INVESTIGATION: The ruble of war, what Western observers take away from it

Introduction

Russia's 2026 budget counts on oil and gas revenue of 8.9 trillion rubles, according to The Moscow Times on October 28, 2025. This figure, huge on its face, hides a fragile reality that the Kremlin's official rhetoric does not let show, a fragility this investigation sets out to document using the best Western sources available. A budget that leans this heavily on oil is a budget betting, every day, on a price Moscow no longer fully controls.

This investigation draws on cross-referenced data from the US Treasury, relayed by Reuters, as well as Estonian estimates picked up by Euromaidan Press, to build as precise a picture as possible of what Western observers actually take away from the state of Russia's war finances in 2026.

Sanctions on Rosneft and Lukoil have directly cut Russian oil revenues, according to the US Treasury, cited by Reuters on November 17, 2025. This official US finding is the central piece of this investigation, around which the other factual elements gathered here are organized.

The budget figure, 8.9 trillion rubles expected

What this figure concretely represents for Moscow

The 8.9 trillion rubles expected from oil and gas revenue for 2026 represent, according to The Moscow Times, a substantial share of the Russian federal budget, illustrating the persistent dependency of Russia's war economy on hydrocarbons, despite years of official talk about economic diversification. Diversifying the Russian economy remains, in 2026, more a repeated slogan than a verifiable budgetary reality in the published figures.

This structural dependency exposes the Russian budget to fluctuations in the global oil market and to Western pressure measures specifically targeting this sector, a vulnerability Western observers have been watching with particular attention since the start of the war in Ukraine.

A projection that rests on price assumptions

Like any forecast budget, this figure of 8.9 trillion rubles rests on oil price assumptions that could prove, over the course of the year, more or less optimistic. No source consulted for this investigation details precisely the per-barrel price used as the baseline assumption for this Russian budget projection.

This zone of uncertainty requires treating this figure as an official target rather than an already-achieved result, an essential methodological nuance for any serious analysis of Russian public finances in wartime.

The documented effect of the Rosneft and Lukoil sanctions

What the US Treasury confirms

The US Treasury, cited by Reuters on November 17, 2025, confirms that sanctions targeting Rosneft and Lukoil have directly cut Russian oil revenues. This official confirmation, coming from a leading Western government institution, provides solid proof of at least the partial effectiveness of these economic pressure measures.

This documented reduction in revenue contrasts with certain narratives that systematically downplay the impact of Western sanctions on the Russian economy, a contrast worth highlighting for a balanced assessment of the real situation. Downplaying the effect of sanctions is one narrative; having it confirmed by the US Treasury itself is another, far harder to dispute.

Rosneft and Lukoil, two historic pillars targeted

Rosneft and Lukoil rank among the largest Russian oil companies, carrying considerable weight in the country's hydrocarbon exports. Targeting these two companies with targeted sanctions therefore represents a strategic choice aimed at maximizing the economic impact on Russia's capacity to finance its war effort.

The choice of these two specific targets rather than a blanket sanction on the entire Russian energy sector illustrates a calibrated pressure approach, seeking a balance between economic effectiveness and managing the risk of excessively disrupting global energy markets.

The cost of munitions production, one trillion rubles a year

What the Estonian estimates reveal

Munitions production reportedly costs the Russian state roughly one trillion rubles a year, according to Estonian intelligence estimates picked up by Euromaidan Press on February 11, 2026. This figure, set against the 8.9 trillion rubles expected from oil and gas revenue alone, gives a sense of the share this industrial effort represents in Russian public finances.

This budgetary perspective helps explain why oil revenue, even reduced by sanctions, remains so central to Moscow: it directly finances a significant part of the war effort through munitions production destined for the Ukrainian front. Every barrel sold finances, somewhere, a shell; it's the simplest and most unsettling equation of this war budget.

A figure that must be treated as an estimate

It should be noted that this figure of one trillion rubles comes from an intelligence estimate, not data officially published by Russian authorities themselves. This origin requires methodological caution in using this figure, without necessarily calling into question its general plausibility in light of other available data.

The delayed deadline for the Lukoil asset sale

What this delay reveals about market difficulties

The delay in the deadline for selling Lukoil assets to May 30, 2026, documented by Reuters on April 29, 2026, illustrates the difficulty of finding buyers for Russian oil assets under international sanctions. This concrete difficulty is further proof of the real effect of sanctions on the commercial operations of major Russian oil companies.

A deadline delay of this kind does not generally occur without a serious structural reason: it reflects potential buyers' reluctance to expose themselves to secondary sanctions by dealing with a Russian entity under an international sanctions regime. No one rushes to buy what the whole world regards as toxic; that may be the quietest and most effective sanction of all.

Implications for Lukoil's future structure

This delay raises questions about Lukoil's structural future, some of whose assets might have to be sold under less favorable conditions than initially expected, if no satisfactory buyer comes forward before the pushed-back deadline. No source consulted for this investigation allows a precise anticipation of how this matter will be resolved.

