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Oil and gas exports have sustained Russia’s finances throughout its war against Ukraine. But as the fourth anniversary of the full-scale invasion approaches, those cash flows have suddenly dwindled to lows not seen in years. It’s the result of new punitive measures from the U.S. and the European Union, U.S. President Donald Trump’s tariff pressure against India, and a tightening crackdown on the fleet of sanctions-dodging tankers carrying Russian oil. The drop in revenue is pushing President Vladimir Putin to borrow from Russian banks and raise taxes, keeping state finances on an even keel for now. But those measures only increase strains in a war economy now plagued by slowing growth and stubborn inflation. In January, Russian state revenues from taxing the oil and gas industries fell to 393 billion rubles ($5.1 billion). Thats down from 587 billion ($7.6 billion) in December and from 1.12 trillion ($14.5 billion) in January 2025. That’s the lowest since the COVID-19 pandemic, says Janis Kluge, an expert on the Russian economy at German Institute for International and Security Affairs. A new approach to sanctions To pressure the Kremlin to halt fighting in Ukraine, the Trump administration imposed sanctions on Russias two largest oil companies, Rosneft and Lukoil, from Nov. 21. That means anyone buying or shipping their oil runs the risk of being cut off from the U.S banking system a serious concern for any multinational business. On top of that, on Jan. 21 the EU began banning fuel made from Russia crude meaning it could no longer be refined somewhere else and shipped to Europe in the form of gasoline or diesel fuel. The head of the EU’s executive commission, Ursula von der Leyen, on Friday proposed a full ban on shipping services for Russian oil, saying sanctions offered leverage to push Russia to halt the fighting. We must be clear-eyed: Russia will only come to the table with genuine intent if it is pressured to do so,” she said. The latest sanctions are a step beyond the oil price cap imposed by the Group of Seven democracies under the Biden administration. The $60 per barrel cap, enforced through insurers and shippers based in G-7 countries, was aimed at reducing Russias profits, not banning imports, out of concern over higher energy prices. The cap did reduce government oil revenues temporarily, especially after an EU ban on most Russian seaborne oil forced Russia to shift sales to China and India. But Russia built a shadow fleet of aging tankers operating beyond the reach of the cap, and revenues rose again. Pressure on India to stop Russian oil imports Trump on Feb. 3 agreed to lower tariffs to 18% from 25%, saying Indian President Narendra Modi agreed to halt Russian crude imports, and on Friday removed an additional 25% tariff imposed over continued imports of Russian oil. Modi hasnt commented. Foreign affairs spokesman Randhir Jaiswal said India’s strategy was diversifying our energy sourcing in keeping with objective market conditions. Kremlin spokesman Dmitry Peskov noted that Moscow was monitoring the statements and remains committed to our advanced strategic partnership with New Delhi. In any case, Russian oil shipments to India have declined in recent weeks, from 2 million barrels per day in October to 1.3 million per day in December, according to figures from the Kyiv School of Economics and the U.S. Energy Information Administration. Data firm Kpler says India is unlikely to fully disengage in the near term” from cheap Russian energy. Ukraine’s allies increasingly have sanctioned individual shadow tankers to deter customers from taking their oil raising the number to 640 among the U.S., U.K., and EU. U.S. forces have seized vessels linked to sanctioned Venezuelan oil, including one sailing under a Russian flag, while France briefly intercepted a suspected shadow fleet vessel. Ukrainian strikes have hit Russian refineries, pipelines, export terminals, and tankers. Russian oil is trading at a steep discount Buyers are now demanding bigger discounts on Russian oil to compensate for the risk of running afoul of U.S. sanctions and the hassle of finding payment workarounds that skirt banks reluctant to touch the transactions. The discount widened to about $25 per barrel in December, as Russia’s primary crude export, Urals blend, fell below $38 per barrel, compared with about $62.50 per barrel for international benchmark Brent crude. Since Russias taxes on oil production are based on the price of oil, that cuts into state revenues. “Its a cascading or domino effect, said Mark Esposito, a senior analyst focused on seaborne crude at S&P Global Energy. Including diesel and gasoline created a really a dynamic sanctions package, a one-two punch that are impacting not only the crude flow, but the refined product flow off of those barrels. … A universal way of saying, if its coming from Russian crude, its out. Reluctance to take delivery has meant an inordinate amount about 125 million barrels has built up in tankers at sea. That has driven up costs for scarce capacity, with rates for very large oil tankers