Russian Oligarchs Got Richer Despite Sanctions, Forbes Russia Reports 2023
Some Russian industrialists profit from selling metals, chemicals, and fuels to the army. To evade sanctions, some deny their involvement.
- A UBS report indicates that Russia’s total wealth increased by $600 billion in the past year.
- This growth occurred despite the ongoing conflict in Ukraine.
- The number of millionaires and ultra-high-net-worth individuals in Russia also saw an increase during this period.
It is estimated that around half of Russian oligarchs got richer despite sanctions, have been able to benefit from the ongoing conflict, and are still accumulating wealth, even in the face of international sanctions. According to a recent investigation conducted by the independent news outlet Proekt, on July 31st, it was discovered that out of the top 200 wealthiest Russians in 2021, a minimum of 81 individuals have direct connections to Russia’s invasion of Ukraine. These individuals are either owners of companies that supply components, equipment, or fuel to the Russian military or arms factories.
Over the past year, Russia’s richest individuals have experienced a remarkable surge in their fortunes, resulting in a combined increase of $152 billion. Forbes Russia attributes this surge to the rise in natural resource prices and their recovery from significant losses incurred during the early stages of the Ukraine conflict.
Based on the most recent information from Forbes Russia, there has been a significant uptick in the number of Russian billionaires, now totaling 110. This marks an increase of 22 billionaires compared to the previous year.
What’s even more striking is the substantial growth in the collective wealth of these individuals. It has surged from $353 billion, as documented in the 2022 list, to an impressive $505 billion. This financial leap underscores the resilience and prosperity of Russia’s wealthiest individuals, despite the challenging economic and geopolitical environment they operate in.
Overview of the increase in wealth among Russian oligarchs got richer despite sanctions
Despite the Western sanctions imposed on Russia due to the conflict in Ukraine, the country’s wealthiest individuals have seen a significant increase in their fortunes. Here’s an overview of how the wealth of Russia’s richest people has grown despite the sanctions:
- Wealth Surge in 2022: According to Forbes Russia, the wealthiest people in Russia increased their combined wealth by a startling $152 billion in 2022. The combined wealth of Russian billionaires surged from $353 billion in the previous year to $505 billion this year, with each individual experiencing an average increase of $600 million.
- Expanding Billionaire Roster: Russia now boasts 110 official billionaires on the Forbes list, marking an increase of 22 individuals from the previous year. This expansion underscores the resilience of the country’s wealthiest individuals.
- Key Contributors to Wealth Growth:
- Andrei Melnichenko, who made his fortune in the fertilizer industry, secured the top spot as Russia’s richest individual with an estimated net worth of $25.2 billion, more than doubling his previous year’s valuation.
- Vladimir Potanin, the second-richest person in Russia, rebounded from a $9.7 billion loss last year to a fortune of $23.7 billion.
- Vladimir Lisin, the head of NLMK Group, a prominent Russian steel manufacturer, claimed the third spot with a wealth of $22.1 billion.
- Rising Numbers of Super-Rich: The number of super-rich Russians, defined as those with fortunes exceeding $1 billion, increased to 110 individuals, a significant rise of 22 compared to the previous year. Additionally, Russia witnessed an upsurge in the number of millionaires, with around 56,000 new additions in 2022. Furthermore, the count of ultra-high-net-worth individuals, individuals with wealth surpassing $50 million, surged by nearly 4,500.
- Global Comparison: UBS’s annual wealth report reveals that Russia added a remarkable $600 billion to its total wealth in 2022. The country also saw the number of millionaires rise by approximately 56,000, along with a notable increase in the count of ultra-high-net-worth individuals. In contrast, the United States and Europe reported substantial reductions in wealth, shedding trillions of dollars, according to the Swiss bank’s findings.
- Oligarchs’ Perspective on Sanctions: Many Russian billionaires consider the Western sanctions to be a blunt instrument, despite the difficult economic environment they have created. These sanctions have contributed to a weakening ruble, the departure of foreign companies, a decline in the stock prices of public companies, and the confiscation of high-value assets, including opulent villas and luxury yachts. However, the sanctions have not prevented Russian oligarchs from amassing greater wealth.
Potanin and his Russian commercial lender Rosbank were sanctioned by the United States in December last year.
Key Players and Their Profits
Profiles of top Russian oligarchs and their businesses
Despite the Western sanctions imposed on Russia’s oligarchs over the war in Ukraine, many of them have retained their wealth and even increased it. Here are some profiles of top Russian oligarchs and their businesses who got rich after sanctions:
Andrei Melnichenko, the founder of Eurochem, a fertilizer production company, holds the title of Russia’s wealthiest individual. Russia is home to 110 billionaires, whose collective wealth surged from $353 billion in March 2022 to $505 billion by March of this year. Remarkably, this growth occurred despite Western sanctions imposed on Moscow in response to the Ukraine conflict.
Vladimir Potanin, the chairman of Norilsk Nickel, the world’s leading producer of nickel and palladium, maintains investments in banking, media, and real estate. Notably, he has been listed on the US Treasury’s “Putin list” of sanctioned individuals since 2018. However, in 2022, despite these sanctions, Forbes Russia reports that Potanin’s net worth saw a significant increase of $3.7 billion.
Leonid Mikhelson, A billionaire entrepreneur, Mikhelson has significant investments in the natural gas and petrochemical sectors. He serves as the CEO of Novatek, the largest independent natural gas producer in Russia. Notably, he has been under US Treasury sanctions since 2018 as part of the “Putin list.” According to Forbes Russia, Mikhelson’s net worth increased significantly in 2022, rising by $3.6 billion.
Viktor Vekselberg is a billionaire entrepreneur known for his investments in metals, mining, and energy. He is the founder of the Renova Group, a diversified conglomerate with interests across various industries. Notably, Vekselberg has been included on the US Treasury’s “Putin list” of sanctioned individuals since 2018. Surprisingly, in 2022, despite these sanctions, Forbes Russia reported a significant increase in its net worth of $2.5 billion.
Mikhail Fridman is a billionaire entrepreneur known for investments in the banking, telecommunications, and energy sectors. As the founder of Alfa Group, one of Russia’s prominent privately-owned investment conglomerates, he has remained on the US Treasury’s list of sanctioned individuals since 2018. Surprisingly, according to Forbes Russia, Fridman’s net worth increased by $2.4 billion in 2022 despite these sanctions.
Oligarchs are still pretty rich
According to Forbes, Russia’s billionaires haven’t been hit too hard by recent events. As of April, the 39 Russians on Forbes’ list of global billionaires had seen their collective wealth decrease by $45 billion since the invasion began. While this is a significant sum, it translates to only a 13% decline in their overall net worth.
Several factors have contributed to this decline, including a weakening ruble, the departure of foreign companies, a drop in the stock prices of public companies, and the confiscation of valuable assets like large estates and luxury yachts.
Despite these challenges, many oligarchs have shown a willingness to give up their international assets to maintain a presence in Russia. Peter Rutland, a government professor at Wesleyan University, explained that the downside is clear: losing all assets within Russia and putting allies and family at risk of arrest. However, the potential upside is the ability to continue amassing wealth within Russia.
For some oligarchs, their wealth earned within Russia has remained relatively robust, even in the face of economic turbulence. Forbes reported that Andrei Melnichenko’s net worth has doubled since the invasion, primarily due to surging fertilizer prices, his primary source of income. His current net worth stands at $15.6 billion, according to the Bloomberg Billionaires Index.
