Revenues from oil and gas have plummeted over the past year in a major blow to Vladimir Putin’s war machine. Russia has been gripped by an economic crisis that shows no sign of abating any time soon.
Prohibitively high interest rates of 21% have left many Russian firms with a heavy exposure to bank loans struggling to stay solvent – with the threat of mass bankruptcies looming large. Despite political pressure from the Kremlin, Russia’s Central bank has refused to lower the rate, as it retains tight control over the money purse.
Meanwhile, consumers have been hit by crippling food price inflation, far outstripping the official rate of 10.3%.
Over the last year in Russia, the cost of milk and apples have gone up by approximately 20%, cucumbers by 22%, beetroot by 32%, butter by 35%, cabbages by 42%, onions by 46% and potatoes by a whopping 90%.
And things look set to get worse for a desperate Kremlin, as Russia’s economy continues to creak under the strain of its wartime footing.
In the latest piece of bad news, energy revenues have dramatically plunged over the past 12 months.
Income from oil and gas sales fell by an eye-watering 1.09 trillion roubles (£10 billion) in April.
This represents a fall of 12% year-on-year, and presents the Kremlin with an unwanted fiscal headache.
Russia relies heavily on its oil and gas revenues to fund its brutal and illegal war in Ukraine.
Revenues from the sale of its fossil fuels account for a significant 30% of Russia’s state income.
Moreover, the Kremlin has increased defence spending by 25% in 2025 to £109 billion, making it more dependent than ever on income from oil and gas.
As energy income slips and war costs climb, Moscow is now considering lowering its oil price benchmark from $60 to $50.
Commenting on the situation, the former head of Ukraine’s National Bank – Kyrylo Shevchenko – noted in a post to his X social media page: “With shrinking reserves and growing desperation, #FiscalPolicy is veering from strategy to speculation.
“But for us, that’s just good news! #MakeRussiaPay.”