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Wartime Windfalls: How Russia’s Billionaire Class Thrived Under Sanctions When comprehensive sanctions meet war economies, who actually gets richer?
By Michael Lamonaca, 31 December 2025
Russia has 140 billionaires today—the highest number in its history. This happened during a war, under comprehensive Western sanctions, with assets frozen and properties seized across Europe and America. The paradox isn’t accidental. It’s structural. When foreign companies fled Russia after the invasion, they left behind highly lucrative assets that Kremlin-friendly oligarchs bought for pennies on the dollar. When Western sanctions froze Russian wealth abroad, it trapped capital inside Russia where Putin controlled who could access it. And when defense spending surged to fuel the war machine, it created a military-industrial feeding frenzy where loyalists made billions from contracts while dissidents like Oleg Tinkov lost everything. The war didn’t impoverish Russia’s elite. It sorted them—those who stayed silent got richer, those who spoke lost their fortunes, and the West’s sanctions policy accidentally became Putin’s loyalty enforcement mechanism.
The mechanism of wealth concentration operates through three distinct channels that compound each other. First, the exodus of foreign companies created a fire sale of valuable assets. When McDonald’s, Starbucks, IKEA, and hundreds of other Western corporations abandoned their Russian operations in 2022, they left behind supply chains, real estate, manufacturing facilities, and customer bases that didn’t simply disappear. Someone had to buy them. That someone was inevitably a Russian businessperson with Kremlin approval, because operating at scale in Russia requires state permission. These assets were acquired at massive discounts—the original owners wanted out quickly, and buyers knew sellers had limited options. This wasn’t market pricing. It was distressed sale pricing in a market where the only buyers were those the government allowed to participate.
Second, Western sanctions froze Russian wealth held abroad but did nothing to prevent wealth creation inside Russia. Oligarchs couldn’t access their London properties or Swiss bank accounts, but they could still make money from nickel mines, oil fields, defense contracts, and the everyday economic activity of 144 million Russians. The sanctions didn’t destroy their capacity to generate revenue. They eliminated their ability to move that revenue out of Russia. This had an unintended consequence: it trapped capital inside the Russian economy where Putin’s government controlled access to it. An oligarch who might have previously diversified wealth across jurisdictions now had to keep everything inside Russia, making them more dependent on maintaining good relations with the Kremlin, not less.
Third, war spending created extraordinary profit opportunities for those positioned to capture them. Russia’s defense budget more than doubled between 2021 and 2024. This money didn’t evaporate—it flowed to contractors, suppliers, and the entire ecosystem supporting military production. Vladimir Potanin, who supplies nickel for fighter jet engines, is Russia’s fifth-richest person. More than half of Russia’s billionaires in 2024 either directly supplied the military or benefited from the invasion through related industries. The war economy isn’t an abstraction. It’s a massive redistribution of state resources to private individuals who control the means of production that the military requires. When a government spends lavishly on war, someone makes that money. In Russia’s case, it’s the oligarchs who stayed loyal.
The sorting mechanism operates with brutal clarity through the example of Oleg Tinkov. The day after Tinkov criticized the war as “crazy” in an Instagram post, Kremlin officials contacted executives at his bank—Russia’s second-largest at the time. The message was simple: the bank would be nationalized unless all ties to its founder were severed. Tinkov had built Tinkoff Bank over decades. It was worth approximately $300 billion. Within a week, a company linked to Vladimir Potanin announced it was purchasing the bank. The price paid was 3% of its actual value—roughly $9 billion in wealth destroyed for one social media post.
This wasn’t negotiation. It was confiscation dressed in the language of transaction. Tinkov couldn’t discuss the price because there was no market, no competing buyers, no appeal process. The bank was taken because the state decided to take it, and the legal mechanics were irrelevant except as paperwork justifying the transfer. The message to every other Russian billionaire was unmistakable: speak against the war and lose everything, or stay silent and potentially profit. The calculation is coldly rational. If criticizing the war costs you $9 billion, and supporting it—or at minimum remaining quiet—allows you to participate in the wartime wealth redistribution, the financial incentive structure is entirely one-directional.
