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Military And Security Developments
Dec 23.
KEY DEVELOPMENTS
- OFFENSIVES: Russian forces launched a series of cross-border attacks into Sumy and Kharkiv oblasts; we assess they are likely aimed at presenting Russian forces as advancing on multiple fronts, and do not represent a genuine new offensive
- BELARUS: Belarusian President Alyaksandr Lukashenka stated that Russia has deployed the Oreshnik intermediate-range ballistic missile system in Belarus, though this does not change the military balance in the region
- STARLINK: Intelligence services of two unspecified NATO countries reportedly suspect that Russia is developing a new anti-satellite weapon to undermine Starlink terminals, though the likelihood of a major attack remains low in the short term
- FORECAST: Despite the approval of a large-scale loan to support Kyiv in 2026, developments indicate that fractures over the ‘Ukraine policy’ will undermine the EU’s position as a major geopolitical actor and influencer in negotiations next year
- OFFENSIVES: Between 20 and 21 December, Russian forces launched a series of cross-border attacks into Sumy oblast, as well as Kharkiv oblast to a lesser extent. Hrabovske (Sumy oblast) and Sotnytskyi Kozachok (Kharkiv oblast) became the focal points of the fighting. Hrabovske is now likely under Russian control, with Ukrainian units reportedly conducting a tactical withdrawal from surrounding areas. Meanwhile, Ukrainian forces have stated that they repelled the assault in Sotnytskyi Kozachok. These cross-border attacks occurred in an area where Russia has previously attempted to establish a buffer zone through limited incursions and raids. The Sumy sector had been relatively quiet since this summer, with fighting largely limited to sporadic shelling, drone strikes and small-scale reconnaissance or sabotage activity. While the latest attacks mark an uptick in hostilities, they do not constitute an operational breakthrough. At the time of writing, we assess that they are highly unlikely to presage a new major offensive.
- OFFENSIVES: The nature of these cross-border attacks deviates from Russia’s typical tactics observed elsewhere along the frontline, indicating that the operation is likely aimed at supporting Russia’s information campaign. The attack seemingly involved non-dispersed Russian troops, advancing in a highly unusual move that would ordinarily make them vulnerable to Ukrainian defensive fire. There is no indication that the Russian command has reinforced its Northern Grouping, which is responsible for operations in Sumy oblast. Furthermore, the incursions were not preceded by intensive drone or artillery strikes against Ukrainian logistics, a move that would normally prepare the ground for sustained assaults.
- OFFENSIVES: Further cross-border attacks are likely in the coming weeks, likely as part of the Kremlin’s efforts to probe Ukrainian defences and increase pressure on its defensive capabilities, particularly as Russia continues offensive efforts elsewhere along the frontline. Realistically, Moscow could also have ordered the attacks as per Russian President Vladimir Putin’s statement on 17 December that Russian forces are actively expanding so-called ‘buffer zones’. Russian commanders are likely keen to provide the Kremlin with some progress in previously quiet areas along the border.
- OFFENSIVES: Meanwhile, Russia is highly likely to use such attacks to reinforce the perception that it retains the initiative in the conflict and is able to sustain simultaneous offensive efforts at various points of the frontline. This supports its broader information effort aimed at influencing Western decision-makers to believe that Ukraine is losing the war, though there is currently no evidence to indicate that Ukrainian border defences will collapse.
- DONETSK: On 21 December, a Ukrainian military observer reported that Russian forces had completed the capture of Siversk (Donetsk oblast), following their reported entry into the town in mid-November. Siversk’s capture will likely provide the Russian forces with favourable positions to launch larger assaults on Lyman located to the north-west and advance to the east towards Sloviansk – a key node in Ukraine’s so-called ‘fortress belt of cities’ in Donetsk. However, Russian forces reportedly took approximately 41 months to advance around seven miles (12km) from Lysychansk to Siversk’s western boundary, underscoring the extremely slow pace of their progress. Any breakthrough towards Sloviansk will require an advance of roughly 18.6 miles (30km) west of Siversk and the capture of Lyman – progress towards the latter has also been made in recent weeks, albeit slowly.
- STRIKES: Over the past weeks, Russia has intensified its long-range strikes against Ukraine’s Odesa oblast. The attacks have heavily targeted energy facilities, transportation networks as well ports. The escalation is likely part of Russia’s retaliation for the frequent Ukrainian strikes against Russian civilian and military naval assets in recent weeks. We assess that the threat level will likely remain elevated in the region, with persistent security risks to energy infrastructure, transport and maritime operations.
