Trump will leave Putin unable to fund his war.

The decline in oil prices, triggered by US President Donald Trump’s trade war, has started to deplete the Russian military budget, despite the US president’s simultaneous efforts to improve relations with the Kremlin. Russian budget revenue, roughly 33% of which come from oil and gas, could be ₽1T (2.5%) lower than anticipated this year if crude oil prices stay at their current levels. This would translate to a slowdown in GDP growth by 0.5 percentage points. The situation would compel the Kremlin to increase borrowing, reduce non-military spending, or tap into its remaining reserves.

The average price of Russian Urals oil has dropped to its lowest level in nearly two years, at around $50 a barrel, while the Russian budget was establishing using a price of $69.70.

Furthermore, according to the Russian Central Bank, following the onset of the full-scale war foreign direct investment in the real sector of Russia’s economy plummeted by 57% to $216B, the lowest figure since 2009. In the first year of the invasion, the Russian Federation lost $138B in foreign investments, in 2023 another $80B, and last year an additional $63B.