Putin Calls War 'Peace Chance' While Moscow Faces Gas Lines and a Deficit Up 40%

Since Ukraine ramped up its long-range drone campaign against Russian refineries earlier this year, gasoline shortages that once hit only border regions have spread all the way to Moscow, where lines of 30 to 50 cars are now routine at gas stations, according to Bloomberg reporting carried by Ukrainska Pravda. Vladimir Putin stood up in Vladivostok on Thursday and said there's a "chance" at peace.

"Ultimately... the problem must be resolved by the countries involved in the conflict, Russia and Ukraine," Putin said at the Eastern Economic Forum, according to CNBC's translation of his remarks. He also called Kyiv's warnings to airlines about avoiding Russian airspace "state terrorism," a line that doesn't exactly scream de-escalation.

The optimism didn't sit well with NATO. Secretary General Mark Rutte said Wednesday that Russia is becoming "increasingly reckless," pointing to missiles and drones crossing the alliance's eastern flank and an alleged hybrid attack at Germany's Leipzig airport last month, according to CNBC. "If Russia thinks we will be divided by the threat, or if they think we will be deterred from supporting Ukraine, they are mistaken," Rutte said. The UK has since summoned Russia's charge d'affaires over the Leipzig incident, according to The Independent.

The Money Problem Putin Says Isn't a Problem

While Putin was talking peace, his own government's books tell a different story. Russia's budget deficit grew 40% between January and July to 2.8% of GDP, blowing past the government's own 1.6% target, according to The Moscow Times and figures cited by ua.news. Putin dismissed it Thursday: "Considering that we have one of the lowest levels of national debt in the world, there is nothing critical here."

That's a defensible point on paper. Russia's debt-to-GDP ratio is genuinely low by global standards, and a government running a low overall debt load does have more room to absorb short-term deficit spikes than one already drowning in obligations. Putin is not wrong about the raw debt number.

But the deficit isn't the only warning sign. German Gref, CEO of Sberbank, Russia's largest bank, has said the economy is in a state of "overcooling," according to ua.news. Growth that topped 4% during the war-spending boom slowed to roughly 1% in 2025 and just 0.6% in the first seven months of 2026. Annual inflation sits at 6.3% as of August 31, per the Economic Development Ministry, and Russia's Central Bank has held its key rate at 14% despite business pressure to cut it, with Reuters-polled analysts expecting another hold at next week's meeting.

The deficit growth traces directly to the war. Moscow has raised taxes and increased borrowing specifically to keep funding the invasion, a pattern The Moscow Times and CNBC both confirm has been building since 2022.

Refineries Are the Real Pressure Point

The fuel shortages aren't a separate story from the war. They're a direct result of it. Ukraine has hit Russian refineries at least 21 times since the start of August, according to Bloomberg's reporting via Ukrainska Pravda. Reuters reports gasoline production fell to about 70% of domestic consumption in late August after strikes on refineries in Perm, Nizhny Novgorod and Yaroslavl forced full or partial shutdowns.

Independent stations are now selling gas above 100 rubles a liter, roughly $1.20, while major oil companies with their own refineries keep prices under 80 rubles, per RBC Ukraine's sourcing. Zelensky has mocked the irony of an energy-exporting nation now importing fuel to keep its own drivers moving.

Diplomacy Keeps Circling Without Landing

India's foreign minister S. Jaishankar arrived in Kyiv this week, his first visit since the full-scale invasion began, and told reporters India is ready to help end the war "in any manner," according to the Times of India. That follows Prime Minister Narendra Modi's direct appeal to Putin at the Shanghai Cooperation Organisation summit in Bishkek, urging a move "from an endless war to an end of war." China's foreign ministry has echoed calls for dialogue, while CIA Director John Ratcliffe reportedly traveled to Moscow last week to warn against further escalation.

Ukraine's foreign minister, Andrii Sybiha, told Reuters he sees a "new dynamic" building toward renewed diplomatic engagement. Putin's own comments Thursday paired talk of a peace "chance" with a description of Ukraine's airspace warnings as terrorism, and NATO's Rutte spent the same 24 hours warning that Russian behavior is getting more dangerous, not less.

Russia's Central Bank is scheduled to make its next rate decision within days. Whether Jaishankar's Kyiv trip, wrapping up Saturday with stops in Poland, produces anything beyond another round of statements remains to be seen.