"It is impossible to expect an increase in budget revenues from oil"

Alexey Gromov, Principal Director on Energy studies at the Institute for Energy and Finance, commented to the Novye Izvestia Internet portal about the reduction of oil and gas budget revenues and the risks of reducing Russian oil exports to India amid US sanctions pressure against this country.

In three months of 2025, oil and gas sector brought less money to the country's treasury than in the crisis of 2023 and post-crisis 2021. The budget for this year was designed based on the indicators of 2024. At that time, world prices were significantly higher and 50% more volumes were sold. The Ministry of Finance does not receive the export duty and mineral extraction taxes.

— Are there ways to increase revenues from hydrocarbons to the Russian budget?

— In fact, given the current global oil prices and additional pressure on Russia, if Trump's threats are fulfilled, I think it is impossible to expect an increase in budget revenues. Rather, they will continue to decline. The main driver of the decline in budget revenues is the decline in world oil prices, which have decreased by almost $15 compared to last year. That's a lot.

— How can the country's authorities respond to falling prices?

— The state can, and it is already doing so, reduce fuel damper payments this year. At the beginning of the year, they were expected to reach record levels, but as of today they have been significantly reduced. This is a tool that allows the government to save on the fuel damper and, thus, compensate for the loss of oil and gas revenues due to unfavorable market conditions and sanctions pressure.

— OPEC has announced an increase in production. How will this affect Russia?

— The paradox is that there is even such a possibility. But we have a fundamental question — to whom should we sell? Two thirds of our oil is exported in one form or another. These are either crude oil or petroleum products. And only a third goes to the domestic market. We satisfy the domestic market. Well, we'll get more oil. OPEC+ allows it. And where are we going to sell it? At what prices?

— Will world prices decrease with an increase in the OPEC+ production?

- No. OPEC+ made this decision so easily because production may be higher, but the ongoing sanctions pressure on Russia and pressure on Iran are balancing the price. An increase in oil supply formally moves prices down. Geopolitical tensions are driving them upward. As a result, they stand still.

— If you look at the figures of the energy companies themselves, they are doing quite well. Gazprom, for example, is not in trouble again…

— We need to pay attention to the details of the reports published by Gazprom. The colossal loss, which was demonstrated at the end of last year, was associated with the write-off of a large number of foreign assets. When a write-off occurs, losses grow. They were reflected in last year's financial statements.

And from the point of view of operational activity, the indicators are better than last year. We are also able to sell more gas in export destinations than in 2024, and in Russia we see that gas prices have risen dramatically.

As for oil and gas budget revenues, even in Russia's energy strategy it was planned that they would decrease in the coming years. The market situation is changing, and the Russian economy is functioning in the expectation that oil revenues will fall. Even now, they do not play a decisive role for the functioning of the Russian economy. Naturally, they are significant, about 25%, but this is no longer 45%, as it was a few years ago.