By John Q. Hosedrinker 
Russia’s oil and gas revenue is anticipated to decrease by approximately 35% in November compared to the previous year, reaching roughly $6.6 billion, due to weaker crude prices and a stronger ruble. This decline, also reflected in a 7.4% decrease from October, places pressure on Russia’s budget, especially with elevated defense spending. For the first 11 months of 2025, oil and gas revenue is projected to total approximately $102 billion. Western sanctions, designed to limit Moscow’s war funding, have compounded the issue.
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Russia’s November Oil and Gas Revenues Seen Down 35%, Missing Budget Targets, and it paints a rather grim picture, doesn’t it? It’s like watching a slow leak in a boat, and the water is definitely starting to rise. A 35% drop in revenue is a significant blow, especially when those revenues are the lifeblood of the entire operation. It suggests a serious mismatch between what was expected and what’s actually coming in, and that imbalance is going to cause some serious ripples.
Missing budget targets is the natural consequence when the main source of income takes a massive hit. You can bet the folks in the Kremlin are scrambling to figure out how to bridge that gap. Where do you start? They are likely looking at all the obvious choices. They could pull from reserves, tighten the belts, and maybe, just maybe, try to find new sources of income, but it’s not going to be easy.
Of course, the war with Ukraine is the elephant in the room. You can’t ignore it. It’s draining resources at an alarming rate. It’s not just the direct costs of fighting, but the indirect ones too. The sanctions are taking their toll. The loss of access to markets is hurting. Everything is working against them. You have to wonder how long they can keep up this pace.
The prewar savings, those are getting smaller and smaller. It’s a bit like watching a savings account dwindle as you pay the bills. Eventually, the money runs out. While there’s still some cash tucked away with the oligarchs and in the banks, the situation is far from ideal. Leaning too heavily on those sources could create a crisis of a different kind.
A banking collapse is a nightmare scenario. It would be devastating, crippling their economy and their war effort. It’s the kind of thing that can unravel everything very, very quickly. It would be a huge hit. The oligarchs are another possible source, but even tapping them comes with risks. Take too much, and they might turn on you, and that’s a power struggle you really don’t want.
We’re not in full-blown economic collapse territory yet, and that’s important to remember. It’s not a Venezuela-style meltdown…not yet. They still have some cards to play. But pretending that the Russian economy is as strong now as it was a couple of years ago is just ignoring reality. Even those at the top, like Putin and the head of the central bank, acknowledge the problems they are facing. They’ve been selling gold reserves and have limited debt.
Ukraine is hurting, too. This is an awful war of attrition. But to talk about it being completely captured and collapsed is way off the mark. They’ve just mounted a successful counterattack in Pokrovsk. That’s a real kick in the teeth for Russia, and it proves that this is a long fight, and the battlefield fortunes can and will change.
It’s hard for Russia to completely unravel without adopting the socialist policies of Venezuela. Their lack of debt isn’t due to prudent financial management. It’s more because nobody trusts them enough to lend them money at a reasonable rate. If they could get a good loan, they likely would have gotten one. The truth is, inflation is a serious problem. It’s hard to get a clear picture, with official numbers being massaged and the actual experience of the people differing. Regardless of how you slice it, people are paying a lot more for things. The government is also providing substantial sums of money to workers.
You can’t lend money to the government when the government can’t borrow. The government can borrow from domestic sources and that’s what it’s been doing. However, it’s all from Russian banks and investors. There aren’t any friendly lenders lining up outside Russia.
Selling land to China is an option. Leasing for 99 years would be funny, wouldn’t it? This approach might look okay in the short term, but it could introduce bigger issues in the long run. The war is burning through money, and there’s no return on investment. Artillery shells don’t create wealth.
It’s a high-stakes game. Banks loan the money to the Kremlin. The Kremlin can’t pay the banks back. Then the banks fail. All this comes with significant risks. A banking failure is a major problem, especially because the country can’t get any help from outside lenders. Inflation is almost guaranteed to rise.