Vladimir Putin is facing a severe fiscal challenge: Russia’s state budget suffers from a critical deficit as the war in Ukraine drags on. The Russian president called on his network of business allies and oligarchs, asking them to financially support military operations in view of declining oil revenues caused in part by Ukrainian drone strikes on energy facilities. Political analysts note that only one attendee, Suleyman Kerimov, agreed to contribute, and only with $1 billion—an amount covering less than two days of Russia’s current war expenses.
The idea to collect funds from the elite was put forward by Rosneft chief Igor Sechin. However, many Russian oligarchs are reluctant to support the war effort, as much of their wealth is frozen, their businesses are shrinking, and their financial power weakened by sanctions. Many lack access to significant cash sums.
Meanwhile, in the United States, political tensions remain high. Donald Trump is signaling the possibility of further escalation in the Middle East, which could influence oil markets, and is simultaneously pushing for negotiations. The US Congress is preparing a new round of sanctions targeting Viktor Orban’s allies for acting against Ukraine, reflecting growing international political and economic pressure on Putin’s circle.
Ukrainian drones are repeatedly striking deep into Russian territory, targeting energy infrastructure, further undermining Russia’s ability to generate state revenue. In response, the Kremlin may consider tapping into citizens’ bank deposits or imposing new levies to continue financing the war.
The international context is tense. The US has issued warnings of a possible operation in Iran and advised its citizens to leave the region. Meanwhile, despite internal disagreements, diplomatic talks concerning possible de-escalation continue.
Analysts observe that current developments signal a weakening of Russia’s financial and military strength. Ukraine’s technological advantages, continued Western assistance, and new sanctions create favorable conditions for Ukrainian resistance and pressure on Russia.
