Sanctions have caused Russian oil and gas companies’ profits to drop by 50% in the past year, with refinery profitability approaching zero.

Rosstat reports that in the first quarter of 2025, net profit for these companies fell by nearly half. Within three months, Russian oil and gas firms, which account for 33% of the budget, generated ₽789.5B, down from ₽1.45T the previous year. Russian oil refineries’ profitability has nearly vanished, as oil product producers saw earnings fall to ₽4.5B (-95.7%). Overall, the raw materials sector, which constitutes 14% of Russian GDP and provides 50% of budget revenue, experienced a 38% decline in net profit: ₽1.1T versus ₽1.76T in the same quarter last year.

With declining oil prices, Russian oil companies have experienced a deterioration of their financial standding; a barrel of Russian Urals fetched $66 in January but fell to $59 by the end of March and remained at $59 at the end of May. Consequently, Russia’s oil export foreign exchange earnings have reached a 2.5-year low of $1.2B weekly.

Experts suggest that the intensifying Western sanctions on Russia’s shadow fleet and a reduced price ceiling on Russian oil from $60 to $45 per barrel indicate “challenging times” ahead for oil companies and signify “pain for (Russia’s) budget”.