Russia is heading into 2026 with a familiar problem wearing a sharper edge: the oil revenues that bankroll its budget — and its war — are shrinking fast.
According to Reuters calculations released Friday, Russia’s tax proceeds from crude oil production in January could fall to about 380 billion roubles ($4.7 billion), the lowest monthly take since late 2022. That would mark a 16% drop from December and a collapse of more than 50% compared with January last year. For a government that still leans heavily on oil income to fund military spending and social obligations, the timing is awkward.
Oil prices did most of the damage. Russia’s export blends were cheaper in December than in November, with average prices down about 12%, which mechanically reduced the mineral extraction tax tied to those prices. According to Argus, Russia's main export grade Urals was selling below $35 per barrel on Friday, December 19th. The stronger rouble compounded the hit by shrinking the value of export earnings once converted into local currency. Refining margins also weakened, dragging down tax receipts from oil products alongside crude.
The mineral extraction tax is due at the end of each month and reflects the previous month’s production. For crude produced in December, the effective tax rate is estimated at about 14,266 roubles per tonne — nearly 20% lower than November and more than 50% below the level seen a year earlier. Those rates are back in territory last visited in December 2022, when the European Union’s embargo on Russian oil formally kicked in.
