Russia’s oil and gas revenues fell sharply in the first nine months of 2025, dropping more than 20 per cent year on year to 6.61 trillion rubles (US$81.6 billion), according to data released by the Russian Finance Ministry.
The decline reflects the combined effect of lower global oil prices, falling export volumes, and the sustained impact of Western sanctions on Russia’s energy sector.
Energy revenues — historically the backbone of Russia’s federal budget — have come under increasing pressure in 2025 amid sluggish global demand and restrictions on Russia’s access to key international markets.
The ministry’s figures show that revenues from crude oil and petroleum products declined by nearly a quarter compared with the same period a year earlier, while natural gas export earnings contracted further following continued curbs on pipeline and liquefied natural gas (LNG) shipments to Europe.
The sharp revenue drop poses new fiscal challenges for Moscow, which has relied heavily on energy taxes and export duties to finance both domestic spending and defence outlays.
With oil and gas still accounting for close to one-third of total federal budget income, analysts warn the sustained weakness could compel the government to draw further on its sovereign wealth reserves or revise state spending plans heading into 2026.
Brent crude prices have averaged below US$70 per barrel for much of 2025, down from more than US$85 a barrel during the same period last year.
Russia’s main export blend, Urals, has traded at an even steeper discount due to sanctions and restrictions on shipping and insurance, further tightening revenue inflows.
The ceiling on Russian oil export prices imposed by the G7 and European Union has continued to limit profits, despite efforts to divert supplies to Asia and other non-aligned markets.
Moscow has sought to cushion the blow by increasing shipments to China, India and Türkiye, offering steep discounts and exploring new settlement mechanisms in national currencies to bypass Western financial systems.
Nevertheless, those measures have not fully offset lost European markets, where Russian energy imports have been cut dramatically since the outbreak of the war in Ukraine in early 2022.
The Finance Ministry noted that while domestic production of crude oil has remained relatively stable, refiners are struggling with reduced export margins and limited access to Western technology and spare parts.
Meanwhile, gas production and export volumes have continued to slide, with Gazprom reporting lower output across major fields and reduced pipeline utilisation toward both Western and Eastern routes.
Economists expect Russia’s full-year energy revenues to remain under pressure, particularly if global oil prices fail to rebound and Western sanctions tighten further.
The sluggish outlook has reinforced concerns about the country’s longer-term fiscal resilience, as non-energy sectors have yet to generate sufficient income to compensate for diminished oil and gas receipts.
The ruble’s depreciation against the U.S. dollar — down more than 15 per cent since January — has provided some nominal support to budget inflows in local currency terms.
However, rising inflation and capital flight continue to erode the benefits.
With fiscal reserves under strain, policymakers face a delicate balancing act: sustaining military and social spending while managing the risks of a widening deficit.
Despite these headwinds, the government has reaffirmed its commitment to stabilising energy exports through new infrastructure links and deeper ties with Asian partners.
Yet, analysts caution that without a sustained recovery in prices or a broad easing of sanctions, Russia’s oil and gas sector will remain constrained — limiting its capacity to drive economic growth and fiscal stability into 2026.
