From January to July 2025, revenues to the Russian federal budget from the oil and gas sector fell by 19% compared to the same period last year, down to $69.2 billion. The main reasons are the drop in oil prices, the strengthening of the ruble, and a sharp decrease in gas exports to the EU.
The average price of Urals crude oil dropped by 18.4% to $60.37 per barrel. Meanwhile, the ruble strengthened by 45% since the beginning of the year, from 113.71 to 81.25 per US dollar. Gas supplies to the EU fell by 50% to 9.93 billion cubic meters.
In response to reduced revenues, the Russian government is cutting compensation to oil companies under the fuel price cap mechanism. The Ministry of Finance revised its forecast for oil and gas revenues in 2025 down to $104.4 billion—24% less than previous expectations ($137.3 billion).
The decline in energy revenues highlights the growing vulnerability of the Russian economy to external pressure. To cover the deficit, the government plans to more actively use funds from the National Wealth Fund and cut budget items to finance the war against Ukraine.
