PDB Afternoon Bulletin | September 7th, 2026: Ukraine’s Drone War Costs Russia Billions & Kim Unveils Nuclear Destroyer

Mike Baker (0:11)

It's Monday, the 7th of September, welcome to the PDB Afternoon Bulletin. I'm Mike Baker, from your eyes and ears on the world stage. All right, let's get briefed. First up, Ukraine's drone war is hitting Russia right in Putin's pocketbook. New figures show the strikes are costing the Kremlin billions and impacting everything from fuel supplies to air travel. Later in the show, Kim Jong Un unveils a new destroyer that he says will be part of North Korea's nuclear response system, as Pyongyang pushes to build a more dangerous Navy. But first, today's afternoon spotlight.

As President Trump's envoys, Steve Whitgoff and Jared Kushner wrap up a weekend of meetings with Moscow and Kiev, part of the White House's renewed efforts to restart peace talks, we're getting a clearer picture of the economic pressure that Ukraine is putting on Russia. The Wall Street Journal has pulled together new data showing that the effects of Ukraine's long range drone campaign are now spreading through major parts of the Russian economy and increasingly being felt by ordinary Russians. The most striking acknowledgement has come from Vladimir Putin. According to the Journal, Putin said last week that Ukrainian attacks on Russia's economic infrastructure have caused losses equivalent to roughly 1% of the country's gross domestic product. That works out to be around $25 billion.

Putin dismissed those losses, how cavalier, as, quote, not critical for us, end quote. Well, perhaps what he meant was not critical for Putin. He is, after all, after all these years, one of the world's richest men. But for the Russian population in general, the damage is showing up in some unexpected places. Let's start with energy. Ukraine has spent months hammering Russian oil refineries with long-range drones. Those refineries processed about 3.8 million barrels of oil per day in August. A year earlier, they were processing roughly 5 million. The result has been fuel shortages and rationing in parts of the country. Russia, one of the world's largest crude oil producers, has resorted to importing gasoline, including from India. Moscow has also loosened fuel quality standards, so older Soviet-era refineries can increase supplies while restricting diesel exports. And according to official Russian statistics cited by the Journal, gasoline prices have risen by almost 20 percent since the beginning of the year. That creates another headache for Moscow, inflation. Russia's Central Bank has been trying to bring inflation down toward its 4 percent target. Instead, it remains around 6 percent, with higher fuel costs adding additional pressure. But the disruption goes well beyond energy. Since July, Ukraine has reportedly carried out more than 30 attacks against logistics centers used by wild berries and ozone, as Russia's two largest e-commerce companies. Some of those attacks caused enormous warehouse fires, and destroying merchandise belonging to thousands of independent merchants.

A Moscow-based research firm estimates that the strikes have caused more than 10 billion, with a B, dollars in damage to infrastructure and goods, and could produce another 12 billion dollars in lost sales over the coming year. Those losses are beginning to raise questions about Russia's banking sector. As we've noted on the PDB before, wild berries reportedly owes billions of dollars to state-controlled VTB Bank. VTB shares have fallen more than 25 percent this year, while Russians themselves are showing a growing preference for keeping cash outside of the Russian banking system. One reason is another second-order effect of the drone campaign. When Ukrainian drones approach Russian cities, authorities frequently shut down mobile internet services as a defensive measure. That can disrupt online banking and electronic payments.

Russia's central bank says individuals withdrew more money from banks than they deposited during the second quarter of this year. That's a reversal of the usual pattern.

And then there is agriculture. Ukrainian attacks on Russian ports, export terminals and commercial vessels have badly disrupted grain shipments through the Black Sea and the Sea of Azov. Russian wheat exports fell by more than 50 percent in August compared with the same month last year. That's according to the Agricultural Consultancy of Savikon, the lowest level since 2010

That's left more grain trapped inside Russia pushing down prices for farmers. The governor of the Rostov region declared an agricultural state of emergency in late August while one Russian analyst warned that a wave of farm bankruptcies could follow.

Commercial ships operating around the Black Sea are now even adopting improvised defenses against drones as attacks on maritime traffic intensify.

And perhaps nowhere is the disruption more visible to ordinary Russians than at the airport. There were close to 1,000 temporary airport closures across Russia in August as authorities responded to drone threats, roughly five times the number recorded six months earlier. That is a lot of canceled flights and stranded travelers. Now this isn't a story about Ukraine suddenly collapsing the Russian economy. Russia does remain capable of absorbing enormous costs, and Putin insists the attacks will not change his military objectives. It's more a story about Ukraine finding ways to make relatively inexpensive drones create economic damage far beyond the targets they actually destroy.