Russia's revenues from fossil fuel exports fell by 19% in 2025, even though the sales volume of oil now exceeds pre-invasion of Ukraine levels. Sanctions imposed by the West are effectively reducing the Kremlin's margins, forcing the sale of raw materials at significantly lower prices. Simultaneously, Europe is grappling with challenges in the area of defense, trying to balance rising expenditures with gaps in combat capabilities.
Revenue decline of 19 percent
Russia's revenues from fuels fell by almost one-fifth in 2025 due to low selling prices.
Exports higher than before the war
The volume of exported oil is 6% higher than in 2021, mainly thanks to China.
Gaps in Europe's defense
Despite increased defense spending, European countries still exhibit deficiencies in defensive capabilities.
The latest data from a report by the Finnish research center CREA indicates a progressive erosion of market confidence in Russian energy resources. Although in 2025 Russia exported 6% more oil than in 2021, its total revenues from this source have drastically fallen. The price cap mechanism and maritime sanctions have led to a situation where Moscow is forced to offer high discounts to its new partners in Asia. China has become the main buyer, replacing India as the leader in Russian oil imports, but the logistics of these supplies are significantly more expensive and fraught with risk. In 2022, in response to the full-scale aggression against Ukraine, Western countries introduced an unprecedented package of energy restrictions. Cutting Russia off from European markets forced the Kremlin to build a so-called shadow fleet, consisting of tankers with unregulated status, designed to circumvent Western insurance. Concurrently, security reports point to serious gaps in the European defense system. Although defense spending in Europe has been systematically rising since February 2022, the continent still struggles with an ammunition deficit and outdated production infrastructure. Experts emphasize that simply increasing budgets is not enough without tightening industrial cooperation between NATO member states. Russia, despite declining revenues, has switched its economy to a war footing, which poses a persistent challenge to regional security. „Russia is exporting more oil now than before war despite sanctions” — The Guardian Russian oil exports relative to 2021: 2021: 100, 2025: 106 An interesting phenomenon is the transformation of supply chains. To compensate for the loss of European terminals, Moscow is using giant VLCC tankers, conducting transshipments on the open sea to facilitate long-distance transport to China. A side effect, however, is a decrease in real profit per barrel, which in the long term may limit Moscow's ability to finance its costly war machine and modernize its army.