Russia Floats Asset Sales as War Costs Mount

 Jun 20, 2025

Russia is preparing to sell off chunks of its most prized state-owned companies in a desperate bid to raise cash—reviving an old strategy with a history of smoke, mirrors, and self-dealing.

Finance Minister Anton Siluanov confirmed Friday that firms in the energy, transport, and finance sectors are on the chopping block as Moscow scrambles to fund a ballooning war budget and entice private capital in a post-sanctions economy. Though no names were dropped, this is the same playbook that’s repeatedly floated Rosneft and other energy giants as “privatization candidates”—only for the state to engineer complex deals that change little beyond the headlines.

The last time the Kremlin tried this, in 2016, it announced the sale of a 19.5% stake in Rosneft to Glencore and Qatar. But multiple investigations and leaks suggested the deal was internally financed through Russian banks and structured to make it look like foreign capital was returning.

This time, the motivations are no less urgent. Russia’s federal budget is straining under military expenditures, and Western sanctions have choked access to foreign financing. Domestic borrowing comes at a punishing 20% interest rate, making privatization one of the few remaining tools for raising capital—at least on paper.

But skepticism runs deep. The state has promised privatization before, only to delay or dilute it when politics or prices turned unfavorable. And even if stakes are sold, few expect meaningful transfers of control. The Kremlin is unlikely to loosen its grip on strategic assets like oil, gas, and banking.

The move may generate short-term cash and headlines for the St. Petersburg Economic Forum, but without structural reform or real foreign participation, this version of privatization may be just another performance—a fire sale where nothing actually burns.

=oilprice.com=