Russian energy revenues experienced a sharp contraction in October 2025, with oil and gas taxes declining 27% compared to the previous year as Western sanctions continue to squeeze Moscow's primary source of wartime funding. The Finance Ministry reported energy revenues of 888.6 billion rubles ($10.9 billion) for October, down from approximately 1.2 trillion rubles in the same period last year.

The revenue decline accelerated following new US Treasury sanctions imposed in late October targeting the financial divisions of Rosneft and Lukoil, Russia's two largest petroleum companies. These entities collectively handle nearly 3 million barrels per day, representing approximately half of Russia's seaborne crude exports. The sanctions create additional compliance risks for international buyers and force Moscow to offer deeper discounts to compensate for heightened legal and logistical uncertainties.

Market analysts indicate that Russian crude will face increasing pressure on pricing rather than availability, as buyers demand wider discounts to offset sanctions-related risks. Oxford Economics forecasts that additional insurance and financing costs will create a permanent sanctions premium on Russian oil, further eroding Moscow's net revenues even as export volumes remain relatively stable through shadow fleet operations.

The cumulative impact over the first ten months of 2025 shows total energy revenues falling to 7.5 trillion rubles, down from 9.5 trillion rubles in the corresponding period of 2024. This 2 trillion ruble decrease represents a substantial erosion of fiscal resources as Russia's economic growth slowed to just 0.6% in the third quarter, marking a significant deceleration from earlier quarters despite massive defense spending initiatives.