The decrease in oil and gas prices has put Russia in a tough position. It has been noted that Moscow, whose war budget is running out, may embark on new quests to make up for the losses. President Donald Trump’s tariff policies and OPEC+’s decision to increase production have altered the dynamics in the energy market. Both oil and gas prices have seen a sharp decline. While natural gas prices in Europe dropped by 20 percent, Brent crude oil fell below $60 and hit a four-year low. With expectations of continued volatility in oil prices, concerns have emerged about the serious damage Russia may incur from this situation. The price of Russia’s main export, Urals crude oil, has plummeted to the lowest level in two years at $50. When the country’s 2025 budget was being prepared, the price target for Urals was set at $69.70. According to an analysis in the Financial Times, the decline in oil prices is beginning to deplete Putin’s war budget. It was noted that about a third of Moscow’s treasury consists of revenues from oil and gas. The drop in crude oil prices suggests a 2.5 percent decrease from the forecasted amount for 2025. As of today, Brent crude is trading at close to $65. HOW WILL THE OIL LOSS BE OFFSET? If the decrease in oil and gas continues, Moscow may need to consider different options. It was mentioned that Putin might have to think about further borrowing, cutting non-military expenses, or spending from reserves. Russia had used a significant portion of state funds for the ongoing four-year war in Ukraine. Additionally, Western countries had seized Moscow’s $340 billion in assets. Economists stated that compensating for the loss in oil revenues from other sources may not be feasible, and borrowing from international markets might be difficult due to investor concerns. Economists also expressed that Russia might have to cut non-military expenses such as social spending for its economy.