The historical transformation of Russia’s oligarch class reveals how systematically Putin has subordinated wealth to power over 25 years. In 2000, oligarch Boris Berezovsky claimed to have orchestrated Putin’s rise to the presidency. Whether this was true or exaggerated, it reflected the reality that Russia’s ultra-wealthy wielded significant political influence. They owned media empires, funded political movements, and had direct access to the highest levels of government. The post-Soviet chaos that created their fortunes also gave them power that rivaled state authority in certain domains.
Putin’s project was to reverse this hierarchy—to make wealth dependent on political loyalty rather than political power dependent on wealth. The mechanism was demonstrated most clearly through Mikhail Khodorkovsky, once Russia’s richest man. In 2001, Khodorkovsky launched a pro-democracy organization. By 2003, he was arrested. He spent the next decade in prison while his oil company, Yukos, was dismantled and its assets redistributed to state-controlled entities and loyal oligarchs. The message was clear: political opposition, even from the wealthiest Russians, would result in total destruction.
The period between Khodorkovsky’s imprisonment and the 2022 invasion saw systematic consolidation of this model. Anyone who has worked inside hierarchical organizations recognizes the pattern: initial plurality where multiple power centers compete, followed by systematic consolidation where one authority subordinates all others, ending in total dependence where survival requires demonstrating loyalty rather than competence. The 1990s oligarchs operated like independent contractors with significant autonomy. The 2020s oligarchs operate like division managers within a corporation—wealthy within their domains but utterly subordinate to executive authority. They can make operational decisions about their businesses, but strategic decisions about Russia’s direction are made by Putin alone, and their continued prosperity depends on perfect alignment with those decisions.
By the time Putin summoned Russia’s richest to the Kremlin on February 24, 2022—hours after ordering the full-scale invasion of Ukraine—the power dynamic was absolute. Witnesses described the assembled billionaires as “pale and sleep-deprived.” They knew their fortunes were about to take a massive hit from sanctions. They said nothing. Putin told them, “I hope that in these new conditions, we’ll work together just as well and no less effectively.” It wasn’t a request. It was a notification that their continued wealth depended on continued cooperation. The transformation from Berezovsky’s era to this moment was complete: oligarchs had been reduced from kingmakers to servants.
The immediate aftermath of the invasion demonstrated the scale of damage sanctions could inflict—and their ultimate inadequacy to achieve political objectives. According to Forbes, in the year following the invasion, the number of Russian billionaires fell from 117 to 83. Collectively, they lost $263 billion—an average decline of 27% of individual wealth. These weren’t trivial losses. Assets were frozen, properties seized, travel restricted, and international business relationships severed. For oligarchs accustomed to operating globally, the sanctions represented genuine isolation.
But the losses were temporary, and the recovery revealed the deeper structural dynamics at play. By 2024, Russia had 140 billionaires with collective wealth of $580 billion—just $3 billion shy of the pre-invasion peak. The recovery wasn’t because sanctions were lifted. It was because the Russian economy, fueled by wartime spending, grew at more than 4% annually in 2023 and 2024. This growth was concentrated in sectors directly tied to the war effort and in the acquisition of abandoned Western assets. The oligarchs who survived the initial shock found themselves operating in an economy where the state was spending aggressively, foreign competition had disappeared, and the barriers to entry for new rivals were absolute because the Kremlin controlled market access.
Western sanctions failed to create the intended pressure on Putin because they misunderstood the relationship between Russian oligarchs and state power. The theory behind targeting oligarchs was straightforward: make them poorer, they’ll pressure Putin to end the war, and the war becomes politically unsustainable. This theory assumed oligarchs retained political influence over the Kremlin—an assumption that was already outdated by 2022. Putin had spent two decades systematically subordinating oligarchs to state authority. They had no mechanism to pressure him even if they wanted to.
