So far in 2025, the Kremlin's oil and gas revenues have fallen by more than 20% year-on-year. In recent months, the pressure has only intensified and there is no prospect of reversing the trend. Here's why:
In the early years of the war against Ukraine, the Russian economy felt relatively stable, including thanks to significant oil export revenues. In 2025, the situation changed: oil revenues began to decline sharply. Russia's exports were affected by several factors at once. What are they and how likely is the pressure to persist in 2026?
What will happen to Russia's oil export revenues?
In November 2025, oil and gas export revenues in the Russian budget were 34 percent lower than in November 2024, according to data from the Ministry of Finance. For the 11 months as a whole, the gap is smaller, but still serious - 22.4 percent.
The Ministry of Finance is counting on receiving 580 billion rubles from oil and gas exports in December, which is 36 percent or 280 billion rubles less than a year earlier. This is also 140 billion less than the baseline level established after the last revision of the budget parameters for 2025, made in late October.
At the same time, it is entirely possible that the December plan will not be implemented. The sharp reduction in revenues in 2025 is due not to one, but to several factors. All of them continue to have an impact.
Why Russia's oil revenues are decreasing
For most of 2025, two factors exerted pressure: the decline in world oil prices and the strengthening of the ruble. In January, a barrel of "Brent" (oil produced in the North Sea, which is considered a global reference price) cost $79, in early December - $62. The average annual price is just under $70, which is 13 percent less than in 2024. The ruble has strengthened by a quarter against the dollar since the beginning of the year - from 100 rubles per dollar in January to 79 at the beginning of December.
At the end of the year, a third factor was added: the oil exported from Russia began to fall in price faster than others - due to the sanctions imposed by the US against "Lukoil" and "Rosneft".
According to data from the "Bloomberg" agency, a barrel of "Urals" oil (the main Russian export brand) was sold in the port of Novorossiysk for an average of $38.28, and in the Baltic ports - for $41.16. Respectively about 20 percent cheaper than "Brent", and before that the price difference was almost half as small.
How did the US sanctions against "Lukoil" and "Rosneft" affect Russian exports
According to "Bloomberg", Russian oil is being loaded in the previous volumes, even in slightly larger ones. But now half of the tankers have no destination point - they are actually used as floating storage facilities until buyers are found who are ready to violate the sanctions. And in order to find such buyers, discounts are made, which is why cheaper sales are growing.
"The volume of Russian oil that is at sea is growing, but this cannot continue for long. "In order to attract buyers, even greater discounts may be necessary," ING Bank analysts Warren Patterson and Eva Mantey said. "If the attempts are unsuccessful, this will most likely lead to a reduction in production." However, our base scenario assumes that Russia will still find ways to circumvent the sanctions."
In their forecast, the analysts assume that so far, after another increase in sanctions pressure, events have always developed according to the same scenario: the main buyers of Russian oil - China and India - have temporarily reduced imports, which has led to an increase in discounts, but then new supply chains have been established, supplies have been restored, and discounts have been reduced.
Will Russia be able to adapt to the new sanctions?
Russia last had to readjust its oil exports in early 2025 - after the US imposed sanctions against "Gazprom-Neft" and "Surgutneftegaz".
"The January sanctions initially seemed severe, but the production and export volumes of the two companies practically did not decrease - gradually exports to India and China returned to their pre-sanctions levels," expert Sergei Vakulenko from the "Carnegie" Center in Berlin told DW. "The main deliveries began to be made through partner companies, but the two companies often send oil cargoes on their own behalf, so there is no serious reason to expect that the two following oil companies will not be able to cope with the same task."
However, this will be more difficult now. Market conditions have changed significantly since the beginning of the year: the world oil market has moved from a deficit to a surplus.
Russia's 2026 oil revenue plan under threat
According to the International Energy Agency's November forecast, the surplus will reach 2.4 million barrels per day this year, and in 2026 it will increase to four million barrels per day. Russia exports exactly that much crude oil.
In a situation where supply exceeds demand, the motivation to look for ways to circumvent sanctions decreases: if the reduction in oil prices offered by sanctioned companies is not high enough, the raw material can be purchased from other suppliers - for example, from Saudi Arabia or Iraq. This creates additional risks for the Russian budget, the implementation of which in 2026 raises serious questions anyway.
The Russian budget for 2026 assumes a price of $59 per barrel of "Urals" - only $3 less than the current price of "Brent". That is, in order to implement the plan for oil and gas revenues, either a radical limitation of reductions or an increase in world prices is necessary. The first is possible only in the event of the lifting of sanctions, and there are no prerequisites for the second: most analysts expect a decrease in world prices due to the increase in the surplus.