Russia’s war funding under threat as oil revenues hit five-year low

Putin's financing of his invasion of Ukraine is set to be made more difficult, experts say (Image: Getty)

Falling Russian oil and gas revenues and the country's continued depletion of its liquid reserves will likely complicate Moscow's efforts to fund a protracted war in Ukraine, experts have said. Russian oil and gas revenues in 2025 dropped to a five-year low amid declining gas exports due to Western sanctions and falling crude oil prices, it has been reported.

The Institute for the Study of War (ISW) highlighted that the Russian Ministry of Finance stated on January 15 that the country's federal budget received a total of 8.48trillion rubles (roughly $108billion or £80.5billion) in oil and gas taxes in 2025, which Bloomberg noted is a decrease of 24% compared to 2024. Experts also emphasised that Russia’s federal budget received fewer rubles per barrel produced and sold in 2025 due to a stronger ruble. This increased Moscow's purchasing power on the global market, ensuring that parallel imports were cheaper in the face of Western sanctions.

The full-scale invasion of Ukraine has dragged on for nearly four years (Image: Getty)

The Kremlin's Finance Minister Anton Siluanov admitted in September 2025 that officials expected the share of Russia’s revenues from oil and gas sales to fall by roughly 30% in 2026.

The ISW added: "Russia has also gradually depleted its liquid reserves over the last four years of its war in Ukraine."

Reports suggest that Russia has deployed more than half of its sovereign wealth fund to "bridge the widening gap" between revenues and spending and has "turned to expensive borrowing that will take years to pay back".

The ISW wrote: "The sovereign wealth fund is a state-owned investment fund from which Russia pulls money to avoid incurring debt, but Russia has been steadily depleting the fund’s liquid reserve to fund its war, including by selling its gold reserves in late November 2025.