MOSCOW, July 10 — Against the backdrop of a grinding war in Ukraine and the steady erosion of its primary revenue stream, the Russian ruble has lost roughly a fifth of its value against the U.S. dollar over the past year, sliding from about 70 rubles per dollar to 90 rubles per dollar. The depreciation, which unfolded through 2023, is partly a consequence of reduced energy revenues, the lifeblood of the Russian state. Russia’s oil and gas revenues totalled about $180 billion in 2021, representing 45% of the federal budget.
By 2023, after the European Union embargo and the G7 price cap took hold, Moscow’s oil export revenue fell to about $180 billion — a 24% decline from 2022 levels, according to the International Energy Agency. That drop, compounded by a widening discount on Russian crude, which was already trading at a $10-15 per barrel discount to Brent in 2023 due to sanctions, has squeezed the Kremlin’s fiscal room for manoeuvre.
Inflation has risen in tandem. The Russian Central Bank recorded inflation at 7.4% in 2023, a figure that erodes household purchasing power and complicates the central bank’s monetary policy choices. The ruble’s weakness feeds directly into that inflation, making imports more expensive for Russian consumers and businesses alike.
What is at stake now is whether the proposed U.S. tariffs on Russian oil — a policy under active consideration — will deepen the damage. Analysts estimate the tariffs could further reduce Russia’s oil revenue by an estimated $20-40 billion annually, depending on the tariff rate and enforcement.
The tariffs could also increase the discount on Russian crude, which was already trading at a $10-15 per barrel discount to Brent in 2023 due to sanctions. The wider picture, however, is not one of imminent collapse. Russia’s sovereign wealth fund, the National Welfare Fund, held about $150 billion in assets as of early 2024, providing a buffer against external shocks — though not an unlimited one.
The Russian economy is expected to grow by only 1-2% in 2025, according to the International Monetary Fund, down from 3.6% in 2023. That deceleration reflects both the structural impact of sanctions and the diminishing returns of wartime fiscal stimulus. In the corridors of global energy markets, the tariff proposal has also raised questions about knock-on effects.
The International Energy Agency has warned that the tariffs could affect global oil prices, potentially increasing them by $5-10 per barrel if significant volumes of Russian oil are removed from the market. Higher oil prices would benefit U.S. oil producers, but they would also increase costs for U.S. consumers, who paid an average of $3.50 per gallon for gasoline in early 2025.
For European policymakers, the situation carries uncomfortable echoes of 2022, when the sudden disruption of Russian gas supplies sent energy prices soaring across the continent. While Europe has since diversified its energy imports — replacing much of its Russian pipeline gas with LNG from the U.S., Qatar, and Norway — the global oil market remains deeply interconnected. A sharp reduction in Russian crude exports would raise prices for all buyers, including European refiners.
The Russian ruble’s trajectory in the second half of 2026 will depend heavily on the fate of the proposed tariffs, the evolution of global oil prices, and the Kremlin’s ability to manage its fiscal and monetary levers. Against this backdrop, the National Welfare Fund provides a cushion, but not a solution.
The discount on Russian crude, the narrowing of export revenues, and the persistent inflation all point to an economy under structural strain — one that has adapted to sanctions but has not escaped them. What to watch next: the U.S. administration’s final decision on tariff rates and enforcement mechanisms, which will determine the scale of the revenue loss for Moscow. Also, the response of key buyers such as India and China, who have absorbed much of the Russian crude that Europe has rejected.
Their willingness to continue purchasing discounted Russian oil — and at what price — will shape both the ruble’s value and the Kremlin’s ability to finance its war effort.
