By John Q. Hosedrinker 
The Russian Finance Ministry announced a significant decrease in oil and gas revenues for November, marking a 34% drop year-over-year. This decline, attributed to sanctions, weak crude prices, and a strong ruble, resulted in 530.9 billion rubles collected in oil and gas taxes. Mineral extraction tax revenue decreased by 36% and export duties by nearly 40%, further contributing to the revenue shortfall. The Urals crude average price also fell to its lowest point since March 2023 at $44.87 per barrel in November, which added to the economic pressures.
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Russia’s Oil and Gas Revenues Fall 34% Year-on-Year in November, and that’s the headline we’re focusing on today. It’s a significant drop, and it’s got people talking, rightfully so. We’re seeing the impact of sanctions and, frankly, the global shift away from relying on Russian energy. The numbers don’t lie – a 34% decrease in revenue is a serious blow, especially for a country that heavily depends on oil and gas to fund its operations. This isn’t just a blip; it’s a trend, and it’s a trend that’s putting a real squeeze on Russia’s finances.
Now, some might say, “Well, they still have a war chest, right?” And yes, they did have reserves, built up over time. But those reserves are dwindling. They’re being used to fund this war, to keep the economy afloat, and to support a system that’s increasingly reliant on military spending. This is a very important point, it’s not sustainable in the long run. The longer the war goes on, the more those reserves will be depleted, and the more pressure will mount on the Russian economy.
The war is undeniably making things very uncomfortable for Russia, and this drop in oil and gas revenue is a key reason why. The financial impact is felt across the board. They’re having to sell off gold reserves, take on debt, raise taxes, and cut spending in other areas. It’s a desperate measure to stay afloat, and these actions indicate they’re having to reach deep just to keep the lights on, so to speak.
Here’s another important thing to remember: time is not on Russia’s side, contrary to what some might think. Even if Ukraine cannot win outright, every day that the Ukrainians hold their ground is a victory in itself. It’s a victory because it continues to cripple Russia’s long-term geopolitical capabilities, making it less likely that they’ll be able to launch similar aggressions in the future.
The economic reality is increasingly clear. Russia’s economy has become almost entirely premised on producing disposable military hardware. It’s no longer competitive and doesn’t produce anything that generates lasting value or returns. Inflation is soaring, and interest rates are sky-high. These are not signs of a healthy economy, and the pain is going to continue to grow.
The military situation is also worsening the financial problems. Russia’s military machine is burning through fighting-age men and equipment. The loss of life is tragic, of course, but it’s also a long-term drain on their resources and workforce, made worse by a pre-existing demographic crisis. They are also rapidly running out of tanks and armored vehicles from storage. That means they have to build them from scratch, which is much more expensive. This is why you’re seeing more infantry and civilian cars/bikes being used in assaults, which are less effective.
It’s tempting to think that finding new buyers in China and India will make a big difference, and it does help, but not enough to offset the losses. The fact is, the war has become unprofitable for them.
Let’s also not forget the human aspect. It’s speculated that the oligarchs are not hurting too much, even while Russia struggles. They are still rich, while ordinary Russians are paying the price. The money being paid for the war is going to both the war effort and the corruption within the country, and that’s a costly situation.
This is where the story gets really interesting. The current situation suggests that Russia may reach a point of desperation. The war effort, combined with the loss of oil and gas revenue, is creating a perfect storm that could lead to financial instability. The fact that Russia is taking on debt and raising taxes indicates that they are running dry.
The sanctions and restrictions, the dwindling reserves, and the ongoing war are all contributing factors, and those factors are pushing Russia further down.