Russia is plunging deeper into economic turmoil as ballooning war expenditures, inflation, and mismanaged spending have pushed the Kremlin into a severe fiscal crisis. In the first four months of 2025 alone, the country recorded a staggering 3.2 trillion ruble deficit, raising alarms about the long-term sustainability of Moscow’s wartime budget. Despite official claims that revenues are increasing at a rate of 5%, spending continues to surge far beyond forecasts.

Tatneft’s net profit under Russian Accounting Standards (RAS) dropped by 45.5% year-over-year in the first quarter of 2025, falling to 37.29 billion rubles, according to the company’s financial disclosures. This represents a 1.8-fold decrease compared to the same period last year. Quarterly revenue declined by 5.4% to 361.44 billion rubles, while the cost of sales rose 8.1% to 276.59 billion rubles. As a result, gross profit contracted by 32.8%, totaling 84.86 billion rubles.

Russia’s economic stability faces mounting challenges as oil prices plummet to levels far below the government’s budgetary expectations. As of May 2, 2025, the average price for Russia’s Urals and ESPO oil blends has dropped to $48.92 per barrel, or 3,987 roubles, marking a two-year low and standing over 40% beneath the 6,726 roubles per barrel projected in the federal budget. This significant shortfall in oil revenue is exerting considerable pressure on Russia’s fiscal health.

The Central Bank of Russia has reported a $3.5 billion decrease in its international reserves over the week ending April 25, bringing the total down to $677.8 billion. While Russian officials attribute the drop to “negative revaluation,” the reality is more complex— and more troubling for the Kremlin.