Kremlin faces further fall in oil revenues after Indian refineries pause purchases
The Russian government’s oil revenues may fall even further than already predicted by its finance ministry after Indian refineries reportedly paused purchases due to pressure from Washington.
On 5 August, the Russian Ministry of Finance said in a press release that it expects the budget to lose 12.1 billion roubles (152.2 million US dollars at today’s exchange rate) in oil and gas revenues in August. That would be the fourth consecutive month of lost oil and gas revenues suffered by the budget — following an expected fall of RUB 25.8bn in July (USD 324.4m).
At the end of July, American president Donald Trump threatened Russia with further sanctions on its oil exports if it did not end its war against Ukraine by 8 August — and took aim at India in particular, the largest buyer of seaborne Russian crude oil.
Since then, Indian state-run refineries have been looking to other suppliers as they spurn Russian crude, according to unnamed sources familiar with purchasing plans cited by Reuters and Bloomberg.
On 6 August, the Trump administration doubled American tariffs on Indian goods to 50%, effective 27 August, “due to India’s direct or indirect importation of Russian Federation oil”.
In the first six months of 2025, Russian oil and gas revenues slumped 17% year on year to RUB 4.73 trillion (USD 59.48bn) due to lower prices and a stronger rouble.
For several months now, even the highly constrained Russian media have been highlighting the mounting risks faced by the economy, as indicated by official data — the reliability of which is limited due to potential manipulation.
In June, the Central Bank of Russia cut its benchmark interest rate to 20% from a record peak of 21% reached in October last year amidst intense inflation. On 25 July, the board of the central bank cut the rate again, by 200 basis points, to 18%, citing a faster than previously forecast decline in inflation as growth in demand slowed. In July, the Russian budget deficit widened by RUB 1.2tn (USD 15.09bn) to RUB 4.9tn over the first seven months of 2025 — or 2.2% of GDP — as oil and gas revenue (its main source of income) slumped, the finance ministry reported on 7 August.
