Putin Asks Oligarchs to Fund Ukraine War as Costs Soar

On March 26, 2026, Vladimir Putin gathered Russia's wealthiest businessmen behind closed doors and made a request that would have been unthinkable a decade ago: he asked them to open their wallets for the state [1]. The meeting, first reported by The Bell citing unnamed sources, came as Russia's war in Ukraine enters its fifth year and the federal budget buckles under the combined weight of record military spending and collapsing energy revenues [2].

At the meeting, billionaire Suleiman Kerimov reportedly pledged 100 billion rubles — approximately $1.23 billion — while at least one other unnamed oligarch also committed a substantial sum [3]. Putin told attendees that Russia would keep fighting "until it captures the remaining areas of Ukraine's eastern Donbas region not under its control," according to sources familiar with the discussions [1].

The proposal for oligarch contributions originated with Rosneft chief Igor Sechin, who suggested issuing military federal loan bonds to attract funding. Putin endorsed the idea and "personally suggested that oligarchs make 'voluntary contributions'" [3].

Reuters could not immediately verify The Bell's account, and calls to Kerimov's office in Russia's Federation Council went unanswered [1].

The Budget Under Siege

Russia's fiscal position has deteriorated sharply. The 2025 budget closed with a deficit of 5.6 trillion rubles ($73.4 billion), or 2.6% of GDP, driven by a 23.8% decline in oil and gas revenues compared to 2024 [4]. In the first two months of 2026, energy revenues halved while overall revenues fell by 11% [5].

The 2026 federal budget allocates nearly 40% of all spending to defense and security — the highest share in modern Russian history [6]. Direct military spending stands at 12.93 trillion rubles ($167 billion), with an additional 3.91 trillion rubles ($50.4 billion) earmarked for "national security" covering the Interior Ministry, National Guard, intelligence agencies, and the prison system [6]. The Stockholm International Peace Research Institute (SIPRI) estimates that total military-related spending reached approximately 7.5% of GDP in 2025 when including off-budget expenditures [7].

Source: FRED / U.S. Energy Information Administration

Data as of Mar 23, 2026CSV

The budget assumes an average Urals crude price of $59 per barrel, but prices spent most of January and February well below that threshold [4]. Only the recent spike in global oil prices — triggered by the Iran conflict — has temporarily pushed prices above the budget's break-even point, with WTI crude surging from roughly $57 in early January to over $89 by late March [8]. Whether that relief proves durable will determine the depth of spending cuts ahead.

How Much Is Being Asked — and From Whom

The full scope of Putin's request remains unclear. Kerimov's reported 100 billion ruble pledge represents roughly 3-4% of his estimated net worth, which Forbes has placed at approximately $12.6 billion in recent years [9]. Kerimov, a senator from Dagestan who made his fortune in gold mining and banking, has been under U.S. sanctions since 2018. The U.S. Treasury blocked more than $1 billion in trust fund assets linked to him in 2022 [10].

The number of oligarchs approached and the total amount sought have not been disclosed publicly. The Bell reported the meeting involved "top Russia's businessmen," suggesting a gathering of the country's most prominent billionaires [1]. For context, Russia's 25 wealthiest individuals hold a combined estimated fortune exceeding $300 billion [11].

The request comes against a backdrop of mixed fortunes among sanctioned oligarchs. By 2024, their collective wealth had recovered to approximately $337 billion, down only modestly from $353 billion in April 2021. While 22 sanctioned billionaires saw their wealth decline, 17 others grew richer, and only one — Oleg Tinkov — ceased to be a billionaire [11]. Vladimir Potanin's wealth, for example, increased from $17.4 billion in 2022 to approximately $24.2 billion by mid-2025 [11].

The Shadow of Yukos

The word "voluntary" carries a particular weight in Putin's Russia. The Kremlin has a well-documented history of using legal and extralegal mechanisms against oligarchs who fall out of favor.

The defining case remains that of Mikhail Khodorkovsky, once Russia's richest man, who was arrested in 2003 after openly criticizing Putin and funding opposition parties. He received a nine-year prison sentence on charges of embezzlement and tax fraud, and his oil company Yukos was dismantled — its core assets ultimately absorbed by the state-owned Rosneft [12]. An international arbitration panel later ruled that Russia owed $50 billion in compensation to former Yukos shareholders, a judgment Moscow has refused to honor [13].

