Russia’s Oil and Gas Revenue Seen Down 46% in January

Russia’s federal budget income from oil and gas taxes is expected to fall sharply in January, sliding about 46% from a year earlier as lower oil prices and a stronger rouble squeeze energy revenues.

Oil and gas receipts account for roughly a quarter of the Kremlin’s total budget income and remain a critical funding source for state spending.

Based on calculations using government and market data, Russia is projected to collect around 420 billion roubles ($5.4 billion) from oil and gas in January — the weakest monthly intake since August 2020, when the COVID-19 pandemic crushed global fuel demand.

The slump is being driven by a steep fall in Russia’s rouble-denominated oil price used for taxation. In December, the benchmark price for tax calculations dropped 53% year-on-year to about 3,073 roubles per barrel, while the rouble strengthened by more than 30% against the dollar compared with the same period last year.

Lower energy prices and currency movements have combined to erode tax receipts even as Russia continues to pump large volumes of crude and gas. The finance ministry is due to release official January revenue figures on February 4.

For 2026, the federal budget assumes oil and gas revenues of 8.96 trillion roubles, out of total planned budget income of about 40.3 trillion roubles. Last year, energy revenues fell 24% to 8.48 trillion roubles, the weakest level since 2020.

Analysts say the revenue squeeze could tighten fiscal conditions for Moscow at a time when energy markets are becoming more competitive and sanctions continue to reshape global trade flows.

Brief Summary

Russia’s oil and gas tax revenue is expected to drop about 46% year-on-year in January, pressured by lower oil prices and a stronger rouble, which have reduced the rouble value of export earnings used for tax calculations. Government-linked calculations point to around 420 billion roubles ($5.4 billion) in January receipts — the weakest monthly intake since August 2020 — highlighting rising fiscal pressure even as Russia maintains high production levels.

Why this matters for markets and businesses

• Budget pressure: Oil and gas still fund roughly a quarter of Russia’s federal revenue, so weaker receipts reduce fiscal flexibility.
• Policy risk: Falling energy income increases the likelihood of tighter budget discipline, tax adjustments, or cuts in discretionary spending.
• OPEC+ implications: Sustained revenue pressure may affect Russia’s stance in supply negotiations, including support for tighter production controls.
• Currency dynamics: A stronger rouble lowers the local-currency value of exports, complicating revenue planning for producers and the state.
• Geopolitical buffer shrinks: Reduced oil-and-gas income weakens Russia’s financial cushion amid sanctions-driven trade rerouting and competitive global energy markets.

FAQs

Q1: Why are Russia’s oil and gas revenues falling so sharply?

Lower global oil prices and a stronger rouble have reduced the rouble value of export proceeds that form the basis for many oil and gas tax calculations.

Q2: How important is oil and gas revenue to Russia’s budget?

Oil and gas-related taxes typically account for around 25% of federal budget income, making them a critical funding source for government spending.

Q3: What is the expected oil and gas revenue for January 2026?

Based on calculations using government and market data, January oil and gas receipts are projected at around 420 billion roubles ($5.4 billion) — the lowest monthly level since August 2020.

Q4: Is Russia producing less oil and gas?

Not necessarily. Production has remained high, but falling prices and currency movements are reducing the value of export earnings and related tax receipts.

Q5: What is driving the slump in rouble-denominated oil prices?

The benchmark rouble price used for taxation has fallen sharply due to both weaker crude prices and the stronger rouble, which reduces local-currency revenue per barrel.

Q6: How could this affect global energy markets?

If the revenue squeeze persists, Russia may have stronger incentives to support supply tightening, pricing discipline, or fiscal measures that aim to stabilise energy income.

Q7: What does this mean for investors?

It signals heightened sensitivity to energy prices and FX dynamics, reinforcing volatility risks in oil-linked markets and increasing fiscal strain for one of the world’s largest producers.