The Russian economy is running out of steam

At first glance, the windfall from oil revenues generated by the conflict in the Middle East should have provided Moscow with a lifeline. This is not the case, according to Thomas Nilsson, head of Swedish military intelligence, who, in a rare interview with the Financial Times, paints an alarming picture of a war economy running on empty that the Russian authorities are striving to conceal behind falsified data.

Simply to cover its budget deficit, Russia would need the price of its main crude to remain above $100 a barrel for at least a year, and for much longer still to resolve its other structural problems. A condition that no reasonable scenario guarantees, especially if the ceasefire in Iran holds and oil prices stabilise. Vladimir Putin himself has acknowledged that his economy is underperforming, and that the additional revenue linked to the war in the Middle East (up to $150 million a day according to some estimates) would be short-lived.

The picture painted by Nilsson goes far beyond public finances. The Russian military-industrial complex, presented as the main driver of national growth, is in reality heavily in deficit, riddled with corruption and kept afloat by state banks. Only the drone and long-range weapons industries are escaping this collapse, with funds being redirected to sectors where the nature of warfare is evolving. Outside this scope, the civilian economy is stagnating or contracting, and GDP has already fallen by 1.8% in the first two months of the year, including in key sectors such as construction and industrial production.

Stockholm also believes that the Russian central bank is underestimating actual inflation, which is much closer to the 15% key rate than the official figure of 5.86%. Sweden and Germany agree that Moscow is concealing an additional deficit of around $30 billion, and certain financial indicators point to a possible banking crisis on the horizon. The manipulation of data is said to be such that Putin himself may not realise the true scale of the situation, or may be pretending to ignore it. “If you’ve created a system like he has, he might not know just how bad the economic situation really is,” summarises Nilsson. The Financial Times

Oil • Oil prices surged by more than 5% on Monday, with Brent crude nearing $95 a barrel, driven by the combined impact of the closure of the Strait of Hormuz and the US Navy’s seizure of the Iranian tanker Touska. Analysts point out that physical oil flows remain constrained by longer transport times and rising freight costs. Despite this rebound, the markets still seem to be banking on an imminent agreement between Washington and Tehran.

G20 • G20 finance ministers, meeting on the sidelines of the IMF and World Bank Spring Meetings, agreed to continue discussions on global food security, which has been undermined by disruptions to the fertiliser supply chain linked to the war in Iran. According to the IMF, around 45 million people are at risk of becoming food insecure.

AD

AI keeps coming up at work, but you still don't get it?

That's exactly why 1M+ professionals working at Google, Meta, and OpenAI read Superhuman AI daily.

Here's what you get:

Join 1M+ pros

🇺🇸 United States – 🇮🇷 Iran • A US delegation led by JD Vance is on its way to Islamabad for talks with Iran, whose ceasefire expires on Wednesday. Trump spoke of a “reasonable deal” but threatened to “destroy Iranian power stations and bridges” should Iran refuse.

🇮🇷 Iran – 🇺🇸 United States • Tehran has announced it has “no plans” for a new round of negotiations with Washington, with Iranian state television citing “no clear prospect of fruitful negotiations”. Iran is making the lifting of the US naval blockade of its ports a precondition.

🇱🇧 Lebanon • President Joseph Aoun delivered his first address to the nation since the ceasefire came into effect on Friday, announcing a “new phase” aimed at a “permanent agreement” with Israel. He denied that direct talks constituted a “sign of weakness” and assured that Lebanon would “never again be the theatre of anyone’s wars”. The comprehensive cessation of hostilities began after a month and a half of conflict that left nearly 2,300 dead on the Lebanese side. However, the ceasefire has not been respected, notably by the Israeli army, which has carried out destruction in southern Lebanon. A French peacekeeper was killed in an ambush attributed to Hezbollah this weekend.

🇺🇸 United States – 🇮🇷 Iran • On Sunday, the US Navy seized the Iranian-flagged cargo ship Touska in the Gulf of Oman, after firing on its engines to immobilise it. Tehran has promised to “retaliate soon” and accused Washington of “armed piracy”. Since the US blockade of Iranian ports was imposed on 13 April, 25 commercial vessels have already turned back or been sent back to Iran.

🇮🇷 Iran • After a brief reopening on Friday, Iran closed the Strait of Hormuz again on Saturday, with the Revolutionary Guards threatening to target any vessel approaching the strategic waterway, through which a fifth of the world’s oil normally passes.

🇵🇸 Gaza • The UN, the European Union and the World Bank today estimated Gaza’s reconstruction needs at $71.4 billion over 10 years, including $26.3 billion for the first 18 months. After 24 months of conflict, more than 371,000 homes have been destroyed or damaged, over 50% of hospitals are out of service, and the enclave’s economy has contracted by 84%. At least 72,549 people have been killed in Gaza, according to the Gaza Ministry of Health, whose figures are considered reliable by the UN.

