Russia’s economy during wartime is facing a potential collapse, with Putin receiving warnings after spending over £400 million in a single night on a significant drone attack in Ukraine. The Kremlin executed a massive missile and drone assault on Ukraine, resulting in the death of at least 15 individuals and injuring over 100. The attack, costing an estimated £400 million, involved 73 missiles and 656 drones, causing fatalities in Dnipro and Kyiv.
Despite Ukraine’s air force intercepting a large portion of the attack, with 40 missiles and 602 drones stopped, approximately 38 targets were still hit. Reports indicate that Russia’s top financial officials have cautioned Putin about the affordability of his war expenditures as the Russian economy faces challenges. Both the Ministry of Finance and the Central Bank of Russia have alerted Putin to “critical risks” to stability due to the escalating deficit in Ukraine.
This year alone, Russia’s Ministry of Defence has accumulated a significant deficit of around three trillion rubles (£30 billion). Moscow’s Ministry of Defence has resisted budget cuts and requested additional funding to continue its operations in Ukraine, leading Putin to reduce budgets in other departments to compensate for the shortfall.
Simultaneously, Ukrainian drones have targeted the Ilsky Oil Refinery in the Krasnodar region, marking the 16th attack on the facility during the conflict. Russia is on the brink of recession after revising down growth forecasts in May, prompting Putin to demand explanations for the country’s economic challenges. Despite receiving a temporary economic boost earlier in the year due to oil price spikes from the conflict in Iran, the gains are insufficient to cover the substantial gap in Russia’s budget.
In a recent development, the French navy, with assistance from Britain, seized one of Russia’s shadow fleet tankers, the Tagor, further disrupting Russia’s covert oil operations. Despite Russia’s claims of the seizure being “illegal,” the French president criticized the shadow fleet as a vital funding source for Putin’s ongoing invasion of Ukraine.
