The Baltic nation will instead direct the funds toward drones, counter-drone measures and air-defense systems, while squeezing more service life out of the country’s existing fleet of second-hand CV90 vehicles.

Estonian Defense Minister Hanno Pevkur announced the move, which pauses a €500 million ($590 million) acquisition, last week, saying it was based on lessons drawn from Russia’s invasion of Ukraine. Tallinn will “extend the service life of the existing CV90 vehicles by at least 10 years,” Pevkur was quoted in a statement issued by the government.

The move is in contrast with actions by the other two Baltic States, Latvia and Lithuania, which have made decisions to buy new CV90 and Ascod vehicles, respectively.

“We have decided that, at present, it is more rational to modernize the existing infantry fighting vehicles rather than replace them. Modernization will ensure the sustained preservation of capability and the efficient use of resources,” Andri Maimets, spokesman for the Estonian Centre for Defence Investments (ECDI), the country’s military procurement agency, told Defense News.

Under the modernization plan, the vehicles are to be fitted with new electronics, and their weapon and targeting systems will be upgraded, Maimets said.

Estonia secured 44 used CV90s from the Netherlands that were delivered in 2019, and sourced additional 37 hulls of vehicles made by BAE Systems Hägglunds for Norway, subsequently rebuilding them into support vehicles.

Raimond Kaljulaid, an Estonian lawmaker who represents the opposition Social Democratic Party on the parliament’s National Defence Committee, told Defense News the decision should be viewed in the context of Estonia’s rising military expenditure.

“Estonia spends over 5% of its GDP on defense, and this is real spending on our military which is above NATO’s 3.5 percent target to meet the capability targets,” Kaljulaid said. “This means that, if we want to invest more in counter-drone technologies or combat drones, the money must come from the existing budget,” he added. “If our threat assessment and priorities change, we need to adapt our spending accordingly.”

The lawmaker said the National Defence Committee will “keep a close eye on the adapted approach to make sure that everything is done the right away to ensure national security.”

As Tallinn advances plans to select a foreign supplier for the planned domestic ramp-up of 155 mm artillery ammunition production, Kaljulaid also said that projects to attract international defense industry players to Estonia must be accelerated.

“The past five-six years have brought remarkable success to the development of Estonia’s defense industry, with unmanned technologies as one of the prime examples. At the same time, we must make efforts to ensure that Estonia continues to be competitive with regards to other countries in the region,” he said.

The ministry released a video showing combat vehicles that are part of the mobile intermediate range ballistic missile system driving across a forest as part of combat training. The announcement followed a statement from Belarusian President Alexander Lukashenko, who said earlier this month that the Oreshnik had arrived in the country. Lukashenko said that up to 10 such missile systems will be stationed in Belarus.

Russian President Vladimir Putin said earlier this month that the Oreshnik would enter combat duty before the year’s end. He made the statement at a meeting with top Russian military officers, where he warned that Moscow will seek to extend its gains in Ukraine if Kyiv and its Western allies reject the Kremlin’s demands in peace talks.

The announcement comes at a critical time for Russia-Ukraine peace talks. U.S. President Donald Trump hosted Ukrainian President Volodymyr Zelenskyy at his Florida resort Sunday and insisted that Kyiv and Moscow were “closer than ever before” to a peace settlement.

However, Moscow and Kyiv remain deeply divided on key issues, including whose forces withdraw from where in Ukraine and the fate of Ukraine’s Russian-occupied Zaporizhzhia nuclear power plant, one of the 10 biggest in the world. Trump noted that the monthslong U.S.-led negotiations could still collapse.

Putin has sought to portray himself as negotiating from a position of strength as Ukrainian forces strain to keep back the bigger Russian army.

Russia first tested a conventionally armed version of the Oreshnik — Russian for hazelnut tree — to strike a Ukrainian factory in November 2024. Putin has bragged that Oreshnik’s multiple warheads plunge at speeds of up to Mach 10 and can’t be intercepted, and that several of them used in a conventional strike could be as devastating as a nuclear attack.

The Russian leader has warned the West that Russia could use the Oreshnik next against allies of Kyiv that allowed it to strike inside Russia with their longer-range missiles.

The Belarusian Defense Ministry said Tuesday that the Oreshnik has a range of up to 5,000 kilometers, or 3,100 miles.

