Moscow’s Sterilized Barrel

For decades, oil was the shorthand indicator of Russia’s financial strength: when the barrel rose, so did fiscal revenues and reserves, the ruble stabilized, and geopolitical room for maneuver expanded. It was an almost linear relationship, and the 2026 shock seemed set to revive it. At the acute stage of the crisis, Brent moved back above $100 a barrel and, in April, federal oil and gas revenues rebounded to 855.6 billion rubles.

But something has changed. To understand the new dynamics, it is necessary to measure how much of that price actually reaches the Kremlin’s coffers. The comparison between the twelve months ending in May 2026 and the previous twelve months is instructive, because it captures two windows with almost identical average Brent prices, around $76 a barrel. Energy revenues in dollars fell from $115 billion to $90 billion (-22%). In rubles - the currency in which Moscow pays for the war - the fall is even starker: nearly one third, from 10.4 trillion to 7.2 trillion.

That 22% decline is already a dollar figure: Russia’s new geopolitical spread - the gap between the international price and the effective fiscal take - therefore exists independently of the ruble.

Other forces widen it. As a result of sanctions, Russia sells crude below Brent, leaving part of the price 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 thins out what ultimately reaches Moscow.

During the crisis, this was compounded by the fuel-damper mechanism. To keep gasoline and diesel prices under control at home, the state compensates refiners; a decree in force from October 2025 to May 1, 2026 suspended the cap that normally eliminates the subsidy when domestic prices rise too far. Thus, in April, at the height of the price spike caused by the attacks, compensation payments jumped to 207.5 billion rubles, from 15 billion in March. In the same month, the additional intake generated by high prices - the revenue above the roughly $60 a barrel on which the budget is calibrated - was just 21 billion rubles: the subsidy cost almost ten times the premium from the rally. Unless the derogation is reinstated, however, this factor is likely to fade.