Russia’s oil, gas budget revenue falls by more than a third in May

MOSCOW: Russia’s oil and gas revenue fell by 35 per cent year-on-year in May to 512.7 billion roubles ($6.55 billion), data from the finance ministry showed on Wednesday, as weakening oil prices and sanctions weighed on the country’s economy.

Russia needs higher oil prices to balance its budget and fund its military operation in Ukraine.

Sources with knowledge of the talks told Reuters that Russia opposed recent oil output hikes by the Organization of the Petroleum Exporting Countries and its allies, a group known as OPEC+.

Oil and gas revenue has been the most important source of cash for the Kremlin, accounting for about a quarter to half of total federal budget proceeds over the past decade.

Oil dips amid rising OPEC+ supply and tariff worries

According to the finance ministry, revenue in May fell to 512.7 billion roubles ($6.55 billion), 35% lower that in the same month a year ago.

Revenue also fell by 53% from April as global oil prices declined, while the rouble strengthened. Reuters expected the revenue at 520 billion roubles.

The finance ministry also said it expected oil and gas revenue in June to be less by 40.3 billion roubles than had been planned.

The fall in oil prices have been painful for Russia, which ran a budget deficit of 3.2 trillion roubles, or 1.5% of gross domestic product, in the first four months of the year.

Russia’s finance ministry has also raised the 2025 budget deficit estimate to 1.7% of gross domestic product (GDP) from 0.5%, after reducing the energy revenues forecast by 24% due to expectations of a prolonged period of low oil prices.

Budget proceeds from oil and gas fell by 14.4% in January to May from the same period a year ago to 4.24 trillion roubles, finance ministry data showed on Wednesday.