Russia's oil and gas budget revenue falls by a third year-on-year in June
Oil and gas revenue has been the most important source of cash for the Kremlin, accounting for about a quarter of total federal budget proceeds.
In addition to dropping by a third year-on-year, revenue also fell by 3.5% from May.
For the first half of the year, the revenue declined by almost 17% from the same period a year before, to 4.73 trillion roubles.
The decline in proceeds is painful for Russia, which has heavily increased defence and security spending since launching its military campaign in Ukraine, which it calls a special military operation, in February 2022.
Russia hiked state spending on national defence by a quarter in 2025 to 6.3% of gross domestic product, the highest level since the Cold War. Defence spending accounts for 32% of total 2025 federal budget expenditure.
The finance ministry had initially planned to earn 10.94 trillion roubles from oil and gas sales this year, but due to falling oil prices it revised that expectation down to 8.32 trillion roubles.
Oil and gas revenue reached 11.13 trillion roubles last year.
($1 = 78.7000 roubles)
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Reuters
an hour ago
- Reuters
Exclusive: Russia's VTB to gain billions of roubles if interest rates come down, CFO says
ST PETERSBURG, Russia, July 4 (Reuters) - Every 1% cut in central bank interest rates gives Russia's VTB Bank an extra 20 billion roubles ($250 million) in net profit, CFO Dmitry Pyanov told Reuters, which benefits the government as the state-owned lender plans to distribute 50% of its profits via dividends - half of it to the state. Russia's benchmark interest rate remains extremely high at 20%, discouraging borrowers and hurting banks' loan books. While the central bank cut the rate last month from a more than 20-year-high of 21%, pressure is growing on it to bring rates down faster, with government officials and business leaders fretting over the risks of a recession. Among Russian banks VTB ( opens new tab has the highest proportion of loans on floating rates, so high official rates raise the risk it faces of more defaults or debt restructuring moves, which in turn can push up its capital requirements, while lower rates stand to benefit the bank's bottom line. "VTB Bank is a main beneficiary of the key rate cut," Pyanov told Reuters on Thursday at a financial forum in St Petersburg. "We suffer most of all during a period of its increase and will realise positive interest rate risk when the rate decreases." "A one percentage point rate cut gives us 20 billion roubles of net profit." President Vladimir Putin in June ordered that VTB's dividend payments be used to finance United Shipbuilding Corporation, which has been under VTB's management since 2023, and has state contracts in the defence sector. The state owns more than 60% of VTB. High interest rates have indeed stalled investment and encouraged companies and consumers to hold money on deposit. Corporate and consumer lending is slowing and the central bank has noted a deterioration in credit quality, although it says the situation is not yet critical. A survey of participants at a financial congress in St Petersburg this week pinpointed the key risk factors as corporate credit concerns and interest rate risks for banks. Pyanov said he did not expect a banking crisis and saw no banks in need of a bailout. Dividends from state companies are a major source of revenues for Russia's budget, which is operating at a deficit of 1.5% of GDP as Moscow diverts vast sums to the defence sector for its conflict in Ukraine and grapples with reduced energy revenues from lower oil prices this year and a strong rouble. Shareholders of top lender Sberbank ( opens new tab approved a $10 billion dividend payout this week. VTB surprised the market in April by announcing its first dividend since the start of the conflict in Ukraine, having slumped to a $7.7 billion sanctions-induced loss in 2022. The total payout of 275.75 billion roubles comes on the back of record profits in 2024 and though a decline is expected this year, profits could once again surpass 500 billion roubles, Pyanov said. Depending on capital adequacy rules that the central bank may adjust, Pyanov said VTB would work hard to keep dividend payments at 50% of net profit for the years to come. Pyanov also noted how the departure of Western capital and the emergence of retail investors as a dominant force in the Russian stock market since the start of the conflict in Ukraine had influenced VTB. Dividends are now key to maintaining shareholder value in Russia, he said. "With such a dominant retail investor, everyone wants dividends," Pyanov said. ($1 = 79.0000 roubles)
Reuters
an hour ago
- Reuters
New NATO commander stresses unity at handover ceremony
MONS, Belgium, July 4 (Reuters) - U.S. Air Force General Alexus Grynkewich took over on Friday as NATO's top military commander, sending a message of resolve and reassurance to allies concerned about potential cuts to U.S. forces in Europe by the Trump administration. The U.S. has filled the post of Supreme Allied Commander Europe since its creation after World War Two but U.S. officials discussed ending that tradition as President Donald Trump pushes Europe to take more responsibility for its defence. That possibility rattled European allies - who rely heavily on the 80,000 U.S. troops in Europe to protect the continent and would expect many more to join them if Europe came under attack - and alarmed senior members of the U.S. Congress. Ultimately, Washington nominated Grynkewich as successor to Army General Christopher Cavoli, who played a key role in advising Ukraine's military after Russia's 2022 invasion and oversaw a sweeping overhaul of NATO's defence plans. But U.S. allies remain concerned that an ongoing review of U.S. force posture worldwide could lead to troop cuts in Europe, just when they see Russia as a greater threat than at any time since the end of the Cold War. "These are consequential times," Grynkewich said at the handover ceremony, which took place in bright sunshine at NATO military headquarters outside the Belgian city of Mons, attended by military officers and officials from across the alliance. "The threats we face are only becoming more intertwined, but they are no match for the unity, the resolve and the shared purpose that I see gathered on this field today," he declared. "We stand ready in defence of our nations, and we're only going to get better," he said. Speaking to reporters after the ceremony, Grynkewich - also known from his time as a fighter pilot by his call sign "Grynch" - said it was too early to say what the U.S. force posture review would conclude. European leaders say they are ready to step up on security, having pledged big increases in military spending at a NATO summit last week, but want any transition to be gradual and orderly to avoid gaps in Europe's defences. In his confirmation hearing in the U.S. Senate last week, Grynkewich said he thought Ukraine "can win" its fight against Russia's invasion and spoke in favour of continued support for Kyiv. After the handover ceremony in Mons, he declined to comment on the recent U.S. decision to halt the delivery of some critical weapons and ammunition to Ukraine. "It's a conversation that's ongoing," he told reporters. "I think we'll see more play out in the next week or two." Besides his role at NATO, Grynkewich has also taken over as the head of U.S. European Command, based in Stuttgart in southern Germany, which oversees all U.S. forces in Europe.
Reuters
an hour ago
- Reuters
Germany's Merz held call with Trump on Ukraine arms deliveries
BERLIN, July 4 (Reuters) - German Chancellor Friedrich Merz spoke with U.S. President Donald Trump on the phone on Thursday about arms deliveries to Ukraine, a spokesperson for the German leaders told Reuters. Merz initiated the call with Trump, the spokesperson said on Friday. Spiegel magazine first reported on the call.
