If a Russian painting fetched £50,000 at auction in London or New York 15 years ago, it ranked as newsworthy. Now no one raises an eyebrow when dozens sell for over £1m. Last year, Christie’s and Sotheby’s sold more than £100m of Russian works of art in their specialist sales alone. According to Oleg Stetsyura, president of the leading Moscow auction house Gelos, the Russian art and antiques market is already worth an estimated $1bn-$1.5bn a year – and it is growing fast. The rise of the Russian art market is nothing short of staggering. But nobody knows precisely what business is being done. The workings of this particular market are about as transparent as a bowl of borscht.

Certainly the past five years has seen soaring prices and a new confidence that this time the boom is here to stay. There is a sense that the whole Russian market – not only for Russian works of art – is poised to explode in a frenzy of activity. And yet it is not at all clear precisely who, or what, is fuelling this burgeoning market. Apart from oil at $60-$70 a barrel, that is. To all but a select few, the Russian buyer is something of an enigma.

The most prominent figure in the field is the oil and metals billionaire Viktor Vekselberg. Last April, Vekselberg set up Aurora Fine Art Investments, Russia’s first art investment fund, in partnership with the Moscow businessman and gallery owner Vladimir Voronchenko and the Russian-born, California-based art dealer Andre Ruzhnikov. At the same time, his private charitable foundation dedicated to repatriating important Russian works of art, The Link of Times, paid over $100m to secure the Forbes Fabergé collection, days before it was due to be auctioned at Sotheby’s in New York. The fund’s current project is repatriating the 17th-century Moscow bells sold by the Russian government in 1929 and now in Harvard Chapel.

Although the principals have declined to disclose the amount of the capital investment, the fund, according to Ruzhnikov, intends to spend $100m on Russian works of art in the next year and is aggressively pursuing high-quality Russian works from private or trade sources. “After dealing for 30 years, I know who has what,” says Ruzhnikov, “and I am approaching owners and telling them that the time has come to cash in.” What has slipped past his radar is being flushed out via a series of prominent ads in the international art press. “Aurora has initially been set up as a five-year fund,” Ruzhnikov explains. “In a couple of years we will calculate whether it has been a worthwhile investment or not.” He adds: “Russia is laced with money and our Russia-based clientele is growing in leaps and bounds but people are not buying stupidly.”

But just how many are buying? According to Ruzhnikov, the number of real collectors at the top end of the market can be counted on one hand. The international auction houses put the number of serious buyers at fewer than 100. Gelos believes the number of active buyers in the market amounts to 15,000. Certainly the New Russians’ penchant for discretion – quite unlike most nouveaux riches – makes it difficult to gauge quite how many people are active in this most elusive of markets as buyers or sellers. One facet of the new flurry of buying can be attributed to Russia’s gift culture. After all, what do you give an oligarch for his birthday when he already has a drawer full of expensive Swiss watches? Indeed, several of Moscow’s new art and antiques galleries specialise in supplying appropriate presents. As to the question of what does an oligarch give his wife, the answer, increasingly, is an antiques shop, art gallery or studio.

The most serious of these is the Stella Art Gallery, launched in 1993 as the first Russian gallery to show the best of international contemporary art. The opening of a second space in Moscow has allowed the gallery to work with established and emerging Russian artists, a field particularly attractive to a younger generation of entrepreneurs such as the 34-year-old Leonid Friedland of luxury goods giant Mercury.

The past year has also seen greater Russian participation at international contemporary art fairs and next month Sotheby’s will stage a contemporary art-selling exhibition as part of its Russia Week in New York. One of the paradoxes of this market is that although it is dominated by Russians, its temperature continues to be measured outside – in the auction houses and specialist dealers of London and New York. There are still relatively few big galleries – three or four in St Petersburg and perhaps 10 in Moscow – although the number of new ventures is rising.

Few doubt the potential of the Russian market. Gelos, founded in 1988 and itself a testament to the opening up of the Russian art and antiques market, already stages 100 auctions a year, and also operates as dealer, appraiser and educator.

As the Moscow World Fine Art Fair revealed last September, there are many inside and outside the country who are only too happy to oblige the newly rich New Russians in their acquisition of works of art. This pioneering fair, staged for the first time in 2004 by the Zurich-based Art Culture Studio, offered a spectacular showcase to more than 50 international dealers.

At first sight, it looked like any other smart international art and antiques fair – and rather better than most – with the recently restored Manege, just steps from the Kremlin, flooded with natural light and lined with the elegant stands of some of the most respected dealers of Paris, London and New York. A longer look had it resembling nothing so much as a curious dance of which no one knew the steps.

The problem for the western dealers was that they had no idea who was walking on to their stand – and their visitors were rarely prepared to tell them, let alone leave an address.

But deals were struck and exhibitors were taking a long-term view.

This year’s fair, which shows at the Manege from May 22-29, promises to be a much more Russian affair – no doubt a reflection of the huge exhibiting costs for the international dealers of up to $250,000 – and moderate, if any, returns.