Russian state media boasted that it would take the missile only 11 minutes to reach an air base in Poland and 17 minutes to reach NATO headquarters in Brussels. There’s reportedly no way to know whether it’s carrying a nuclear or a conventional warhead before it hits the target.

Intermediate-range missiles can fly between 500 to 5,500 kilometers, or 310 to 3,400 miles. Such weapons were banned under a Soviet-era treaty that Washington and Moscow abandoned in 2019.

Russia previously deployed tactical nuclear-capable weapons to Belarus, whose territory it used to launch a full-scale invasion of Ukraine in February 2022. Lukashenko has said that his country has several dozen Russian tactical nuclear weapons.

While signing a security pact with Lukashenko in December 2024, Putin said that even with Russia controlling the Oreshniks, Moscow would allow Minsk to select the targets. He noted that if the missiles are used against targets closer to Belarus, they could carry a significantly heavier payload.

In 2024, the Kremlin released a revised nuclear doctrine, noting that any nation’s conventional attack on Russia that is supported by a nuclear power will be considered a joint attack on his country.

The threat was clearly aimed at discouraging the West from allowing Ukraine to strike Russia with longer-range weapons and appears to significantly lower the threshold for the possible use of Russia’s nuclear arsenal.

The revised Russian doctrine also placed Belarus under the Russian nuclear umbrella.

Lukashenko has ruled the nation of 9.5 million with an iron fist for more than three decades. His government has been repeatedly sanctioned by the West for its crackdown on human rights and for allowing Moscow to use its territory for the invasion of Ukraine.

Belarusian opposition leader Sviatlana Tsikhanouskaya has said that the deployment of Oreshnik to Belarus deepens the country’s military and political dependence on Russia.

Cheap, domestically manufactured drones have played an increasingly critical role for both sides in the four-year war following Russia’s invasion of Ukraine in February 2022. Both countries have experienced enormous battlefield casualties, the land war has morphed into a war of attrition in which Russia’s primary tool is the Shahed, a domestically manufactured UAV based on the original Iranian model.

On Sunday, the Ukrainian Unmanned Systems Forces reported that its 412th Brigade Nemesis had intercepted a Shahed attack by launching its own Sting drone from an unmanned seaborne vehicle — the world’s first successful use of this method to intercept a Shahed.

“Using surface drone carriers to deploy interceptor drones expands air defense options and creates an additional layer of protection for Ukrainian cities,” the USF wrote on X.

Many such Russian attacks are directed at cities in southeastern Ukraine and launched over the Black Sea. For Russia, that serves a two-fold purpose: wear down civilians in the region, force Ukraine to make land concessions to reach a peace deal and exploit the fact that Ukraine lacks traditional naval power.

Sunday’s apparently successful interception may eventually change the calculus, shoring up Ukraine’s ability to defend cities like Odesa, thereby blunting Russia’s ability to force concessions in future peace negotiations.

The U.S. in particular has looked to Ukraine as a model, ramping up investments in cheap drones for its own use.

In the war against Iran, for example, the U.S. has burned through costly weapons systems including the Tomahawk cruise missile and the Patriot missile defense systems. A single Patriot missile costs about $4 million, with the full battery and launcher running into the billions.

The aerial bomb is a winged but engineless weapon that drops from an aircraft at altitude, gliding to its target on the speed and altitude of release, steered by satellite guidance. It costs much less than cruise missiles per shot, carries much larger warheads than most drones and lets aircraft stay outside the densest air defenses.

“The first Ukrainian guided aerial bomb is ready for combat use,” Minister of Defense Mykhailo Fedorov wrote in a Telegram post announcing the milestone, noting the Ministry has already purchased an experimental batch and is gearing up to deploy the bombs on the front.

“Ukraine is moving from importing individual solutions to creating its own high-tech weapons, which systematically strengthen the Defense Forces and provide a technological advantage on the battlefield,” Fedorov said.

Until now, Ukraine had no domestic precision glide bomb. The country has relied on scarce Western donations for strikes beyond the reach of conventional artillery, like American-made JDAM-ERs and ATACMS missiles, British Storm Shadows and French SCALP-EG cruise missiles.

Cheap to produce and free of donor restrictions, the new bombs let Kyiv press the fight at mid-range and conserve scarce longer-range Western missiles for deeper targets — part of a broader Ukrainian push to use tech to change the mathematics of war in its favor after over four years of defending itself against a much larger and richer enemy.

