Russia’s oil revenues plunge amid sanctions, falling prices

Russia’s oil and gas revenues fell sharply in October, highlighting growing pressures on the country’s federal budget. 

According to the Finance Ministry, taxes collected from oil and gas producers totaled 888.6 billion rubles ($9.7 billion) last month, a 27% decline compared with October 2024. Revenue from the mineral extraction tax, a key budget source, also dropped 26% year-on-year to 671.3 billion rubles, Caliber.Az reports , citing Russian media.

Over the first ten months of 2025, total oil and gas income reached 7.5 trillion rubles, down 2 trillion from 9.54 trillion in the same period last year. The decline has accelerated steadily, from 14% in the first five months to 21% by October.

The downturn is attributed to a combination of falling crude prices, a stronger ruble, and tightening Western sanctions. In late October, the US imposed new restrictions targeting Russia’s largest oil producers, Rosneft and Lukoil, which together account for roughly half of the country’s crude exports, or 2.2 million barrels per day. Approximately 70% of Russia’s seaborne oil exports are now affected by these sanctions. Analyst Vladimir Chernov of Freedom Finance Global noted that “a 5–10% drop in Rosneft and Lukoil exports combined with wider discounts on Russian crude could cost the state budget up to 120 billion rubles ($1.3 billion) per month.”

Adding to the pressure, Russia’s Urals crude averaged $53.99 per barrel in October, well below the government’s initial forecast of $70 and a later revision to $56. Economist Yegor Susin warned that revenue shortfalls could worsen in November and December if prices remain low.

The 2025 budget had initially projected 10.94 trillion rubles in oil and gas revenue, with 1.8 trillion earmarked for the National Wealth Fund. With the revised outlook now at 8.6 trillion rubles, the government plans to offset the shortfall through higher taxes on non-oil sectors, a VAT hike to 22%, increased small-business levies, and an ambitious 12-trillion-ruble borrowing plan. Forecasts for 2026–2028 show revenues remaining well below 2024 levels, signaling sustained fiscal challenges.

By Vafa Guliyeva