More critically, the sanctions eliminated the oligarchs’ exit options. If any of them had considered defecting to the West with their wealth, the sanctions made it impossible. Assets were frozen before they could be moved. Properties were seized before they could be sold. Western banks closed accounts before funds could be transferred. The result was that oligarchs who might have fled found themselves trapped inside Russia with all their wealth under Putin’s control. As Alexander Kolyandr of the Center for European Policy Analysis observed, “The West did everything possible to ensure that Russian billionaires rallied around the flag. There was absolutely no plan, no clear path for any of them to jump ship.”
The sanctions created a perverse incentive structure where staying loyal to Putin became not just the most profitable option but the only survivable one. An oligarch who contemplated opposition faced three barriers: their wealth was trapped in Russia where Putin controlled it, Western sanctions meant they couldn’t access frozen foreign assets even if they defected, and Tinkov’s example demonstrated the price of public dissent. The rational calculation was to stay silent, participate in the war economy, and hope to preserve wealth by maintaining Kremlin favor.
The most significant wealth transfer occurred through the acquisition of abandoned Western assets at fire-sale prices. When foreign companies fled Russia, they faced an impossible choice: hold onto assets they couldn’t operate and risk nationalization without compensation, or sell quickly to whoever the Kremlin allowed to buy. The buyers were inevitably Russian businesspeople with government approval, and the prices reflected the sellers’ desperation rather than fair market value.
The scale of this transfer was extraordinary. Alexander Varshavsky and Kamo Avagumyan, previously owners of Avilon—a significant but not dominant auto dealer—used the war to acquire the Russian manufacturing plants of Volkswagen and Hyundai. These weren’t minor operations: together, Volkswagen and Hyundai had outsold Russia’s market leader AvtoVAZ before the invasion. Vadim Kharytonin, founder of Pharmstandard, purchased Russian assets from Henkel and saw his wealth climb to $6.9 billion by 2024. His business partner Yegor Kulkov, who first appeared on the Forbes billionaire list in 2022, increased his fortune from $2 billion to $4.2 billion within two years. Ivan Tyryshkin acquired Home Credit Bank, a microloan provider, an insurance company, and a collection agency—all previously owned by Czech PPF Group—with combined net assets of 262 billion rubles (approximately $2.6 billion).
The energy sector saw similar transfers. Leonid Mikhelson’s Novatek acquired TotalEnergies’ share in the Terneftegaz project and Shell’s stake in Sakhalin-2, generating net profit of 40 billion rubles ($400 million) in 2022 alone from these acquisitions. Shell’s 27.5% stake in Sakhalin-2 was valued by the Russian government at 94.8 billion rubles (approximately $948 million), but Shell received roughly $1.2 billion—a price reflecting urgency rather than fair valuation. McDonald’s estimated its losses from leaving Russia at $1.2 billion, with net assets valued at 41 billion rubles ($410 million) at the end of 2022.
These acquisitions created what Alexandra Prokopenko of the Carnegie Russia Eurasia Center calls “an army of influential and active loyalists” whose future prosperity depends on continued confrontation with the West. These new billionaires—11 emerged in 2024 alone through this mechanism—have a vested interest in the war continuing because their wealth is entirely dependent on maintaining control of assets that might be reclaimed if Western companies return. Their worst fear isn’t sanctions. It’s peace that brings Western companies back and potentially reverses the transfers that made them rich. This creates a constituency within Russia’s elite whose economic interests align perfectly with prolonged conflict, and who will use their influence and resources to support policies that maintain the separation from the West that protects their newly acquired wealth.
The sorting of oligarchs into loyalists and exiles represents the completion of Putin’s 25-year project to subordinate private wealth to state power. Those who stayed silent watched their fortunes recover or grow. Those who spoke publicly against the war—a handful including Tinkov, Mikhail Fridman, and Oleg Deripaska—either lost their wealth, fled the country, or both. The mechanism is sustainable because it’s self-reinforcing: each oligarch who sees another destroyed for dissent has stronger incentive to remain quiet, and each round of wealth redistribution from punished oligarchs to loyal ones strengthens the loyalists’ stake in the system.
This is not the oligarchy of the 1990s where wealthy businessmen could challenge state authority. This is a system where wealth exists at the state’s pleasure, where fortunes can be confiscated with a phone call, and where the only path to preserving wealth is absolute loyalty. The oligarchs aren’t Putin’s partners. They’re his instruments—useful for operating industries the state needs, dispensable when they become inconvenient, and utterly subordinate to political authority in all matters.