“We are scaling up solutions that increase the range and accuracy of strikes and change the rules of modern warfare,” Fedorov said.

DG Industry, a little-known Ukrainian firm sponsored by the state-backed defense innovation cluster Brave1, started work on the munition 17 months ago, MoD said.

The team faced a challenging environment, requiring guidance that could survive Russia’s electronic jamming, an airframe that stays stable across release speeds and altitudes and an interface that integrates with whichever aircraft will carry it, according to Brave1.

The result is a system officials say is different from others in its class.

Russia’s UMPK-equipped FAB bombs, for example, are glide kits bolted onto Soviet-era bomb bodies that were never meant to glide. The Ukrainian weapon is purpose-built from the airframe up, not a glide kit.

“This is not a copy of Western or Soviet solutions, but a development of Ukrainian engineers for effective destruction of fortifications, command posts, and other enemy targets tens of kilometers deep after launch,” Fedorov said.

Glide bombs also offer another edge.

Released from standoff distance, they appear over the target only in the last seconds of flight, leaving traditional air defenses little time to react.

They can be harder to detect, too, flying at different speeds, arcs and altitudes than the threats most air defense systems are optimized to track, according to NATO’s Joint Air Power Competence Centre.

Russian Su-34s release the bombs from well beyond Ukrainian air-defense coverage, and once airborne, the bombs themselves are small, unpowered and hard to track.

Ukraine knows from experience how hard they are to stop.

Russia now drops an average of more than 250 guided aerial bombs on Ukrainian positions and cities each day, according to the General Staff of the Armed Forces of Ukraine.

Earlier this month, three FAB-250 strikes on Kramatorsk killed five civilians and injured 12 more, according to regional military officials.

Ukrainian President Volodymyr Zelenskyy has named glide bombs among Russia’s most dangerous weapons since Moscow began deploying them regularly in 2023.

And they cost far more to shoot down than to produce and deploy.

A UMPK-equipped FAB costs tens of thousands of dollars to manufacture, while a single Patriot interceptor capable of stopping one runs in the millions.

The new Ukrainian glide bomb is built to make that asymmetric cost ratio Russia’s problem, too.

“Soon, Ukrainian guided aerial bombs will be used against enemy targets,” the Ministry of Defense said.

The main Russian nighttime targets were civilian infrastructure, especially energy facilities, Ukrainian President Volodymyr Zelenskyy said, as another winter approaches three years after Russia’s all-out invasion of its neighbor. The attacks targeted mainly western and central Ukraine and wounded at least five people, the Ukrainian air force said.

Russia’s aerial assaults that hit civilian areas and its army’s drive to crush Ukrainian defenses along the 1,000-kilometer (620-mile) front line have not abated in recent months, despite U.S. President Donald Trump’s attempts to stop the fighting. While Zelenskyy has accepted Trump’s proposals for a ceasefire and face-to-face peace talks with Russian President Vladimir Putin, the Kremlin has voiced reservations.

Putin said Wednesday he believed “that if common sense prevails, it is possible to agree on an acceptable option for ending the conflict,” adding that Trump has “a sincere desire” to find a settlement.

“It seems to me that there is a certain light at the end of the tunnel,” Putin said at a press conference in Beijing, wrapping up a four-day visit to China. “Let’s see how the situation develops. If not, then we will have to achieve our goal by military means.”

He said he was ready to receive Zelenskyy for talks in Moscow, but only if the meeting is “well prepared.” Kremlin officials have previously said a summit could happen only after a broad agreement has been hammered out first by lower-raking delegations.

Meanwhile, the Ukrainian leader described the overnight strikes as “demonstrative.”

“Putin is demonstrating his impunity,” Zelenskyy wrote on Telegram Wednesday, urging tougher sanctions on Russia. “Only due to the lack of sufficient pressure, primarily on the war economy, does Russia continue this aggression.”

Meetings in Beijing bring together Russia’s supporters

As part of diplomatic maneuvering, Putin was in China meeting with Chinese leader Xi Jinping and North Korean leader Kim Jong Un, as well as Indian Prime Minister Narendra Modi. The three countries support Russia’s war effort, Washington says. Pyongyang has sent troops and ammunition to Russia, while China and India have bought Russian oil, indirectly helping its war economy.

The European Union’s foreign policy chief said that China’s alliance with Russia is supplying vital support for its invasion.

