Washington, D.C. – July 2025
Russia’s energy sector—the backbone of its war-time economy—is bleeding fast. According to the latest financial data, Russian oil and gas revenues fell by a staggering 33.7% year-over-year in June, dropping to 494.8 billion rubles (~$6.29 billion USD)—the lowest monthly figure since January 2023. For a country where oil and gas make up nearly 40% of the federal budget, the impact is catastrophic.
But the pain doesn’t stop there. Over the first six months of 2025, Russia’s total energy income dropped by 17%, totaling 4.73 trillion rubles (~$60.5 billion USD). Analysts agree: the Kremlin’s economic reality is far worse than officials are publicly admitting.
One major factor behind this steep decline is the collapse in the price of Urals crude, Russia’s primary oil export blend. In the early days of the Russo-Ukrainian war, prices spiked to over $100 per barrel, briefly handing Moscow an unexpected windfall. But with the imposition of multiple Western sanctions, prices steadily declined.
By mid-2024, Russian oil still found buyers in India and China, pushing prices back up to $80 per barrel. That ended when President Trump returned to office, quickly closing loopholes and reintroducing secondary sanctions on third-party countries trading in Russian oil. Prices have since plummeted to $60 per barrel.
Still, the problem is not just price—Russia is producing less oil and gas overall.
In July, President Trump announced a plan to impose 500% tariffs on any country caught importing Russian energy. While symbolic, the move spooked Beijing, which is already struggling with its own economic slowdown. Fearing a broader trade war with the United States, China has drastically cut its Russian oil purchases, weakening one of Moscow’s last dependable revenue streams.
Perhaps the most dramatic blow to Russia’s energy infrastructure came not from sanctions, but from the battlefield.
This month, Ukrainian drones penetrated over 1,000 kilometers into Siberia, hitting a key gas pipeline that directly supplies Russian missile factories. The attack immediately disrupted the flow of 4 million cubic meters of gas, costing Russia over $1.3 million USD in direct losses and further crippling its war logistics.
But this is part of a broader pattern:
• Ukrainian sabotage has reduced Russia’s refinery output by 12.5%.
• Production capabilities have fallen by 20%, according to Ukrainian intelligence.
• The collapse of the Russian pipeline maintenance system—once managed by global energy giants like BP, Shell, and Exxon—has left the country scrambling. Since their exodus in 2022, Russian engineers have struggled to operate and maintain these complex systems, many of which now face 8% degradation annually.
Visual data confirms this steep decline. One chart shows the fall in Urals oil price, now hovering near $60—well below Russia’s fiscal breakeven point. A second graph illustrates the shrinking revenue stream from fossil fuel exports, providing a grim forecast for what lies ahead.
The message from Washington is clear: economic pressure works, and Trump is doubling down. With tougher sanctions, supply chain disruptions, and expanded support for Ukraine, the Kremlin’s financial engine is being slowly strangled.
Putin’s strategy is to outlast the West, betting on American fatigue and European division to cut a deal on his terms. But if President Trump maintains pressure—militarily and economically—he calls Putin’s bluff. And the numbers suggest:
Russia can’t afford this war much longer.
