Oil and money are going into negative territory: Russia’s economy is on the verge of collapse

The Russian economy is facing serious challenges due to the war in Ukraine, and the situation could worsen further in 2026.

This is stated in the article of The Washington Post.

Despite US President Donald Trump’s claims about Russia’s superiority in war, the country’s financial reality suggests otherwise.

Vladimir Putin has already spent a significant portion of state reserves and borrowed funds that previously covered military spending, and new economic challenges lie ahead.

New tough US sanctions on Russia’s oil sector are widening the budget deficit and creating additional risks for the financial system. The restrictions have affected the largest companies, including Rosneft and Lukoil, forcing Moscow to sell oil at a discount of more than $20 per barrel. Experts say the country’s oil and gas industry is sinking into crisis, and the new sanctions are only accelerating this process.

Experts warn of the risks of defaults and a banking crisis in 2026, even if the Kremlin maintains a tough stance in negotiations over the war. 2026 could be the first year when the economic consequences of the conflict will hit Russia hard.

At the same time, most of the Russian elite do not expect mass protests or a serious impact of economic problems on the Kremlin’s political decisions.

Recall that Russian oil prices fell to their lowest level since the Russian Federation’s full-scale invasion of Ukraine.

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