• The US is cracking down on Russia's oil industry, with broader sanctions introduced on Friday.
• The US and UK are blocking two Russian energy giants and other entities in the nation's oil trade.
• Russia's energy revenue is expected to account for more than a quarter of the nation's budget in 2025.

The US is tightening the screws on one of the key pillars of Russia's wartime economy: its energy business.

The US said it would join the United Kingdom in imposing wider-sweeping sanctions against Russia's oil industry on Friday, which include blocking Gazprom Neft and Surgutneftegas, two of Russia's largest oil producers.

Sanctions will also be imposed on the producers' subsidiaries, as well as 183 tankers associated with Russia's oil trade, according to a statement from the Treasury Department. Some of the sanctioned tankers were part of Russia's shadow fleet, a group of ships Russia is known to rely on to trade oil under the radar.

The new sanctions also targeted several "opaque traders" involved in Russia's oil business, as well as oilfield service providers and prominent executives at Russian energy companies, the statement added.

"The United States is taking sweeping action against Russia's key source of revenue for funding its brutal and illegal war against Ukraine," Treasury Secretary Janet Yellen said in a statement. "With today's actions, we are ratcheting up the sanctions risk associated with Russia's oil trade, including shipping and financial facilitation in support of Russia's oil exports," she later added.

Western nations have targeted Russia's energy trade since the early days of the Ukraine war, given that Russia's energy revenue makes up a big chunk of the nation's war budget. Oil and gas revenue is expected to account for around 27% of Russia's federal revenue in 2025, according to a draft budget viewed by Reuters in September.

Consequences from existing measures, like the ban and $60 price cap on Russian oil, have already started to hit Moscow's cash flow. Russia's total energy revenue plummeted by nearly a quarter in 2023, according to data from Russia's finance ministry.

The nation's oil and gas revenue is also expected to decline through 2027, the draft budget showed.

Economists share a grim outlook for Russia's economy, with some experts expecting the nation to soon undergo a stagnation that could mirror the decline of the Soviet Union. The nation is now likely feeling the full impact of international sanctions, which could produce enough strain to bring an end to the war this year, according to one Washington, D.C.-based think-tank.

• Russia's railway industry is in the midst of a big downturn, according to one Russian research firm.
• Investment in Russia's railways is being slashed by nearly a third next year, TASS reported.
• It complicates Russia's trade with China, which has relied partly on rail transport.

One of Russia's key trading channels with China is facing serious snags. That's a result of burdens stemming from Russia's war-driven economy, which have fueled a big slowdown in the nation's rail industry — a vital means of trade between Moscow and Beijing.

Russia's rail industry is in its worst slowdown since the Great Financial Crisis, with the downtrend "still going strong," according to an analysis from the Russian research firm MMI Research. Freight volume transported by Russian Railways, Russia's state-owned rail system, slumped 5% in the first 11 months of 2024 compared with the same period last year, according to MMI data cited by Bloomberg.

The slowdown is driven in part by Russia's need to ship war-related materials, which have worsened supply bottlenecks and slowed the trade of key commodities, like coal and aluminum, the outlet reported.

Investment in Russia's railroads is also being slashed, partly due to high interest rates in the nation, according to a report from the state-owned news agency TASS. Russian Railways said it would earmark just 890 billion rubles, or $8.5 billion, for its investment program next year, a 30% cut from investment in 2024, TASS reported.

The firm is mulling whether it should cut investment by another third through the end of the decade, the Russian outlet Kommersant reported. Russian Railways did not immediately respond to a request for comment from Business Insider.

The changes spell bad news for Russia's trade with China, which has leaned on railway transport amid Western sanctions. Russia poured billions into its railways earlier this year partly to accommodate its increased trade with China.

The changes also speak to the growing costs of Russia's war against Ukraine, which have produced myriad economic problems for Moscow.

Russia's central bank raised interest rates to a record 21% earlier this year in an effort to lower sky-high inflation. The bank kept interest rates level in their policy decision last week, due to concerns about "excessive cooling" in Russia's wartime economy, according to the nation's top central banker.

• Russia's labor shortage has businesses turning to teens and retirees to fill positions.
• Openings for workers as young as 14 or older than 55 have jumped.
• The nation was short around 5 million workers last year, Russia's Academy of Sciences estimated.

Russia's wartime economy is dealing with a difficult labor shortage, and the problem is pushing companies to broaden the age range of new hires as they look to fill their ranks.

An analysis cited by the Russian news site Nakanune showed that job openings tailored to "young applicants" — as young as 14 — soared 119% year-over-year in the first quarter. That adds to last year's 289% increase, with openings for young workers rising from 14,500 to 42,000, the analysis found.

In catering and retail, the demand for workers between the ages of 16 and 18 has doubled, Bloomberg reported, citing an analysis from the Russian ad agency Avito.

Demand is also growing for older workers. Openings for specialists over the age of 55 climbed 65% in the culture and education sectors in the third quarter, while openings for specialists in the services sector rose 12%, according to a study viewed by the Russian state-owned news agency TASS.

The average age of specialists has also climbed by three to six years since 2022, per Bloomberg, citing an analysis from the Russian recruiting agency SuperJob.

Russia has also dialed back rules to allow younger people to work, or to allow retirement-age people to continue working.

Last year, Putin approved the employment of workers as young as 14 in some circumstances, though Russia's legal working age is still technically set at 16 years old.

In 2018, Russia raised the retirement age from 60 to 65 for men and from 55 to 63 for women. The nation also plans on raising pension payments for working retirees early next year, with retirement-age people who choose to work potentially receiving an average minimum increase of 1.3 million rubles a year, or $12,264, according to estimates from Russia's Deputy Prime Minister.

Russia's working-age population took a hit in 2022, when millions of Russians fled the nation after the start of the war in Ukraine. The nation is short around 2 million workers, Bloomberg reported, citing an analysis from FinExpertiza, one of the nation's largest auditors. Last year, the Russian Academy of Sciences estimated the nation was short around 5 million workers.

Meanwhile, around 73% of businesses are experiencing a staffing shortage, according to polls conducted by Russia's central bank.