POLITICAL DEVELOPMENTS
- BELARUS: On 18 December, Belarusian President Alyaksandr Lukashenka said that Russia has deployed the Oreshnik intermediate-range ballistic missile system in Belarus. Lukashenka claimed that the system is on combat duty, though Defence Minister Viktor Khrenin contradicted this by stating that preparations were underway for it to be put on combat duty. Lukashenka clarified on 22 December that there would be a maximum of ten of the missiles stationed in Belarus. The deployment was expected, with Lukashenka announcing it in late October (see Sibylline Ukraine Update – 4 November 2025). We continue to assess that Russia views Oreshnik as a strategic deterrence weapon and as a form of leverage over the West to influence its decision-making on Ukraine. We assess that it does not change the nuclear or conventional balance in Belarus, as it is unlikely to have a viable conventional warhead, though it does signal the continued military integration of Belarus within Russia.
- STARLINK: The Associated Press (AP) reported on 22 December that the intelligence services of two unspecified NATO countries suspect that Russia is developing a new anti-satellite weapon to undermine Starlink terminals. AP claimed that the capability would release ‘hundreds of thousands of high-density pellets’ into space, which it warned would risk multiple satellites being disabled at once and cause collateral damage to other orbiting systems. The report claims that the fragments would be minuscule and would thus evade detection by ground- or space-based systems which track objects in space. However, the reported findings did not specify when Russia would realistically be capable of deploying such a system, nor how advanced work is on the capability.
- STARLINK: Starlink has become a vital capability for Ukrainian forces, including for battlefield communications. Russian forces also use Starlink terminals, and would therefore be impacted by any outage, though Ukraine is significantly more reliant on the system. While we cannot verify the AP report, in February 2024, the US briefed several NATO allies on a new Russian space-based anti-satellite capability (see Sibylline Ukraine Update – 15 February 2024). We assess that the new reports do not indicate an immediate threat to global communications and the world’s satellites, with Russia unlikely to deploy any such capability in the short-to-medium term. However, such systems could be leveraged as part of Russian deterrence efforts.
FORECAST
EU: Despite the approval of a large-scale loan to support Kyiv in 2026/27, recent developments indicate that fractures over Ukraine policy will undermine the EU’s position as a major geopolitical actor and an influential bloc in peace negotiations in 2026. On 19 December, EU leaders decided to lend Ukraine EUR 90bn (USD 105bn) after not reaching an agreement on whether to utilise frozen Russian assets. Instead, the money will be borrowed from the EU’s budget. The bid to use the immobilised funds – the majority of which are held in Belgium – was unsuccessful due to concerns raised by Belgian Prime Minister Bart De Wever about Russian retaliation. This indicates that Moscow’s deterrence campaign has been successful to an extent. France’s reported key role in the EU’s decision not to use frozen Russian assets likely indicates its efforts to reassert itself as a major European player. According to a report from Politico on 22 December, French President Emmanuel Macron ‘tipped the balance’ against using the assets at a crucial moment during the European Council summit held on 18 and 19 December. Three unspecified EU diplomats and an EU official claimed that France was ‘quietly working’ to ensure that the bloc chose the joint borrowing option. Previously, several countries had expressed opposition to using frozen Russian assets, including the Czech Republic, Hungary, Italy and Slovakia.
Macron’s position in the EU has been undermined by his ailing domestic popularity, providing Germany with an opportunity to expand and consolidate its growing geopolitical influence. In contrast to France, German Chancellor Friedrich Merz was a strong supporter of the plan to use frozen Russian assets. Under Merz, Berlin has sought to position itself as a more vocal Ukraine supporter and to strengthen its position and influence over the EU’s foreign policy – a realm traditionally dominated by Paris. We assess that Macron’s involvement in ensuring that frozen Russian assets were not used will likely strain Franco-German relations, with the two countries likely to continue to vie for influence in the EU in 2026. Such competition will undermine the EU’s unity on major policy issues, including Ukraine. For further analysis on relations between Berlin and Paris, see Sibylline Situation Update Brief – 11 November 2025.
Macron’s willingness to resume contact with Russia marks a break from the EU’s de facto position of not speaking with the Kremlin without Ukraine’s input. On 19 December, Macron said that Europe will need to find ways to ‘re-engage in a fulsome dialogue’ with Russia if the US-led peace talks fail; these negotiations are yet to produce a breakthrough. Macron and Putin last spoke in July, after nearly three years of no contact. Ukraine’s allies had criticised Macron previously for maintaining ties with Russia following its full-scale invasion of Ukraine in February 2022. However, the US’ perception that the EU is not prepared to engage in peace negotiations seriously has undermined the bloc’s credibility and influence over the US-led process.
