Russia loses billions from oil and gas – revenues reach lowest level since 2020

Thanks to sanctions, falling oil prices and an ill-timed rise in the value of the ruble, Moscow's war machine saw revenues from its gas and oil industry contracts at their lowest levels in half a decade.

Moscow's sales revenue in this sector fell by 24 percent in 2025 to 8.48 trillion rubles, the lowest figure since 2020. This is a significant enough variable to consider in betting on whether Ukraine can withstand Russia's nearly four-year occupation, when you consider that oil and natural gas revenues constitute the largest single item in the Kremlin's annual budget black ink.

The most widely exaggerated factor in that misguided trajectory is Europe’s decision to phase out its supply of fossil fuels from Russia. Russian natural gas coming via LNG tanks will be completely banned from the EU starting this year, while gas imports via pipelines will end there by September 2027.

It should be noted here, however, that the EU spent €1.15 billion ($1.35 billion) on Russian fossil fuels in August 2025 alone. The biggest European spenders were and remain: Hungary, €416 million in August ($488 million); Slovakia, €275 million ($323 million); and France, €157 million ($184 million).

But the most devastating blow to the Kremlin last year was dealt by oil prices. The cost of crude oil, overall, fell by more than 18 percent in 2025, the biggest annual drop since the Covid pandemic smothered trade, manufacturing and travel around the world in 2020.

For example, in the week of Moscow’s full-scale invasion of Ukraine in February 2022, crude oil prices were around $122 per barrel (the cost of West Texas Intermediate, WTI, or light crude oil). This week, the same price was around $59 per barrel.

And that’s just the price of “Texas tea.” In November, the price of Urals crude oil loaded at the Black Sea port of Novorossiysk fell to about $36 per barrel, the lowest in nearly three years. 

On the supply side of this equation, the Kremlin has not been overly concerned about Ukrainian attacks on its tankers and facilities, and about other countries' demands for Russia's "shadow fleet" of tankers, as fewer barrels on the market translates into higher prices and, therefore, higher revenues.

Russia is the third-largest oil producer by country, after the United States and Saudi Arabia.

Although Moscow is certainly unhappy when its oil shipments are confiscated, more worrying for its autocrat Vladimir Putin is when other nations are flooding the market with their crude and natural gas.

In this light, US President Donald Trump's invasion of Venezuela earlier this month was less worrisome for Putin (while the Kremlin laughed off " respect for international legal norms ”) in its implications for geopolitical or ideological influence, rather than having to do with the control of Venezuela's oil and the numbers of barrels of oil that Trump will have under his control.

The Trump administration has already begun calling on Southern European allies, such as Italy and Greece, to acquire American-controlled oil and natural gas.

Third, and perhaps the most ironic factor in Moscow's disappearing billions has been the value of the ruble itself.

Falling oil prices and a strong ruble forced the Russian Finance Ministry to revise its forecasts for 2024, but even the Kremlin did not expect the figures to come in the first quarter of 2025.

The ruble appreciated about 45 percent against the US dollar in 2025, and when your currency is expensive, you will sell fewer products internationally.

As Julienne Geiger of Oilprice.com explained: “The shortfall exceeded official expectations. Even after the government lowered its oil and gas forecast for 2025 to 8.65 trillion rubles, from an initial forecast of 10.94 trillion, actual revenues were still not up to par. This is structural exposure to price weakness.”