On January 8, 2026, Russia's Ministry of Finance published data showing oil and gas revenues for 2025 totaling 8.5 trillion rubles, a 24% decrease from 2024 and the lowest figure since 2020, when the COVID-19 pandemic caused a global economic downturn.
The decline was particularly severe in December, with revenues only 447 billion rubles compared to 790 billion in December the previous year. The main cause was sanctions imposed by Donald Trump's administration on October 22, 2025, targeting Russia's major oil companies Rosneft and Lukoil. These sanctions made selling oil on the international market much riskier for buyers.
India and China, formerly Russia's main oil customers, significantly reduced their purchases out of fear of secondary US sanctions. The price of Urals oil fell from $67 to $39 per barrel, with discounts compared to Brent reaching a record $28–35 depending on the market.
As a result, Russia's budget fell short by over 2 trillion rubles, while expenditures—mainly for war—continued to rise. The federal budget deficit in the first 10 months of 2025 reached 4.2 trillion rubles, more than triple the plan. To cover the gap, Moscow is depleting the National Welfare Fund and raising taxes, including increasing VAT to 22%, which could further drive inflation.
Official Russian forecasts indicate the budget deficit will persist for at least two more decades. Experts note the lack of economic diversification and reliance on energy exports make Russia’s economic model vulnerable to sanctions.
