Russia’s Oil and Gas Revenues Drop 17% Despite Rising Prices

Russia’s oil and gas tax revenues have declined by 17% in the first nine months of 2026, despite a significant rise in oil prices. According to Russia’s Ministry of Finance, the sector contributed 5.47 trillion rubles ($64.43 billion) to the budget during this period, down from 6.61 trillion rubles in the same period last year. The oil and gas sector typically accounts for around 20% of Russia’s tax revenues.

The decline in revenues comes despite higher crude prices, which reached over $92 per barrel for Russian Urals crude by the end of September. Prices peaked at $113.89 in April, the highest level since 2013, driven by supply disruptions in the Middle East. However, the Western price cap on Russian oil remains at $44.10 per barrel, limiting some of the financial benefits from higher global prices.

Russia has also revised its forecasts for oil and gas production and exports downward for 2026. The revised oil production forecast is the lowest in 17 years, with production falling to 8.718 million barrels per day in August, down from 9.240 million in January. This represents a decline of over 5.6%. The drop in production has been attributed to factors such as attacks by Ukrainian drones on Russian refineries and reduced oil shipments through the port of Novorossiysk due to security risks.

The strengthening of the Russian ruble has also impacted revenues. From January to August, the ruble was on average 9% stronger against the dollar compared to the same period in 2025. Although the average oil price used to calculate taxes rose from $59.12 to $66.70 per barrel, the increase was much smaller in ruble terms, preventing higher prices from offsetting the decline in oil and gas revenues.