Putin's Last $35 Billion: The Economic Countdown Begins

If Ukraine and Europe start the clock

I never joined the chorus predicting Russia's economic collapse, and I'm still not convinced it's imminent. Two factors anchor my skepticism: first, I am not going to underestimate Russian Central Bank Cheif Elvira Nabiullina; second, Putin is not dumb enough to run the final leg of liquid cash left in the Russian National Wealth Fund ground to zero.

The western world has managed to shave off merely $60 to $100 billion from Russian oil revenues—less than $3 billion monthly. Without British Prime Minister Keir Starmer's government pushing the West to systematically target Russia's shadow fleet since last October, even these modest losses might never have materialized.

The uncomfortable truth? Evil doesn't guarantee failure. When the malevolent outwork the righteous, when criminals hustle harder than law enforcement, the system warps beyond recognition. This is precisely where the West finds itself with sanctions—trapped in a game where effort matters more than virtue.

The irony cuts deeper still.

While the West spent three and half years in chipping away at the edges of Russia's financial foundations, Putin accomplished what sanctions couldn't: he dismantled his own central bank's defenses in a mere six months. The timing couldn't have been worse. He neutralized his most potent economic weapon at the moment he needed it most—not his nuclear arsenal, but Nabiullina herself, the architect who has repeatedly pulled Russia's economy back from the brink. He forced her to cut interest rates, when she wanted to increase it. Now inflation is out of control.

Yet, even after watching Putin sabotage his own position, I remain reluctant to predict Russia's imminent collapse. The numbers tell a complex story.

When the war began, Russia held over $475 billion in reserves, with the National Wealth Fund accounting for nearly $175 billion —

• $115 billion liquid,

• $60 billion illiquid.

Nearly $300 billion sat in Western institutions, now frozen solid and generating interest payments that flow directly to Ukraine's defense. Any hope of reclaiming them lies buried in years of legal arbitration. This leaves only the National Wealth Fund as Russia's accessible lifeline.

With Western capital markets closed off, the Kremlin has turned inward, issuing domestic loans at punishing double-digit rates that crush businesses under compound pressure. Each loan becomes a gamble against time, with the mathematics working relentlessly against the economy. That leaves the NWF as the only back up for the Russian economy. It is not just under pressure—it's bleeding, and the wound grows deeper with every passing month.

Russia's official numbers paint a rosier picture: by June 2025, they claim the liquid portion dropped to $35 billion while the illiquid assets ballooned to $135 billion, maintaining a respectable total near $170 billion. According to Moscow's arithmetic, they've effortlessly managed sky-high deficit budgets through financial alchemy—transforming crisis into stability with a wave of the bureaucratic wand.

It's complete fiction.

Yes, rising gold prices provided some genuine relief—a 72% surge between 2022 and 2025 offered real value.

But Russia wants us to believe they more than doubled their illiquid NWF holdings while simultaneously draining the fund to cover massive budget deficits. Even in Russia's alternate reality, the math doesn't add up. When you control the country's accountants, creative bookkeeping becomes indistinguishable from fantasy.

Liquid portion of the Russia’s NWF

The $35 billion liquid figure, however, likely reflects truth—it almost certainly comes from Ukrainian intelligence, not Kremlin propaganda. And that number tells the real story: Russia's withdrawal rate is unsustainable. Russian Central Bank Chief Elvira Nabiullina would have delivered this message with characteristic bluntness to Putin: cut spending, both military and civilian, or face economic collapse.

The evidence suggests Putin listened.

Since early this year, the Kremlin has been slashing state expenditures with desperate urgency. Military cuts have begun too, though more subtly. The brakes aren't fully engaged yet, but the deceleration is unmistakable.

1. Drone attacks have intensified—they're cheaper—while missile salvos grow smaller.

2. Troop strength hovers around 630,000, but expansion has stalled completely.

Though Putin feeds his oligarchs and the world manipulated numbers, I do expect that he has ordered his team to find ways to ease the pressure on the NWF. He may even have instructed them to inject funds back into it rather than continue draining it. The only realistic path to achieve this is through relentless cuts in state expenditures. He will risk a recession.

This desperation explains why sanctions have become the West's sharpest blade. It illuminates Putin's frantic courtship of Trump—if America fractures from Europe, the odds of tightening sanctions crumbles, gifting Russia the breathing room it desperately needs. But if the Atlantic alliance holds firm, the forced Russian transition to austerity will strangle the war machine as well as the economy with a single rope.

The current phase is everything for Putin.

Survive this transition, and Putin can drag the war into another grinding year. Fail, and the entire system implodes under its own contradictions. The mathematics are stark: only sustained Western pressure can guarantee Russia's economic collapse.

Europe and Ukraine cannot afford to wait for American leadership.

1. The pressure must remain relentless—monthly sanctions packages from Brussels, escalating long-range strikes from Kyiv.

2. The time has come for Ukraine to defy American targeting restrictions as much as they possibly can.

3. Every Russian drone and missile demands immediate retaliation in kind.

Ukraine must frame each strike not as escalation, but as legitimate response to Russian aggression—a doctrine of proportional defense that strips away any pretense of restraint.

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