18 months after Putin invaded Ukraine, Russia's sanctioned oligarchs are still rich and even less likely to stand up to him

• Russia's oligarchs are even less likely to turn on Vladimir Putin 18 months after the invasion.
• Their political influence has waned since it started, and their wealth now depends more on Putin.
• They're adapting to the sanctions, finding fresh ways to make money and new places for vacations.

Right now, Andrey Melnichenko could very well be relaxing on his $300 million yacht in a Dubai port.

If he had a drink in hand, it wouldn't be alcoholic — he observes local customs, he told the Financial Times. Still, despite labeling himself as a pariah forced to sit in the United Arab Emirates' ports, it appears the fertilizer tycoon has plenty to toast.

In the 18 months since Russia invaded Ukraine, the lives of Russian oligarchs such as Melnichenko have changed immeasurably in the face of Western sanctions.

But as the conflict drags on, it doesn't look like these restrictions have succeeded in making the billionaires much more miserable or, crucially, any less sympathetic to Putin.

Putin's loyal soldiers

Melnichenko, the man Forbes named Russia's richest in April, has mostly been living in Dubai since he was sanctioned in March 2022 after attending a roundtable held by Russian President Vladimir Putin.

He's one of a select group to have been exiled from Western countries that had become a second home to Russia's wealthiest.

Sanctions were unleashed on Russia's billionaires as part of a wider set of economic restrictions that some hoped would inspire a revolt within the country.

The wealthiest Russians have wielded unusual political and economic power in Russia. Most rose to prominence after buying up assets in industries including natural gas, oil, fertilizer, and steel on the cheap when they were privatized in the "perestroika" reforms of the late 1980s as communism crumbled in the Soviet Union.

This "kleptocracy" model gave Western leaders some hope they could conspire to stop Putin's war by hurting a handful of billionaires. But apart from a couple of exceptions, there hasn't been any hint of a "palace coup" gathering pace against Putin — for several reasons.

Russia's oligarchs have Putin to thank for their ongoing success. The autocratic president clamped down on oligarchs as part of an anti-corruption drive after coming to power in 2000. While some were ousted, those who backed Putin saw their wealth and influence swell.

That's inspired staunch loyalty among the remaining oligarchs. The European Union said billionaires such as Roman Abramovich enjoyed privileged access to Putin. Alisher Usmanov, a prominent metals and mining investor, has "particularly close ties" to the Kremlin, the EU said.

But while the loyalty remains, any notion of a kleptocracy is gone. Oligarchs who once had a say in how Putin ran Russia have seen that influence evaporate since the invasion's start, Ivan Fomin, a democracy fellow at the Center for European Policy Analysis, said.

"If anything, assets are now liabilities, making their owners more vulnerable as the control over the businesses in Russia is conditional on owners' loyalty to Putin and, specifically, on their support of the war," Fomin wrote in April.

In February, researchers at the Center for Strategic and International Studies wrote: "If there is any grumbling, discontent, or scheming being done by disaffected oligarchs, it is being done behind closed doors and well out of the public eye."

While their waning political influence has hobbled them, oligarchs' continued prosperity may be a more-compelling reason to stay silent during the war.

Oligarchs are still pretty rich

Forbes reported Russia's billionaires were worse off — but not by much. The publication reported that as of April, the 39 Russians on its list of the world's billionaires had lost a collective $45 billion since the invasion began. That's not insignificant but represents only a 13% decline in their net worth.

A weakening ruble, an exodus of foreign companies, the collapse in the share prices of public companies, and the seizure of expensive property, including massive villas and luxury yachts, have all eroded their wealth.

However, Peter Rutland, a professor of government at Wesleyan University, told Insider oligarchs had been willing to sacrifice their holdings abroad to maintain their presence in Russia.

"You would immediately lose all your assets inside Russia. Your allies and family would be liable to arrest. There's no ambiguity to the downsides," he said. "And the upside is you can continue to make a lot of money in Russia."

And for many of the oligarchs, that Russian-earned wealth has stayed resilient despite a turbulent economy. Forbes reported that Melnichenko's net worth had doubled since the invasion because of skyrocketing prices for fertilizer, which is his main source of income. He's now worth $15.6 billion, per the Bloomberg Billionaires Index.

Vladimir Potanin, meanwhile, saw his fortune swell by more than $6 billion after buying back Rosbank from the French bank Société Générale in April 2022, Forbes reported.

Potanin is the richest Russian on the Bloomberg Billionaires Index at number 50 and worth $28.8 billion, up $238 million this year.

His purchase of Rosbank was one of several transactions that saw Russian businesspeople sweep up $40 billion worth of Western assets at bargain-basement prices in events reminiscent of the first oligarchs' scramble for assets that started in the 1980s.

Luxury lives on

A more-fanciful hope among Western policymakers was that oligarchs might withdraw their support for Putin through a yearning to return to their old luxuries.

But instead, they've simply adapted to the new paradigm. Some oligarchs have proved adept at moving assets out of the reach of Western clutches or finding a loophole in sanctions.

In the UK, new financial rules since Brexit undermine the perceived effectiveness of closing oligarchs' bank accounts.

A New York Times investigation found that certain exemptions from the UK government had allowed oligarchs to keep paying for expenses such as private chefs, personal drivers, and housekeepers.

For those who have been unable to return to their favored locations, Rutland said there'd been a lifestyle pivot.

"You can't spend the money in the same way you used to spend it in France and London — but you can spend it in Thailand or wherever," he said.

The oligarchs' pragmatism shouldn't come as a surprise, Rutland added: "Most of the 1990s there was a lot of political chaos. These folks are hardened to this kind of abrupt shift in rules of the game, so they're prepared for this kind of pivot."

Abramovich is one of those to have laid down new roots outside the West.

Despite enduring several humbling moments, including the forced sale of his beloved soccer team, Chelsea FC, and the $1 sell-off of the telecommunications operator Truphone, he hasn't quite disappeared into the sunset.

Abramovich managed to transfer many of his assets, including superyahcts and private jets, to his nonsanctioned children, The Guardian reported in January. He's also been spending time in Turkey and the United Arab Emirates, like Melnichenko.

The Wall Street Journal reported in April last year that wealthy Russians and oligarchs were buying up to four apartments at once in Turkey in the months after sanctions were introduced.

"We'll continue to see Londongrad on the Persian coast," Rutland said.

Revolt is possible but unlikely

It now appears Russia's oligarchs have adapted to a new status quo where they lack political influence but still have a reliable stream of cash.

Yet there are some signs that patience is waning. The Yandex founder Arkady Volozh finally criticized the war 18 months after the invasion — days before he asked for the EU to lift sanctions imposed on him, the Financial Times reported.

But for the most part, according to Rutland, any hints of sanctions sparking a palace coup should be taken with a heavy pinch of salt.

"Some kind of oligarch revolt is not impossible, but it doesn't look very likely right now," Rutland said.

And if oligarchs were developing an appetite for revolt, the death in August of Yevgeny Prigozhin, a former Putin oligarch, will surely have put them off.

The former Wagner leader staged a short-lived unsuccessful coup against Putin in June before dying in a suspicious plane crash two months later.

With Putin displaying newfound bullishness, oligarchs may be even happier to sit on the billions they have left.