As Russia’s war in Ukraine enters its third year, financial strains may be pushing Russian President Vladimir Putin toward negotiations.

Axar.az reports that Agathe Demarais, a senior policy fellow at the European Council on Foreign Relations (ECFR), stated this in an article published by Politico.

While Moscow's official fiscal metrics appear stable, Western sanctions have restricted access to international debt markets, forcing the Kremlin to rely on domestic banks and the National Welfare Fund (NWF) to cover its budget deficit.

However, the NWF’s liquid reserves have already shrunk by 60%, and the country’s January 2025 budget deficit far exceeded targets.

With domestic banks struggling and no clear alternative funding sources, Russia risks a financial crisis. Seeking fiscal relief, Putin may be looking for negotiations with the U.S. to ease sanctions or reduce military spending, aligning with earlier predictions that Moscow would seek an end to the war in 2025 to avoid economic collapse.