Russia’s oil and gas revenue in December is expected to be nearly half compared to the previous year, Reuters reported on Dec. 12.

The decline, down to about 410 billion rubles ($5.17 billion), is being driven by lower global oil prices and a stronger ruble, bringing monthly revenues to Russia’s lowest level since 2020.

Oil and gas income remains the Kremlin’s main source of funding, accounting for roughly a quarter of federal budget revenues.

These revenues have been strained by rising defense and security spending, since the start of Russia’s full-scale war against Ukraine in 2022.

For the full year, oil and gas revenues are projected to total 8.44 trillion rubles ($105 billion), nearly 25% lower than last year and below the Finance Ministry’s oil-and-gas earnings forecast, according to Reuters calculations based on industry and official data.

Analysts said that Russia plans to cover the December budget deficit by borrowing through government bonds, but warned that the situation could become more difficult in 2026 if oil prices stay lower and currency assumptions do not hold.

Ukraine and its Western allies have repeatedly said efforts to curb Russian oil revenues are aimed at undermining Moscow’s ability to finance the war.

As part of that effort, Ukraine has repeatedly targeted Russian oil and gas infrastructure, including refineries and storage facilities, seeking to disrupt a major source of Kremlin funding.

Read also: The cost of war: Is Russia running out of money to continue the fight?

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