Asger Risom
Moscow faces growing budget strain as energy exports decline
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Russia’s economy, already under immense pressure due to sanctions and wartime spending, now faces another significant blow: a steep drop in its oil and gas revenues—the Kremlin’s most crucial source of funding.
Revised Forecasts Point to Deeper Economic Trouble
According to a recent document from Russia’s Ministry of Economy, obtained by Digi24, the country now expects to generate $200.3 billion from oil and gas exports in 2025—a 15% decrease from last year’s earnings.
The sharp revision is largely attributed to lower crude prices and reflects the long-term financial strain from international sanctions targeting Russia’s energy sector.
Over the past decade, oil and gas have accounted for roughly one-third of Russia’s federal budget revenue.
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With expenditures ballooning due to the ongoing war in Ukraine, any reduction in export income is likely to widen the fiscal gap.
The forecast for oil production in 2025 was also revised downward, with expectations now set at 516 million tons, or approximately 10.32 million barrels per day.
Meanwhile, the average price for Russian Urals crude has fallen to near $53 per barrel, its lowest since 2023.
Long-Term Trends Show Limited Recovery
Despite modest recovery projections in the coming years—$220.4 billion in 2026 and $244.1 billion by 2028—these figures remain consistently below earlier estimates.
Compounding the issue, Russia’s pipeline gas exports, which plummeted after the invasion of Ukraine, are only expected to partially rebound.
The Ministry of Economy also downgraded its Brent crude oil price expectations by nearly 17%, indicating that global market dynamics are unlikely to reverse course soon.
The Central Bank has echoed this sentiment, warning of prolonged periods of subdued oil prices.
As energy revenues decline, Russia may be forced to make difficult fiscal decisions, potentially curbing domestic programs or increasing reliance on reserves.
Either way, the Kremlin’s room to maneuver is narrowing—raising concerns about the long-term sustainability of its economic model amid geopolitical isolation.
