(MOSCOW) — The ostentatious wealth long associated with the Russian Federation’s elite, often romanticised in popular culture, is facing a systemic collapse as the nation’s largest corporate entities face potential bankruptcy. Major flagships of the regime, including Lukoil, Rosneft, Gazprom, and Russian Railroads (RZD), have reported devastating losses, with some seeing annual revenues plunge by 50 per cent. This downturn has forced these once-profitable giants to seek emergency liquidity from a federal budget and a National Wealth Fund that are increasingly described as depleted.
The crisis is largely attributed to the sustained impact of international economic sanctions and a targeted Ukrainian drone campaign against energy infrastructure. Lukoil, frequently described as a primary financial pillar for the Russian dictator’s inner circle, has been particularly hard hit. The company reported a 50 per cent revenue loss in 2025, following the neutralisation of numerous refineries and terminals by low-cost Ukrainian aerial vehicles. Furthermore, global sanctions have forced the sale of Russian crude at steep discounts, falling as low as $27 per barrel against a budgeted $59, and led to the confiscation of Lukoil’s foreign assets in Bulgaria, the Netherlands, and Iraq.
Industry experts warn that the Russian dictator’s inability to protect these assets or support allies like Maduro in Venezuela and Assad in Syria has signaled structural weakness to global markets. In the oil sector, a forced production freeze due to lack of funds could prove terminal, as resuming operations after such a hiatus typically requires decades of investment and advanced technology currently unavailable to Moscow.
The logistics sector is suffering similar contagion. Russian Railroads, once a prestigious employer and critical transport link, is now burdened by a debt of 4 trillion roubles (approximately £33.4 billion or $39.1 billion). The company has seen a 14 per cent drop in cargo volumes as the metallurgical and construction firms that once relied on its services face their own insolvencies. To address the shortfall, the Kremlin has proposed restructuring RZD’s debt and increasing transportation tariffs—a move likely to further stifle the remaining domestic industry.
The fiscal outlook remains bleak. Last year, the National Wealth Fund could only cover 65 billion roubles (£542 million or $636 million) of RZD’s 2-billion-rouble request, and reports indicate that 71 per cent of the fund’s gold and reserves have already been liquidated. This “National Poverty Fund,” as critics now term it, is unable to bridge the widening deficit. Consequently, the Russian banking system is under extreme pressure, leading to a surge in private withdrawals as citizens attempt to safeguard their savings against rising inflation and systemic instability. Observers have compared the current regional unrest and economic paralysis to the period of 1989, which preceded the total collapse of the Soviet Union.
russian giants Lukoil, Rosneft, Gazprom and Russian Railroads are on the brink of bankruptcy, losing up to 50% of their annual revenue and begging Kremlin for help. But the russian federal budget and national wealth fund are empty, so the companies will go down together with russia`s economy.
