The kremlin Is Trying to Keep the Economy Alive with Lies and Remaining Reserves

The degradation of the russian economy is deepening against the background of a protracted war against Ukraine and multi-level Western sanctions. The kremlin’s key stabilization tool – the national wealth fund (nwf) – is undergoing a systemic reduction.

As of the beginning of July 2022, the liquid part of the nwf reached $145 billion. A year later, in July 2023, this figure decreased to $78 billion. As of May 1, 2025, the reserves amounted to only $39 billion. Since the beginning of the full-scale war, the decline has almost quadrupled.

The main source of revenues for the nwf (oil exports) remains under pressure. Western sanctions have restricted the rf’s access to traditional markets, while alternative logistics channels are less efficient and more expensive. The average price of Brent oil is projected to reach $64 for a barrel in 2025 and $60 – in 2026. For russia, whose budget is filled with oil and gas revenues, such dynamics creates critical fiscal risks.

The problems are already being reflected in key sectors. For example, the projects of the state corporation “rosatom” scheduled for 2025 remain underfunded by 80 %, “russian railways” is recording a decline in transportation volumes, the mining, metallurgical and construction sectors are experiencing a decline in production, and russian corporations are massively suspending dividend payments. All of this indicates large-scale budget constraints and a loss of financial maneuverability, even in strategic industries.

Despite this, moscow continues to publicly demonstrate confidence in the stability of the economy. However, state-controlled propaganda that conceals the real extent of the economic downturn does not change the facts: the resource-based model of the russian economy is losing efficiency.

If the current restrictions and additional measures are maintained – in particular, strengthening control over the circumvention of oil sanctions – russia risks losing the last remnants of its financial cushion as early as 2026.