The drop in oil and natural gas prices has put Russia in a difficult position. It was indicated that Moscow, whose war budget is starting to run out, may embark on new quests to make up for the losses. The customs tariffs imposed by US President Donald Trump and the decision to increase production by OPEC+ have changed the balances in the energy market. Oil and natural gas prices suffered a sharp decline. While natural gas prices in Europe fell by 20%, Brent crude oil dropped below $60 and hit a four-year low. The volatility in oil prices is expected to continue for a while, leading to discussions about serious damage Russia could incur from this situation. The price of Ural crude oil, Russia’s main export product, has dropped to its lowest level in two years, at $50. When the 2025 budget was being prepared in the country, the price target for Ural was set at $69.70. According to an analysis in the Financial Times, the decline in oil prices has started to deplete Putin’s war budget. It was stated that about one-third of Moscow’s treasury consists of revenues from oil and natural gas. The current level of oil prices signals a 2.5% decrease from the predicted level in 2025. Brent crude oil is currently trading close to $65. HOW WILL THE LOSS OF OIL BE COMPENSATED? According to the analysis, if the decline in oil and natural gas continues, Moscow will have to consider different options. It was noted that Putin may have to consider options such as further borrowing, cutting non-military expenditures, or spending from reserves. Russia had used a significant portion of state funds for the four-year Ukraine war. Additionally, $340 billion of Moscow’s assets had been seized by Western countries. Economists indicated that it would not be possible to compensate for oil revenues from other sources and that borrowing from international markets was difficult due to investor concerns. Economists expressed that Russia may have to reduce non-military expenditures such as social spending for the Russian economy.