What Western observers conclude overall

Real pressure but not yet decisive

The synthesis of the available elements suggests that Western observers view the economic pressure exerted on Russia as real and measurable, without being judged decisive on its own for ending the conflict. This cautious nuance matches the most common reading found in the sources drawn on for this text.

This cumulative pressure, combining reduced oil revenue with the rising cost of munitions production, nonetheless forces Moscow into increasingly difficult budgetary choices as the conflict drags on. A budget that has to choose between guns and public services is never a budget that's truly winning; it's only postponing the bill.

The question of this economic model's sustainability

The medium-term sustainability of this war economic model, heavily dependent on oil revenue under growing sanctions pressure, is an open question that the sources consulted for this investigation do not allow us to settle definitively. This uncertainty honestly reflects the current state of knowledge on this complex subject.

The role of oil prices in this equation

A dependency that exposes Moscow to global markets

The Russian budget remains heavily exposed to fluctuations in the global price of oil, a factor that neither Moscow nor Western powers fully control. This structural exposure is a recurring vulnerability of Russia's war economy, independent even of specifically targeted Western sanctions.

A durably low oil price would mechanically worsen the Russian budgetary difficulties documented in this investigation, while a high price would, conversely, offer Moscow additional room to finance its war effort. Moscow does not control the price of the barrel; that may be the greatest weakness of a budget that nonetheless claims to be running an entire war.

Western oil price-cap mechanisms

The Western mechanisms capping the price of Russian oil, documented by the European Commission, add to the targeted sanctions on Rosneft and Lukoil to form a multi-layered pressure system seeking to limit Russian revenue while avoiding excessive disruption to global energy markets.

The limits of this investigation, what it cannot establish

The absence of independently verified Russian financial data

This investigation relies exclusively on Western sources and intelligence estimates, in the absence of Russian financial data independently verified by international auditors. This methodological limit, inherent to any journalistic work on the finances of a wartime state with little transparency, requires constant caution in interpreting the figures put forward.

The lack of Russian budgetary transparency structurally complicates any independent verification of the official figures announced by Moscow, which paradoxically reinforces the value of Western estimates despite their own acknowledged methodological limits. A state that hides its real figures always ends up being read through the estimates of those it refuses to inform.

The difficulty of measuring the real impact on the military ground

No source consulted for this investigation establishes a direct, measurable causal link between the budgetary pressure documented here and any resulting limitation of Russian military capabilities on the Ukrainian battlefield. This link, often assumed in Western discourse, remains more a plausible hypothesis than a fact strictly established by the available sources.

Historical precedents of economic pressure on Russia

A country used to sanctions cycles since 2014

Russia has been under Western economic sanctions since the annexation of Crimea in 2014, which has given it, over the years, a certain experience in adapting to this type of pressure. This accumulated experience could partly explain the relative resilience observed so far despite the scale of sanctions imposed since 2022.

This resilience, documented by several Western economic analyses, should not, however, be confused with total immunity: the data gathered in this investigation does show measurable effects, even if their scale remains below the initial hopes of some Western policymakers. Withstanding sanctions is not the same as not being affected by them; Russia does the former, never the latter.

What sets the current cycle apart from precedents

The current cycle of sanctions differs from precedents in its scale and its international coordination, bringing together the European Union, the United States, and numerous other Western partners in a concerted effort rarely seen at this scale in the recent history of international economic relations.

What this means for the rest of the conflict

One factor among others in the overall equation

The budgetary pressure documented by this investigation is one factor among others in the overall equation of the conflict, alongside the military, diplomatic, and human factors that jointly shape how the war in Ukraine evolves. No source consulted for this text allows this economic factor to be singled out as decisive on its own for the outcome of the conflict.

This analytical nuance, essential to avoid any misleading shortcut, takes nothing away from the real importance of the budgetary elements gathered here for understanding the growing constraints Moscow faces. Refusing the easy shortcut is the only way to keep credibility when writing about a war still under way.

The questions this investigation leaves open

Several central questions remain open at the end of this investigation: how much further could these budgetary constraints worsen, and at what threshold would they truly become decisive for the Kremlin's strategic choices. These questions will likely shape the next economic analyses devoted to this file.

The human dimension behind the budget figures

What these figures mean for Russian households

Behind these abstract budget figures lies a more concrete reality for Russian households, whose standard of living could be affected by the budgetary choices needed to finance both the war effort and basic public services. No source consulted for this investigation details this social impact precisely, which would deserve a dedicated investigation of its own. We measure the trillions of rubles long before we measure the lines they often end up causing.

This lack of detail on the direct social impact does not mean that impact is nonexistent, but it requires treating it as an open question rather than a fact established by the sources drawn on here. What budget statistics never say is the price paid, every month, by an ordinary Russian family.

