For the first nine months of 2025, revenues from oil and gas in the Russian budget decreased by 20% compared to the previous year, 2024, the Russian Ministry of Finance reports. The main reason is the decline in world oil prices. It is possible that in the end, the total volume of revenues from oil and gas exports will meet the government's expectations, but not those from the initial plan, but from another, much more modest one, which appeared in the summer, when it became clear that the set data could not be achieved.
Experts warned a year ago that the authorities would have to revise their expectations - the government was proceeding from too optimistic assumptions when discussing the 2025 budget. And in 2026, there is a risk that the situation will repeat itself.
What will happen to oil and gas revenues
The reduction in oil and gas revenues, which bring about a quarter of the revenues to the Russian budget, is increasing the pressure on state finances. Even in the most favorable scenario, oil and gas revenues this year will be the lowest since the pandemic year of 2020. Economist Sergei Aleksashenko believes that they will amount to about 8.5 trillion rubles.
At the same time, since 2020, Russian budget expenditures have increased significantly - mainly because of the war. In order to finance it in 2026, the authorities will increase taxes again, although they promised the exact opposite.
The size of Russia's oil and gas revenues depends on three key indicators - the volume of exports, the price of Urals oil and the ruble exchange rate. In 2025, there was no problem with exports, but the same cannot be said for the other two factors. The government believed that the average annual price of a barrel of Urals would be $69.7, and the dollar - 96.5 rubles. In reality, however, Urals is trading for less than $60 per barrel, and the dollar is worth about 80 rubles.
Government forecasts and expert forecasts
At first glance, the price targets set in the 2026 Budget Law seem more realistic. The Russian government is counting on $59 per barrel of Urals and 92.2 rubles per dollar. But the market is more pessimistic.
In recent months, leading investment companies - Citi, Goldman Sachs, JPMorgan and others - have lowered their expectations for Brent prices from $60-70 to an average of $50-60 for 2026. According to the US Energy Information Administration, in 2026 the average price of Brent could fall to $51 per barrel - one of the bleakest forecasts.
If these forecasts come true, Russian Urals oil will turn out to be even cheaper. According to “Reuters“, India, which is currently the largest importer of Russian oil, receives it at a discount of 2-3 dollars per barrel.
Why analysts expect a drop in oil prices
In the first years of the war, the situation on the world oil market developed very favorably for Russia, but this year the trend has changed. The main reason for the expected price decrease is the same as this year: supply is growing faster than demand. This process accelerated after eight OPEC+ member countries began to abandon voluntary production restrictions.
From April to September, OPEC+ countries increased production to 2.2 million barrels per day. In early September, they decided to gradually return another 1.65 million barrels per day to the market. In October, production is set to increase by 137,000 barrels per day, and the pace of increase could accelerate from there.
According to data from “Bloomberg“ and “Reuters“, Saudi Arabia, which has no difficulty increasing production, has been advocating for a more decisive step since October. Russia, which has more difficulty increasing its production, has insisted on a more restrained approach.
According to a forecast by the International Energy Agency, by the end of 2025 there will be a surplus of 1.9 million barrels per day on the market. In 2026, it will increase to 3.3 million barrels per day, which is equivalent to about 3% of global demand.
There will be no sharp fluctuations
Citi analysts write in their latest forecast that oil prices are currently being held back from a sharp decline thanks to the fact that some countries, especially China, are actively replenishing their reserves. According to them, the most likely scenario is that Brent will fall to $60 per barrel by the end of the year and maintain this level. Unless something unexpected happens - for example, the war in Ukraine ends suddenly - there will be no sharp price fluctuations, Citi experts believe.
But there are other points of view. “Bloomberg“ commentator Javier Blas notes that depending on the growth of the surplus, the pressure on prices will increase. Earlier, in such periods, surplus oil was more actively entering storage facilities. Now this mechanism works worse because of high interest rates, which reduce the benefit of storing oil.
Russian exporting companies - under double pressure
All this is the reason for a high level of uncertainty. “We can say that Russian exporting companies are under enormous pressure from two sides: the pressure on foreign markets combined with the deterioration of the price situation and the strong ruble“, financial analyst Nikolai Dudchenko noted. “But even if Russian business somehow manages to cope with the sanctions, it will not be able to influence world prices.“
Author: Oleg Khokhlov