Ukrainian intelligence forecasts when Russian oil revenues will collapse

The updated forecast of Russia's Ministry of Economic Development has turned out to be critically dependent on whether international sanctions are lifted or maintained.

Source: Foreign Intelligence Service of Ukraine (FISU)

Details: Analysts at the Russian ministry predict that the average price of Urals oil – the country's benchmark crude – will rise from US$58 per barrel in 2025 to US$65 in 2028, but only if Moscow emerges from international isolation.

Global demand for oil is growing more slowly, the OPEC+ deal is losing effectiveness and surplus capacity in the Middle East and increased production in South America are putting pressure on the market.

As a result, the price of Brent oil – global benchmark North Sea crude – in the coming years may fall to US$60 per barrel, which would collapse the Kremlin's revenues, Ukrainian intelligence forecasts.

In August 2025, Urals cost only US$56.1 per barrel with a discount of US$12.1 to Brent. A return to a more favourable gap (US$1-2) is possible only if the European embargo is lifted and Russian companies are removed from the US sanctions list. Without this, Russian oil is doomed to discounts.

The gas sector is no less difficult, Ukraine's foreign intelligence notes. The Russian government expects liquefied natural gas (LNG) exports to grow from 34.6 million tonnes in 2024 to 58.4 million tonnes in 2028. However, achieving such volumes is impossible even with Arctic LNG 2 – new projects are needed, and the key ones are under US sanctions.

There are also problems in oil refining. Even under optimistic forecasts, the growth of petroleum product exports from 122.5 million tonnes in 2024 to 134 million tonnes in 2028 is only possible with access to Western equipment, which has been banned from supply since 2022.

Read also: Stagflation and an impoverished population: how the Kremlin is paying for the war against Ukraine

Background:

• Earlier, the FISU stated that Russia has trapped itself by boosting defence spending and turning its defence industrial base into the main driver of domestic demand.
• The Russian Ministry of Finance reported on a new measure designed to protect the state budget from oil price fluctuations and Western sanctions affecting Russian energy exports.
• The Russian government is considering raising the value-added tax (VAT) rate to curb the budget deficit and preserve reserves.
• Russia's economy has more serious problems than is officially acknowledged, and there is a real risk of a systemic banking crisis during the year.

Support Ukrainska Pravda on Patreon!