Oil Price Slump Won’t Break Putin’s War Machine, For Now
An oil pumping unit at a drilling site near Almetyevsk, Russia.
Photographer: Andrey Rudakov/Bloomberg
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The recent plunge in oil prices won’t be a game changer for Russia’s ability to finance its war machine as rising revenue from non-energy sectors and rainy-day reserves help offset losses.
While Russia’s National Wealth Fund has slimmed down since the start of the invasion, it’s still sufficient enough to make up any shortfall in oil revenue for the next 18-24 months should Russia’s crude cost around $50 a barrel, according to estimates by Bloomberg Economics. That’s likely enough time for commodity markets to recover, which makes any near-term cuts to military spending unlikely.