As the conflict in Ukraine is about to mark 4 years, the flow of money to Moscow is being significantly blocked. The reason comes from a combination of tougher sanctions from the administration of US President Donald Trump, tariffs on India and a fierce crackdown campaign targeting the "dark fleet".
According to the latest figures, revenue from Russian oil and gas taxes in January 2026 only reached 5.1 billion USD, a sharp decrease compared to 14.5 billion USD in the same period last year. Janis Kluge, an economist at the German Institute for International Affairs and Security, said this is a record low since the COVID-19 pandemic.
Pressure on the Kremlin has increased sharply since November 21 last year, when the Trump administration imposed sanctions on two Russian oil and gas "giants" Rosneft and Lukoil. This move puts any partner trading with them at risk of being removed from the US banking system.
Following that, on January 21, the EU filled legal loopholes by banning the import of fuel refined from Russian crude oil from third countries. European Commission President Ursula von der Leyen also proposed a complete ban on Russian oil transportation services, affirming that Moscow will only negotiate when cornered economically.
At the same time, the Indian market - Russia's "lifeline" - is also shrinking. Under tariff pressure from the US, Russian oil exports to India have decreased from 2 million barrels/day in October to 1.3 million barrels/day in December.
The tightening of management by the West has caused difficulties for Russia's "dark fleet". About 640 oil tankers have been blacklisted. Buyers are currently demanding very high discounts, up to 25 USD/barrel to compensate for risks. Russia's Urals oil price is currently falling below 38 USD/barrel, much lower than the 62.5 USD of international Brent oil.
To compensate for the budget deficit, the Kremlin is forced to borrow from domestic banks and increase taxes. The Russian Parliament (Duma) has just raised VAT from 20% to 22%, while increasing import taxes on cars, cigarettes and alcohol.
Although Russia still has reserve funds to hold out in the short term, economic growth is slowing down (forecast to only reach 0.6-0.9% this year). Expert Kluge predicts: "In the next 6 months to a year, financial pressure may force Russia to recalculate its strategy, reduce combat intensity or narrow the scope of military operations due to excessive costs.
