Russia's Underwhelming Oil Revenue Windfall

The latest data show that the increase in energy prices since the start of the conflict with Iran has done relatively little to improve the finances of the Russian government or its military industry.

A barrel of Brent crude oil cost about $103, on average, in the month of March, up from $66/barrel in October 2025-February 2026. Thanks to sanctions, the price of Russian Urals crude was somewhat lower in the months before the war with Iran, averaging around $55/barrel, while the price increase was proportionately larger as some of those sanctions were lifted in an attempt to mitigate the disruptions in the Strait of Hormuz.

Six weeks ago, I had estimated that this could triple the Russian government’s energy revenues, based on what had happened the last two times energy prices had been as high—particularly the stretch from January 2011-September 2014 when Brent cost $108/barrel on average, there was basically no discount on Russian export prices relative to that benchmark, and the effective tax rate was higher.

We now have the official numbers through April 2026, and it looks as if Russia’s windfall is somewhat smaller.¹