Projected Revenue Decline Signals Fiscal Strain
Russian Federation's oil and gas revenue for December 2025 is projected to fall by nearly 50% compared to the previous year, reaching approximately 410 billion roubles ($5.17 billion). This forecast, based on Reuters calculations, indicates the lowest monthly revenue for the Kremlin since August 2020, when figures stood at 405 billion roubles during the COVID-19 pandemic-induced oil price slump.
Factors Contributing to the Downturn
The anticipated sharp decline is primarily attributed to two key factors: lower global crude oil prices and a stronger rouble. In November, the price of Russian oil, used for tax purposes and expressed in roubles, experienced a significant drop of 17.1% from October, settling at 3,605 roubles per barrel. Western sanctions, including price caps and embargoes on Russian oil and gas products, have also played a role in limiting Russia's export earnings and increasing transaction costs for its oil companies.
Annual Performance and Budgetary Impact
For the entire year 2025, Russia's total oil and gas income is expected to reach 8.44 trillion roubles, falling short of the Finance Ministry's revised forecast of 8.65 trillion roubles. This annual projection is nearly 25% lower than the previous year's figures. Oil and gas revenues are a critical component of the Russian federal budget, typically accounting for about a quarter of its total proceeds. The significant reduction in these revenues poses a challenge for Russia, particularly given its heavily increased defense and security spending since the commencement of its military campaign in Ukraine in February 2022. The Finance Ministry had initially projected higher oil and gas revenues of 10.94 trillion roubles for the year but revised this forecast downwards in October due to declining global oil prices.
Outlook and Official Reporting
Analysts suggest that the expected budget deficit for December, which some estimate at 1.6 trillion roubles, may be covered through the issuance of state bonds. However, the fiscal outlook for 2026 could present further challenges if oil prices remain low and current currency assumptions do not hold. The Russian Finance Ministry is scheduled to release its official oil and gas revenue estimates for December on January 14.
5 Comments
Michelangelo
Good. Their war machine needs to run out of funds.
Donatello
Seeing Russia's revenue drop is a sign that economic pressures are having an effect. Nevertheless, the article also mentions a stronger rouble, which could offer some internal economic stability despite the lower export earnings.
Leonardo
It's clear Western sanctions and lower oil prices are impacting Russia's energy income, but global energy markets are volatile. These projections could shift rapidly if geopolitical events change or new alliances form.
Raphael
The article highlights a considerable financial challenge for Russia, especially with increased defense spending. However, focusing solely on oil and gas might overlook other sectors of their economy that could be adapting or growing.
Donatello
Excellent. The regime's fiscal pain is a victory for peace.