Following a ban over alleged state-sponsored doping in the 2014 Sochi Olympics, the International Olympic Committee (IOC) last week decided to allow only 169 of Russia's athletes to take part in the Games under a neutral flag.
The move has excluded many high-profile athletes from the 2018 Winter Olympics. As only four of Russia's speed skaters have been allowed to compete -- including Graf -- Russia will be unable to form pursuit teams.
"That makes it impossible for Russia's athletes to participate in the event."
Graf, who won two bronze medals in Sochi in the 3,000 metres and in the team event, said she was forced to decline the IOC invitation to Pyeongchang because she had hoped to win a medal in the pursuit.
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Russia's Skaters Union (RSU) chief Alexei Kravtsov said that the federation will support any decision by athletes over participation in the 2018 Olympics.
Graf said that her decision did not mean she was retiring. "I want to continue training," she told RIA Novosti news agency. "If there are alternative competitions, I will take part in them.