Sanctions Will Continue to Work
- Admin of the NAM
- Apr 2
- 5 min read
Based on an analysis of macroeconomic data for 2025 — early 2026, the state of global commodity markets, and logistics reporting, a conclusion can be drawn: sanctions pressure on the Lukashenko regime continues to work effectively. The reorientation of cargo flows to Russian infrastructure has not led to a full recovery of export revenues. On the contrary, it has created a critical dependency on Russian ports, which are currently vulnerable to attacks by Ukrainian UAVs. This is compounded by unfavourable conditions on the global fertiliser market and Belarus's growing foreign trade deficit.
1. Blockade of Traditional Logistics and Dependency on Russian Ports
European sanctions, in particular EU Regulation No. 765/2006 (Article 1i), have erected a rigid legal barrier. The European Commission's interpretation of the concept of "transfer" has completely deprived the Lukashenko regime of access to transit through the ports of the Baltic states (primarily Klaipėda) and the services of Lithuanian Railways. In response, Belarus was forced to reorient its cargo flows to 20 Russian ports (Baltic, Azov, Caspian, and Black Sea basins). The key hub became the Grand Port of Saint Petersburg and especially Ust-Luga, where by the end of 2025 the volumes of transshipment of Belarusian petroleum products had grown several times over, and structures such as "Belbudtsentr" are investing in the reconstruction of terminals.
Analysis of transshipment dynamics: Despite the manifold increase in the use of Russian ports, the overall freight turnover statistics of Belarus show a decline: minus 2.6% at the end of 2025 and a continued fall of minus 0.9% in January–February 2026 (Belstat data). This means that Russian infrastructure has been unable to physically and economically compensate for the loss of the short and inexpensive Baltic route.
2. The Ukrainian Drone Factor: New Risks for Petroleum Products
The reorientation towards Ust-Luga and other Russian ports has made Belarusian exports (primarily petroleum products) hostage to the military situation.
Ukrainian drone strikes on terminals create a direct threat of physical destruction of cargo and infrastructure.
Even with Russian authorities' claims of "timely extinguishing" and no casualties, the Ukrainian side records a slowdown or halt in shipments following strikes.
Price and margin dynamics: On the global market, petroleum product prices are subject to fluctuations; however, for Belarus the main problem is not the global price but the discount and logistics costs. The increase in transportation distance along Russian railways, transshipment at Russian ports, and rising vessel insurance costs due to UAV strikes are critically reducing the profitability of Belarusian petroleum exports.
3. Stagnation in the Potash Market: The Failure of Attempts at Price Dictation
The Belarusian potash sector has found itself in a trap.
Despite artificial attempts to restrict supply, global potash prices are stagnating.
The market is oversaturated. Competitors are actively expanding capacity: production growth is expected in Canada, Russia, and Laos (through Chinese investment).
Dynamics: In conditions of global supply surplus, Belarus cannot compensate for the decline in export volumes through price increases. Sanctions force the sale of fertilisers at a discount through complex logistics chains, while competitors (such as Nutrien, with 20% of the market) are capturing market share.
4. Trade with the EU: Asymmetry and Growing Deficit
Sanctions have led to a sharp deformation of Belarus's trade balance, confirmed by 2025 data:
The trade deficit is breaking records: in 2025, the goods deficit reached nearly $7 billion (Belstat), while the overall goods and services deficit stood at $1.8 billion (National Bank).
Imbalance in growth rates: in the same year of 2025, imports grew by 5.8%, while exports grew by only 2.6%.
Decline and structural shift in trade with the EU: In 2025 (based on Comext / UN Comtrade data), a precipitous fall in key indicators was recorded.
Export from the EU to Belarus: a fall of nearly 1.6 times; imports from Belarus to the EU: a fall of more than 3 times. Total trade turnover declined.
Imports of Belarusian goods into the EU have been almost entirely eliminated (reduction from €1.3 billion to €0.4 billion), indicating a near-complete blockage of supplies of sanctioned products (potash, timber, metals, petroleum products).
Meanwhile, imports from the EU continue, but are of a critical consumption character: Belarus is purchasing medicines, medical devices, automobiles, agrochemicals, and seeds.
Analysis: Export sanctions are working to deplete foreign currency earnings. Belarus cannot sell its main goods on the premium markets of Europe, but is forced to spend foreign currency on purchasing critically important European imports.
5. The US Sanctions Factor: Why Their Hypothetical Removal Would Not Change the Picture
Even if the United States fully or partially lifts its sanctions, the overall situation for the Lukashenko regime will not improve. There are three key reasons for this:
The primacy of the European logistics blockade: The main barrier to exports is not the closure of the American market, but the physical impossibility of transporting goods through the nearest Baltic ports. As long as the European ban on transit (transfer) through EU territory remains in force, Washington's permission will not give Belarusian potash a short route to the sea.
The "over-compliance" effect: The global financial and transport systems are deeply integrated. International banks, major maritime carriers, and ship mutual insurance clubs (P&I) will continue to avoid handling Belarusian cargo for fear of violating European sanctions or suffering reputational damage. The lifting of US sanctions will not cancel the toxicity of these cargoes.
Market specifics: For Belarusian petroleum products, the United States was never the primary market (that was Europe and Ukraine). As for potash, over the period sanctions have been in effect, global consumers have restructured their supply chains. Regaining lost positions on the global market, having at one's disposal only expensive and dangerous logistics through Russian ports, will be virtually impossible even in the absence of an American embargo.
Conclusions and Forecast
Logistics deadlock: The bet on constructing one's own terminals at Ust-Luga requires long-term investments whose payback period is in question due to systematic UAV strikes on Russian port infrastructure.
The ineffectiveness of half-measures: A weakening of US sanctions is incapable of reviving exports, since physical access to optimal logistics is reliably blocked by European regulations, and global insurance and logistics companies avoid such risks.
Loss of market power: In the potash market, Belarus has lost the ability to influence global prices. Reductions in production volumes no longer lead to price increases due to the commissioning of new capacity by competitors.
Deterioration of macroeconomic indicators: The growing goods deficit of nearly $7 billion and the decline in overall freight turnover are direct mathematical proof that "sanctions work." The Belarusian economy is falling short of export revenues while maintaining a high dependency on imported technologies and goods, which in the medium term will exert enormous pressure on the national currency exchange rate and foreign currency reserves.
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