Putin hat Russland in eine „Crack-Kokain“-Wirtschaft verwandelt – er sitzt in der Falle

Russia is now more than four years into a full-scale war with Ukraine – a protracted conflict following an invasion it was confident would lead to a total victory in weeks, if not days. The conflict has become a long, grinding war of attrition, with hundreds of thousands, if not millions, of casualties on both sides in what has become the 21^(st) century equivalent of trench warfare.

One result of this is that Russia has become a nation with a wartime economy. Defence now accounts for almost 40 per cent of all government spending, and [military spending has reached around 7 per cent of GDP](https://www.sipri.org/publications/2026/sipri-insights-peace-and-security/budget-fifth-year-war-military-spending-russias-budget-2026) – more than three times the level of most Nato members.

Beyond that, sanctions have reshaped the wider Russian economy. It has been cut off from most of the global financial system, and has had overseas assets seized or frozen across the world. Europe has largely weaned itself off Russian oil and gas, forcing the country to find new customers and new routes to market – a task made harder by sanctions and seizures of tankers at sea. Russia’s global trade looks very different today than it did in 2022.

Russian exports of oil to Europe have fallen from around 175 million tonnes a year in 2021 to just 25 million tonnes in 2025 – today, India and China account for 80 per cent of its exports. The conflict in Iran improves Russia’s situation markedly in two ways: first, with the Strait of Hormuz all but blocked, rival suppliers are off the market; and second, the crisis has sent oil prices through the roof, greatly to Russia’s benefit.

With the US still seemingly determined to secure a peace deal between Russia and Ukraine, and willing to try to force one through on terms more favourable to Russia than either Ukraine or Europe would like, all of this raises a serious question: could Russia’s economy even transition back to peacetime without a crisis?

The sanctions against Russia have been subject to a frenetic briefing war telling two very different stories. Russia and its boosters claim the sanctions have backfired entirely, making Russia’s economy stronger while damaging the west. Some Ukraine backers, by contrast, claim that sanctions have brought Russia to the verge of economic collapse and that it cannot keep up its current spending for much longer.

Unsurprisingly, most experts think the truth lies somewhere between these two extremes. Tom Keatinge, director of the Centre for Finance and Security at the think-tank Rusi, notes that the UK foreign office claims sanctions have taken around $450bn out of the Russian economy – a huge number, but one he notes has stayed largely static over the last year.

This is because around $300bn of that total was the result of freezing Russian assets overseas, which you can only do once. When new sanctions are issued, even amid fanfare, they are usually more an attempt to counter Russian efforts to evade existing sanctions than a new crackdown. Sanctions are more of a “slow puncture” than a knockout blow.

Even if the US brokered a peace deal tomorrow that involved lifting its Russian sanctions, its economy would not bounce back overnight. European countries would, Keatinge notes, be vanishingly unlikely to unfreeze Russian assets without reparations to Ukraine for war damages.

Beyond that, most European countries have spent billions to secure new sources of oil and gas, and having now done so, have no reason to return to a reliance on Russia to keep their homes heated and their lights on – at least until the Iran crisis threw supply lines into chaos again. Whatever Russia or even the US might like, a lot of this trade simply isn’t coming back.

Keatinge likens a wartime economy to being on “crack cocaine”, not least because it’s a difficult thing to quit. “The great thing about a war economy is that there is almost an infinite demand for stuff, because it’s all getting destroyed in eastern Ukraine,” he notes. “And so if you manufacture trucks…happy days.”

Russia’s ability to restock its military from overseas is limited, meaning domestic manufacturers have been having a boom producing for the war effort. If that conflict stops, so does that seemingly limitless demand, almost overnight. Not having anything to replace it sparks a serious risk of an economic crisis – which is a particularly dangerous thing in an autocracy like Russia. Peacetime could prove much more dangerous for Vladimir Putin’s continued rule than wartime ever has.

That risk might be overplayed, though: Mark Galeotti of the UCL School of Slavonic and East European Studies notes that weapons and truck manufacturers might have several years of production left after a war to replenish stocks of what was lost to pre-war levels. Similarly, while Russia’s government is heavily reliant on oil – which accounts for about 20 per cent of its revenues – it is not totally reliant upon it. The rest comes from the same sources as most other governments: income tax, corporation tax, and the like.

Galeotti also notes Russia is suffering from a serious manpower shortage. Millions of young men have gone to serve in the war – estimates suggest around 1.2 million of them have been killed or seriously injured – leaving major shortages of workers at home. Many of these men have come from Russia’s poorest regions, emptying out whole towns because of the relatively high pay and death or injury bonuses on offer. That leaves few workers available, and drives up the cost of hiring the ones who remain.

“Things like agriculture are really suffering because they really can’t afford to pay the salaries that they need to for people to bring in the harvest, and collect the eggs, and all that stuff,” Galeotti notes.

Peacetime could cut either way on that front. It might mean a return of many young men to regular employment, restoring Russia to a more normal economic footing. By contrast, it might mean millions of injured or traumatised young men flooding the streets. Both experts suggest the demographic effects of the war on Russia will be felt for decades – partly from the men who fought and died, and partly from the bright young men of the elite who fled in the war’s early days, out of fear that they might otherwise be conscripted.

Galeotti in particular thinks the west missed a trick in 2022 to deprive Russia of its best and brightest, and take them for ourselves. When we might have appealed to young men afraid of being sent to fight and die, instead we closed off our borders to Russians, for fear of spies or sabotage.

Putin’s government quickly realised the political risk of drafting elites, and made sure soldiers were recruited from poorer regions far from the capital. The brain drain slowed to a trickle, as a result.

As ever, the story on Russia’s economy is always more complicated than either side in the conflict would like to present it. Russia might have failed spectacularly to secure the easy military victory it believed was possible in Ukraine, but its administrators back home have worked wonders to keep its economy operational even under the maximum pressure the west could muster.

Transitioning to peace, if a deal could ever be struck, would be a similarly fraught task and bring a new package of risks to Putin and his administration – but would also bring new opportunities to attract investment, particularly from Donald Trump’s America. Putin has political and economic advantages from war. He is only likely to agree a peace deal if he thinks the price is right.