Russia’s war funding under threat as oil revenues hit five-year low | World | News
Russia’s falling oil and gas revenues and the continued depletion of the country’s liquid reserves will likely complicate Moscow’s efforts to finance a protracted war in Ukraine, experts said. Russia’s oil and gas revenues in 2025 have reportedly fallen to a five-year low due to reduced gas exports due to Western sanctions and the decline in crude oil prices.
Institute for the Study of War (ISW) He highlighted that the Russian Ministry of Finance announced on January 15 that the country’s federal budget will receive a total of 8.48 trillion rubles (about $108 billion or £80.5 billion) from oil and gas taxes in 2025. This is a 24% decrease compared to 2024, Bloomberg noted. Experts also emphasized that Russia’s federal budget receives fewer rubles per barrel produced and sold in 2025 due to the stronger ruble. This increased Moscow’s purchasing power in the global market and made parallel imports cheaper in the face of Western sanctions.
But experts said this had negative effects on Russia’s export profits.
Russia’s oil and gas revenues will account for approximately 30% of Russia’s total federal revenues in 2024, falling by 22% annually in 2025.
Kremlin Finance Minister Anton Siluanov admitted in September 2025 that officials expected Russia’s share of revenues from oil and gas sales to fall by about 30% in 2026.
ISW added: “Russia has also gradually depleted its liquid reserves over the last four years of its war in Ukraine.”
Reports suggest that Russia is using more than half of its sovereign wealth fund to “close the widening gap” between revenues and spending and is “turning to expensive debt that will take years to repay.”
ISW wrote: “The sovereign wealth fund is a state-owned investment fund from which Russia draws money to avoid going into debt, but Russia has been steadily depleting the fund’s liquid reserve to finance its war, including selling its gold reserves in late November 2025.”
“Putin has grossly mismanaged Russia’s economy, which is suffering from unsustainably high spending on the Russian military and the Russian defense industrial base (DIB), significant labor shortages, and reductions in Russia’s sovereign wealth fund.
“ISW continues to assess that increased Western sanctions against Russia, combined with continued Western military support for Ukraine, will likely further impact the Russian economy and Russia’s ability to finance a protracted war.”