reaching $125,000 per day and thats directly correlated with the ramifications of the sanctions, said Esposito. Slowing growth strains Russia’s budget On top of that, economic growth has stalled as the boost from war-related spending reaches its limits and as labor shortages put a cap on potential business expansion. And lower growth means less tax revenue. Gross domestic product increased only 0.1% in the third quarter. Forecasts for this year range between 0.6% and 0.9%, down from over 4% in 2023 and 2024. I think the Kremlin is worried about the overall balance of the budget, because it coincides with the economic downturn, said Kluge. And at the same time the costs of the war are not decreasing. The Kremlin responds by raising taxes and borrowing The Kremlin has resorted to higher taxes and borrowing to fill the gap left by dwindling oil revenues and by slower economic growth. The Kremlin-controlled parliament, the Duma, raised value-added tax paid on consumer purchases at the cash register to 22% from 20% and increased levies on car imports, cigarettes, and alcohol. The government has increased its borrowing from compliant domestic banks. And a national wealth fund still has reserves to patch budget holes. So the Kremlin has money for now. But raising taxes can slow growth even more. And borrowing risks worsening inflation, brought down to 5.6% through interest rates of 16% from the central bank, down from a peak of 21%. “Give it six months or a year, and it could also affect their thinking about the war, said Kluge. I dont think they will seek a peace deal because of this, but they might want to lower the intensity of the fighting, focus on certain areas of the front and slow the war down. This would be the response if its getting too expensive. David McHugh, Associated Press
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Were still in the earliest days of artificial intelligence. It was just November 2022 when OpenAI released ChatGPT, and the world changed. However, enough time has passed for us to have a sufficient perspective to categorize AI and autonomous agents into three distinct eras. Introduction2024: In the initial shockwave, there was more novelty and hype than practicality around the possibilities of AI. Businesses and leaders understandably struggled to understand what was barreling toward them. Evaluation2025: There was a reality check for organizations as they began testing, experimenting with, and piloting AI projects in their search for use cases that created value. For various reasons, businesses often failed to achieve the results they expected or sometimes even saw their efforts completely stall. Production2026: The coming year is when we begin to see a real payoff from business investments as innovative organizations take what theyve learned and seriously embrace AI, embedding agents throughout their operations to realize value. Its an absolute certainty that AI activation will become the story of business. Were witnessing a profound shift from pilots to production agents embedded in real business processes, and its going to explode exponentially as AI adoption enters the mainstream enterprise and delivers measurable ROI. And the stakes will be incredibly high for businesses to get it right. TIME TO SEPARATE HYPE AND ACTIVATION Two things can be true at the same time. We can observe heightened speculation about AI alongside the on-the-ground emergence of agentic capabilities in real-world environments. The massive investments in power generation, data centers, and chip innovation are unlike anything weve ever witnessed. The market cap of hyperscalers is reaching vertigo-inducing heights. Jamie Dimon, the CEO of JPMorgan Chase, frequently references this as a picks-and-shovels moment in a modern gold rush because its the infrastructure that will enable the innovation that comes next. Much of the conversation today focuses on whether were in an AI bubble. That speculation will likely continue, but the real story is what comes next. Were not spending enough time imagining the world that will emerge on the other side of this period of intense innovation, whatever form that transition takes. From a historical perspective, there have been many boom-and-bust cycles that, over the long run, proved beneficial. Ive been in the software industry for nearly three decades, which means I know bubbles firsthand. I began my business career in the 1990s, at the dawn of the Internet era, and experienced the dot-com boom and the subsequent crash. The market disruption was profound and painful. Fast forward to today. Can anyone imagine if we couldnt order a sandwich on our phones and have it delivered in 15 minutes or less? There was an incredible payoff, but that only became apparent over time. Many of the innovations and infrastructure built in that era laid the groundwork for the world we live in today. We need to focus on the long game because AI will improve our lives immeasurably. In moments of rapid technological change, the broader environment typically undergoes significant shifts as innovation accelerates. Whats unmistakable, however, is that