Macron’s comments likely represent an acknowledgement that the EU’s current stance towards discussions with Russia to end the war should be recalibrated to bolster Europe’s credibility in the peace process. Moscow has frequently cast Europe as undermining the peace process and highly unlikely views the EU as a serious actor. Rather, Russia prefers to engage with countries it regards as ‘great powers’ (including the US and to a lesser extent France, Germany and the UK). Reportedly, Macron and Putin are expected to speak as early as this week to discuss peace prospects. Realistically, Macron’s willingness to engage directly with Putin could be an attempt to cement France’s involvement in the peace process in the coming year.
Executive summary
- In our last Strategic Risk Forecast, we put forward various scenarios concerning the trajectory of the Russo-Ukrainian war in the next 12 months. Our baseline scenario is that the war will likely continue in some form without a definitive resolution; there is also a realistic possibility of a fragile ceasefire that will fail to stop the fighting entirely.
- Despite intensive shuttle diplomacy and efforts by the US to propose various options for ending the war, we have seen little substantive change that would make the signing of a peace deal (or even a ceasefire) likely in the coming month. Russian President Vladimir Putin has repeatedly emphasised that Russia’s war goals in Ukraine have not – and will not – change, underscoring that the aims of his ‘special military operation’ will be met ‘unconditionally’, either by diplomacy or military action. Although this is possibly a negotiating tactic, we have seen little shift in the key strategic drivers that would likely make Russia amenable to peace or a ceasefire.
- Meanwhile, intense negotiations are continuing between the US, Europe and Ukraine over possible security guarantees that would form part of a potential peace deal. While the details remain unclear, the prospect of an Article 5-like arrangement would prove significant – if its terms can be agreed. However, Russia will almost certainly oppose the deployment of Western troops (under any aegis) in Ukraine.
- During a key European Council summit on 19 December, the bloc agreed to provide Ukraine with a EUR 90 bn (USD 106 bn) interest-free loan in 2026, which will help to stabilise Ukraine’s finances over the coming year; the decision came about due to disagreements over using frozen Russian assets for Ukraine’s benefit.
- Key triggers, warnings and indicators (TWIs) to watch for in January 2026 include the US leveraging new sanctions against Russia or withdrawing intelligence sharing / arms sales vis-à-vis Ukraine in the event that the administration is set on ramping up pressure to make further progress towards peace.
- Ukraine: Commercial debt restructuring will lower default risks in 2026. On 22 December, the credit rating agency Fitch upgraded Ukraine’s rating to ‘CCC’ from ‘restricted default’, citing the normalisation of Ukraine’s relations with most of its external commercial creditors. This followed Ukraine’s announcement on 18 December that it had reached an agreement with commercial creditors to swap so-called GDP warrants for bonds. Under the previous arrangement, Ukraine was required to make payouts linked to its economic performance in any year in which real GDP growth exceeded 3%, a mechanism likely to impose a significant financial burden on the country. For instance, Kyiv defaulted earlier in 2025 on a USD 665 m payment, which was linked to economic growth of 5.3% in 2023. In the context of a post-war recovery with strong growth potential, such payouts could have reached as much as USD 20 bn, according to the Ukrainian authorities. The new agreement is likely to improve Ukraine’s long-term debt sustainability and reduce default risks in 2026. However, the outlook for public finances remains highly uncertain, as Kyiv continues to rely heavily on external financial support.
- Portugal-Ukraine: Defence co-operation will increase risk of Russian grey-zone operations. On 20 December, Portuguese Prime Minister Luís Montenegro signed a partnership agreement with Ukrainian President Volodymyr Zelensky for the joint production of maritime drones. Portugal aims to leverage Ukraine’s battlefield experience to improve broader European maritime defence; sea drones have become a key component of Ukraine’s maritime defence since the 2022 Russian full-scale invasion. Sea drones are a relatively underdeveloped area in many EU navies. Joint production with Ukraine will help to narrow this gap, providing know-how and designs already tested in combat. We assess that Russia will possibly seek to retaliate with grey-zone operations targeting Portugal in 2026, a country which had not previously been a prime target of Russian hybrid activities. These will likely include reconnaissance of port operations, mapping and surveillance of cable routes and sabotage operations targeting the defence sector. Irregular drone flights in the vicinity of military bases, government buildings, airports, seaports and other critical national infrastructure (CNI) facilities are also possible.
