April 24, 2026: Recently Vladimir Putin reacted to the theoretically huge rise in Russia’s oil income as a result of the Iran war. Putin is profoundly concerned about Russia's economic dilemma. On March 26 the Russian Union of Industrialists and Entrepreneurs Russia’s most powerful industrialists were warned against undue confidence over rising economic costs from the war in the Middle East.

If the market changes one way today, tomorrow it could turn the other way. Putin sought to have this message be widely heard as the full contents of such meetings are normally not disclosed. Since the Ukraine War began, the list of attendees has been declared a secret.

Behind closed doors, Putin did something more significant. Even as he promised to take all of Ukraine’s Donbas region, he invited the assembled gathering of wealthy businessmen to contribute voluntary aid to the war effort.

The notion of shaking down business in a problematic time for the country originated with the Rosneft director, who proposed the issuance of war bonds as the fundraising process. Since he was not a major shareholder in the company he runs, he will be spared the questionable honor of contributing his own money.

Others, though, responded immediately, offering $1.1 billion. Another sanctioned businessman agreed to contribute when asked.

These men had little choice. It is beyond belief that Russia’s major billionaires would refuse, and that’s closely linked to why these men should no longer be called oligarchs. Decades ago, they could impose their will on Russia, manipulate the legislature, and bend or subvert the law: they were oligarchs in the true sense of the word.

But since the financial crisis of 2008–09, and with increasing speed after Putin’s return to the presidency in 2012, they bend to the Kremlin’s will rather than shape it. The invasion of Ukraine marked a new stage in this subservience. Putin has offered his tycoons state support in weathering Western sanctions in exchange for complete loyalty and public backing of the war. Squeezed between those sanctions and the threat of domestic reprisals, the billionaires fell into line. They are creatures of Putin now, not a power unto themselves.

Putin’s demand might seem odd given the financial windfall the war in Iran has delivered; estimates suggest this could amount to $2.8 billion monthly if prices stay high. Add in gas and fertilizer revenues, and it’s clear the budget is benefiting.

But there is no disagreement. Russia's posture is that commodity windfalls are temporary, while the costs of war are structural and open-ended. Therefore, the state reaches for both simultaneously and forces the rich to finance some of the war effort to remove it from government accounts.

Four weeks of war in the Middle East, and the oil price surge it has triggered, have given the Russian government room to breathe for the moment. Both the Russian government and the Finance Ministry know the situation remains unpredictable. The immediate improvement in revenues has allowed Russia to abandon plans to tighten budget management which would have redirected a larger share of oil income into reserves rather than spending. The Finance Ministry has not, however, abandoned a separate round of planned budget cuts.

Annual revenue increases will depend on how long prices stay high and nobody can predict that with confidence. There are some grounds for the government to feel optimistic; even the most hopeful oil analysts argue that were the war to end tomorrow, supply disruptions would persist for at least four months given the need to repair infrastructure, restart facilities, and clear backlogs in tanker traffic. The average oil price for this year is unlikely to fall below $80 a barrel even in optimistic situations.

Given this uncertainty, the Finance Ministry has decided to suspend its budget rule entirely until the summer. That means all oil and gas revenues will flow directly to the budget, regardless of the price level, rather than being diverted to the National Wealth Fund. The ministry is pursuing two objectives: ensuring the deficit is brought under control while conditions allow and avoiding strain on currency markets. Had the rule remained in force, the ministry would have been obliged to purchase exporters’ foreign currency earnings before those companies could pocket the bulk of their windfall.

Oil revenues are not the only source the state is turning to. Whether the government will follow through on its earlier spending cuts remains unclear: with oil prices high, the immediate fiscal pressure has eased, and cutting budgets in a boom is politically awkward. Spending has, in any case, been inflated by four years of wartime fiscal stimulus. At his meeting with business leaders, Putin himself warned against using the oil bonus to pay out dividends or ramp up state expenditure. The logic is plain: if elevated prices are temporary, windfall profits cannot simply be spent.

And if they cannot be spent, but the war still needs funding, other sources must be found. That is where the voluntary contributions come in. The surge in profits flowing to fertilizer, grain, and aluminum businesses will tempt the state to force owners to share their gains, just as it did in 2022.

The war in Iran has given Russia’s budget breathing space, but it has not resolved the fundamental problems. The very fact that even with oil at $100 a barrel, Putin is passing around the collection tin tells you that the gap between structural expenditures and revenues has not closed.

Other risks loom too. If prices stay too high for too long, which they could as in 2008 and 2014, this will prompt a global demand slump. Combined with rising supply, that would push prices sharply lower, potentially very fast. For now, the government is making the most of the moment, and making sure business pays its share.