Russia's "rainy day" reserve has decreased by another 14%: war and oil prices are hitting the budget

Liquid assets of the Russian National Welfare Fund, which is the country's reserve for a "rainy day", decreased by 14% in May 2025. Bloomberg writes about this.

The reason for this is that the rising costs of a full-scale war in Ukraine and falling oil prices are squeezing the Russian budget.

The Russian National Welfare Fund's free cash fell to 2.8 trillion rubles ($35.7 billion) in May, a loss of 453.8 billion rubles ($5.8 billion) available to finance the budget deficit.

According to Bloomberg estimates, since the beginning of Russia's full-scale invasion of Ukraine in February 2022, the Fund's liquid assets have decreased by 68%.

Plans to replenish reserves this year with excess revenues from oil and gas sales have been thwarted by a drop in oil prices caused by US President Donald Trump's trade war.

The decline in oil prices has forced the Russian government to cut its energy revenue forecast by 24% and triple its projected budget deficit.

• Russia's revenues from the oil and gas sector fell by 17% in March 2025 – the budget received a shortfall of $2.73 billion.
• In April, Russia's oil and gas revenues fell by almost 12% year-on-year.