What to Expect From the Russian Economy in 2026

At the center of the new war in the Middle East is one of Russia’s most important partners in its struggle against the West: Iran. Despite strategic agreements with Tehran, Moscow is not bound by a treaty alliance with Iran—and is also consumed by its own costly war against Ukraine. Accordingly, the Kremlin has provided the Iranian regime with limited assistance, but hopes to reap greater benefits from the second-order effects of the chaos in the Middle East unleashed by Trump. How does the war affect Russia both in the Middle East and globally? How do volatile oil prices benefit the Russian war machine, and how long will the effect of this new war last for Russia?

Following the initiation of a peace agreement between Armenia and Azerbaijan last summer, there is still a long way to go before the conclusion of a formal agreement and sustainable peace in the region. In the wake of a visit by U.S. Vice President JD Vance and a plethora of signed agreements, the South Caucasus finds itself less and less dependent on a previous regional hegemon: Russia. What does this mean for the region? What obstacles remain on the road to a full-fledged peace between Armenia and Azerbaijan? Check out the paper here.

The Russian economy has been under intense pressure from sanctions, the demands of war, and structural challenges. Still, it isn’t collapsing, despite predictions and wishful thinking on the part of the West. How healthy is the Russian economy, and how much strain can it handle in 2026?

This year’s World Economic Forum took place amid turbulent transatlantic relations. Donald Trump has renewed his plans for “getting” Greenland, threatening to annex part of a NATO ally. Meanwhile, the war in Ukraine rages on, while the peace talks have stalled. What is the state of the European discussion on relations with the U.S.? Can Europe support Ukraine while managing its own domestic challenges and a volatile U.S. foreign policy? What are Western leaders thinking in terms of their Russia strategy?

Under Putin, Russia has established a relationship with Venezuela, and was heavily involved in the country until recent years. The Chavez and then Maduro regimes bought Russian weapons with sizeable loans from the Kremlin, Moscow ordered its energy companies to invest in Venezuelan oil fields, and Russia boasted of having secured a foothold in the U.S.’s backyard. With Trump’s swift and successful operation to arrest Maduro, the situation has changed. What are the implications for Russia’s global posture? What can the Kremlin do, and will it do anything? Will deposing Maduro lead to a situation in which Venezuelan oil floods global markets with U.S. help?

India and Russia have a mutually beneficial relationship going back decades, and since the full-scale invasion of Ukraine, India’s strategic importance for Russia has grown considerably. This hasn’t gone unnoticed by the Trump administration, which has slapped additional tariffs on India for buying Russian oil. To maintain its position as an emerging global powerhouse, India must navigate not only an unpredictable U.S. foreign policy, but also a more assertive China that is exploiting Russia’s asymmetrical dependence, and a Europe that is unhappy about New Delhi’s ties to Moscow.

Russia went from a tsarist empire and the totalitarian USSR to the freedom of the 1990s, complete with hopes of becoming a European democracy. Unfortunately, multiple missteps and reckless foreign policy endeavors have resulted in Russia becoming a security threat to Europe and its own neighbors. Two Chechen wars, the invasion of Georgia, and annexation of Crimea paved the way for Russia’s full-scale invasion of Ukraine. How did it end up this way? Were there signs? What is the current state of Russian society?

Russia has had a year to convince Trump to give up on Ukraine and force Zelensky to surrender, but at the end of 2025, we are yet to see any significant results from the Kremlin’s efforts. After a triumphant beginning that had Europe and Ukraine worried, and an unprecedented Anchorage summit between Putin and Trump, the situation no longer looks as favorable for Russia. The planned Budapest summit has been called off, Trump has introduced the first sanctions against Russian oil giants since returning to the White House, and the U.S. president never misses an opportunity to criticize Putin for being intransigent. What contributed to Russia’s diplomatic failure? When did Putin stop relying on his diplomats, and how did the Russian Foreign Office come to be nothing more than another source of the Kremlin’s delusion and another mouthpiece for Putin’s propaganda?

After recent failures to bring the Kremlin to the negotiating table to end the war in Ukraine, Trump has adopted a new approach to Putin, taking the significant step of sanctioning Russia’s two biggest oil producers, Rosneft and Lukoil, while also demanding that China and India stop buying Russian oil. Will this step finally persuade Putin to negotiate an end to his war? Why has it taken the United States so long to go after the two biggest cash cows in Putin’s war chest? Will these sanctions have any side effects for global markets?

Russian assets abroad were frozen almost as soon as the country launched its invasion of Ukraine in 2022. The idea of seizing those assets and transferring them to Ukraine has been discussed in Western capitals for more than three years, but no significant action has been taken because the assets are protected by sovereign immunity and the West is officially not at war with Russia. Now, with a new administration in the United States and the war of attrition in Ukraine dragging on, European leaders find themselves between a rock—the need to show unwavering support for Ukraine—and a hard place: growing public discontent at having to fund this war from European pockets, when there are billions of euros in Russian money sitting in Western bank accounts.What would the procedure be for embarking on such a complex legal matter? What would setting such a precedent mean for the EU, the euro, and the dollar, and for the countries looking to deposit their reserves in the EU? And does Europe have a plan B if internal divisions can’t be overcome?