Russia’s oil revenues slump amid sanctions and a weaker ruble

Receipts from Russian crude exports have fallen to their weakest level in about five years, driven by a mix of Western sanctions, persistent price caps on seaborne shipments and currency movements that have reduced the ruble value of foreign sales. Sanctions and the threat of secondary penalties have reshaped trade chains: insurers, shipping companies and large trading houses increasingly avoid sanctioned flows, pushing some cargoes into longer routes, higher freight and insurance costs, and steeper discounts. At the same time, benchmark prices and regional differentials for the grades Russia typically sells have narrowed headline export realizations. Although the weaker ruble cushions some conversion into local currency, it has not offset the drop in dollar receipts because of reduced volumes and deeper discounts. The result is a meaningful squeeze on federal revenue that has long relied on energy rents, forcing policymakers to reassess fiscal projections and consider reallocating spending or drawing on reserves. State producers face compressed margins on export barrels, complicating investment and maintenance choices and raising the risk of deferred field work. Compounding these pressures, an Indian minister’s recent comments signaled that New Delhi — which had become a major destination for discounted Russian crude — may scale back imports. A persistent decline in Indian uptake would remove a crucial outlet for sanctioned barrels, likely prompting Russia to offer steeper concessions, seek new buyers in other regions, or restructure logistics to retain volumes. For India, a reduction in Russian crude flows could squeeze refinery margins and force refiners to compete more aggressively for alternative feedstocks, with downstream implications for domestic fuel prices. Geopolitically, New Delhi’s apparent rebalancing reflects the unresolved trade-offs between securing cheap feedstock and managing international political signals and practical frictions such as payments, insurance and shipping. In global markets, any sustained drop in a large buyer’s imports tightens effective supply of certain grades and could push benchmarks higher, while competitors may try to capture displaced volumes. The near-term trajectory for Russian export receipts will depend on how sanctions regimes, payment arrangements and routing frictions evolve, how quickly buyers adjust their sourcing, and the ruble’s exchange path.