(LONDON) – Russia’s income from oil exports has fallen by more than half over the past year, threatening the funding of its war in Ukraine, as sanctions, tanker seizures and reduced purchases by major importers tighten pressure on the Kremlin.
The warning was given by investor and anti corruption campaigner Bill Browder in an interview with Frontline, where he said Moscow’s official economic figures were unreliable and likely overstated.
“If they are telling you growth is plus one per cent, it is probably minus five per cent,” Browder said. “They control the statistics and present them to the world.”
He said the Russian economy remained narrowly focused on natural resources and military production, leaving it vulnerable to external pressure.
According to Browder, Russia is facing high inflation, labour shortages and growing financial instability. He said between one million and 1.2 million young men have been killed or permanently injured in the war, while another million have left the country to avoid mobilisation.
“These losses have created skills gaps across the economy,” he said. “There is also a serious banking problem, with many loans not being repaid.”
Browder said state energy companies were also struggling. Gazprom, once responsible for about a quarter of Russia’s tax revenue, is now operating at a loss. Similar problems affect Rosneft and Lukoil.
He said tax revenues have fallen sharply, worsening pressure on public finances.
Despite these difficulties, Browder said the Russian dictator Vladimir Putin was able to remain in power through repression rather than public support.
“He does not need people to be happy,” Browder said. “He needs them to be afraid.”
He compared Russia’s situation to North Korea, which has survived decades of economic failure through strict control of its population.
Pressure on Russia’s finances has increased following reports that Donald Trump has proposed cutting tariffs on Indian exports to about 18 per cent if India reduces purchases of Russian oil.
Browder said such a move would alarm the Kremlin, as India is one of Russia’s three main oil buyers, alongside China and Turkey.
“Most of the money that funds the war comes from crude oil exports,” he said. “If India steps back, Russia is in serious trouble.”
He said China and Turkey would be unlikely to fully replace lost Indian demand, leading to excess supply and forcing Russia to sell oil at steep discounts.
“If China sees Russia is weak, it will demand lower prices,” Browder said.
He added that Russian oil was already being sold well below international Brent crude prices.
Recent estimates suggest Russia’s oil revenue is about 50 per cent lower than a year ago.
Browder said this reduction weakens Russia’s ability to continue the war and increases the chances of future negotiations.
“The only way Russia will stop is when it cannot afford to continue,” he said.
He cautioned, however, that previous commitments by India and the United States had not always led to lasting changes.
He said the European Union and the United Kingdom also played a major role in enforcing sanctions.
“The European Union has economic power close to that of the United States,” Browder said. “It should not be underestimated.”
He noted that many Indian refineries are privately owned and operate globally, making them cautious about violating Western sanctions.
“These companies do not want to be seen as rogue operators,” he said.
Browder said uncertainty remained over the consistency of US policy, particularly under Donald Trump.
“His actions have often been unpredictable and inconsistent,” he said.
He said, however, that falling revenues showed pressure was having an effect.
“The proof is in the numbers,” Browder said.
Looking ahead, he said Western governments could further restrict Russia’s income by targeting two major Chinese refineries that are large buyers of Russian oil.
“If they stopped buying, that would be decisive,” he said.
He suggested denying these companies access to Western banking, insurance and ports if they continued purchasing Russian supplies.
“This does not require a trade war,” he said. “It requires enforcement.”
Browder said Putin was aware that oil income was his main financial lifeline.
“He needs that money to pay for soldiers and weapons,” he said.
Russia’s difficulties have been increased by seizures of tankers involved in transporting oil.
The United States has confiscated several vessels this year, mainly because of links to sanctioned Venezuelan exports.
France has also seized a Russian tanker, setting a precedent for further action.
At the same time, Ukraine has targeted Russia’s so called shadow fleet.
Browder said four or five tankers have been damaged or disabled in recent attacks.
“It is not a good time to be a captain of a shadow fleet vessel,” he said.
He said the combined impact of sanctions, seizures and military action was tightening pressure on Russia’s export system.
“From every direction, the noose is tightening,” Browder said.
He added that earlier action could have reduced civilian suffering in Ukraine.
“If this had happened two years ago, many lives might have been saved,” he said.
“Better late than never.”
