Russia economy in meltdown as oil and gas revenues plummet | World | News
High sanctions are continuing to cripple the Russian economy, with figures showing its oil and gas revenue plummeting to a new low this year. The combined revenue from oil and gas sectors declined by 50% to 393.3 billion rubles (£377 billion) in January, with oil-related tax income also dropping by half to 281.7 billion rubles (£270 billion) – the lowest level since 2020.
EU sanctions envoy David O’Sullivan said Vladimir Putin‘s economy was on the verge of “unsustainability”, pointing to Western sanctions as a “significant” factor in the hiked fiscal pressure.
“We may be, in the course of 2026, coming to a point where the whole thing becomes unsustainable, because so much of the Russian economy has been distorted so much by the building up of the war economy at the expense of the civil economy,” he told The Guardian.
He added: “I think defying the laws of economic gravity can only go on for so long.”
The Russian economy proved relatively resilient during the first three years of its war with Ukraine, from February 2022, but slowed sharply in 2025 as interest spiked to its highest level since the 2000s.
The EU has levied 19 rounds of sanctions on Moscow since its illegal invasion, across sectors including luxury and consumer goods, aviation and energy.
Despite its dire fiscal position, Russia has not retreated from its aggressive military position in Ukraine, with around 55,000 kamikaze drones launched into the eastern European region last year, a five-fold increase from 2024.
Officials have engaged in three-way peace talks with Ukraine and the US aimed at ending the four-year conflict, but Putin is thought to possess the resources for sustained fighting in the region until at least the end of 2026.
Alongside sanctions and high interest rates, Russia has struggled with labour shortages in recent months, linked to military mobilisation and emigration, with key industries including defence and manufacturing majorly impacted.
Around 415,000 Russian soldiers died in Ukraine last year, with a total of 1,228,000 losing their lives since the beginning of the invasion.
