29 June 2026
Nervousness is growing among Russia’s elites over the potential military escalation that Vladimir Putin might resort to in response to long-range strikes against Russia, The Washington Post reports.
A series of drone strikes, which hit nine of Russia’s 10 largest oil refineries, as well as defense plants in Voronezh, Volgograd, and the Tula region, is adding to the anxiety of officials who are already struggling to keep the economy afloat and maintain a budget deficit that exceeded 6 trillion rubles between January and May.
“There aren’t enough air defense systems to protect our infrastructure, that’s clear,” a Moscow businessman told WaPo. “No one knows what to do to increase production. This is a dire situation that Putin and his inner circle apparently didn’t expect. They weren’t prepared for a long war, and they’re not ready for a drone war.”
The escalating Ukrainian attacks, which threaten to isolate Crimea and have already triggered the worst fuel crisis in the country’s history, are compounded by a worsening geopolitical situation, WaPo notes: Donald Trump has threatened new sanctions, praised Ukrainian President Volodymyr Zelenskyy, and signed the G7 declaration for the first time, pledging support for Ukraine’s territorial integrity. These are all clear “alarm bells,” says another source close to the Russian diplomatic corps.
Falling oil prices will further complicate the economy: following the US-Iran agreement, the price of a barrel of Russian Urals crude has fallen to $50, while the Ministry of Finance needs to find funds to increase military spending, which accounted for every second ruble spent by the budget and two-thirds of tax revenues in the first quarter.
Given the “massive deficit” and the nearly depleted National Welfare Fund, the government will borrow more, which in turn will fuel inflation, a former senior finance official told WaPo.
Nevertheless, Putin is unlikely to succumb to pressure and will likely seek ways to intensify retaliatory strikes against Ukraine, WaPo reports. “It seems we’re headed for a new cycle of escalation,” a source close to the diplomatic corps told the publication.
Concerns are growing among the business community that the state will seek to dig into private savings to finance the war, WaPo reports. Rumors of confiscating deposits, which have been circulating since late 2024, took an unexpected turn in June, when Communist Party leader Gennady Zyuganov suddenly proposed “mobilizing” household and corporate bank deposits . Although he later disavowed his statements, this did not allay fears. “The government may try to get money by any means necessary. Everyone is thinking about how to withdraw their money and leave,” a Moscow businessman told WaPo.
This lack of preparedness is typical of Putin’s system, where everything is built on his dominant role and coordination between branches of government is weak, emphasizes Tatyana Stanovaya, a senior fellow at the Carnegie Center for Russia and Eurasia. “This is a perennial problem for the Russian authorities” and “a serious test for the Russian economy and population,” she emphasizes. “The question remains whether they have an action plan or an understanding of how to handle this situation.”
It’s not smartphones or PCs, it’s not Instagram or Tictok, it’s not gold, diamonds, or stocks. What makes a modern society work?
Fuel.
Fuel is needed for EVERYTHING. Without fuel, society breaks down. The military too. Ukraine’s strategy is working. We want more!