In an interview economist Igor Lipsitz argues that Russia’s worsening fuel shortages and broader economic pressures reflect mounting structural challenges created by the war in Ukraine. While he believes these difficulties will make sustaining the conflict increasingly costly, he also contends that they are unlikely to produce an imminent political crisis or bring the war to an early end.
Russia’s deepening fuel shortages have become one of the most visible domestic consequences of the war in Ukraine, raising questions about the long-term sustainability of the country’s wartime economy. According to an interview published by Die Zeit with Russian economist Igor Lipsitz, the fuel crisis represents only one element of a broader deterioration affecting infrastructure, transport, industry and public finances as the conflict continues.
Lipsitz, a prominent Russian economist and one of the founders of Moscow’s Higher School of Economics, has lived in Lithuania after being designated a so-called “foreign agent” by the Russian government in 2024 because of his criticism of the war and of President Vladimir Putin. Speaking to Die Zeit, he argued that the economic consequences of the conflict are becoming increasingly severe and, in his assessment, could ultimately exceed the long-term economic damage experienced by Russia following the Second World War.
He attributes this assessment to what he describes as the absence of conditions that enabled post-war recovery in the twentieth century. Unlike the period after 1945, he argues, Russia today cannot expect external reparations or the restoration of economic ties that previously helped rebuild industrial capacity. At the same time, he says Ukraine has continued striking Russian infrastructure and industrial facilities, adding further pressure to an economy already adapting to prolonged wartime conditions.
Much of the discussion focused on Russia’s fuel crisis, which Lipsitz believes has become a significant economic challenge. He questioned whether damaged oil-processing facilities would be restored while the conflict continues, arguing that companies may see little commercial incentive to invest heavily in repairs if future attacks remain a possibility. According to his assessment, businesses may instead announce reconstruction plans while delaying substantial investment until the security environment changes.
Beyond the energy sector, Lipsitz described what he sees as wider weaknesses across Russia’s transport system. He argued that aviation faces growing difficulties because of an ageing aircraft fleet and increasing fuel costs, while limitations on aircraft maintenance and production could further constrain air travel. Rail freight, meanwhile, was presented as another area of concern, with Lipsitz suggesting that slow transport speeds and operational bottlenecks risk affecting the movement of goods across the country.
He further argued that disruption to transport networks could have broader economic consequences, including for agriculture and food supplies. Reduced mobility between regions, he suggested, may also contribute to growing regional tensions as communities compete over increasingly limited resources.
During the interview, Lipsitz referred to examples of fuel shortages affecting different parts of Russia. He cited reports of tensions surrounding fuel availability in the Krasnodar region and discussed proposals in Transbaikal to restrict transit by freight vehicles in an effort to preserve supplies for local residents. He presented these developments as illustrations of the practical challenges emerging from the country’s fuel shortages.
The interview also examined the broader state of Russia’s economy. Lipsitz argued that a combination of budget pressures, difficulties within parts of the energy sector, weakness in financial markets and concerns over unpaid loans present increasing challenges for the wartime economy. He suggested that some workers have effectively been placed on unpaid leave while not appearing in official unemployment statistics and argued that financial pressures are becoming more widespread across several industries.
When discussing the government’s fiscal options, Lipsitz suggested that the Kremlin may increasingly rely on measures such as expanding the money supply, drawing additional resources from wealthy business figures or identifying alternative sources of funding as wartime costs continue to rise. He also argued that sanctions imposed on individual Russian oligarchs had, in his view, produced unintended consequences by increasing their dependence on the Russian state.
Throughout the interview, however, Lipsitz remained sceptical that economic hardship alone would compel Russia to alter its strategic objectives. He argued that the country’s leadership appears prepared to continue the conflict despite mounting domestic costs and suggested that prolonged confrontation could become an enduring feature of Russia’s political and economic landscape.
Although he described worsening living conditions and growing strains on infrastructure, Lipsitz did not predict an imminent collapse of the Russian political system. Instead, he argued that many members of the country’s elite may continue to support the existing leadership because of uncertainty over what might follow any sudden change in power. In his assessment, concerns over instability could outweigh dissatisfaction with present conditions.
Lipsitz also reflected on the broader social effects of the war, describing correspondence he receives from people inside Russia reporting local problems ranging from reductions in public services to the cancellation of projects because of budget pressures. He characterised many of these messages as expressions of concern about the gradual erosion of conditions that had previously supported ordinary life.
Despite the often bleak outlook presented during the interview, Lipsitz explained that he continues to speak publicly because he sees it as part of his role as an educator. He said he believes helping people understand economic developments remains worthwhile and noted that responses from readers and viewers reinforce that conviction.
