Putin Reportedly Vows To ‘Keep Fighting,’ Asks Oligarchs To Pitch In

Russia “will keep fighting” until it captures the rest of the Donbas region in eastern Ukraine, President Vladimir Putin reportedly told Russian business elites.

During a meeting last week, the autocrat also asked oligarchs to help shore up the Kremlin’s budget as they cash in on price spikes driven by the Middle East crisis, according to both the independent Russian outlet The Bell and the Financial Times. Putin’s remarks suggest that despite the growing costs of his war in Ukraine, he remains wedded to his maximalist demands.

New Windfall Should Not Be Taken for Granted, Putin Warns

Putin delivered his message at the Congress of the Russian Union of Industrialists and Entrepreneurs, or RSPP, Russia’s main big-business lobby. The gathering on March 26 came as the prices of Russian oil, natural gas, fertilizer, and aluminum exports surged due to the Iran war, padding Moscow’s budget.

This additional revenue is coming at an opportune time for the Kremlin. Russia began the year facing a deep deficit amid declining energy revenues, a slowing economy, and high defense spending. To help fill the gap, Russia was forced to hike its value-added tax and was reportedly preparing to slash all “non-sensitive” spending by 10 percent while diverting more oil earnings to its reserve fund. Moscow has now suspended those plans.

A report by the Kyiv School of Economics estimates that the Kremlin could earn $45 billion to $151 billion in additional budget revenue from oil and gas sales, depending on the duration of the Iran war and how long markets take to normalize. This would reduce Moscow’s deficit or, in the most extreme scenario, result in a surplus, the report found.

During the public portion of the RSPP meeting, however, Putin urged caution: “Markets that have swung in one direction today can move the opposite way tomorrow.” Russian business leaders and government officials must not be “tempted” to use their temporary windfalls for “opportunistic” dividends or increased state spending, he warned.

Putin Signals Oligarchs Must Help Fund War

Apparently, the Kremlin believes big businesses should instead direct their extra profits toward supporting the state. At the closed-door part of the RSPP gathering, Putin reportedly reaffirmed his determination to seize the rest of the Donbas through military means, since Kyiv has refused to surrender that territory during recent U.S.-brokered talks. He then asked oligarchs to make donations to the state budget, The Bell and Financial Times reported (though the Kremlin later claimed Putin had merely supported an initiative put forward by an unnamed tycoon).

Reportedly, the oligarch Suleiman Kerimov pledged 100 billion rubles ($1.23 billion), while metals magnate Oleg Deripaska also agreed to contribute. One of The Bell’s sources said the idea of “shaking down business in a difficult time for the country” originated with longtime Putin crony Igor Sechin, head of state-owned oil company Rosneft. This echoes Moscow’s decision in 2023 to impose a one-time “superprofits” tax on large firms.

U.S. Must Focus on Russian Obstacles to Peace

The war in Ukraine is taking a growing toll on Russia’s economy while destroying thousands of lives with each passing month. The Ukrainian defense is holding firm. Yet Putin seems undeterred. His financial windfall from the Middle East crisis, coupled with the transatlantic tensions and diversion of U.S. military resources caused by that conflict, has likely buoyed his confidence.

While the White House fixates on pushing Ukraine to withdraw from the Donbas, the fundamental obstacle to peace is the chasm between Russia’s military means and Putin’s maximalist demands, which extend beyond the issue of territory. Washington must not only correct course, but work even harder to reestablish the lost pressure on Moscow.

Once the oil market has stabilized, the United States should stringently enforce and expand upon its sanctions on Russian oil exports. In the meantime, it should maximize military assistance for Ukraine to help show Putin he cannot accomplish his objectives through force of arms.

John Hardie is deputy director of the Russia Program at the Foundation for Defense of Democracies (FDD). Keti Korkiya is a research analyst at FDD. For more analysis from the authors and FDD, please subscribe HERE. Follow FDD on X @FDD. Follow John on X @JohnH105. FDD is a Washington, DC-based, nonpartisan research institute focused on national security and foreign policy.