Economics

The economics of occupation attract less attention than its military or humanitarian dimensions, yet the economy is both a principal aim of the occupation and a key determinant of Russia's ability to hold ground over the long term. Russia has built a distinct wartime economy in the occupied territories on three foundations: resource extraction, the redistribution of property and integration into the Russian economic system.

How Russia extracts value has changed over time. The chaotic asset-seizure and looting of 2022 — grain, machinery, ports, elevators — gave way, after the pseudo-referendums, to an institutionalised model in which seized assets are "legalised" through occupation ministries, registries and state enterprises. Grain is the clearest case: Ukraine's Prosecutor General records more than four million tonnes illegally removed, funnelled through a sanctioned "State Grain Operator" and exported via Azov and Black Sea ports to the Middle East. Coal, iron ore, manganese and maritime logistics have followed the same logic of extraction-into-integration.

Who profits is, first, the Russian state — which gains ports, the land corridor to Crimea and the resources of Donbas and the Azov region — and, the evidence suggests, senior officials who stand to gain privately from reconstruction and property redistribution. Real estate is a case in point: in Mariupol alone some 25,000 homes have been listed as "ownerless" and repurposed to house officials, military personnel and incoming Russian settlers.

The real cost for the population, and the model's underlying sustainability, are visible in the occupation's own budgets. Despite roughly USD 11.8 billion in infrastructure spending, the territories remain deeply subsidised, their own revenues far too small to fund basic services — an economy that extracts continuously while depending, just as continuously, on federal transfers. This theme reads that ledger to ask what it reveals about the occupation as a long-term colonial project rather than a temporary military administration.

Questions we ask

1. How does Russia extract economic value from the occupied territories?
2. Who profits from this system?
3. What is the real cost of occupation for the population?
4. What does the financial documentation of the occupation administrations reveal about the sustainability of this model?

Fact-check of statistics

Figures are drawn from Ukrainian state bodies, international investigations and independent reporting, as noted below.

Figure	What it means	Source	Link
4 million+ tonnes	Ukrainian grain illegally removed from occupied territories for export	Office of the Prosecutor General of Ukraine	gp.gov.ua
212,000 tonnes	Grain exported from occupied territories by the "State Grain Operator" in 2023	Ukrainska Pravda, 29 March 2024	pravda.com.ua
up to 60,000 tonnes/month	Ukrainian coal exported through the Port of Mariupol	USM Media	usm.media
USD 11.8 billion	Russian infrastructure spending in occupied territories	Reuters, 26 March 2026	reuters.com
~25,000	Homes in Mariupol placed on lists of "ownerless property"	Ukrainska Pravda, 26 June 2026	pravda.com.ua

The full picture

The economic dimension of occupation often receives less attention than its military or humanitarian aspects. Yet the economy is one of the key factors determining not only Russia's ability to maintain long-term control over occupied territories but also one of the primary objectives of the occupation itself. The occupation creates new sources of resources, new markets and new opportunities for the redistribution of property. Russia has effectively built a separate wartime economy on three principles — resource extraction, property redistribution and integration into the Russian economic system — and this model has passed through several stages of transformation.

Phase one. Military seizure of assets and looting (2022). The first months were characterised by the chaotic seizure of assets, as Russian forces and occupation administrations took control of agricultural enterprises, industrial assets, ports, grain elevators, logistics centres and municipal enterprises. The process unfolded most rapidly in southern Ukraine, where much of the country's agricultural production and export infrastructure was concentrated. As early as 2022, Russia began the systematic removal of Ukrainian grain from occupied territories,¹ alongside the mass confiscation of agricultural machinery, industrial equipment and finished products.² At this stage Russia largely acted as an army seizing war trophies — but by the end of 2022 a transition to a different model had begun.

Phase two. Institutionalisation of the occupation economy (2023–2024). Following the pseudo-referendums and the formal incorporation of occupied territories into the Russian Federation, Russia began creating a system for the legalisation of seized assets. Occupation ministries of economy and regional tax authorities were established; real estate registries and land cadastres were introduced; and seized assets were legalised through business re-registration or the creation of occupation state enterprises. A model emerged in which resources were no longer simply extracted but integrated into the Russian economy.

The agricultural sector is the clearest example. According to the Office of the Prosecutor General of Ukraine, more than four million tonnes of Ukrainian grain were illegally removed from temporarily occupied territories for export.³ Affected companies included NIBULON, Kernel, the State Food and Grain Corporation of Ukraine, several enterprises belonging to the Tessla group and dozens of local farms.⁴ To manage the sector, the occupation authorities created the so-called "State Grain Operator," now the key mechanism for integrating stolen Ukrainian grain into Russia's export system and currently under sanctions imposed by the United States, the United Kingdom and the European Union.⁵ International investigations report that the enterprise exported more than 212,000 tonnes of grain from occupied territories in 2023 alone,⁶ shipped through Azov and Black Sea ports to Syria, Türkiye, Egypt and other Middle Eastern countries.¹

Mineral resources are a second focus. After the occupation, the Port of Mariupol was integrated into the export system for Ukrainian coal, with Ukrainian analytical centres estimating up to 60,000 tonnes exported through the port every month;⁷ the Foreign Intelligence Service of Ukraine has reported the systematic transport of Ukrainian coking coal to Russia.⁸ Russia has also shown particular interest in iron ore, manganese, scrap metal, industrial equipment and maritime logistics infrastructure, and in occupied Zaporizhzhia Oblast has taken control of Ukraine's largest manganese ore deposits, of strategic importance to the metallurgical industry.

The ports of Mariupol and Berdiansk have become principal instruments of economic integration. After 2024, Russia launched large-scale modernisation and dredging works in Mariupol's port infrastructure.⁹ According to Reuters, Russia has already allocated approximately USD 11.8 billion to infrastructure projects in occupied territories, including roads, railways and port modernisation.¹⁰ These expenditures are not aimed at improving local well-being; they are intended to integrate the occupied territories into Russia's military and economic logistics system and, as investigative reporting indicates, to generate private gains for senior Russian officials.

A further component is the confiscation of real estate. In Mariupol alone, approximately 25,000 apartments and houses have been placed on lists of so-called "ownerless property,"¹¹ a mechanism Le Monde has described as one of the largest campaigns of forced housing confiscation in modern Europe.¹² This real estate is increasingly used to accommodate Russian officials and military personnel, to incentivise the resettlement of Russian citizens and to facilitate the demographic transformation of the occupied territories.

Despite official claims of "economic revival," the occupied territories remain deeply subsidised. Budget documentation shows a critical dependence on federal transfers; the regions' own revenues are insignificant and insufficient to fund social services and municipal infrastructure. In practice, the occupation economy exists in two dimensions at once: the continuous extraction of resources, and constant financial dependence on the federal budget of the Russian Federation. The principal beneficiary is the Russian state itself, which gains control over ports, logistics, agricultural flows, the land corridor to Crimea and the resources of Donbas and the Azov region. A separate area of risk concerns foreign companies that, while not directly present in occupied territories, may form part of the supply chain through certification, transshipment, insurance, trading or port services.¹³

The occupation economy has evolved from chaotic wartime looting into a well-organised system of resource exploitation. Russia uses the occupied territories as a source of grain, coal and other resources; a logistics corridor; a market for Russian companies; a platform for the redistribution of real estate; and an instrument of demographic policy. Despite substantial investment in transport and municipal infrastructure, the territories remain deeply subsidised and economically dependent on Moscow. The economic dimension demonstrates that Russia is not building a temporary military administration but a long-term colonial regime based on control over resources and their systematic exploitation.