Falling Russian oil and gas revenues and the country’s continued depletion of its liquid reserves will likely complicate Moscow’s efforts to fund a protracted war in Ukraine, experts have said. Russian oil and gas revenues in 2025 dropped to a five-year low amid declining gas exports due to Western sanctions and falling crude oil prices, it has been reported.
The Institute for the Study of War (ISW) highlighted that the Russian Ministry of Finance stated on January 15 that the country’s federal budget received a total of 8.48trillion rubles (roughly $108billion or £80.5billion) in oil and gas taxes in 2025, which Bloomberg noted is a decrease of 24% compared to 2024. Experts also emphasised that Russia’s federal budget received fewer rubles per barrel produced and sold in 2025 due to a stronger ruble. This increased Moscow’s purchasing power on the global market, ensuring that parallel imports were cheaper in the face of Western sanctions.
But this had adverse effects on Russia’s export profits, specialists said.
Russia’s oil and gas revenues accounted for roughly 30% of Russia’s total federal revenues in 2024 but decreased 22% year on year in 2025.
The Kremlin’s Finance Minister Anton Siluanov admitted in September 2025 that officials expected the share of Russia’s revenues from oil and gas sales to fall by roughly 30% in 2026.
The ISW added: “Russia has also gradually depleted its liquid reserves over the last four years of its war in Ukraine.”
Reports suggest that Russia has deployed more than half of its sovereign wealth fund to “bridge the widening gap” between revenues and spending and has “turned to expensive borrowing that will take years to pay back”.
The ISW wrote: “The sovereign wealth fund is a state-owned investment fund from which Russia pulls money to avoid incurring debt, but Russia has been steadily depleting the fund’s liquid reserve to fund its war, including by selling its gold reserves in late November 2025.
“Putin has grossly mismanaged Russia’s economy, which is suffering due to unsustainably high spending on the Russian military and the Russian defence industrial base (DIB), significant labour shortages, and reductions in Russia’s sovereign wealth fund.
“ISW continues to assess that increased Western sanctions on Russia — in tandem with continued Western military support to Ukraine — will likely further impact the Russian economy and Russia’s ability to fund a protracted war.”