The Khodorkovsky case established what analysts call a "template for compliance." Most oligarchs who benefited from the 1990s privatizations understood his imprisonment as a clear warning against challenging the Kremlin [12]. In 2015, Russia's Constitutional Court was granted authority to nullify international court judgments deemed contrary to the Russian Constitution, further insulating the state from accountability for asset seizures [13].

Beyond outright seizure, the Kremlin has subtler tools. Tax investigations can be initiated at will. Regulatory inspections can paralyze business operations. State contracts — on which many oligarch-linked companies depend — can be redirected. In an environment where property rights are contingent on political loyalty, the line between a request and a demand is thin.

Fiscal Desperation or Political Strategy?

The central question is whether Putin's move reflects genuine financial strain or serves a broader political purpose. Evidence supports both readings.

The case for fiscal desperation: Russia's National Welfare Fund (NWF) — the country's sovereign rainy-day fund — has shrunk from a peak of $113.5 billion in early 2022 to approximately $36.4 billion in liquid assets as of mid-2025, the lowest since 2019 [14]. Foreign currency holdings within the fund fell to 153.7 billion yuan (roughly $21 billion), the lowest since the fund's creation in 2008 [14]. Economists at the Russian Presidential Academy of National Economy and Public Administration (RANEPA) and the Gaidar Institute warned in mid-2025 that the fund could be exhausted by 2026 if oil remained around $52 per barrel [14].

Meanwhile, roughly $280 billion in Russian central bank reserves remain frozen by Western sanctions — about half of Russia's pre-war foreign reserves [15]. The government has been preparing contingency plans for a 10% cut to all "non-sensitive" spending, excluding defense and social payments like pensions and public-sector salaries [5].

The case for political calculation: Russia is not bankrupt. Its central bank holds approximately 30 trillion rubles ($350 billion) in gold and foreign currency reserves that could theoretically be transferred to the NWF [14]. Tax revenues from non-energy sectors, while slowing, have not collapsed. The Finance Ministry has proposed raising VAT to 22% in 2026 to fund military needs [6]. And the recent spike in oil prices from the Iran conflict has provided unexpected fiscal breathing room.

Asking oligarchs to contribute directly creates a mutual dependency: it ties their fortunes explicitly to the war's continuation and makes them stakeholders in its outcome. It also serves as a loyalty test, signaling to the business elite that fence-sitting is no longer an option. Ukraine's Foreign Intelligence Service has characterized the Russian economy as having "entered its deepest crisis phase in the past 20 years" [3], but whether the Kremlin shares that assessment is unknown.

Source: World Bank

Data as of Mar 27, 2026CSV

The Cost to Ordinary Russians

While oligarchs are being asked for billions, ordinary Russians are absorbing the war's economic costs through less visible channels.

Official inflation ran at 8.4% in 2024, but household-level price increases for essentials have been substantially higher [16]. A November 2025 poll found that 24.9% of Russians said their lives had worsened in recent months — the highest share since the full-scale invasion began in 2022 [17]. The survey data revealed deepening inequality: 49% of those who could only afford food said life had become harder, compared with 13.5% of wealthier respondents [17].

Pensioners — a core Putin constituency — have been hit particularly hard. In the first nine months of 2024, real pensions (adjusted for inflation) fell by 0.6% compared to the same period in 2023, as government indexation of 7.5% failed to keep pace with actual price increases [18]. For 2026, pensions will be indexed by 7.6%, which the government projects will outpace inflation if consumer prices fall below 6% as forecast [18]. Whether that forecast proves accurate amid war spending and a weakening ruble is uncertain.

The government's proposed 10% spending cuts to "non-sensitive" categories would affect new construction, road repairs, and other infrastructure projects [5]. Defense and social payments are reportedly exempt, but the distinction between "sensitive" and "non-sensitive" spending is made by officials, not by the citizens who rely on state services.

