Russia faces market crash and political exclusion amid Ukraine conflict

Russia is facing heightened internal and economic instability amid the ongoing conflict in Ukraine. The Moscow Exchange experienced its sharpest intraday drop since the 2022 mobilization, with the main index falling 4.29 percent on Friday. This market collapse followed statements from Foreign Minister Sergei Lavrov, who rejected proposals to freeze the conflict along current frontlines and warned of tougher responses toward nations supporting Kyiv. Major energy companies, including Gazprom, Lukoil, and Rosneft, saw significant declines.

Simultaneously, political tensions are rising ahead of the State Duma elections scheduled for September 18–20. Russian authorities have barred the Jabloko opposition party from participating in the elections. As the only officially registered party opposing the war in Ukraine, Jabloko leader Nikolai Rybakov stated that the exclusion represents a refusal to engage with voices questioning government policy.

These developments coincide with increased Ukrainian drone strikes targeting Russian energy infrastructure deep within Russian territory, further complicating the domestic security and economic landscape.