The Russian economy is "bleeding cash" as capital flight sees £214billion sapped out of the country. Moscow has also been impacted by a downturn in exports of oil, gas & cars to China, says Chief of the National Bank of Ukraine Kyrylo Shevchenko.

Posting on X, he said: "Russia's bleeding cash—$281B (£214bn) in capital fled since 2022! $138B (£105bn) in year one, $80B (£61bn) in '23, $63B (£48bn) last year. Even China says 'nyet' to oil, gas & car plants. #RussiaEconomy #CapitalFlight." Russia's economy is feeling the impact of Western sanctions imposed after Vladimir Putin ordered the invasion of Ukraine in February 2022. While Moscow's economy surprised many with its resilience under sanctions, inflation and capital flight are among the key challenges facing the Kremlin.

To bypass sanctions, Russian companies transferred capital out of Russia and into third countries.

Sanctions have also caused China to curb its imports from Russia. In March, Reuters reported that Chinese state oil companies were "shying away" from Russian oil.

Beijing has also instructed local companies not to invest in Russia's oil and gas sector and refused to invest in the Power of Siberia 2 project. The Moscow Times reports that the automotive industry has also been warned not to build factories in Russia.

The export of oil to China and India fell sharply after former US President Joe Biden's last round of sanctions before leaving the White House in January.

Reuters also cited sources who said China's state-run Sinopec and Zhenhua Oil paused purchases of Russian oil due to concerns over doing business with sanctioned companies.

In March, Russia's oil and gas sales fell 17% year-on-year. As a result, the Kremlin lost £2bn in revenue, accounting for a third of its total revenue.

In the first quarter of 2025, Russia saw a huge £24bn drop in its total oil and gas revenues.

Russia's economic downturn will also have ramifications for its war effort in Ukraine, experts warn.

The Financial Times reports that a third of Russia's total budget is derived from oil and gas sales.

Kremlin spokesman Dmitry Peskov admitted earlier this week: “This indicator is very important for us in terms of budget revenues ... The situation is extremely volatile, tense and emotionally charged."