Russia's Finance Ministry published quarterly data on 8 May 2026 showing oil and gas budget revenues fell 38.3% year-on-year in January-April to 2.3 trillion roubles ($30.77bn)1. The government's baseline assumption was 2.8 trillion roubles, at an implied $59/barrel Urals; the actual figure suggests Urals averaged closer to $45-50/barrel once volume losses are factored in, not the headline Brent figure.
The spending side moved the other way. Federal expenditure rose 15.7% year-on-year to 17.6 trillion roubles over the same period, driven by defence allocations. The Q1 budget deficit alone exceeded the full-year target, a figure the Finance Ministry published without editorial comment2. Russia's National Wealth Fund (NWF) held $49.1 billion in liquid assets on 1 May; the Finance Ministry is purchasing 110 billion roubles in NWF assets in May to recapitalise. That is a balance-sheet transfer that moves liquid cover from one government account to another, making the NWF position look healthier while draining the underlying buffer.
Economic Development Minister Maxim Reshetnikov warned in late April that the NWF's liquid share could fall to roughly $12.5 billion by year-end. The 8 May data confirms the trajectory that warning implied. Ukraine's strikes had reduced Russian refinery throughput to a 16-year low in early May, compounding the structural volume loss from shadow fleet SDN exposure and the Druzhba Kazakh transit halt.
Brent at $107/barrel, elevated partly by the Iran ceasefire wobble, sits at the heart of the paradox. Each Russian barrel that cannot leave legally earns nothing while a barrel that can leave earns roughly $82-87 at the Urals discount. High oil prices make blocked volume maximally costly; Russia earns more per barrel precisely as the volume constraint tightens. The second half of 2026, against a military budget growing at 15.7% on a 38.3%-smaller oil revenue base, runs the arithmetic in one direction.
