HMM: Russia posted a $29 billion deficit in the first quarter as energy revenue plummets — and it could spell trouble for the country’s military bills.

Russia’s finance ministry did not quantify the impact of the ban and price cap on Russian crude but the Centre for Research on Energy and Clean Air, a Finnish think tank, estimated in January that the ban and price cap was costing the Kremlin over $170 million a day.

In sharp contrast, Russia’s expenditure has seen a massive jump — the country’s spending jumped 34% to 8.1 trillion rubles over the same first quarter period, per the finance ministry data.

The Russian finance ministry did not explain why expenditures spiked so sharply, but the country’s defense spending went over budget by 54% in 2022, according to Gaidar Institute, an independent Moscow-based think tank, Reuters reported on April 4.

The country is likely to continue plowing money into defense and security, with combined spending expected to hit 9.4 trillion rubles in 2023, according to a Reuters budget analysis in November. That’s nearly one-third of the national budget.

But: Ukraine’s air defence could be ‘out of ammunition this week’ leaked US documents suggest.

UPDATE (FROM GLENN): I believe there’s a line in Jim Dunnigan’s How To Make War about how the least-appreciated thing about modern warfare is how wildly, crushingly expensive it is.

And, from the comments: “Just think, it is very likely that had Donald Trump been reelected in 2020 our petroleum producers would have driven Russia bankrupt without sanctions or any other horse shit like them, but simply by out competing Putin. It would been glorious for the US economy and citizens, and could have conceivably prevented Putin from invading Ukraine due to lack of funds. All that money and war machinery we are pissing down a rat hole in Ukraine could be doing something more productive and useful.”

Yep. I think it’s worth funding Ukraine to weaken Putin, but we could have done a better job of it via deterrence and drilling.