the future belongs to companies that view AI not simply as a tool, but as a game-changing intelligence thats omnipresent in everything they do as they deliver for their customers. Its why I remain so optimistic about the impact AI will have on all of us. PREDICTIONS FOR 2026 This will be the most productive year in history, as concerns about AI replacing humans fade and the technology instead augments people, enabling them to perform their jobs more effectively and improving their lives. Trust in AI. The level of confidence businesses place in AI to help them run their organizations will increase as they adopt measures that emphasize greater governance and data accuracy. AI translates to ROI. This relates directly to trust. Weve already begun to see it, but the growth in real business value (substance, not hype) will happen as we move beyond simplistic AI co-pilots to agentic solutions that become integral to making businesses and people more productive. As more agents enter production, it will inevitably lead to sprawl. A mindset shift toward agent governance will be crucial to delivering the greatest return. Race toward AGI. We will reach peak intensity in the development of artificial general intelligence. I expect well see announcements and investments that advance ambitious research initiatives across the field. Flood of mergers and acquisitions. As the pressure to adopt AI intensifies, companies that havent kept pace with innovation will be forced to explore new ways to advance their technology roadmaps. We can expect to see more organizations pursuing partnerships and selective acquisitions to strengthen their AI position. Its going to be a busy year. WHAT WILL DEFINE 2026 Weve reached the long-heralded moment of divergence between the AI natives and the AI nots. There will be a gap. It will be wide. And it will become painfully clear which category businesses fall into this year. The pressure will grow on CEOs and the board of directors to make AI activation their top technology investment priority. That means stopping experimentation and expecting production results. Businesses cant afford to fall so far behind that they cant catch up. The question for you in 2026 is this: What kind of foundation are you building in your business so that AI becomes a competitive advantage? Steve Lucas is the chairman and CEO at Boomi.
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In 2023, the science fiction literary magazine Clarkesworld stopped accepting new submissions because so many were generated by artificial intelligence. Near as the editors could tell, many submitters pasted the magazines detailed story guidelines into an AI and sent in the results. And they werent alone. Other fiction magazines have also reported a high number of AI-generated submissions. This is only one example of a ubiquitous trend. A legacy system relied on the difficulty of writing and cognition to limit volume. Generative AI overwhelms the system because the humans on the receiving end cant keep up. This is happening everywhere. Newspapers are being inundated by AI-generated letters to the editor, as are academic journals. Lawmakers are inundated with AI-generated constituent comments. Courts around the world are flooded with AI-generated filings, particularly by people representing themselves. AI conferences are flooded with AI-generated research papers. Social media is flooded with AI posts. In music, open source software, education, investigative journalism, and hiring, its the same story. Like Clarkesworlds initial response, some of these institutions shut down their submissions processes. Others have met the offensive of AI inputs with some defensive response, often involving a counteracting use of AI. Academic peer reviewers increasingly use AI to evaluate papers that may have been generated by AI. Social media platforms turn to AI moderators. Court systems use AI to triage and process litigation volumes supercharged by AI. Employers turn to AI tools to review candidate applications. Educators use AI not just to grade papers and administer exams, but as a feedback tool for students. These are all arms races: rapid, adversarial iteration to apply a common technology to opposing purposes. Many of these arms races have clearly deleterious effects. Society suffers if the courts are clogged with frivolous, AI-manufactured cases. There is also harm if the established measures of academic performancepublications and citationsaccrue to those researchers most willing to fraudulently submit AI-written letters and papers rather than to those whose ideas have the most impact. The fear is that, in the end, fraudulent behavior enabled by AI will undermine systems and institutions that society relies on. Upsides of AI Yet some of these AI arms races have surprising hidden upsides, and the hope is that at least some institutions will be able to change in ways that make them stronger. Science seems likely to become stronger thanks to AI, yet it faces a problem when the AI makes mistakes. Consider the example of nonsensical, AI-generated phrasing filtering into scientific papers. A scientist