- Russia: Assassination of senior general underscores persistent risk of attacks, including in capital. Earlier on 22 December, Lieutenant General Fanil Sarvarov was injured when an explosive device detonated in his car on Yasenevaya Street in the south-east of the capital Moscow at around 0700hrs (local time). Sarvarov, who headed the Russian Armed Forces’ operational training department, later died from his injuries. Russian investigative authorities stated that the explosion was caused by a device planted in the vehicle and have opened a criminal investigation, including into the possible involvement of Ukrainian intelligence services. While Ukraine has not commented on the incident, its security services have been linked to several high-profile assassinations and plots targeting senior Russian military figures in the last few years. For example, in April the deputy head of the main operations directorate of Russia’s general staff was killed in a car explosion; in December 2024 the head of the Russian Armed Forces’ radiation, chemical and biological defence troops was killed in an explosion at his Moscow residence. This latest attack is likely to heighten security concerns among senior Russian officials and will likely prompt retaliatory action from the Kremlin. More broadly, the incident underscores the persistent risk of attacks across Russia, including in major urban centres like Moscow. Short-term disruption to traffic is expected in the immediate vicinity of the incident, alongside enhanced security measures.
Dec 22.
- Denmark: Russian grey-zone attacks on key infrastructure highlight disruption, destruction risks. On 20 December, international news outlets reported that two pro-Russia hacktivist groups (‘Z-Pentest’ and ‘NoName057(16)’) had targeted Danish companies in disruptive and destructive cyber attacks in December 2024 and November 2025. In the first incident, Z-Pentest reportedly compromised a water utility company in Køge (Zealand region) and altered the water pressure to ultimately burst affected pipes, highlighting the destructive nature of this attack. Subsequently, in November 2025, NoName057(16) temporarily disrupted several local government websites with denial-of-service attacks ahead of the Danish municipal and regional council elections likely in an attempt to attract public attention and sow distrust. On 18 December, the Danish Defence Intelligence Service (DDIS) stated that both groups are likely connected to the Russian state amid a spike in Russian grey-zone operations targeting European and NATO countries since the beginning of 2025. As geopolitical tensions persist, we assess that these incidents underscore the elevated risk of disruption and destruction facing key sectors in Denmark.
Dec 19.
- EU: Ukraine loan increases financial exposure; decreases Belgium’s vulnerability to Russian retaliation. Earlier on 19 December, the European Council agreed to provide an interest-free loan of EUR 90bn (USD 105.7bn) to Ukraine for 2026 and 2027. The EU will borrow on capital markets and back the loan with the EU budget. Belgium – which hosts the largest share of frozen Russian assets – has opposed using these funds to finance the loan, citing legal and retaliatory risks. The country has faced an increased exposure to Russian grey-zone operations in recent months, which we assess will likely decrease now in intensity (though it is unlikely to stop entirely). This will lower operational risks for critical infrastructure operators which had faced an uptick in drone sightings. However, frozen Russian assets remain immobilised; the EU has not abandoned plans to use them in future. Consequently, Russia will likely continue targeting Belgian and wider European political and financial structures using intimidation tactics. While the loan will strengthen the EU’s credibility in the ongoing US-mediated peace negotiations on the Russo-Ukrainian war, it will also increase the financial exposure of the EU budget’s largest contributors, such as France, Germany and Italy. The unanimity on the loan was reached only after EU leaders agreed that the Czech Republic, Hungary and Slovakia will not incur any financial obligations related to the loan, exposing the bloc’s enduring internal divisions over Ukraine.
- Ukraine: EU funding is likely to improve 2026 financial outlook, though financing gaps will persist. Earlier on 19 December, the European Council approved a EUR 90bn loan for Ukraine, financed through EU borrowing on capital markets. The loan is expected to be issued from the second quarter of 2026, when Ukraine is estimated to face a cash shortfall. The financing is likely to prove critical for Ukraine’s budget; it is intended to enable the procurement of military equipment. However, the loan does not cover Ukraine’s full financing needs for the 2026/27 fiscal year, which the EU has estimated at approximately EUR 135bn (around USD 158.2bn). Furthermore, once the EU disburses the first tranches, weapons procurement will likely face delays related to contract negotiations and equipment delivery timelines. Therefore, the loan’s disbursement is unlikely to have an immediate impact on Ukraine’s operational military capabilities, though it will help Ukraine’s war effort in 2026. Overall, we assess that while the loan will improve Ukraine’s financial outlook for 2026, financing gaps are likely to persist. Kyiv’s operational situation is expected to remain tense, particularly in the first quarter of 2026. (Source: Sibylline)
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