(STOCKHOLM) – Russia’s latest offensive in Pokrovsk has come at a heavy cost, with analysts warning that the Kremlin’s rush to secure a symbolic victory before economic pressures become unbearable may be backfiring.
According to Dr Andreas Umland, an analyst at the Stockholm Centre for Eastern European Studies at the Swedish Institute of International Affairs, Moscow appears to be “stomaching enormous losses” in the Donetsk region in a desperate attempt to deliver something the Russian dictator Vladimir Putin can sell to the public as a success.
Umland said the intensity of the offensive reflects Moscow’s fear that “time is running out.” He suggested the Kremlin is aware that the longer the war continues, the greater the political and financial strain on Russia’s already fragile economy.
Recent data indicates that Russia’s government spending has outpaced its revenues by more than 15 billion USD in the first ten months of 2025. The national budget deficit is projected to rise from 1.6 percent to 2.6 percent by the end of the year, largely due to war expenditure and sanctions.
| Indicator | Current Estimate (2025) | Notes |
|---|---|---|
| Russian Budget Deficit | 2.6% (expected) | Up from 1.6% earlier in the year |
| Spending-Revenue Gap | $15 billion | Mainly caused by war costs |
| Indian Oil Imports | Sharply reduced | Five largest refineries halted new orders |
Umland explained that the war has consumed almost every sector of the Russian economy. “Much of Russia’s industry now works for the war effort,” he said. “Sanctions from Western countries, combined with Ukraine’s drone and missile strikes on refineries and energy infrastructure, have created a cumulative effect that is now biting.”
Despite attempts to circumvent sanctions through trade with countries such as China and India, Umland noted that these channels are narrowing. Reports indicate that India’s five largest oil refineries have stopped placing orders for Russian crude from December onwards — a major setback for Moscow, which had come to rely on India as a key market for discounted oil.
“Russia’s economy was heavily dependent on India’s purchases of oil,” Umland explained. “If those orders fall sharply, it will complicate Moscow’s foreign trade picture.”
While the full effect of India’s pullback remains to be seen, Umland warned it could accelerate an economic downturn in Russia. “Moscow may find short-term ways to compensate,” he said, “but the longer-term picture points towards stagnation, if not outright recession.”
Asked whether economic collapse could force Putin to sue for peace, Umland said it was difficult to predict. “There will be a point when Putin cannot continue,” he said. “The enormous pressure in Pokrovsk may be linked to a sense in Moscow that time is no longer on its side.”
The analyst added that the Kremlin might be preparing to use any limited success in Pokrovsk to justify a temporary ceasefire. “If they can present a picture that can be sold to the Russian population as a victory, Putin might declare a pause,” he said.
He also warned that Western nations should remain sceptical of any ceasefire initiative from Moscow, noting that previous truces were used by Russia to regroup and rearm.
Umland dismissed speculation that sanctions on Russian oil could backfire on Western economies. “The idea that Europe or global markets cannot function without Russian energy was vastly exaggerated,” he said. “The world economy can manage without it — the pain will be felt far more in Moscow than in Berlin or Washington.”