using an AI to assist in writing an academic paper can be a good thing, if used carefully and with disclosure. AI is increasingly a primary tool in scientific research: for reviewing literature, programming, and for coding and analyzing data. And for many, it has become a crucial support for expression and scientific communication. Pre-AI, better-funded researchers could hire humans to help them write their academic papers. For many authors whose primary language is not English, hiring this kind of assistance has been an expensive necessity. AI provides it to everyone. In fiction, fraudulently submitted AI-generated works cause harm, both to the human authors now subject to increased competition and to those readers who may feel defrauded after unknowingly reading the work of a machine. But some outlets may welcome AI-assisted submissions with appropriate disclosure and under particular guidelines, and leverage AI to evaluate them against criteria like originality, fit, and quality. Others may refuse AI-generated work, but this will come at a cost. Its unlikely that any human editor or technology can sustain an ability to differentiate human from machine writing. Instead, outlets that wish to exclusively publish humans will need to limit submissions to a set of authors they trust to not use AI. If these policies are transparent, readers can pick the format they prefer and read happily from either or both types of outlets. We also dont see any problem if a job seeker uses AI to polish their resumes or write better cover letters: The wealthy and privileged have long had access to human assistance for those things. But it crosses the line when AIs are used to lie about identity and experience, or to cheat on job interviews. Similarly, a democracy requires that its citizens be able to express their opinions to their representatives, or to each other through a medium like the newspaper. The rich and powerful have long been able to hire writers to turn their ideas into persuasive prose, and AIs providing that assistance to more people is a good thing, in our view. Here, AI mistakes and bias can be harmful. Citizens may be using AI for more than just a time-saving shortcut; it may be augmening their knowledge and capabilities, generating statements about historical, legal, or policy factors they cant reasonably be expected to independently check. Todays commercial AI text detectors are far from foolproof. Fraud booster What we dont want is for lobbyists to use AIs in astroturf campaigns, writing multiple letters and passing them off as individual opinions. This, too, is an older problem that AIs are making worse. What differentiates the positive from the negative here is not any inherent aspect of the technology; its the power dynamic. The same technology that reduces the effort required for a citizen to share their lived experience with their legislator also enables corporate interests to misrepresent the public at scale. The former is a power-equalizing application of AI that enhances participatory democracy; the latter is a power-concentrating application that threatens it. In general, we believe writing and cognitive assistance, long available to the rich and powerful, should be available to everyone. +The problem comes when AIs make fraud easier. Any response needs to balance embracing that newfound democratization of access with preventing fraud. Theres no way to turn this technology off. Highly capable AIs are widely available and can run on a laptop. Ethical guidelines and clear professional boundaries can helpfor those acting in good faith. But there wont ever be a way to totally stop academic writers, job seekers, or citizens from using these tools, either as legitimate assistance or to commit fraud. This means more comments, more letters, more applications, more submissions. The problem is that whoever is on the receiving end of this AI-fueled deluge cant deal with the increased volume. What can help is developing assistive AI tools that benefit institutions and society, while also limiting fraud. And that may mean embracing the use of AI assistance in these adversarial systems, even though the defensive AI will never achieve supremacy. Balancing harms with benefits The science fiction community has been wrestling with AI since 2023. Clarkesworld eventually reopened submissions, claiming that it has an adequate way of separating human- and AI-written stories. No one knows how long, or how well, that will continue to work. The arms race continues. There is no simple way to tell whether the potential benefits of AI will outweigh the harms, now or in the future. But as a society, we can influence the balance of harms it wreaks and opportunities it presents as we muddle our way through the changing technological landscape. Bruce Schneier is an adjunct lecturer in public policy at Harvard Kennedy School. Nathan Sanders is an affiliate at the Berkman Klein Center for Internet & Society at Harvard University. This article is republished from The Conversation under a Creative Commons license. Read the original article.
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