On Friday, the United States announced it is moving forward with legislation to impose sanctions on buyers of Russian oil. Lawmakers hope this will produce a ripple effect across Russia’s economy, dissuading other nations from trading with Moscow as the US would place heavy tariffs on imports from countries that purchase Russian oil, uranium, and natural gas. Whether these sanctions will become the tipping point is still unclear, but the effort aims to strike Russia where it is most vulnerable. The Russian economy is completely reliant on revenue from fossil fuel exports, which brings in 734 million euros each day.
Though Russia’s economy remains huge—valued at roughly $2.6 trillion—growth is decelerating, and the economy contracts quarter after quarter. Projected growth rates for 2026 stand at only 0.4%. That is even worse than 2025, when Russia managed just 1% growth and narrowly avoided a recession.
In 2022, Russia’s economy initially shrank when sanctions first hit, but it rebounded in 2023 by forming new trade relationships with other countries, achieving a 4.1% growth rate, according to the World Bank. However, that growth proved short-lived as the wartime spending boom exhausted itself, energy prices dropped, and the costs of the war spiraled upward.
This year, defense officials reportedly told Russian President Vladmir Putin that billions more would be needed to finance the conflict, since the war was running at least $28 billion over budget. It was also projected that Russia would overspend on the war by an additional $54 billion in 2027 and 2028.
That is certainly a major increase. Between 2019 and 2021, Russia spent roughly $47 billion annually on national defense, but this year’s budget requires more than $158.5 billion. When all costs are accounted for, research by Stanford researcher David Henderson estimates the conflict is surpassing $2.5 trillion.
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Russia is essentially burning through its GDP to capture a section of Ukraine that amounts to 10% of Texas’s size—or 268,597 square miles. This works out to roughly $90 million spent per square mile acquired, with territory being gained very slowly.
