Russiaʼs oil revenues to fall by 20% in 2025 due to sanctions and falling prices

In 2025, Russiaʼs energy export revenues fell by about 20% compared to the previous year due to sanctions and falling prices.

The Financial Times writes about this.

After the US imposed sanctions on Rosneft and Lukoil in late 2024, the difference between the price of benchmark Brent crude and Russian Urals increased sharply. According to FT calculations, the discount to Urals exceeded $24 per barrel, while in the previous two years it remained at around $15.

Against this backdrop, the price of this grade of oil has fallen to its lowest levels since 2021, further impacting Moscowʼs export revenues. With the loss of the European gas market in 2022, Russian budget revenues have become even more dependent on oil prices.

In December, the price of Urals fell to $39.2 per barrel, the lowest since the Covid-19 pandemic. According to industry sources, some shipments to India were even selling for $22-25 per barrel, barely covering the costs of production and transportation.

The decline in oil revenues has hit public finances hard. The share of energy revenues in Russia’s federal budget has fallen from around 50% to 24%, the lowest figure in a decade. To partially offset the losses, the Kremlin has raised VAT and the tax burden on small businesses.

Amid rising military spending, Russiaʼs budget deficit is set to reach 2.6% of GDP in 2025, five times the planned level. This is the fourth consecutive year that the Russian budget has been in deficit, one of the longest such periods under Putin.

Sanctions have also forced Russia to accept ever-increasing discounts to maintain exports. In December, seaborne imports of Russian oil to China rose 23% compared to November, while shipments to India fell 29%.

Additional pressure on the budget is created by the strengthening of the ruble, whose exchange rate exceeds that set in the budget calculations. This means that the state receives fewer rubles for each dollar of export revenue.

Analysts estimate that by the end of January, seaborne exports will be about 410 000 tons per day, down 11% from a year ago. If low oil prices persist, the Russian budget deficit could reach about RUB 3 trillion by the end of the year, about 7.5% of the revenues Moscow expects to receive in 2026.

• The US President Donald Trump signed sanctions against two of Russiaʼs largest energy companies “Lukoil” and “Rosneft” on October 23. The sanctions were supposed to take effect on November 23, but on November 15, the restrictions against “Lukoil” were postponed until December 13.
• In early December, the US postponed the imposition of sanctions against Russian oil giant “Lukoil” gas stations located outside the Russian Federation until April 29. “Lukoil” stake in Bulgaria was also exempted from sanctions until April 29. And Hungary was exempted from US sanctions on Russian oil and gas for a year.

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