The Russian economy has fallen into a financial trap, demonstrated by reductions in military contract bonuses directly tied to falling oil export revenues. In 2025, both indicators sharply decreased at the same time.
In 2024, Russian regions competed in offering the highest signing bonuses for military contracts. In July, the federal government raised the payout from 195,000 to 400,000 rubles and advised regions to add at least as much. Some regions, such as Samara, set records offering up to 4 million rubles—more than the average annual salary and enough to buy a two-room apartment. By June 2025, however, regions began to cut bonuses due to funding shortages.
Bashkortostan was first to lower payments from 1.6 million to 1 million rubles, Samara Region from 3.6 million to 2 million, and others soon followed. As a result, only 38,000 new contracts were signed in the second quarter of 2025—half as many as a year earlier.
The main reason is the drastic decline in Russia’s export earnings from oil and energy. In September 2025, oil revenues fell to half the September 2022 level, impacted by export restrictions, Ukrainian drone attacks on refineries, and lower prices. Meanwhile, the strengthening ruble further reduces exporters’ profits.
Budget deficits in the regions have reached record levels (Bashkortostan nearly 10 billion rubles, Samara 6%). War expenditures are set to exceed 4 trillion rubles this year, with 20% allocated to contract bonuses. Reduced federal subsidies force regions to cut payments, and fewer recruits threaten mobilization rates.
Experts believe that each drop in oil prices directly hurts Russia’s ability to finance its war. Combined, these factors are worsening the economic crisis and social tensions across the country.
