Iran war boosts Russia’s oil and gas revenues by 39% in May

Russia’s state oil and gas revenues are expected to increase by 39% year-on-year to RUB 700 billion (US$9.8 billion) in May, driven by higher global oil prices caused by the war in Iran.

Source: Reuters calculations

Details: Meanwhile, revenues are expected to decline by around 17% compared with April due to cyclical profit tax payments.

Russia’s budget is also expected to lose revenue because of increased subsidies to oil refineries.

According to Reuters’ calculations, Russia’s federal budget revenues from oil and gas fell by about one-third year-on-year to RUB 3 trillion (US$42 billion) in the January-May period.

Russia’s 2026 budget projects oil and gas revenues at RUB 8.92 trillion (US$125 billion).

Total budget revenues for the year are forecast at RUB 40.28 trillion (US$564 billion).

Russia, the world’s third-largest oil producer and exporter after the United States and Saudi Arabia, has been one of the main beneficiaries of the US-Israeli war in Iran, which began in late February.

Oil and gas revenues remain a key source of funding for Russia’s war against Ukraine.

Background:

Last year, Russia’s federal budget revenues from oil and gas fell by 24% to RUB 8.48 trillion (US$119 billion), marking the lowest level since 2020.
Oil and gas revenues account for roughly one-fifth of Russia’s total budget income.