Public-sector workers — teachers, doctors, law enforcement personnel — face a different squeeze. Their wages are tied to official inflation rates of around 9%, while real inflation for many households exceeds 20% according to some independent estimates [17].

Historical Comparisons: How Abnormal Is This?

Russia's current military spending stands out even by its own historical standards. At 7.5% of GDP in 2025, defense expenditures have reached levels comparable to the late Soviet era, when the USSR was simultaneously fighting in Afghanistan and maintaining a vast nuclear arsenal to counter NATO [19].

The Soviet-Afghan War (1979–1989), by contrast, cost the USSR an estimated 2-3 billion rubles annually in direct military spending — roughly 2 to 2.5% of the total defense budget, which itself was about 8.4% of GDP in 1989 [20]. The Afghan war was expensive, but it did not require the kind of economic mobilization now underway for Ukraine.

Germany's Federal Intelligence Service (BND) has assessed that Russia's war spending has reached levels "rare in the post-WWII era" for any major power [19]. The comparison is instructive: the United States spent approximately 4.3% of GDP on defense at the height of the Iraq and Afghanistan wars, while the UK spent roughly 2.5% [6]. Russia is now spending nearly double the U.S. wartime rate as a share of its economy.

The decision to ask oligarchs for direct fiscal contributions has few modern precedents. During World War II, the Soviet state financed the war through centralized economic planning, war bonds, and mass mobilization — not through individual donations from the wealthy. The current approach more closely resembles medieval levies on nobles than modern fiscal policy.

Reserves, Revenue, and the Sanctions Squeeze

Russia's ability to sustain current spending depends on several variables, each under pressure.

Oil and gas revenue — historically 30-40% of the federal budget — has declined to roughly 22% of total revenues, the lowest share in at least two decades [4]. This reflects both lower global prices and the effect of Western price caps and sanctions on Russian crude exports. Oil and gas revenues totaled 8.48 trillion rubles in 2025, down from 11.13 trillion the year before [4].

International debt markets remain largely closed to Russia. Western sanctions have cut off access to dollar- and euro-denominated borrowing, forcing the government to rely on domestic bond issuance — at interest rates that have climbed sharply as the central bank has raised its key rate to combat inflation [6].

Sanctions evasion has partially offset the pressure. By 2023, 30% of oligarch-affiliated companies were incorporated in tax havens, up from 5% in 2009 [11]. The UAE has emerged as a primary hub for wealth transfers and sanctions circumvention [11]. However, evasion has costs: it requires intermediaries, creates legal exposure, and diverts capital from productive domestic investment.

The Iran conflict wildcard: The U.S. lifted certain oil sanctions in March 2026 following operations against Iran, and President Trump suggested permanent sanctions relief could be possible [3]. If sustained, this would significantly improve Russia's revenue outlook — but it also introduces dependency on geopolitical developments beyond Moscow's control.

What Comes Next

The oligarch funding request is best understood not as an isolated event but as one element in a broader fiscal strategy that includes spending cuts, tax increases, domestic borrowing, and continued pressure on the central bank.

The government's planned 2026 deficit of 1.6% of GDP looks optimistic given first-quarter revenue trends [4]. If oil prices retreat from their Iran-driven spike, Moscow will face difficult choices: deeper spending cuts that risk public discontent, further tax increases that slow an already stagnating economy, or accelerated depletion of the NWF's remaining reserves.

For the oligarchs, the calculus is straightforward. Kerimov's reported $1.23 billion pledge is large in absolute terms but represents a fraction of his fortune — and the alternative to compliance is well understood. The Yukos precedent is not ancient history; it is a living feature of Russia's political economy.

The sustainability of Russia's war effort depends less on any single funding mechanism than on the trajectory of oil prices, the effectiveness of sanctions enforcement, and the Kremlin's willingness to impose further costs on its own population. Putin's request to the oligarchs signals that the existing formula — record military budgets financed by borrowing and reserve drawdowns — is straining. Whether it is breaking is a different question, and one that the coming months of budget data will answer more clearly than any closed-door meeting.

84% of Russia's defense spending remains classified [6], meaning the full picture of war costs is unavailable to outside analysts — and possibly to some of the oligarchs being asked to help pay for it.