Russian state oil and gas revenue is set to fall in July by around 37% from the same month in 2024 to 680 billion roubles ($8.66 billion) due to cheaper oil and a stronger local currency, Reuters reported on 22 July.

The oil and gas revenues significantly fund Russia’s war effort, and a reduction narrows Moscow’s ability to sustain its military campaign. This drop has mainly been caused by Western sanctions, persistent price caps, discounting of Russian oil, lower global oil prices, and declining gas exports amid the Russian full-scale invasion of Ukraine.

The decline marks a significant drop in proceeds from what has been “the most important source of cash for the Kremlin, making up a quarter of total federal budget proceeds,” according to Reuters analysis.

Despite the annual decline, the proceeds are “set to increase by 37% from June due to cyclical payments of oil profit-based tax,” Reuters calculations indicate.

According to Reuters, the average Russian oil price calculated in roubles has remained below the federal budget’s target for 2025 throughout the period analyzed.

The broader impact extends beyond July, with Russia’s oil and gas revenue for January-July potentially declining “by 20% year-on-year to 5.4 trillion roubles,” Reuters calculations show.

The finance ministry will publish its official estimates on 5 August, according to the report.

Budget projections have undergone substantial revisions this year. The ministry had initially planned to earn 10.94 trillion roubles from oil and gas sales this year, but due to falling oil prices, it revised that expectation down to 8.32 trillion roubles.

This represents a sharp contrast to 2024 performance, when “oil and gas revenue reached 11.13 trillion roubles last year,” according to the data.