For the third consecutive month, the Russian federal budget has recorded a steep decline in oil and gas revenues, with figures for July 2025 showing a 29.9% year-on-year drop, according to data from the Russian Finance Ministry. These findings were published by The Moscow Times on August 5.
This marks the steepest contraction since early 2023, reflecting continued pressure from sanctions, price caps, and reduced export volumes. In absolute terms, budget income from the oil and gas sector totaled approximately 643 billion rubles (around $7.2 billion) in July 2025.
The Russian Finance Ministry attributes the drop primarily to falling Urals crude prices and lower export duties. Compared to June 2025, revenues also fell by 11.5%.
At the same time, overall Russian federal budget revenues rose by 37.5% year-on-year, driven largely by a surge in non-oil and gas income sources. Still, the shortfall in energy revenues remains a critical challenge for the Russian government, which has historically relied on hydrocarbons for over one-third of its fiscal intake.
The decline follows a broader trend, with energy earnings having also fallen 31% in May and 28% in June. Despite a modest recovery in global oil prices, Russian grades continue to trade at a discount due to Western sanctions and reduced access to international markets.
According to Bloomberg’s data, the average price of Urals crude in July stood at $55 per barrel, significantly below the G7-imposed price cap of $60, while the ESPO blend fared better at $72, benefiting from demand in Asia.
Meanwhile, Russian Deputy Prime Minister Alexander Novak acknowledged the difficulty in maintaining export levels, citing “logistical and financial constraints.” In response, Russia has increased domestic refinery throughput and offered deeper discounts to Asian buyers to secure cash flows.
Earlier, it was reported that Russia is expected to triple its 2025 federal budget deficit—rising from 1.17 trillion to 3.8 trillion rubles—as oil revenues fall sharply amid sanctions and weakening global prices.
The decline in Urals crude pricing has slashed budgeted energy proceeds by around 2.6 trillion rubles (~$33 billion).
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