Russia's Secret Operation: Here's What's Happening

Rising Cargo Volumes and Military Armament

Cargo volumes to specific industrial clusters involved in Russian shipbuilding and maintenance reveal a significant increase in military-related materials, the study showed.

Russia's Secret Operations

In 2024, the shipyard on the Baltic Sea in St. Petersburg consumed 98% more steel than in 2022, the year Russia invaded Ukraine. Over the same period, steel consumption at the Vyborg shipyard rose by 93%. Another shipyard in St. Petersburg saw a 10% increase in consumption.

Investments have also been directed toward expanding the production capacities of northern shipyards in the Baltic and White Seas, as well as those on Russia’s eastern coast. Notably, the Severomorsk industrial cluster on the Kola Peninsula has increased its activity: in 2024, it received 77,000 tons of goods, mainly oil and steel products, compared to just 33,000 tons in 2021.

Naval Expansion

According to the report, beyond increased steel shipments, several other indicators suggest that Russia’s objective is not merely to maintain its current military capabilities:

• Shipments of explosives
• Deliveries of specialized equipment
• Investments in fleet expansion

T

he Russian Navy had a more significant role early in the Ukraine conflict. However, the Black Sea Fleet has experienced major losses since then.

The overall picture, the report concludes, suggests that “the rearmament of the Russian Navy is not a defensive response to losses in Ukraine, but a calculated effort to increase its power and prepare for future conflicts with the West.”

Russia is also investing in the production of submarines and vessels designed for the Arctic region, as well as integrating advanced weapons systems into its naval fleet. Weapons development priorities imply that Russia is preparing for potential operations, particularly in the northern seas.

Dependence on Imports

Although military-related production is growing rapidly, Russia remains heavily dependent on imports for critical components. Ammunition and missiles are reportedly supplied by North Korea, while machinery and other parts come from China.

The study estimates that 260,000 tons of explosives entered Russia through its southern border crossings and Far Eastern ports, 6.5 times more than in 2022. Nearly all these imports appear to have originated from the Sea of Japan, namely from North Korea.

Companies Operating in the “Grey Zone”

The Ukrainian university report also reveals that several companies continue to support Russia’s military industry, largely free from sanctions.

The most prominent of these so-called “bottleneck companies” is Barricade, a construction firm based in St. Petersburg. As of 2021, Barricade supplied one-fifth of all construction materials used by Russia’s military industry. By 2024, 80% of the company’s business was tied directly to military contracts.

Barricade holds a monopoly on at least one product: it produced 97% of all reinforced concrete slabs used by Russia’s military-industrial complex, vital for constructing airbases, hangars for fighter jets and bombers, military housing, and other defense infrastructure.

Investigators speculate that Barricade may have avoided sanctions due to its “apparent civilian nature.”

Recommendation: Expand Sanctions

The KSE researchers recommend that Western sanctions be expanded to target Russian companies that, while officially civilian, produce key products for the military sector.

They also urge stronger sanctions against Russian logistics companies that facilitate the import of critical machinery and components, especially from China.

The report warns that easing sanctions would be a strategic mistake. Maintaining and intensifying sanctions would further strain Russia’s military industry, which already suffers from structural weaknesses, import dependency, and diminishing supply chains. Sanctions also hinder technological modernization of the armed forces, thereby reducing Russia’s long-term military capabilities.