The price of Russian oil has fallen to its lowest level since the pandemic
The average price of Russia’s main export-grade oil, Urals, fell to $39.18 per barrel by the end of December 2025, which is 41% lower compared to the beginning of the year.
According to data from Russia’s Ministry of Economic Development, the decline accelerated due to the introduction of new sanctions by the administration of Donald Trump against Russia’s largest oil companies — Rosneft and Lukoil. This forced Russian exporters to offer record discounts to buyers in China and India, which currently reach $28 per barrelcompared to the global benchmark Brent.
The actual price of Russian oil is now almost $20 below the level used in Russia’s 2026 budget, which was based on a price of $59 per barrel. This gap creates a massive shortfall in state revenues: economists estimate that lost oil and gas revenues could amount to 1.1–1.4 trillion rubles. As a result, Russia’s budget deficit risks rising to 2.7% of GDP, forcing the aggressor’s government to more actively spend the remaining resources of the National Wealth Fund.
Current price levels have effectively returned Russia’s oil revenues to those of Vladimir Putin’s first presidential term in 2004. At the same time, liquid assets of Russia’s reserve fund have shrunk to 4.1 trillion rubles, which, under current market conditions and wartime spending against Ukraine, may be sufficient for only one and a half to two years. Economic pressure on Russia continues to intensify, as production costs and complex logistics to bypass sanctions make selling oil below $40 per barrel unprofitable for many fields.
