Russia's years-long war with Ukraine has severely depleted the Russian economy, but dictator Vladimir Putin had a serious trump card: solid gold reserves. Its sale increased the value of Russia's reserves by more than $200 billion. However, the situation has recently changed dramatically.
Points of attention
- Economists warn of a potential surplus in oil production, which could lead to a further decrease in oil prices, impacting Russia's oil revenues and economy.
- The combination of diminishing gold reserves, falling oil prices, and escalating Western sanctions present a bleak forecast for Putin's ability to maintain stability and fund the war machine.
Putin's gold "bubble" may soon burst
Over the past 4 years, the dictator has managed to sell off 71% of the gold from the National Welfare Fund of the aggressor country.
This is what gave him the opportunity to save the Russian economy from a deep and protracted crisis.
Moreover, the sale of gold provided funding for the war machine under the pressure of Western sanctions.
However, last week, an event occurred that is truly alarming for the Kremlin — the price of gold unexpectedly collapsed by as much as 18%.
Putin also cannot ignore the fact that Russia's oil export revenues have fallen by as much as 24% in 2025.
In addition, they have effectively gone into free fall due to US President Donald Trump's sanctions against Rosneft and Lukoil.
David Fife, chief economist at energy company Argus, voiced a dismal forecast for Putin in light of recent events:
There is a potential surplus (of oil — ed.) of 3.5 million barrels per day. If OPEC does not step back from the brink and limit production again, the price will fall to $30.
According to him, it is likely that soon Russian oil will be practically unsold.
