![](\"https:\/\/fortune.com\/img-assets\/wp-content\/uploads\/2026\/06\/GettyImages-2278845133.jpg?w=2048\")
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The Kremlin\u2019s war machine is short on money and fuel as Ukrainian drones wreak havoc on Russian supply lines.<\/p>\n
More than four years after Vladimir Putin failed to seize all of Ukraine in a full-scale invasion, analysts say Kyiv\u2019s forces have turned the tide with improved drones and tactics.<\/p>\n
At the same time, Russia is reeling as casualties reach staggering heights; recruitment of replacement troops wanes; and areas far from the front lines come under attack.<\/p>\n
Russia\u2019s changing fortunes were exemplified earlier this week at the St. Petersburg International Economic Forum, which kicked off just as long-range Ukrainian drones damaged a nearby refinery and naval shipyard, sending plumes of smoke over Putin\u2019s attempt to create his own version of the Davos gathering.<\/p>\n
With its war on Ukraine now a quagmire and its economy shrinking, Kremlin finance officials recently told Putin that his war is unaffordable, sources told Bloomberg. <\/p>\n
Defense spending could send the government\u2019s budget deficit into dangerous territory, the report said, noting that the shortfall through April had already deepened to 5.9 trillion rubles, or about 50% above the forecast for the entire year.<\/p>\n
While Russia has been recording deficits for four years, a wider gap would further drain its reserve fund, which is now down 60% from prewar levels. <\/p>\n
In addition, the economy has since reversed after growing on the back of military spending. GDP contracted in the first quarter, and the Kremlin now sees just a 0.4% uptick for all of 2026, down from a previous view of 1.3% growth.<\/p>\n
The pivot toward economic stagnation follows hotter war-fueled GDP gains of more than 4% in 2023 and 2024. But that slowed to 1% last year, and Russia\u2019s budget woes have worsened, too.<\/p>\n
Reports last month said Russia\u2019s finance ministry warned in February that deficits had rapidly deteriorated, and the latest warning comes despite the U.S.-Israeli war on Iran boosting oil prices and providing a revenue bump.<\/p>\n
But Ukraine has also been attacking Russia\u2019s oil infrastructure this year, targeting export terminals, refineries, and trucks carrying supplies in occupied areas of Ukraine.<\/p>\n
Fuel supplies are now being rationed in Moscow and parts of northern Russia, as almost all major oil refineries in central Russia have reportedly halted or scaled back output. <\/p>\n
Meanwhile, Russian-occupied Crimea has basically run dry amid a steady barrage of drone attacks on trucks along key highways linking the Ukrainian peninsula to Russia.<\/p>\n
The supply chain to occupied provinces in southern and eastern Ukraine is also cracking, and authorities have started to restrict gasoline sales in Luhansk and Kherson.<\/p>\n
Analysts at the Institute for the Study of War observed that Kyiv is mounting a two-pronged strategy with its drone attacks on Russia\u2019s oil infrastructure.<\/p>\n
The long-range strikes on refineries are reducing Russia\u2019s fuel output, while the mid-range strikes on the highways are hurting its ability to transport the gasoline that\u2019s still being refined.<\/p>\n
Fuel shortages hit the civilian sector as well as the war effort. The Russian military\u2019s motorcycles, all-terrain vehicles, and trucks run on gasoline, while armored vehicles, heavy trucks, and generators use diesel, ISW pointed out.<\/p>\n
\u201cThe gasoline shortages in occupied Ukraine are likely having a limited effect on the Russian military for the time being,\u201d analysts wrote on Thursday. \u201cMore militarily consequential diesel shortages are beginning to materialize, but the Kremlin may try to limit them with an export ban.\u201d<\/p>\n<\/div>\n
#Putin #running #money #fight #Ukraine #Russianoccupied #Crimea #running #fuel<\/p>\n","protected":false},"excerpt":{"rendered":"
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