Russia is facing a growing economic crisis, with fuel shortages starting to bite across the country. The crisis is partly due to Ukrainian drone strikes on oil infrastructure, causing a shortage of fuel. This has led some experts to speculate that the economic crisis could lead to regime collapse, a scenario reminiscent of the Soviet Union's collapse in 1991.
Since 2022, the UKPulse Media contributor has been visiting Russia annually and notes a clear change in mood. Initially, there was a sense of survival and adaptation to the new reality of sanctions and war. However, over the years, there has been growing optimism about the economy's ability to adapt. By 2026, however, there was talk of an economic recession, even before the current fuel shortages hit.
Russia's economy is heavily reliant on high interest rates and taxes to tame inflation and balance the budget. The VAT was increased from 20% to 22% in January 2026, while taxes on small and medium-sized enterprises were raised. This has led to growing discontent among the population, with some experts warning of potential social unrest and regime collapse.
However, others argue that Russia's economic system is not as fragile as the Soviet Union's. Since 2000, Vladimir Putin has strengthened his grip on power, eliminating opposition and consolidating control over politics and society. The business elite are increasingly under Kremlin control, and the war in Ukraine has only strengthened the influence of the siloviki (Russia's law-enforcement agencies), military-industrial sector, and army.