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The Kremlin is generating significant excess profits due to a sharp rise in global oil prices.
The price of Russian Urals crude has reached its highest level since autumn 2023, providing the Russian government with substantial revenue to fund its military needs, according to Bloomberg on May 13.
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Data from the Russian national tax service indicates that the price of the Urals blend reached $94.87 per barrel in May. The primary factor behind this price jump is the war in Iran, which caused disruptions to raw material supplies from the Persian Gulf through the Strait of Hormuz.
The global market shortage has led to a significant increase in demand for Russian oil. As a result, the price used for taxation purposes rose 18% compared to April. These energy revenues are allowing the Russian government to refill its reserve fund and avoid making cuts to state spending. Tax revenues from oil sales in rubles have increased by 60% compared to the same period last year.
However, the Kremlin's profits are partially offset by the strengthening of the ruble, which is currently at its highest level against the dollar since early 2023. A stronger national currency results in fewer rubles for every barrel sold in dollars.
Additionally, the Russian budget's net income is affected by subsidies for the domestic fuel market. Due to rising global fuel costs, state payments to Russian oil refineries reached nearly $5 billion in April, a record high for the last two years.
In a related development, India has officially requested that the United States extend a special permit for the import of Russian oil. The current license is set to expire on May 16. India justifies the need for this extension by citing the prolonged hostilities in the Middle East.
According to data from early May 2026, weekly average revenue hit a record $2.57 billion as Moscow became a primary beneficiary of the Middle East conflict. This financial windfall was further enabled by Washington easing certain sanctions to stabilize energy markets after the closure of the Strait of Hormuz.
Consequently, crude flows rose to 3.66 million barrels a day, the highest volume since December, as the effects of previous Ukrainian drone strikes on Russian ports began to fade. While these strikes had previously cost Moscow at least $7 billion, the temporary resumption of flows provided a critical financial lifeline to the Kremlin.
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