Kremlin oil revenues slump 33% in June: War fund takes hit
Photo: The Kremlin is losing money on the war due to falling oil prices (Getty Images)
Russia's revenues from oil sales in June 2025 fell to a two-year low amid a decline in global crude prices. In addition, the strengthening of the ruble meant that each barrel was bringing the Kremlin fewer and fewer rubles, Bloomberg reports.
According to Bloomberg calculations based on published data from Russia's Ministry of Finance, revenues from the oil sector shrank by almost 30% to 415.6 billion rubles ($5.27 billion). This is the lowest figure since June 2023.
Calculations show that Russia's total revenues from oil and gas taxes fell by a third compared to last year, to almost 495 billion rubles. This is the lowest figure since January 2023.
A stronger currency means that Russia and its oil producers receive fewer rubles for every barrel they pump and sell. This undermines companies’ profitability and strains the federal budget, which relies on oil and gas taxes for about a third of its revenues.
Any significant reduction in tax receipts from the industry directly affects the country's treasury, which is already burdened with multibillion-dollar expenditures on the war in Ukraine. A stronger ruble also reduces incentives for exports.
Perfect storm
At the end of April, the Russian Ministry of Finance revised its expectations for the budget deficit for this year, forecasting a much deeper deficit than previously anticipated, as US tariff policy and increased OPEC+ supplies led to a sharp drop in oil prices. To cover the deficit, the country is tapping its wealth fund.
The Ministry calculated Russia’s oil revenues in June based on the Urals price of $52.08 per barrel in May. This is the lowest price for the country’s key export grade since March 2023.
The currency traded at an average exchange rate of 80.4603 rubles per US dollar in May, the strongest level in two years, driven by record-high interest rates and expectations of improved relations with Washington.
As a result, the country's oil companies received only 4,190 rubles for each barrel sold, a level not seen since March 2023, Bloomberg’s calculations show.
According to The Economist, the growth of the Russian economy has slowed to zero. As the media outlet notes, Donald Trump may have a good attitude toward Vladimir Putin, but with his tariff wars, the US President kicked him in the teeth.
Rising costs of the war against Ukraine and falling oil prices are putting pressure on Russia's budget. Liquid assets in Russia's National Wealth Fund, the country's rainy-day reserve, fell by 14% in May to $35.7 billion.