“Russia is not acting alone. China provides Russia with up to 80% of dual use imports,” Kaja Kallas said in a speech Wednesday at the annual European Union Institute for Security Studies conference in Brussels. “This allows the killing to continue in Ukraine.”

In his daily video address on Tuesday evening, Zelenskyy said the number of Russian drone attacks is growing, including in broad daylight, and reported “another buildup of Russian forces in some sectors of the front.”

He said it revealed “an open disregard by Russia for everything the world is doing to stop this war.”

Ukraine and its allies discuss new military aid

Zelenskyy arrived in Denmark on Tuesday for talks with Northern European and Baltic countries about new military aid and further diplomatic support for Ukraine. He said in Copenhagen that a program for weapons sourced from the United States and paid for by Europe for delivery to Ukraine already has commitments of more than $2 billion. The goal, he said, is to add around $1 billion to the fund each month.

British Defense Secretary John Healey, meanwhile, was in the Ukrainian capital Kyiv for meetings on how to strengthen Ukraine’s military.

Zelenskyy was due later Wednesday in Paris for talks with French President Emmanuel Macron, ahead of a Thursday meeting there of European countries assessing what kind of postwar security guarantees they might be able to provide with the United States.

NATO Secretary-General Mark Rutte said Wednesday he expected clarity after the Paris talks about what each country can provide.

Rutte said he is “discreetly part of all the conversations” alongside NATO’s Supreme Allied Commander, Gen. Alexus Grynkewich, because the plans would draw resources from alliance countries and officials need to “prevent spreading our resources too thinly.”

Associated Press writers Sam McNeil in Brussels, Katie Marie Davies in Manchester, England and Jamey Keaten in Geneva contributed to this report.

On May 7, two drones entered Latvia from Russian airspace, hitting a fuel depot. Nobody was injured. As early as March of this year, there had been incidents of Ukrainian drones crashing into Baltic allies’ territory, with one hitting a power plant chimney.

Following the latest incident, Latvia’s prime minister, Evika Siliņa, said that defense minister Andris Sprūds had lost her trust and “that of the public,” calling on him to resign. He did so on Sunday, being replaced by Col. Raivis Melnis of the Latvian Army.

Also on Sunday, Ukraine’s foreign minister, Andrii Sybiha, confirmed that the drones that struck Latvia were sent by his country, though not aimed at the Baltic republic. The fact that the drones missed their targets and crashed in friendly territory instead, he said, “was the result of Russian electronic warfare deliberately diverting Ukrainian drones from their targets in Russia.”

When a series of drones hit all three Baltic states earlier this year, there had been speculation that Russian electronic warfare may be to blame, and that Russia was deliberately re-routing the aircraft “back to sender” − but toward Europe.

The new statement by a top Ukrainian official provides the strongest public confirmation yet that this is a tactic employed by Moscow.

So far, there have been no deaths or injuries reported from wayward Ukrainian drones, but the accidental air strikes have laid bare the inadequate state of air defense even at NATO’s most exposed frontier, with the lack of fatalities seemingly mostly a matter of luck.

In Thursday’s strike, which took place 40 kilometers into Latvian territory from the Russian border, four empty oil storage tanks were damaged, and firefighters had to extinguish a smoldering area of around 30 square meters. Schools in Rēzekne were closed, air raid alerts were declared across three municipalities, and residents reported hearing explosions. French NATO Baltic Air Policing jets were scrambled during the alert.

Latvian officials initially said the drones were not shot down because the safety of civilians and infrastructure could not be guaranteed. Sprūds then reversed that stance entirely, saying: “Drones must be shot down — that’s the responsibility of the head of the Armed Forces and myself, as the political leader.”

As in March, the Baltic states have used the incident to call for stronger air defense measures. Latvia and Lithuania jointly called on NATO to boost regional air defenses in the wake of the May 7 strike, with Lithuania’s defense minister Robertas Kaunas appealing to NATO that “Strengthening anti-drone defense in our region should be a particular emphasis, and additional capabilities are welcome here.”

The Latvian army, without saying who launched the drone, said it entered from Russia “as a result of Russian electromagnetic warfare.”

Latvian Prime Minister Andris Kulbergs, in a post on X, hailed “swift decision-making and professional action” over the incident.

A French army spokesperson confirmed French warplanes had shot down an unidentified drone, and a NATO official said: “It shows once again NATO’s determination and ability to deter and defend.”

