This report examines how Russia continues to monetise cheap domestic gas by converting it into fertilizers and plastics that enter the EU through third-country re-export hubs. Despite sanctions on Kremlin-linked oligarchs, artificially low Russian gas prices function as a de facto industrial subsidy, enabling firms such as Uralchem, PhosAgro, EuroChem, and SIBUR to sustain large-scale exports at costs European producers cannot match. Drawing on detailed trade and energy-use data, the analysis traces the rerouting of Russian ammonia, fertilizers, and polymer resins through Türkiye, Kazakhstan, Uzbekistan, Morocco, and Egypt, where they are blended, converted, or relabelled before reaching the EU as third-country goods.

This system is now structurally embedded. It rests on vertically integrated logistics chains, the rapid expansion of Central Asian petrochemical capacity, and the dual-use profile of key chemical intermediates that feed directly into Russia’s military-industrial base. By targeting individuals rather than the corporate networks that manage production, storage, and re-export, EU sanctions have left the core of this trade untouched. Only systemic enforcement tools, which are capable of tracking embedded energy, re-exported feedstocks, and high-risk logistics nodes, can close these loopholes and stop Russian petrochemical revenues from leaking back into the Kremlin’s wartime economy.