Russia faces looming financial meltdown as oil prices plunge, banking sector falters — analyst

Ilia Neskhodovskyi, head of the Analytical Department at the National Interests Advocacy Network (ANTS), said this on Espreso TV.

"The drop in oil prices started back in April 2025, when Trump launched a new trade war, and OPEC+ began deciding to ramp up oil production.

Russia’s financial report for Q1 2025 already shows this downward trend, and that’s just the start. Overall, oil prices in the first quarter were still relatively okay for Russia — around $58–55 per barrel in January, and even higher in February. That let them turn a bit of profit. But the sharpest drop came in April.

I’m waiting on Russia’s financials for Q2 2025, they’ll likely show a serious decline," Neskhodovskyi said.

He noted that meetings are now happening in Russia to figure a way out, but many of the decisions being made on budget stability are questionable.

"More than 300 billion has already been pulled from the Russian National Wealth Fund to prop up banking system liquidity. At this point, pretty much all available budget money is being funneled into the banks. And that, in my view, is the biggest risk. There are three main issues:

The Russian economy is in terrible shape. The recession is ongoing, and most sectors are shrinking. Agriculture is the only exception, but even that’s partially frozen.

The budget situation. The deficit is massive. The question is: how are they going to cover it? Even lawmakers in the State Duma admit that the March 2025 budget revision was way too optimistic. The budget set oil at $56 a barrel, but it’s now at $50, and there’s no sign of it going up. The National Wealth Fund is draining fast.

The banking sector. I think this is where the real financial meltdown will hit. Loan defaults are already rising among the public and the banks. It’s not a full-blown crisis yet, but the warning signs are clear. Banks are actively restructuring debt, which only worsens liquidity. Around $100 billion has already been directed to defense industry enterprises. Now, almost every part of the economy is turning to the federal budget for help," Neskhodovskyi explained.

He added that the deficit isn’t just in Russia’s federal budget, it’s hitting the regions too. Some local governments are already cutting payments on military contracts due to lack of funds.

"For us, these numbers are encouraging. Of course, things can still shift. But if the trends hold, Russia could enter a real financial crisis as early as September 2025, and it’ll start with the banks," Neskhodovskyi stressed.

• Foreign Minister Andriy Sybiha called for immediate, tougher sanctions against Russia following the June 10 attack.