Support for small and medium-sized businesses has been among Vladimir Putin’s stated priorities, even in times of war, and has been framed as a backbone of resilience in the face of Western sanctions.

But the Russian state has failed to protect the sector from the impact of the war and there have been several shocks to businesses since the beginning of the year.

VAT rose from 20% to 22% in January, additional funds were allocated to defense and tax exemptions for some companies were eliminated.

Some 209,000 small and medium-sized businesses closed in the first quarter of 2026, according to the business intelligence platform Kontur.Fokus. That’s 9% more than in the first three months of 2025.

Widespread internet outages and crackdowns on popular messaging apps led to more problems, with Moscow businesses losing tens of millions of dollars in one week in March, according to some estimates.

And then came the fuel crisis, sparked by Ukrainian attacks on oil depots, refineries and supply routes.

“There are already many nails and they continue to be nailed. Is it [the attack on Wildberries warehouses] Another nail in the coffin? Well, yes, of course,” Professor Rubén Eniklopov from Pompeu Fabra University in Barcelona told the BBC.

Small businesses in Russia have shown resilience in the past, but inflation is high, the budget deficit is widening and oil and gas revenues are 23% lower than in the first six months of last year.

Russia has vast financial reserves, accumulated in peacetime, but its war in Ukraine is devouring more and more resources, depriving the civilian economy of growth.

Additional reporting by Olga Shamina.