Russia's oil earnings fall despite price jump as output drops and rouble rises
USO•Russia’s oil and gas tax proceeds fell 17% to 5.47 trillion roubles in the first nine months, from 6.61 trillion a year earlier, despite Urals crude prices more than doubling from before the Iran war. Lower output and a stronger rouble weighed on revenue.
1. Revenue falls despite higher prices
Russia’s oil and gas tax proceeds fell to 5.47 trillion roubles ($64.43 billion) in the first nine months, down from 6.61 trillion a year earlier. The sector accounts for about 20% of tax proceeds going to Russia’s budget, which is expected to run a 2026 deficit of 3% of GDP, almost double the plan.
2. Output and currency pressures
Urals crude traded above $92 at the end of September, double its price before the Iran war and a Western price cap of $44.10. But Russia cut its outlook for oil production and exports this year, with its revised oil production outlook marking a 17-year low; August crude production fell more than 5.6% to 8.718 million barrels per day from 9.240 million in January. The rouble averaged around 9% stronger against the dollar in January-August than in the same period in 2025, limiting the rise in the oil price used for taxation to $66.70 per barrel from $59.12.
