MOSCOW (Realist English). Russia’s budget is entering a period of contraction in oil and gas revenues after three “fat” months driven by the war in Iran and the closure of the Strait of Hormuz.
In July, the Ministry of Finance forecasts additional oil and gas revenues at 147.3 billion rubles — almost a quarter less than in June (209.6 billion).
At the same time, prices for the key export grade Urals in the first decade of July collapsed to $41–42 per barrel, returning to pre‑war levels.
June as a “Transition Month”: What the Statistics Show
In June, oil and gas budget revenues amounted to 683.6 billion rubles — nearly the same as in May (679 billion). At the same time, additional oil and gas revenues (above‑baseline export proceeds) rose from 174.8 billion to 209.6 billion rubles.
As analysts at The Bell explain, June was a “transition month” due to the fiscal lag: the high prices of April and May, when Urals reached $95 and $86 per barrel respectively, fed into taxes with a delay.
“This is still the ‘body’ of the high oil price environment created by Iran’s closure of the Strait of Hormuz. Starting in July, the ‘tail’ will begin,” the outlet notes.
However, as early as June, the average Urals price used for tax calculation had already fallen to $63.52 per barrel. According to Argus Media, in early July the price in western ports dropped to $41, and according to OilPrice.com, the average price over the first three days of July was just $41.66.
First Half: Oil and Gas Revenues Down 22.7%
The results for the first half of 2026 are troubling. Oil and gas revenues of the federal budget for January–June amounted to 3.661 trillion rubles — 22.7% less than in the same period of 2025 (4.735 trillion). The decline is due to lower oil prices in previous periods.
At the same time, non‑oil‑and‑gas revenues rose by 16.3% to 14.961 trillion rubles. However, this is not enough to offset the losses from the oil sector, which traditionally provides about a third of federal budget revenues.
Monthly revenue dynamics are as follows:
| Month | Revenues (billion RUB) | Deviation from Plan |
| January | 393.3 | −17.4 |
| February | 432.3 | −153.2 |
| March | 617.0 | −234.3 |
| April | 856.0 | +21.0 |
| May | 678.9 | +174.8 |
| June | 683.6 | +209.6 |
The three “fat” months — April through June — almost exactly offset the shortfall of January–March, but further big windfalls are not expected.
Why Oil Is Getting Cheaper: Four Factors
The drop in Urals prices is explained by a combination of factors:
- Reopening of the Strait of Hormuz. At the end of June, the US and Iran reached a temporary agreement to restore shipping through the strait, removing the threat to global oil supplies.
- Widening discount to Brent. The discount of Urals to benchmark Brent reached $27.35 per barrel in early July, returning to the level of February 2026.
- Logistics collapse. Ukrainian attacks on refineries have knocked out about a third of Russia’s refining capacity. This forces companies to increase exports of crude oil, which is piling up at sea — an estimated 135 million barrels of Russian crude is stuck on vessels. At the same time, buyers of sanctioned Russian oil are constrained by the threat of secondary sanctions.
- Record exports with falling revenues. Although seaborne oil exports reached 4.13 million barrels per day — the highest since early 2022 — weekly export revenues fell by $200 million to $1.68 billion.
What Next: Budget Under Threat
Analysts warn: if Urals prices remain below the budgeted level of $59 per barrel, the budget deficit could rise significantly. According to expert estimates, the shortfall in oil and gas revenues compared to the plan in the second half could reach 1.5–1.6 trillion rubles.
At the same time, the Ministry of Finance plans to buy foreign currency and gold under the budget rule from July 7 to August 6 in the amount of 123.2 billion rubles. This is less than in June (208.2 billion), reflecting the decline in expected windfall revenues.
However, there are also mitigating factors. As “Profil” notes, “as long as Brent quotes remain above $70 per barrel (a psychological threshold crossed in late February 2026), the likelihood of meeting the annual plan remains fairly high.” However, Urals, trading at a huge discount to Brent, may not allow the budget to benefit from this.
The Kremlin, as Die Welt reports citing Bruegel calculations, received about 1.18 trillion rubles (approximately €13.5 billion) in additional revenues from oil and gas exports in March–June. But this bonus from the Iranian war, it seems, has already been exhausted.
