News outlets are calling the event “Putin’s Davos.” Essentially it’s an annual economic investment conference where Russia hopes to lure in foreign investors and, if possible, sign some big international deals. It’s also a place for Russian bigwigs to strategize how to get the economy to recover at a time when it seems to be sliding toward a recession.
Russian President Vladimir Putin will host his fifth wartime economic conference in St. Petersburg, with his government struggling for a growth strategy as Ukrainian drone attacks hit the economy and businesses see no end to the war.
Growth is the main theme at the St. Petersburg International Economic Forum, which runs from June 3 to 6. Delegates are likely to discuss strategies including the redistribution of labour to faster-growing sectors and the promotion of AI-powered digital platforms in e-commerce and banking. Officials also hope that consumer demand will grow.
Oleg Vyugin, former deputy chairman of the central bank, told Reuters that with the key interest rate in double digits, tax increases to fund the war and declining investment, growth will be hard to achieve.
“The government essentially has nothing to offer for the recovery of growth,” he said.
There’s a lot riding on this conference. If Putin can’t come up with some way to keep his economy from slipping, he’s going to have a hard time keeping the war machine funded. Ukrainian drones have already taken out about 25% of the country’s refinery capacity and the surge of drones is expected to increase this summer. The only bright spot for Putin has been the blockade of the Strait of Hormuz which has sent oil prices higher.
This morning, just as Putin was getting ready to open his conference, Ukrainian drones struck an oil site in St. Petersburg.
Ukraine has carried out a strike on the outskirts of Russia’s St Petersburg, hours before the opening of a major economic forum designed to attract foreign investment into the country.
As dawn broke black plumes of smoke rose over Russia’s second city, where Vladimir Putin is due to address the financial event on Friday. Thousands of guests from 130 countries are due to attend, including a low-key US delegation…
Mobile internet was disrupted and St Petersburg’s Pulkovo Airport was temporarily closed, while some regions of nearby Latvia and Estonia also issued air raid alerts.
Here’s video of one of the drones hitting its target.
The moment a Ukrainian drone strikes the oil terminal in St. Petersburg pic.twitter.com/uwDPF3ftG9
— Visegrád 24 (@visegrad24) June 3, 2026
First @planet low resolution image of the fire in the premises of the St. Petersburg port oil depot. Taken 12.46 local time. pic.twitter.com/UeKWlomAxi
— Mark Krutov (@kromark) June 3, 2026
Here’s what it looked like a bit later from the site where the forum is taking place.
International delegates and attendees arrive at the St. Petersburg International Economic Forum (SPIEF) this morning located at the ExpoForum to the south of St. Petersburg, as smoke from the ongoing fire at the city’s oil export terminal rises into the sky behind them, following… pic.twitter.com/OT1oDQI8AA
— OSINTdefender (@sentdefender) June 3, 2026
One of the high-profile visitors at this year’s event is conspiracy theorist Candace Owens. The owner of a Ukrainian drone company made a joke about her attendance today.
US right-wing commentator Candace Owens and Putin-backing US actor Steven Seagal are also due to attend.
In a tongue-in-cheek post on X, Denys Shtilierman of Ukrainian defence company Fire Point said: “Due to such distinguished guests and the importance of the event itself, we couldn’t ignore it – and urgently flew to [St Petersburg].”
Drones also struck a Naval base nearby, damaging a Russian warship.
The Steregushchy-class corvette ‘Boikiy’ was struck multiple times and burning nicely in drydock in St Petersburg after 1st Unmanned Center ‘deflowered’ it, in their own words.
Source: https://t.co/I9M67YSQzD pic.twitter.com/LzG9xLJ408
— Ukraine Control Map (@UAControlMap) June 3, 2026
Not a great morning for Putin but the real problem isn’t the smoke from burning oil, it’s the fact that Putin is nearing a point where he’ll have to make a choice.
Oleg Vyugin, a former deputy chairman of the central bank, told Reuters that Russia had a choice between a recession or reducing financing for what the Kremlin calls the Special Military Operation (SMO) in Ukraine.
“Russia is faced with a choice between reducing military financing, which will give the economy an incentive to grow by reducing the key interest rate more quickly, expanding lending to the civilian sector, partially lifting sanctions and restoring logistics chains, and continuing the SMO, which will constantly require increased spending and further tax increases, intensifying the economic slide into recession, and a decline in real incomes,” Vyugin said.
Those are the choices. What is no longer on the table is a complete victory in Ukraine.
A recent analysis published in one of Russia’s top foreign policy journals, Russia in Global Affairs, stated that Putin’s war goals were now unachievable, and the report appeared to be a further sign of growing dissent at the top of Russia’s political establishment.
The analysis by Vasily Kashin, a respected Russian academic, argued that ongoing Western assistance for Kyiv means it is now impossible for Russia to outspend Ukraine on military equipment and technology, while Ukraine’s mobilization efforts are proving a sufficient counterweight to Russia’s more limited conscription system.
“The war is going on between comparably equal opponents. Historically such wars have only extremely rarely led to the total destruction of one of the sides,” Kashin wrote. “Liquidating the anti-Russian regime,” he wrote, is “principally unattainable without a total military occupation of the entire country over a long period. For Russia, this is technically impossible.”
Russia’s last hope is to lash out at Kyiv with whatever missiles it can manage in an attempt to make it look like it’s still in the fight. But this strategy is starting to look like the last desperate efforts of a cornered animal.
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