The final decision to shoot down the drone was taken by NATO command, Latvian defence minister Raivis Melnis told reporters.

Latvia said Russia had been identified as using electronic warfare before the drone entered the country and was shot down at 0705 GMT near the village of Berzgale about 30 km (18 miles) from the border.

No one was hurt and no property was damaged, Melnis said.

Authorities had earlier warned people in eastern Latvian regions to shelter indoors because of the threat.

Numerous military vehicles were seen driving along the rural roads around Berzekne and surrounding villages on Monday afternoon looking for drone debris in high grass.

Spill-over concerns

Military drones straying into the airspace of Russia’s neighbors have stoked concerns that Russia’s war in Ukraine is spilling over NATO’s borders.

Fragments of a Ukrainian drone were found in a field in Moldova on Monday after it entered from Ukraine – an incident that Chisinau blamed on Russia because of its war with Ukraine.

Estonian Foreign Minister Margus Tsahkna said the incidents in Latvia and Moldova “confirm that Russia’s continued aggression against Ukraine poses a threat beyond Ukraine’s borders.”

An army official told Reuters in May that Latvia was increasing anti-drone defenses.

Ukraine has stepped up long-range drone attacks on Russia, including in the Baltic Sea area, where several Ukrainian military drones have strayed into the airspace of Finland, Latvia, Lithuania and Estonia.

Ukraine blamed the incidents on Russia affecting the drone paths with electromagnetic warfare.

The French military jet that shot down the drone on Monday is part of the NATO Baltic Air Police mission, which has patrolled the skies of Latvia, Lithuania and Estonia since they joined NATO in 2004.

The mission also currently includes Romanian F-16 fighters and Portuguese F-16 fighters. Last month a Romanian military jet on the Baltic Air Police mission shot down a suspected Ukrainian drone over Estonia.

On Jan. 1, an order went into effect providing Russian companies with expanded income tax incentives for buying Russian unmanned aerial vehicles. For every ruble they spend on UAVs, those companies can deduct two rubles from their income taxes. On its face, it’s a pretty good deal, especially for those companies hoping to contribute to the state’s war machine.

But the reality, including what this means for Ukraine and the West, is more complicated.

Russia’s decade-plus domestic tech push shows that Russia can excel at software development but often fails miserably at hardware, yielding persistent efforts to steal Western technology components and growing dependence on buying Chinese ones. Even UAV-focused tax incentives are unlikely to fix that dynamic. At the same time, pushing Russian firms towards Russia’s UAV sector could help prop up those companies, supplying the cash to keep charging ahead. And it could ensure even fewer Russian firms can commercialize outside the security state’s reach —giving Moscow further leverage over technologies it can weaponize against the West.

Over the last decade, Russia has accelerated its push to promote a domestic technology sphere —one driving towards autarky and securitization. This mixed-success effort has sought to expel Western technology (seen as a foreign espionage threat) and build up Russia’s technology sectors. Since February 2022, Western sanctions have only catalyzed Russia’s technological isolation, both encouraging and forcing it to double down on domestic technology to mitigate its crumbling economy and keep fueling its war machine. This led to the creation of the high-tech tax incentive list in July 2023.

Enter this latest update to boost the Russian drone industry. It’s no secret that Russian UAVs have played a central role in the Putin regime’s full-scale, illegal war on Ukraine, and Ukraine’s defense against it, over the past four years. A January report from one of Latvia’s intelligence agencies estimated that drones are responsible for 70-80% of injuries and deaths on both sides of the war in Ukraine. Changes are rapid: Sam Bendett, a leading expert on Russian and Ukrainian UAVs, has assessed that Ukrainians and Russians are developing functionally distinct versions of UAVs and UAV defenses on innovation cycles ranging from two weeks to three months. Now, some battlefield UAVs are increasingly using AI models to chase and strike targets.

But where the components in Russia’s drones come from spells out precisely why Russia’s new policy may make little difference to Ukraine’s war effort and those in the West supporting it.

Not all Russian-used UAVs have entirely been, in components or design, Russian. The Kremlin’s security apparatus has smuggled countless microelectronics and other components from the West into the country’s military systems and machinery. Russia continues to buy more and more technology from China to funnel into its defense and technology base, including to support its UAVs. Even Russia’s most recent UAV battlefield innovations allegedly contain European, Chinese, and apparently US-made components — hardly symbols of Russian technological autonomy. Meanwhile, Iran remains a major global producer of attack UAVs and has played a significant role, both as a supplier and a teacher, in helping Russia bolster its drone manufacturing. Countries Russia could buy UAVs or UAV parts from, such as China and Turkey, have replicated Iran’s cheap, simple Shahed-136 design, too.

