Russia’s oil, gas revenues set to plunge by third in May

Russia's oil and gas revenues are projected to fall by a third in May compared to the same period last year, hitting their lowest level since July 2023.

The government is expected to collect 0.52 trillion roubles (£4.9 billion; $6.48 billion) from oil and gas sales this month, down sharply from a year ago, as the sector grapples with declining crude prices and a stronger rouble, Caliber.Az reports per foreign media.

Hydrocarbon revenues, which typically make up around a quarter of the federal budget, have been a critical source of income for the Kremlin.

Compared to April, this month’s intake also marks a significant drop, with proceeds halving after the end of a quarterly windfall from an additional oil tax that had temporarily boosted revenue by 0.49 trillion roubles.

Estimates suggest the average price of Russian oil, measured in roubles, dropped to 4,562 per barrel in April — a steep fall from 6,965 roubles a year earlier.

For the first five months of the year, total oil and gas revenue is on course to decline by 14% year-on-year to 4.25 trillion roubles.

The Russian finance ministry is due to publish official figures on 4 June.

The fall in energy income comes as Moscow significantly ramps up defence and security spending following the launch of its full-scale invasion of Ukraine in February 2022, which it continues to refer to as a "special military operation".

Last month, the finance ministry revised down its 2025 oil and gas revenue forecast to 8.32 trillion roubles ($103.55 billion), or 3.7% of GDP — a sharp drop from the previous estimate of 10.94 trillion roubles (5.1% of GDP). At the same time, it raised planned government spending by a further 830 billion roubles.

By Aghakazim Guliyev