Russia's Oil Revenues at Two-year Low

Russia's revenues from oil fell last month to their lowest level since June 2023 amid the global oil price slump.

Oil-related tax revenues fell 32% year-on-year last month to 430.4 billion rubles ($5.5 billion), according to Bloomberg estimates based on data released by the Finance Ministry on Wednesday. Total oil and gas revenues amounted to 512.7 billion rubles, a decline of more than 35%.

Crude prices fell as US President Donald Trump's tariff policy threatened to slow the global economy, while the OPEC+ alliance accelerated production increases in an already oversupplied market. The alliance's decision to increase production, led primarily by Saudi Arabia, drew opposition from a group led by Russia at a meeting over the weekend.

Oil and gas are the backbone of Russian state finances, accounting for about a third of tax revenue. Amid the decline in oil prices, the government revised its budget forecast and tripled its fiscal deficit target.

Oil revenues fell by more than half in May compared to the previous month, according to Bloomberg estimates. This reflects the fact that one of Russia's main oil taxes—which is levied on profits—is paid four times a year: in March, April, July, and October.

The Finance Ministry estimated oil taxes based on an average price of Urals crude at $54.76 per barrel in April, a drop of more than a quarter compared to the same period last year.

The price remained below the $60 per barrel ceiling imposed by the Group of Seven nations to squeeze Russia's revenues for the second consecutive month, according to historical data.

The rouble's strength has also impacted the price of crude oil in Russia. The rouble's strength has also contributed to lower revenues from the oil sector, with the currency rising 10% during the tax period compared to the same period last year, to 83.317 rubles to the dollar.