Russia’s budget revenues from oil and gas are set to drop by 46% on the year this month, according to Reuters calculations, which the publication based on oil and gas production figures, refining rates, and sales on both the domestic and international markets.

According to these, Russia’s revenues from oil and gas for January will be 420 billion rubles, which is equal to about $5.42 billion, driven by lower international oil prices and a stronger local currency. The ruble gained over 30% in December 2025 from a year ago, driving the ruble-denominated price for oil used for tax purposes lower by as much as 53%.

Russia’s oil and gas industry contributes about 25% of its total budget revenues. Western leaders consider this a large enough portion to target with sanctions in order to presumably hurt its ability to fund the war in Ukraine. So far, 19 packages of EU sanctions and several rounds of U.S. sanctions have failed to make any difference in Russia’s military plans, and the EU itself even continues buying Russian oil (via third countries) and gas, on which it has imposed sanctions.

Reuters noted in its report that Russia’s federal budget will receive the approximate equivalent of $120 billion in revenues—8.96 trillion rubles—from the oil and gas industry this year, based on current price assumptions, of course. This will be up from 8.48 trillion rubles for last year, or about $110 billion. The figure represented a 24% decline from the previous year.

There has been a further decline since then, largely because of the November U.S. sanctions, which specifically targeted the two largest exporters of crude oil in Russia and their buyers. As a result, Rosneft and Lukoil clients in India have switched to other energy trading companies and other countries as well. However, the drop in flows to India has been nowhere as pronounced as expected, at over 1 million barrels daily for December versus expectations for 800,000 barrels daily, per Bloomberg.

By Irina Slav for Oilprice.com

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