The Kremlin's implicit budgetary priorities

The continued funding of substantial munitions production, even in the face of oil revenue reduced by sanctions, reveals a budgetary priority the Kremlin has embraced in favor of the military effort, potentially at the expense of other, less visible public spending lines in the sources available for this investigation.

Potential buyers of the Lukoil assets, an open question

Why so few buyers are stepping forward

The scarcity of potential buyers for the sanctioned Lukoil assets illustrates a broader phenomenon of international caution toward anything touching, even indirectly, sanctioned Russian entities. Foreign companies legitimately fear exposing themselves to secondary sanctions by entering into a transaction seen as too close to the Russian regime.

This widespread market caution is, in itself, an indirect but telling indicator of the deterrent effectiveness of Western sanctions regimes, beyond even their direct, measurable effect on Russian revenue documented earlier in this investigation. The fear of being sanctioned oneself sometimes carries more weight, in practice, than the sanction itself.

Possible scenarios for how this matter develops

Several scenarios remain possible for how this matter develops: a new buyer could emerge before the new May 2026 deadline, or conversely, a further delay could be needed if no satisfactory solution is found. No source consulted for this investigation allows one of these scenarios to be favored with certainty. Two possible scenarios, one certainty: the waiting itself already carries a cost for Moscow, whatever the final outcome.

The role of financial intermediaries in this file

A gray area rarely documented in detail

The precise financial mechanisms allowing Russia to keep exporting part of its oil despite sanctions remain, for the most part, a gray area insufficiently documented by the sources available for this investigation. Financial intermediaries located in third-party jurisdictions likely play a role, though their precise identity is not systematically revealed by the Western journalistic investigations consulted here.

This opacity is a permanent challenge for Western regulators tasked with enforcing sanctions, a challenge that the Russian budget figures documented in this investigation only partly explain without revealing the precise mechanics of their circumvention.

What this means for the real effectiveness of sanctions

This financial opacity does not invalidate the documented effectiveness of the Rosneft and Lukoil sanctions, but it suggests the real impact could be even greater if the circumvention mechanisms were better identified and countered by the Western regulators responsible for this area.

International comparisons, a useful lens

How other sanctioned economies have historically reacted

The experience of other economies subject to major international sanctions, such as Iran or North Korea, offers a useful, if imperfect, comparative lens for understanding the possible trajectories of the Russian economy under prolonged sanctions pressure. These precedents generally show significant adaptive capacity, combined with a gradual, lasting decline in the population's standard of living.

This comparison remains limited, however, by the considerable structural differences between these economies and Russia's, particularly in terms of size, natural resources, and pre-existing international trade relationships, which requires handling this comparison with caution rather than as a direct prediction.

What the size of the Russian economy changes in the equation

The sheer size of the Russian economy, far larger than Iran's or North Korea's, gives it a superior structural resilience against sanctions, while also making it harder to completely isolate from global markets — a complex balance Western observers continue to study closely.

Conclusion

The ruble of war, as documented by the Western sources drawn on for this investigation, tells the story of an economy under pressure but not yet out of breath. The 8.9 trillion rubles expected from oil and gas revenue in 2026, set against the documented effect of the Rosneft and Lukoil sanctions and the one-trillion-ruble annual cost of munitions production, sketch a war budget that holds, but holds less and less comfortably.

The delay in the Lukoil asset sale deadline, revealing an increasingly difficult market for sanctioned Russian entities, concretely illustrates this growing pressure. What Western observers take away from this is therefore not an imminent collapse, but a gradual erosion of Moscow's budgetary room to maneuver. A budget forced to keep pushing back its own deadlines is never a healthy budget; it's a budget buying time, one extension at a time.

Signature

Signed Maxime Marquette, columnist

Columnist's Transparency Box

Editorial positioning

This investigation is written from a declared angle of preference, pro-Western, which guides the attention paid to the documented effects of sanctions on the Russian economy. This positioning implies no fixed categorization presented as settled fact: every financial element is presented with its own degree of uncertainty and explicit source.

Methodology and sources

This text relies on The Moscow Times of October 28, 2025 for budget forecasts, on Reuters of November 17, 2025 and April 29, 2026 as primary sources for the sanctions' effect and the Lukoil delay, and on Euromaidan Press of February 11, 2026 for the cost of munitions production.

Nature of the analysis

This text distinguishes between official figures announced by Russian authorities, Western intelligence estimates, and the columnist's personal analysis of the significance of these budgetary elements, clearly identified by tone throughout the text.

Sources

Primary sources

Reuters — Effect of sanctions on Russian oil revenue — November 17, 2025

Euromaidan Press — Annual cost of munitions production — February 11, 2026

Reuters — Delay in the Lukoil asset sale deadline — April 29, 2026

Secondary sources

The Moscow Times — Russia's 2026 budget forecasts — October 28, 2025

Euromaidan Press — Estonian intelligence estimates — February 11, 2026

The Moscow Times — Context on the Rosneft and Lukoil sanctions — October 28, 2025