Russia’s oil and gas revenues took a significant hit in 2025, plummeting 24% to 8.48 trillion rubles (approximately $108.4 billion)—the lowest since 2020. This is critical, as hydrocarbons still account for roughly a quarter of the federal budget, which is being rapidly depleted by defense and security spending.
This decline isn’t due to reduced oil production. Instead, oil prices dropped over 18% last year—the sharpest annual fall since the pandemic began. Additionally, the strengthening ruble played a role. With exports priced in dollars and expenses in rubles, a stronger currency significantly eroded revenue.
Actual oil and gas earnings also fell short of revised forecasts. Even after the government lowered its 2025 projection to 8.65 trillion rubles from an initial 10.94 trillion, the final figure missed the mark.
While 2020 saw revenues drop to 5.24 trillion rubles during the COVID-19 crisis, the comparison holds only partially. In 2020, demand collapsed, whereas in 2025, Russian oil continued flowing—primarily eastward—but at lower prices and thinner margins.
The impact was most acute in December, with oil and gas revenues falling to 447.8 billion rubles (around $5.8 billion)—down from nearly 800 billion rubles year-on-year and significantly below November’s figures.
Western governments have long argued that curtailing Russia’s oil revenues is key to limiting its Ukraine war funding. Critics dismissed early efforts as ineffective, but 2025’s data reveals that the pressure has finally struck a critical vulnerability: the budget.
