New data shows that Russian Oligarchs are losing billions of dollars by the day. At the time of writing, 19 ultra-wealthy Russians had collectively lost $93.18 billion in the past year. That’s per a safenettrading.com data presentation.
Analysts attribute the losses to several factors. First, you have an economy struggling with the after effects of the global coronavirus-induced economic crisis. Additionally, the country’s currency, the Ruble, is performing poorly against the major currencies. Additionally, the country is grappling with economic sanctions that have seen these elites’ fortunes decrease.
A torrid time for Russian Oligarchs
“It’s the worst possible time to be a Russian billionaire,” says Edith Reads from TradingPlatforms.com. She adds, “ A struggling economy post Covid-19 crisis and a weak Ruble haven’t favoured Russian businesses. The sanctions against them and Moscow have only exacerbated their woes.”
Many Western countries instituted a slew of sanctions against Russia, first for its annexation of Crimea. In the past few weeks, they’ve ramped up those sanctions following its invasion of Ukraine. Besides targeting high-ranking state officials in the Kremlin, they also extend to some of the nation’s richest men.
The 19 oligarchs have strong ties with Russian strongman Vladimir Putin. The West has sanctioned them to pile pressure on Putin to withdraw his troops from Ukraine. However, Putin has remained defiant in the face of rising global outrage. Consequently, the people in business have continued facing the brunt of those sanctions losing a significant chunk of their fortunes.
Who are the biggest losers?
According to the data, 10 of the 19 Russian Oligarchs lost $77.87 billion. That works to nearly 84% of all the lost group’s funds. The hardest hit of all was Vagit Alekperov. Mr. Alekperov is president of Russia’s second-largest oil firm Lukoi. The billionaire lost a whopping $17.6 to remain with a net worth of $5.20B.
Following in the second and third positions were Gennady Timchenko and Leonid Mikhelsosn. Timchenko, the founder and owner of the venture capitalist group Volga, has lost $11.4B. Meanwhile, Michelson, the principal shareholder of Novatek, a natural gas company, lost $11.0 B.
Other businessmen that lost significant sums include Russia’s wealthiest man, Vladimir Potanin. The business mogul shed $6.43B to end up with a net worth of $24.5B. The country’s third and fourth richest men, Alexey Mordashov and Vladimir Lisin, lost $7.42B and $7.56B, respectively.
Things can only get darker for Russia. In the absence of a speedy resolution of the Ukrainian conflict and mounting sanctions, the nation will face economic hardships.
Kremlin insiders say that Putin met a section of the oligarchs to explain the importance of Russia’s incursion into Ukraine. Sources privy to the discussions indicate they dwelt on the impact of those sanctions and why they were critical hits to take for Moscow’s ends in Ukraine.
Only time will tell whether or not the sanctions will soften Putin’s stance. But so far, he has remained defiant imposing sanctions of his own on western leaders, including American president Joe Biden. Meanwhile, analysts are afraid for the Russian economy as it increasingly becomes isolated from the global financial space.
The nation is staring at a severe cash crunch following its isolation from Western financial markets. Again, several multinationals have withdrawn their operations from the country. Further, the U.S and other countries have banned Russian oil and gas imports. The EU, the biggest market for Russia’s oil and gas, has said it’ll drastically reduce its imports from Moscow.