Sanctions Have Not Cut Off Another Important Source Of Revenue For Russia

It's time to focus on Russian fertilizers.

During the war, the Russian fertilizer industry not only retained its key foreign markets but also became one of the sources of funding for the Kremlin’s war machine. At the same time, most of the industry has not yet been subject to full-scale Western sanctions, writes CEPA.

After the start of the full-scale war, Russian fertilizer shipments to Europe surged. Against the backdrop of the energy crisis and a decline in their own production, EU countries became even more dependent on Russian raw materials. In 2022–2023, rising gas prices led to the temporary shutdown of approximately 70% of European fertilizer production capacity.

Russia, on the other hand, gained a significant advantage. Its producers had access to affordable gas and continued to ramp up exports. Shipments of nitrogen fertilizers to the EU rose by 27%, imports of fertilizer blends doubled, and Russia became the EU’s leading supplier of ammonia.

The situation began to change only in 2025, when the EU imposed tariffs on Russian fertilizers. The U.S., however, never imposed direct sanctions against them. Moreover, U.S. authorities had previously explicitly informed importers that Russian fertilizers could be purchased without facing sanctions restrictions.

But the problem is not just about money. Russian chemical plants produce acids and nitrogen compounds necessary for the manufacture of explosives. Investigations point to a direct link between the fertilizer industry and the expansion of explosives production for the Russian military.

“The West cannot allow Russia to use the fertilizer industry to increase its revenue and strengthen its military capabilities,” the authors note.

“Uralchem” and “Eurochem,” both linked to influential Russian businessmen, are identified as the largest suppliers of explosives to the Russian military.

It is time for the U.S. and Europe to gradually phase out Russian fertilizers from their markets by increasing their own production. Thanks to cheap natural gas, the United States is capable of replacing Russian supplies without causing a serious shortage or price increases.

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