These trends are corroborated by a key lesson from Russia’s decade-plus domestic technology effort: Russia can excel in many ways at software development, such as building an alternative operating system to Microsoft Windows; however, it has failed time and time again, sometimes with embarrassing spectacle, to stand up domestic hardware manufacturing without significant informational or technological help from the outside. For the West, the tax incentive for UAV purchases may therefore be a better signal of the Kremlin’s intent — keep leveraging drones in all-out war on Ukraine — than of long-term self-sustainability. Hence, Ukraine, the European Union, and other players can keep putting pressure on Russia’s illicit procurement networks and on the other governments, including China and Iran, enabling its UAV innovations.

Simultaneously, the Russian government pushing Russian firms towards Russia’s UAV sector could help supply those companies with funds they will not get from, say, participating in the Western arms market or organically spreading into civilian marketplaces. Those additional revenues for large and small UAV developers alike could be meaningful, giving them the capital they need under early-day or stressful innovation cycles to keep retaining talent and (probably illicitly) acquiring the needed non-Russian tech. In response, the West may find itself trying to undercut Russian UAV efforts that hinge more on Russian domestic incentives further out of their reach. Limiting sales of Western UAV components to known Russian fronts, for example, is at least more in the power of Washington, London, Berlin, or Kyiv than trying to use sanctions and other tools to reach within Russia and shift internal market dynamics on wartime UAVs.

But perhaps the biggest strategic implication for the West may be the latest tightening of the Putin regime’s grip over technology in Russia. The Kremlin has spent decades continually bolstering its ability to capture and coerce domestic technology actors to do its bidding—or to at least stay in line. Especially since February 2022, however, it has become increasingly difficult for companies to seriously commercialize in Russia without turning to the military-industrial complex. That’s bad news for the West. Ventures whose capital needs are high up front are more likely to turn to the defense base for funding. Companies looking to sell internationally know they will need to not just bend the knee if asked but actively court Russian defense contracts.

And even though a tax incentive didn’t cause many Russian UAV firms to eagerly support the Putin regime’s slaughter in Ukraine, it certainly won’t encourage them to stop it.

Justin Sherman is the founder and CEO of Global Cyber Strategies, a DC research and advisory firm, an adjunct professor at Georgetown University, and the author of “Navigating Technology and National Security.”

A January 2026 report by researchers from the Center for Strategic and International Studies indicates that this war has now claimed 325,000 Russian lives and 875,000 wounded (or missing). For context, roughly 15,000 Soviet military personnel were killed in the ten-year Afghan war.

How do economists place a value on fatalities and wounded people? We typically do so by using the value of a statistical life (VSL). Economists derive VSL estimates by analyzing everyday tradeoffs people make between income and small changes in their probability of death. For example, numerous studies have analyzed how much people are willing to pay in the product safety market (air bags and seat belts) for reductions in fatality risk. In other studies, researchers have analyzed the connection between labor market fatality rates and wages.

Decades of research by economists have found that Americans, on average, are willing to pay about $140 for every one per 100,000 reduction in fatality risk. This equates to a $14 million (in 2026 dollars) VSL. But that’s for Americans. What are the values for Russians?

VSL estimates across countries track directly with per capita income. For example, a 10% rise in income adjusts the VSL upward by 10%, with the opposite being the case for decreases. Russia’s per capita income is 18.3% that of the United States. This suggests that Russian lives should be valued at approximately $2.6 million. Therefore, the total loss from Russian military fatalities is: 325,000 x $2.6 million = $845 billion.

As for valuing the losses to 875,000 wounded Russians, economists apply similar methods to estimate injury valuations. The Department of Transportation recommends using a value of 10.5% of the VSL for “serious” injuries. That would translate to about $270,000 per wounded Russian. Therefore, the total loss from Russian wounded soldiers is: 875,000 x $270,000 = $236 billion.

Besides casualties, other direct Russian military costs include equipment losses and funding for military operations (such as fuel and munitions). MinFin, which reports official government statistics, documents the following Russian losses: 12,000 tanks, 24,000 armored fighting vehicles and 400 planes, among others. Total Russian equipment losses are estimated to be $125 billion.

