European Intelligence: Putin's Economy Can Withstand Another Year Of War

Economic growth in Russia has virtually come to a halt.

The war in Iran, which has driven up oil prices, has delayed the onset of economic difficulties in Russia, said Fox News a high-ranking source in European intelligence.

Thanks to additional revenue from raw materials, which allows the Russian government to fill the budget, the Fox source estimates that Vladimir Putin will be able to continue the military campaign in Ukraine at least until next spring or “one more season.”

The price of Russian Urals crude oil, which had fallen to $40 per barrel and below at the start of the year, jumped to $82 in the second quarter, one and a half times higher than the levels during the same months last year. According to the Central Bank, in April–June the Russian economy received $30 billion in additional export revenues, and oil and gas revenues to the treasury in July reached a record high in over a year—934 billion rubles. This is 18% higher than the level in July 2025 and 2.5 times more than what the budget received from oil and gas this winter.

Higher oil prices have helped the Kremlin close a larger portion of the budget deficit and delay the moment when economic difficulties will force Putin to make a difficult choice regarding the war, a Fox source said. “This does not solve Russia’s fundamental economic problems,” but from a budgetary standpoint, Putin “is not under pressure,” added the intelligence source.

According to the Ministry of Finance, from January through July, the “hole” in the federal treasury reached 6.5 trillion rubles, exceeding the full-year target by 70 percent. By the end of the year, the deficit could rise to 7 trillion, predicts Alexander Isakov, head of the bank’s Center for Macroeconomic Research. According to Central Bank estimates, the deficit could exceed 8 trillion rubles.

Economic growth in Russia has virtually stalled: while GDP grew by more than 4% annually in 2023–24, it grew by 1% last year and by only 0.6% in the first half of 2026. Outside the military-industrial complex, industry is mired in a recession, with output volumes nearly 5% lower than in 2024 (according to CMACP estimates).

But the economic situation is unlikely to force Putin to end the war, especially since he is buoyed by high oil prices, says Elina Rybakova, a senior fellow at the Peterson Institute for International Economics.

“Things would have to get much worse,” she believes—for example, a year of oil prices around $35–40 per barrel. However, this is unlikely given the war involving the U.S., Israel, and Iran, Rybakova emphasizes.

A window for negotiations on Ukraine will most likely not open until at least the fall of 2027, according to U.S. officials who agree with European intelligence assessments. According to The New York Times, they expect hostilities to continue, a new Russian offensive in the winter, and a new campaign of strikes against Ukrainian infrastructure, which will make the war even more devastating. At the same time, NYT sources do not rule out the possibility that Putin will announce a new mobilization or escalate tensions with NATO.

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