Russia’s oil-and-gas budget suffered a painful blow in 2025. Revenues from the sector fell 24% to 8.48 trillion roubles, the weakest showing since 2020. That matters because oil and gas still bankroll roughly a quarter of the federal budget, and that budget is being chewed up by defense and security spending at a pace hard to ignore.
This is not because Russia pumped less crude. Oil prices fell more than 18% last year. That is the sharpest annual drop since the pandemic crash. On top of that, the rouble strengthened—bad timing. When your exports are priced in dollars, and your spending is in roubles, a stronger currency essentially kneecaps your revenue, although the finance ministry may attempt to dress it up.
The shortfall blew past official expectations. Even after the government downgraded its 2025 oil-and-gas forecast to 8.65 trillion roubles, down from an original 10.94 trillion, actual revenues still missed the mark. That’s structural exposure to price weakness.
The comparison year being floated is 2020, when revenues collapsed to 5.24 trillion roubles during COVID. But the parallel only goes so far. In 2020, demand slumped. Whereas in 2025, Russian barrels managed to keep flowing—albeit eastward—but at lower prices and thinner margins.
The damage became most visible at year-end. December oil-and-gas revenues fell to 447.8 billion roubles, down from nearly 800 billion a year earlier and sharply below November levels.
Western governments have long argued that cutting Russian oil revenue is key to constraining its war machine. Some have criticized those efforts as weak, but the latest 2025 data suggests that pressure has finally hit Russia where it hurts—their budget. The risk for Moscow now is a market that stays oversupplied.
By Julianne Geiger for Oilprice.com
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