economy
March 6, 2026
War in Iran will not save Putin's struggling economy: Analysis by experts in Russian policy and finance
The war in the Middle East is raising oil prices, to the Kremlin's satisfaction, but the increase may be too short and too small to save the Russian government from inevitable cost cuts this year. Only two months into 2026, the Kremlin's budget is already severely strained.
TL;DR
- Rising oil prices, influenced by Middle East conflict, are not sufficient to offset Russia's budget shortfalls.
- Russia's budget for 2026 is already strained just two months into the year.
- The government plans to reduce spending and revise the 'budget rule,' which dictates savings from oil and gas revenues.
- Falling revenues from oil and gas, down 50% in January, and a projected slowdown in economic growth are key concerns.
- The National Wealth Fund (NWF) has significantly decreased in value since 2022.
- The government may consider lowering the threshold price in the budget rule, potentially reducing expenditures.
- Military spending is considered untouchable, meaning cuts will disproportionately affect civilian sectors.
- Despite higher oil prices, sanctions-related discounts and an unfavorable exchange rate limit the benefit to Russia's budget.
Continue reading the original article