Moscow’s Sterilised Barrel
For decades, oil served as a key indicator of Russia’s financial strength: when the price per barrel rose, so did fiscal revenues and reserves, the rouble stabilised, and Russia’s geopolitical room for manoeuvre expanded. It was an almost linear relationship, and the 2026 shock seemed set to revive it. At the height of the crisis, Brent rose back above $100 a barrel and, in April, federal oil and gas revenues rebounded to 855.6 billion roubles.
But something has changed. To understand the new dynamics, it is necessary to assess how much of that price actually ends up in the Kremlin’s coffers. A comparison between the twelve months ending in May 2026 and the preceding twelve months is instructive, as it covers two periods with almost identical average Brent prices, at around $76 a barrel. Energy revenues in dollars fell from $115 billion to $90 billion (-22%). In roubles – the currency in which Moscow pays for the war – the fall is even more stark: nearly a third, from 10.4 trillion to 7.2 trillion.
That 22% decline is already reflected in dollar terms: Russia’s new geopolitical spread – the gap between the international price and the actual fiscal revenue – therefore exists independently of the rouble.
Other factors are driving it up. As a result of sanctions, Russia is selling crude below the Brent price, effectively leaving part of the profit on the table. Ukrainian attacks have turned refineries and storage sites into military targets – between January and May, around 700,000 barrels a day of capacity were hit across sixteen facilities – so Russia exports more raw material and fewer higher-value products. Sanctions have not removed Russian oil from the market; they have lengthened its route: older vessels, more intermediaries, more insurance. In April, shadow tankers moved 54% of fossil-fuel exports, and every additional link in the chain is a cost that reduces what ultimately reaches Moscow.
During the crisis, this was exacerbated by the fuel price cap mechanism. To keep petrol and diesel prices under control domestically, the state compensates refiners; a decree in force from October 2025 to 1 May 2026 suspended the cap that normally removes the subsidy when domestic prices rise too high. Consequently, in April, at the height of the price surge triggered by the attacks, compensation payments soared to 207.5 billion roubles, up from 15 billion in March. In the same month, the additional revenue generated by high prices – the revenue above the roughly $60 per barrel on which the budget is based – was just 21 billion roubles: the subsidy cost almost ten times the premium from the price rally. Unless the derogation is reinstated, however, this factor is likely to fade.