🇧🇬 Bulgaria • Former President Rumen Radev and his party, Progressive Bulgaria, have won the general election with 44.7% of the vote, securing an absolute majority – a first since 1997. Favourable to dialogue with Moscow and opposed to sending weapons to Ukraine, Radev nevertheless reassured the public of his commitment to the EU and promised not to block its decisions. His party, formed only a few months ago, brings an end to five years of political instability and eight successive elections.

🇭🇺 Hungary • Péter Magyar, Hungary’s future prime minister, has announced his intention to reverse Hungary’s withdrawal from the International Criminal Court and to execute its arrest warrants, including the one targeting Benjamin Netanyahu for war crimes in Gaza. His predecessor, Viktor Orbán, had ordered this withdrawal last year, after hosting the Israeli prime minister in Budapest. The new National Assembly will convene on 9 and 10 May, when Magyar will be sworn in.

🇺🇦 Ukraine – 🇪🇺 European Union • The EU hopes to release a €90 billion loan to Ukraine on Wednesday, which has been blocked for months by Viktor Orbán’s Hungarian veto. Cyprus, which holds the Council presidency, has placed the issue on the agenda for the ambassadors of the 27 member states. Orbán, who was defeated at the polls in mid-April after 16 years in power, had made the lifting of his veto conditional on the resumption of Russian oil deliveries via a pipeline crossing Ukraine, which Kyiv now appears ready to resume.

🇫🇷 France • Elon Musk failed to attend his voluntary interview in Paris on Monday as part of the public prosecutor’s investigation into possible abuses by X, including suspected complicity in the dissemination of child pornography and the creation of sexual deepfakes without consent. The public prosecutor’s office stated that the billionaire’s absence “is not an obstacle to the continuation of the investigations”.

🇸🇮 Slovenia • Outgoing Prime Minister Robert Golob has abandoned plans to form a government, having failed to find a coalition partner following the general election on 22 March. His centre-left party won 29 of the 90 seats, ahead of Janez Jansa’s conservatives with 28. Jansa claims he does not wish to govern either “for the time being”, leaving the head of state obliged to propose a candidate to Parliament within 30 days, against a backdrop of allegations of interference by the Israeli intelligence firm Black Cube.

🇯🇵 Japan • A 7.7-magnitude earthquake struck northern Japan today, triggering a tsunami warning with waves of up to 80 centimetres observed in a port in Iwate Prefecture. The warning was gradually lifted in the evening (Tokyo time), with no serious injuries reported. The Japan Meteorological Agency has warned of an increased risk of major aftershocks in the coming week, recalling the trauma of the March 2011 earthquake, which claimed nearly 18,500 lives.

🇰🇵 North Korea • North Korea announced yesterday that it had tested five tactical ballistic missiles equipped with cluster warheads, fired towards an island in the Sea of Japan. Kim Jong Un, who was present at the exercise, expressed his “great satisfaction”. These weapons, designed to scatter dozens of explosive charges over a wide area, are primarily aimed at South Korea and the approximately 28,000 US troops stationed there.

🇮🇳 India – 🇰🇷 South Korea • India and South Korea have set themselves the target of doubling their trade from $25 billion to $50 billion by 2030, during the first state visit by a South Korean president to India in eight years. Lee Jae-myung and Narendra Modi discussed cooperation in shipbuilding, artificial intelligence, finance and defence, against a backdrop of Seoul seeking to diversify its energy supplies in the face of disruptions in the Strait of Hormuz.

🇺🇸 United States • A US strike in the Caribbean killed three people yesterday on a vessel described by Washington as involved in drug trafficking. This operation brings the total number of casualties from strikes carried out over the past several months in the Pacific and the Caribbean to 180. Experts and UN officials have condemned the extrajudicial killings, as the Trump administration has never provided solid evidence of the targeted vessels’ involvement in trafficking.

🇺🇸 United States • The SAVE America Act, backed by Donald Trump and currently being debated in the Senate, would require voters to provide new proof of citizenship to register to vote. According to the Brennan Center, over 21 million Americans do not have access to such documents. Those most affected would be married women who have changed their names, transgender people and low-income voters – groups whose voting behaviour is statistically unfavourable to Republicans.

🇨🇩 DRC • The Democratic Republic of the Congo and the armed group M23 have reached an agreement in Montreux, Switzerland, to facilitate humanitarian aid in the east of the country and release prisoners within 10 days. These talks, held under Qatari mediation from 13 to 17 April, resulted in a protocol to monitor the ceasefire in a region ravaged by conflict for over 30 years despite a peace agreement signed in December.

🇦🇴 Angola • During a mass attended by huge crowds in Saurimo in the east of the country, Pope Leo XIV denounced the “tyrants” who exploit the hopes of the poorest in a mining region marked by endemic poverty despite an abundance of natural resources. Speaking before 60,000 worshippers, he reminded them that “the bread of all becomes the possession of a few” when injustice prevails. This is the third time he has used the word “tyrant” during his 11-day tour of Africa.