Russian Oil and Gas Revenues Expected to Halve: Reasons and Consequences.

According to ТСН: It is expected that Russia's revenues from oil and gas may almost halve by December 2025, reaching the lowest levels since 2020.

The main reasons for this are the decline in global oil prices and the strengthening of the ruble. According to Reuters, December revenues may amount to around 410 billion rubles, which is lower than the forecast by the Russian Ministry of Finance. This decrease in income is occurring against the backdrop of falling oil prices in the global markets and due to the reduction in the value of Russian oil in ruble terms. At the same time, the country is increasing budget expenditures on defense due to the war against Ukraine.

Outlook for Oil and Gas Revenues in 2025

According to estimates from Reuters, total oil and gas revenues for 2025 may reach approximately 8.44 trillion rubles, which is nearly a quarter less compared to the previous year. This is also lower than the revised October forecast from the Russian Ministry of Finance of 8.65 trillion rubles.

At the beginning of the year, the Russian financial ministry expected significantly higher figures—10.94 trillion rubles—but was forced to revise its forecasts due to the decline in global oil prices, linked to fears of oversupply in the global market.

Historical Context

The last time such low monthly oil and gas revenues were recorded was in August 2020 when they stood at 405 billion rubles amid a sharp drop in oil prices due to the COVID-19 pandemic.

It was previously reported that the discount on Russian Urals oil compared to the benchmark Brent reached $25.8, which is twice as much as after the introduction of US sanctions against Lukoil and Rosneft.

Additionally, the drop in global oil prices is forcing the Kremlin to seek new buyers. India, realizing Russia's weakened position, will demand even greater discounts and concessions.

Thus, the Russian economy again finds itself under pressure from external factors that contribute to a decrease in revenues from the oil and gas sector. This may significantly impact the country's budget and its ability to fund various programs, including military expenditures. The situation in global markets will allow us to observe further steps from Moscow amid rising economic tensions.