The champagne flutes were barely chilled. The Podmoskovie oligarchs had their private jets idling. But this year's St Petersburg International Economic Forum is a wake, not a celebration. Drone attacks on the city's energy infrastructure last night have turned the event into a stage for the Kremlin's war narrative. And in Whitehall, the message is clear: no respite.
Sources close to the Treasury confirm a fresh round of sanctions is being readied. Targets include shell companies linked to the Moscow Exchange. The timing is deliberate. As Vladimir Putin addresses the forum today, the UK will announce measures to block financial flows that have sustained the Russian war machine. A senior government aide put it bluntly: 'We are closing the loopholes they thought they had left open.'
The drone attacks themselves are a propaganda gift to the Kremlin. Footage of burning oil depots will be looped on state TV. But the subtext is different among the forum delegates. Whispered conversations in the corridors of the Expoforum centre suggest unease. One Moscow-based banker I spoke with said: 'The security situation is a problem. People are asking if the forum is worth the risk.'
For the British government, the calculus is about maintaining pressure. The domestic political landscape is volatile. The prime minister faces a backbench rebellion over cost-of-living concerns. But on Russia, the coalition of the willing holds. Labour has signalled it will not oppose further sanctions. The calculation is that Putin's economic isolation must be total.
The key battleground is energy. The UK has already banned Russian oil imports. But the latest measures target Chinese and Indian intermediaries who have kept Russian crude flowing. Whitehall sources say these 'grey fleet' tankers are the primary focus. A leak from the Foreign Office suggests a crackdown on insurance paperwork for vessels carrying Russian oil above the G7 price cap.
Back in St Petersburg, the forum's main hall feels emptier than previous years. Western CEOs are absent. The empty chairs are a message. And the drone attacks have added a layer of grim reality. The Kremlin's narrative of a 'normal' Russia cannot be sustained when the host city is under attack.
For now, the sanctions war continues. The UK is not seeking an escalation, but it is refusing to blink. As one diplomat put it: 'This is a marathon, not a sprint. We have the stamina.' The question is whether Putin does too.
