Internal Kremlin documents reveal mounting fiscal pressure on Russia’s economy. In a recent investigation by Razomua Media, journalists reported that more than 400 oil wells have been shut down and that the federal budget faces an estimated $80 billion deficit. The article examines how declining energy revenues and rising war spending are reshaping Russia’s economic outlook.
Russia is strong enough to continue financing the war, but that is different from being economically strong,” said Torbjörn Becker, in a speech to EU finance ministers.
He pointed to a combination of rising inflation, a labor shortage of 1.9 million workers in industry, and the collapse of foreign investment as drivers of a vicious cycle in which increased state spending fails to generate real growth and instead fuels higher prices.
The article also highlighted that oil refining has declined by around 10 percent for several consecutive months in 2025, while drilling activity is contracting, with roughly 400 wells closed in a single company alone, and limited technological capacity to restart them. At the same time, the federal budget deficit exceeded $80 billion in the first five months of the year, and the liquid assets of Russia’s welfare funds have fallen by half since the start of the invasion, underscoring mounting fiscal pressure beneath the surface of wartime resilience.
The Razomua Media article also addresses the political implications of shrinking energy revenues. Oil and gas exports remain central to Russia’s state finances. Reduced production and discounted exports weaken the government’s ability to fund social programs and military operations. The report points to rising borrowing needs and potential cuts in non-military spending.
In this context, Torbjörn Becker underscores that budget imbalances can erode investor confidence and limit future growth. He adds that Russia’s economic resilience since 2022 has relied heavily on temporary buffers, including sovereign funds and capital controls.
To explore the full investigation and Torbjörn Becker’s commentary, read the complete article in Razomua Media.
Further Reading: Report on Russia’s Wartime Economy
For more on Russia’s economic outlook and the impact of sanctions, explore SITE’s report, “Financing the Russian War Economy.” This in-depth report provides expert analysis of Russia’s fiscal pressures, wartime financing strategies, and long-term growth risks under sanctions. It expands on the themes highlighted by Torbjörn Becker and offers valuable insights into the sustainability of Russia’s wartime economy.
For further expert analysis on sanctions, energy flows, and economic pressure, visit the portal’s recent publications in the Evidence Base. Learn more about sanctions against Russia and Russian economic retaliation by visiting the Sanctions Timeline.
