The Kremlin's financial foundation for war is cracking. According to Ukraine's Foreign Intelligence Service, Russia's federal budget revenues from oil and gas dropped by 19% in January–July 2025 compared to the same period in 2024, down to $69.2 billion.
The drop in energy revenues underscores Russia’s growing vulnerability to external pressure, the agency emphasizes.
A double blow to the Kremlin
The average price for Urals crude fell by 18.4%, to $60.37 per barrel. At the same time, the ruble was artificially strengthened by 45%, from 113.71 to 81.25 per USD, undermining export earnings in foreign currency.
Gas exports to the EU plummeted by 50% to just 9.93 billion cubic meters, continuing Russia’s steady loss of energy foothold in Europe.
Ministry of Finance in panic
The Russian government has already revised its oil and gas income forecast for 2025, now expecting only $104.4 billion instead of the previous $137.3 billion, which is a 24% drop from earlier projections.
To partially offset the shortfall, the Kremlin is cutting fuel subsidies under the "fuel damper" mechanism and tapping into the National Welfare Fund.
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