Russia’s state revenues from oil and gas have risen sharply following the escalation of the war in Iran, but overall energy tax income remains significantly below levels seen in 2022, according to finance ministry data.

The ministry reported that oil and gas revenues reached 856 billion rubles ($11.5 billion) in April, marking an almost 40% increase compared with March and the highest monthly figure since October, News.Az reports, citing The Bell.

The rise was driven in part by higher global oil prices, which hit around $100 per barrel in the first month after the US-Israeli strikes on Iran and disruptions linked to the Strait of Hormuz.

Despite the monthly increase, revenues were still 21% lower than in April 2025, with only a modest surplus above budget expectations set last year.

The main oil tax, the mineral extraction tax (MET), more than doubled month-on-month to 917 billion rubles ($12.3 billion). However, a large portion of this increase was offset by compensation mechanisms, with 378 billion rubles ($5.1 billion) effectively returned to oil companies through state support schemes.

These include the damper mechanism, which compensates producers for selling fuel domestically at reduced prices, and reverse excise taxes that encourage refinery investment and reduce reliance on crude exports. Together, these policies reduce the net benefit of higher oil prices for the state budget.

For comparison, in April 2022, when oil prices averaged around $85 per barrel, Russia’s oil and gas revenues reached 1.8 trillion rubles — more than double current levels in nominal terms.

Officials attribute the long-term decline to a stronger ruble and structural tax reforms that replaced export duties with higher extraction taxes.

At the same time, Russia’s central bank has resumed foreign currency purchases under the budget rule for the first time since the conflict in Iran began. Between May 8 and June 4, the finance ministry plans to buy 110.3 billion rubles ($1.46 billion) worth of foreign currency, mainly Chinese yuan, to support the National Welfare Fund.

However, most of these operations are aimed at covering delayed transactions from earlier months rather than rebuilding reserves, and they do not compensate for earlier fiscal spending.

Economists note that while higher oil prices provide short-term relief, strong domestic currency conditions and subsidy programs significantly reduce the overall fiscal windfall, leaving Russia’s budget position structurally under pressure.

News.Az 

By Leyla Şirinova