The consequence for Western policy is that targeting oligarchs as a pressure mechanism fundamentally misunderstands how power operates in Putin’s Russia. Oligarchs have no independent political leverage. They cannot pressure Putin because they exist only at his discretion. Making them poorer doesn’t create opposition—it creates desperation to prove loyalty through increased support for whatever policies Putin demands. The sanctions that were supposed to turn oligarchs into Putin’s opponents instead eliminated their exit options and made them more dependent on Kremlin favor, not less.
The war economy operates as both punishment and reward system. Those who stay loyal profit from defense contracts, acquire undervalued assets from fleeing Western companies, and participate in the economic growth generated by massive government spending. Those who dissent are stripped of their wealth through mechanisms that appear legal but are actually confiscation. The result is a billionaire class that is richer than ever, more numerous than ever, and more thoroughly subordinated to state authority than at any point in Russian history.
But the implications extend far beyond Russia’s borders. The model Putin has perfected—using external sanctions to trap domestic elites into loyalty, redistributing abandoned foreign assets to reward that loyalty, and funding it all through a war economy that concentrates wealth upward—is replicable. Other authoritarian regimes facing Western pressure are watching and learning. If sanctions consistently produce the opposite of their intended effect by eliminating elite exit options while leaving wealth-generation capacity intact, then every future conflict will see autocrats applying this playbook. The lesson isn’t “sanctions don’t work.” It’s “sanctions work backwards when they eliminate alternatives faster than they eliminate opportunities.”
For Western sanctions strategy globally, the implications are sobering. The same dynamics that made Russian oligarchs more loyal could apply to Chinese entrepreneurs, Iranian business elites, or any other target of comprehensive sanctions. If freezing foreign assets and restricting international movement doesn’t reduce domestic wealth-generation capacity, all it does is ensure that wealth stays trapped in the target country where the regime controls it. This isn’t theoretical—it’s empirically demonstrated across three years of data showing Russian billionaire wealth recovering and even exceeding pre-war levels despite unprecedented sanctions pressure.
The question for democratic societies is whether wealth concentrated in the hands of 140 people serving one man’s geopolitical ambitions represents a sustainable model or a fragile system awaiting its inevitable collapse. Russian billionaires’ wealth now equals 27% of Russia’s GDP—higher than the United States (24%), and far above most developed Western nations (12-18%). This level of concentration suggests an economy optimized for extraction by a narrow elite rather than broad-based prosperity. Such systems can persist for decades or collapse suddenly, but they rarely evolve peacefully into more equitable arrangements. The oligarchs profiting from war today are building fortunes on foundations that may not survive the transition to whatever comes after Putin.
Russia’s 140 billionaires aren’t hostages to Putin’s system. They’re products of it—sorted, tested, and proven reliable through the mechanism of wartime redistribution where speaking costs everything and silence pays extraordinarily well. The West wanted sanctions to create oligarch opposition to the war. Instead, sanctions created the conditions where opposition became economically suicidal and cooperation became massively profitable. When wealth depends entirely on state approval, and the state is run by one man, the wealthy don’t challenge authority. They demonstrate their worth as servants.
What does it reveal about wealth itself that it can be created faster during wartime destruction than peacetime construction? That 140 people can thrive while their country wages a war that has killed hundreds of thousands suggests wealth and societal wellbeing operate on entirely separate tracks—one can climb while the other collapses, as long as the state directs resources toward those it favors. The oligarchs’ silence reveals something uncomfortable about loyalty in systems where all alternatives have been eliminated: compliance isn’t bought with rewards alone, but with the systematic removal of every exit. When dissent carries total destruction as its price, cooperation becomes the only rational choice. This isn’t uniquely Russian. It’s a template for how any system subordinates wealth to power when it controls both the rewards and the escape routes.
Tags: Russia, Oligarchs, Sanctions, War Economy, Wealth Concentration, Geopolitics, Putin