas revenues in 2025—down to $106 billion—forced the Kremlin to revise the federal budget three times, increasing the deficit fivefold. Whereas in January of last year the deficit had been projected at $15 billion, by the end of the year it exceeded $75 billion.

As a result of the sustained use of National Wealth Fund reserves to cover budget shortfalls, the volume of its liquid assets has shrunk by a factor of three over the course of the war.

The Kremlin has already begun selling off gold and precious metals from its reserves. In the first half of the year alone, it planned to use nearly $19 billion worth of these assets to plug the budget deficit.

We are also recording a rise in wage backlogs—even at strategic enterprises and defense-industrial base facilities—amounting to nearly USD $10 million. Compared with 2024, this figure has increased by 88%.

According to our forecast, in 2026 Russia’s economy will face an elevated risk of sliding into recession amid mounting inflationary pressure, a shrinking tax base, and the expansion of the shadow economy.

Q: It is well known that Russia uses its so-called “shadow fleet” to circumvent sanctions and replenish the budget. Which countries are most frequent buyers of Russian oil?

A: Russia exports around 170 million tonnes of oil by sea each year, accounting for more than 70% of its total oil exports. The main buyers of Russian oil are India, China, and Turkey, which together account for 92% of these shipments.

Over the past three years, more than 900 tankers have been involved in transporting Russian oil, with the bulk of this traffic handled by the so-called “shadow fleet.” At the same time, sanctions have driven up exporters’ operating costs. As a result, freight and insurance costs have risen by 40–50%. More than 79 sanctioned vessels ceased transporting Russian oil in 2025 alone.

Buyers are also demanding unprecedented discounts— exceeding 25 percent off the price of Brent crude. Taken together, these factors have led to a decline in foreign-currency revenues, a shrinking income and tax base, and a shortfall in investment, most notably in oil production.

Q: How does Russia exploit the economic potential of currently occupied Ukrainian territory for its own enrichment? In particular, what amounts of Ukrainian grain are being exported, and where are they being sent?

A: In 2025, Russia exported more than 2 million tonnes of grain taken from currently occupied Ukrainian territory, worth approximately USD $400 million. The end consumers are countries in Africa, the Middle East, and Asia.

The grain is shipped by Russia’s so-called “grain fleet” through seaports located in the currently occupied territories of Crimea, Zaporizhzhia, and Donetsk regions.

Russia has also established a “grain hub” in international waters at the exit from the Kerch Strait. There, grain is transshipped from smaller Russian bulk carriers onto foreign dry cargo vessels in an attempt to conceal its true origin.

Our analysts estimate that this operation involves 45 vessels, two floating storage ships, and around 40 coastal (cabotage) vessels. Eighty-five percent of these ships are registered under Russian jurisdiction, which helps minimize the impact of sanctions.

It is also no secret that, in addition to grain, Russia is exporting coal, coke, kaolin, iron ore, soda ash, and steel from the occupied territories. In the past year alone, more than 200,000 tonnes of minerals and metallurgical products were shipped out by sea.

Q: Does the threat of a Russian attack on NATO countries persist, and within what timeframe could this occur?

A: At present, Russia does not possess the capabilities to wage a full-scale war against NATO in the classical sense.

Russia is inferior to NATO both in terms of human potential and defense spending. The disparity is even more pronounced when it comes to weapons and military equipment.

NATO countries collectively have three times more armored vehicles, four times more combat aircraft, and enjoy a tenfold advantage in naval forces. To give just one example: the combined naval potential of NATO includes 210 frigates, whereas Russia has only 12.

To add to this, Russia and NATO share a 2,500-kilometer border that would be extremely difficult to breach.

The Kremlin understands too well that any conventional war against the Alliance would be unwinnable. However, when it comes to localized military operations conducted at a level that would not automatically trigger Article 5 of the North Atlantic Treaty, Russian military planners are indeed developing various offensive scenarios.

I would like to emphasize that Moscow considers such scenarios feasible only in the event of a victory in the war against Ukraine and after a certain period of time to restore and rebuild its war waging capacity.

Alla Shershen, Kyiv

Photos courtesy of the Foreign Intelligence Service of Ukraine