Russia’s Gold Reserve Depletion Signals Mid-2026 Financial Crisis as War Costs Surpass Oil Revenue

TLDR:

• Russia’s National Wealth Fund has contracted from $113 billion to $50 billion, with liquid reserves projected to deplete by mid-2026. 
• Military expenditures now exceed total oil and gas revenue as energy income dropped 22% annually and 34% in November alone. 
• The budget deficit was revised from 1.2 trillion rubles to 5.7 trillion rubles, representing a fivefold increase within one year. 
• Russia controls 40% of uranium enrichment, 24% of wheat exports, and 18% of fertilizers, creating supply shock risks.

Russia has liquidated over 71% of its gold holdings within its National Wealth Fund to sustain military operations, according to recent market analysis. 

The sovereign wealth fund, designed as an emergency financial buffer, has contracted from $113 billion in liquid assets before the conflict to approximately $50 billion currently. 

This depletion occurs as military expenditures surpass total oil and gas income for the first time in decades.

National Wealth Fund Faces Critical Drawdown Timeline

The National Wealth Fund traditionally covered budget shortfalls when energy revenues declined or government spending spiked. More than half of Russia’s financial cushion has vanished since military operations began. 

Market observers project the liquid portion could be exhausted by mid-2026 at present consumption rates. This timeline represents a concrete fiscal boundary rather than speculative analysis.

Budget deficit projections have expanded dramatically from initial estimates. Planned deficit targets stood at 1.2 trillion rubles for the fiscal period. Revised figures now reach 5.7 trillion rubles, marking a fivefold increase within twelve months. 

The gap between planned and actual deficits reflects the mounting costs of sustained military engagement.

Gold sales from the National Wealth Fund directly finance this widening budget gap. Russia maintains limited access to international capital markets due to sanctions. 

The fund’s depletion leaves few conventional options for budget stabilization. Each percentage point of reserve reduction narrows the government’s fiscal maneuverability.

Economic planners face four potential responses when liquid reserves approach depletion. Cutting military spending conflicts with current policy priorities. 

Money printing accelerates inflation pressures already affecting the domestic economy. Tax increases carry recession risks in a contracting economy. Expanding domestic debt raises interest costs in a high-rate environment.

Energy Revenue Collapse Reshapes Fiscal Foundation

Oil and gas revenue historically funded Russia’s entire budget structure. Military spending now exceeds total hydrocarbon income, inverting this traditional model. 

Energy revenues dropped 22% year-over-year in 2025. November recorded a sharper 34% monthly decline compared to the previous year.

Discounts on Russian crude oil have widened as sanctions complicate logistics and payment systems. Tightening restrictions affect both transportation routes and financial settlement mechanisms. 

These operational constraints reduce net revenue even when production volumes remain stable. The revenue base that sustained decades of government operations no longer covers current expenditures.

Russia controls substantial shares of global commodity supplies despite financial isolation. The nation holds 40% of the world’s uranium enrichment capacity. 

Wheat exports account for 24% of international trade. Fertilizer production represents 18% of global output. Palladium supply reaches 40% of world markets.

Financial contagion poses minimal direct threat given Russia’s market isolation. Supply chain disruptions present the primary economic risk. 

Commodity markets face potential volatility if fiscal pressures affect production or export volumes. Critical resource concentration amplifies any operational changes into global market movements.