Putin visits an ally, and it is not Belarus. This week, Russia and Mongolia held their first Forum of Regions in Irkutskwith more than 300 participants signing agreements in trade, energy and transportation. He even described it as “the institutionalization of a new stage” in bilateral relations, in the midst of the conflict in Ukraine and.
The meeting culminates a year of accelerated integration. Mongolia signed a free trade agreement with the Eurasian Economic Union (EEU) in June and in September it abandoned its observer status in the Shanghai Cooperation Organization to focus on trilateral cooperation with Russia.
For Western governments, the country has become a case study in unforeseen effects: the same sanctions designed to isolate Moscow have ended up locking in Mongolia, landlocked and dependent on routes that pass through Russian territory.
Commercial isolation: “Western companies refuse to send containers through Russia”
Until 2022, Mongolia will balance its relations using Russian railways to access European customers. The invasion of Ukraine broke that pattern. , the sanctions caused “Western logistics companies to refuse to send containers through Russian territory,” with insurance costs skyrocketing and goods held up at borders.
The blow was amplified by energy dependence: Mongolia imports 95% of its oil from Russiaaccording to Politico. When Moscow imposed export restrictions in 2023 and 2024, the country experienced an immediate crisis, especially in its mining sector. Without access to deepwater ports, there is no viable alternative.
In September 2025, petroleum products accounted for 18.3% of Mongolia’s total imports, reinforcing the country’s structural vulnerability.
The agreement with the EEU: temporary relief or a long-term trap
The Irkutsk forum celebrated this Interim Free Trade Agreement with the EEU, signed in June 2025. The three-year pact covers 367 product categories and opens tariff-free access to 200 million consumers.
But, While Moscow sells it as a strategic victory, many Mongolian companies see it as a risk. When the deal was announced in December 2024, but he also signed the deal in June 2025.
2025 was a turbulent year for Ulaanbaatar. Publications on networks about the luxurious lifestyle of the prime minister’s son sparked youth protests and 80,000 signatures calling for his resignation. The agreement with the EEU was signed in the midst of political chaos, and another prime minister would be dismissed in October. Meanwhile, business groups were relegated to the background.
What Moscow doesn’t mention: falling GDP, massive increase in imports and less public revenue
A study by the Business School of the National University of Mongolia, cited by The Diplomatprojects a 6.1% GDP growth by 2028, 117% increase in imports and a 3.2% decrease in public revenues. Key sectors such as food and textiles would come under pressure from cheaper and heavily subsidized Russian and Kazakh products.
In contrast, Mongolia maintains unequal relations with other partners: Global Voices Remember that Japan’s exports to Mongolia doubled from 300 to 600 million dollars, while Mongolian exports only grew from 15 to 18 million.
Structural dependence: railways, energy… and foreign policy
The country’s logistical backbone, the Ulaanbaatar railway, remains a 50:50 joint venture with Russia. Moscow controls half of the system that allows the movement of more than 90% of the country’s goods.
That dependence became clear when Putin visited Ulaanbaatar in 2024. Mongolia, despite being a member of the ICC, did not execute the arrest warrant. President Zelensky publicly criticized the decision, stating that Mongolian behavior “indicates a lack of independent decision-making.”
