Russell muscled ahead of Max Verstappen at the start of Saturday's sprint event, but after a resumption following a safety car period, the Dutchman passed him on the run down to Turn 1.
Although that move was achieved with DRS not yet activated, Red Bull's speed on the straight when it is open has been a focus of attention for rivals all season.
"We know what the speed difference is," said Russell when asked by Autosport about Verstappen's pass.
"I think we believe we could take the rear wing fully off, and Red Bull would still be quicker than us on the straights, and that's not even a joke.
"So we don't understand what they're doing. They've clearly done something incredible... Something very, very trick.
"Kudos to them for whatever they've done to achieve this straightline performance.
"But especially with the DRS, as I said, we believe we can take the rear wing fully off and they'd still be quicker than us. So something's not adding up from our side."
Asked if he could have done more to keep Verstappen at bay, he said: "Yeah, of course, you can always do things better.
"But the fact is Max wasn't my fight in that position. He was always going to overtake at some point.
"You need to pick your battles, and I picked my battle at that restart. And he didn't at the race start."
On the positive side, Russell acknowledged that Mercedes looked stronger on Saturday in Baku than in Friday's qualifying session for the grand prix.
"Generally as a team, we seem to perform better as the weekend progresses," he said.
"We've seen that often last year, on a Friday we're a bit off the pace and Saturday's better and even throughout qualifying session; in Q1 we're around P10.
"Q2's a bit better, Q3 a bit better again. Yesterday, I was just on the wrong side of it.
"If I was five milliseconds quicker in Q2, perhaps I would have qualified P5 in Q3. So yeah, it's a bit of a shame. But I'm pleased that we've recovered it today."