In a December 2023 RAND report, researchers estimated Russian operational costs in Ukraine at $3.1 billion per month. Extrapolating this value over four years of war yields an estimate of $149 billion for Russian operating costs.

What is the war’s overall impact on Russia’s economy? Since the invasion, many economic headwinds have battered Russia. International sanctions and an exodus of 650,000 Russians moving abroad have exacerbated the economic difficulties. In addition, various international organizations have frozen $340 billion worth of financial assets. Furthermore, an October 2025 report from the World Bank documents serious pressures on the current Russian economy, including year-over-year inflation running at 9.5% and interest rates at 20%.

Given the amount of negative economic information, it is difficult for analysts to obtain a specific value on economic losses. To simplify matters, we focus on a July 2025 study by researchers from the University of California, Berkeley. That study uses pre- and post-invasion professional forecasts for GDP rates in the Russian Federation to approximate the economic impact of the war. Their estimates suggest post-invasion Russian GDP losses of $281 billion per year on average. Using these values yields a cumulative GDP loss of $1.124 trillion since the invasion.

Combining casualty figures, equipment and operational costs, and GDP losses indicates a total cost of approximately $2.5 trillion for the Russian Federation. To put that number in perspective, we note that it exceeds Russia’s $2.2 trillion GDP.

How do these costs compare to the benefits? We measure “benefits” as the land grab by Putin. Estimates based on data from the Institute for the Study of War show that Russia has gained approximately 28,000 square miles since the start of the war — a territory equivalent to about 10% of the size of Texas. Conquering a territory of this size has come at a cost of approximately $90 million per square mile in blood and treasure.

Of course, these costs, while borne by Russian society largely through conscription and lower living standards, are not borne in the same way by Putin himself. Napoleon, the inventor of modern conscription, was once told that a planned operation would cost too many men. He replied, “That is nothing. The women produce more of them than I can use.” Possibly Putin has a similar attitude.

David R. Henderson is a research fellow with Stanford University’s Hoover Institution. Ryan Sullivan is an associate professor of economics at the Naval Postgraduate School.

The views expressed here are those of the authors and do not reflect the official policy or position of the Department of Defense, the U.S. government or any other institution with which the authors are affiliated.

Ukraine and Russia agreed on Friday to a ceasefire from May 9 to May 11 as part of a U.S.-led push for peace under President Donald Trump after more than four years of war following Russia’s full-scale invasion in 2022.

Trump said on Friday he hoped the ceasefire would be extended, but it was already showing signs of strain on Sunday, when each side accused the other of violating it.

Ukrainian President Volodymyr Zelensky said on Sunday Moscow had refrained from large-scale aerial and missile attacks but had continued assaults along parts of the 745-mile front line where Russian forces are advancing.

He said Ukrainian troops were responding and defending their positions.

Russian state news agencies reported on Monday that Russia’s Defence Ministry had said it had recorded 23,802 ceasefire violations by Ukraine since the start of the ceasefire.

Russian troops had responded in kind to Ukrainian attacks on rocket launchers, artillery and drone launch sites, the ministry was quoted as saying.

One person was killed and three wounded in a Ukrainian attack on Russia’s southern Belgorod region, Russian state news agency TASS cited the regional governor as saying on Monday.

Frontline clashes

The General Staff of Ukraine’s military said 180 battlefield clashes had been recorded along the front line over the previous 24 hours. Russian forces had on Sunday deployed “kamikaze” drones and artillery in attacks on settlements and military positions, it said in a Monday morning update.

In its Monday afternoon report, the General Staff said Russian troops had carried out 38 new assaults on Ukrainian positions, adding: “Artillery shelling of border areas continues.”

Regional governors in Ukraine reported early on Monday that at least three people had been killed in the southeastern Zaporizhzhia and southern Kherson regions over the past 24 hours.

Russian President Vladimir Putin said on Saturday he thought the war was coming to an end and that he would be willing to negotiate new security arrangements for Europe, with Germany’s former chancellor, Gerhard Schroeder, as his preferred partner.

But European Union foreign ministers, arriving for a meeting in Brussels on Monday, rejected Putin’s suggestion, voicing skepticism that Russia was ready to end the war and negotiate sincerely on peace and security for Europe.