Latest US Oil Sanctions Could Cut Russia’s Energy Revenue by 20% in 2025

The latest US sanctions on Russian oil, introduced by the outgoing administration of President Joe Biden, could strip the Russian budget of one-fifth of its oil and gas revenues in 2025.

It was reported by The Moscow Times, citing Janis Kluge, a research fellow at the German Institute for International Security Affairs on January 21.

The sanctions target major entities like Surgutneftegaz and Gazprom Neft, as well as more than 180 vessels in Russia’s shadow fleet . Experts predict the measures could cut 10-20% of Russia’s foreign currency earnings from oil exports, amounting to $10-20 billion annually.

According to Kluge, the sanctions could shave 1% off Russia’s GDP, translating to a budget loss of roughly $24 billion. This figure represents 18% of the oil and gas revenues the Russian Ministry of Finance planned for 2025, originally estimated at $110.5 billion.

“These parting sanctions by Biden are perhaps the toughest yet,” Kluge said, noting that they also target critical infrastructure, including the Omsk and Moscow refineries, the flagship Vostok Oil project, and Baltic LNG  facilities.

More than 270 vessels in Russia’s shadow fleet are now under Western sanctions, according to S&P Global. These ships previously carried half of Russia’s seaborne oil exports—1.5 million barrels per day, with about 1 million barrels destined for China and 500,000 for India.

“The new measures will reduce Russia’s revenues, both in its budget and in its trade balance,” Kluge added.

In 2024, Russian oil and gas taxes generated $112.8 billion for the state, a 26% increase from the previous year but still below initial targets. Total budget revenues rose by 26% to $372.1 billion, while spending surged by 24% to $407.5 billion, exceeding projections by $35.5 billion.

For the third consecutive year, the budget deficit doubled its original forecast, reaching $33.t billion instead of the planned 1.6 trillion.

In 2025, planned expenditures are expected to reach $420.3 billion, with 41% allocated to military, police, and intelligence operations. The Ministry of Finance plans to reduce the budget deficit to $11.86 billion—or 0.5% of GDP—by increasing taxes on businesses and individuals.

Earlier, it was reported that Indian banks began halting payments for Russian oil due to tightened US sanctions, posing obstacles for Russia’s energy sector.