August M
Russia’s public finances are facing renewed pressure as revenues from oil and gas, the backbone of the federal budget, have dropped to their weakest level in years. The decline comes despite higher oil prices and a stronger ruble, underscoring the strain on Moscow’s wartime economy.
The figures highlight how energy income is failing to keep pace with heavy state spending tied to the conflict in Ukraine.
Sharp annual drop
Oil and gas revenues paid into Russia’s federal budget fell by 24% in 2025, reaching their lowest level since 2020, according to data released by the Finance Ministry in Moscow. Reuters reported that the revenues totaled 8.48 trillion rubles ($108.03bn), down from 11.13 trillion rubles in 2024.
These revenues are Russia’s single largest source of budget income, typically accounting for around a quarter of total federal receipts. They have been under growing pressure as defense and security spending has surged since the Kremlin launched its military campaign in Ukraine in February 2022.
The ministry’s data show that the 2025 outcome was worse than officials had expected even after revising their forecasts.
Below expectations
The Finance Ministry had downgraded its revenue projection for 2025 to 8.65 trillion rubles, from an initial forecast of 10.94 trillion rubles. Actual receipts still fell short of that reduced estimate.
Reuters noted that oil prices declined by more than 18% over the year, marking their steepest annual fall since 2020. That earlier slump, triggered by the COVID-19 pandemic and turmoil in energy markets, had pushed Russia’s oil and gas revenues down to 5.24 trillion rubles.
The latest figures indicate that, while not as severe as the pandemic shock, the current downturn is the deepest since that period, Hotnews.ro reported
War and pressure
Ukraine and its Western allies have repeatedly said that cutting Russia’s energy income is a central goal of sanctions policy, aimed at reducing the funds available to sustain the war effort.
Monthly data point to a sharp deterioration toward the end of the year. In December 2025, oil and gas revenues dropped to 447.8 billion rubles, compared with 790.2 billion rubles in the same month of 2024. In November 2025, they stood at 530.9 billion rubles.
The trend adds to questions about how Moscow will balance declining resource income with continued high military spending.
Sources: Reuters, HotNews.ro
