Rajan Wilcox
Russia is a major player in the global energy market and has the largest known natural gas reserves of any state on Earth, along with the second-largest coal reserves and the eighth-largest oil reserves. Russia has increasingly focused on the Arctic to increase oil and gas production, with the Arctic accounting for over 80% of Russia's natural gas production and an estimated 20% of its crude production. Russia relies heavily on revenues from oil and gas-related taxes and export tariffs, which accounted for 45% of its federal budget in 2021. In 2021, Russia exported an estimated 4.7 million barrels of crude oil per day to countries around the world.
| Characteristics | Values |
|---|---|
| Electricity generated by fossil fuels | 60% |
| Electricity generated by hydroelectricity | 20% |
| Electricity generated by nuclear reactors | 20% |
| Oil reserves | 8th largest |
| Coal reserves | 2nd largest |
| Natural gas reserves | Largest |
| Oil shale reserves in Europe | Largest |
| Oil production | 6.9 million bpd refining capacity |
| Crude oil and condensate output | 10.5 million bpd |
| Crude oil exports | 4.7 million bpd |
| Crude oil exports to Europe | 2.4 million bpd |
| Crude oil exports to China | 1.6 million bpd |
| Natural gas production | 762 bcm |
| Natural gas exports | 210 bcm |
| Federal budget from oil and gas | 45% |
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What You'll Learn
Russia's fossil fuel revenues
Russia is a leading global exporter of oil and natural gas and is the fourth-highest greenhouse emitter in the world. It has the world's largest proven gas reserves, the second-largest coal reserves, the eighth-largest oil reserves, and the largest oil shale reserves in Europe. Russia relies heavily on revenues from oil- and gas-related taxes and export tariffs, which accounted for 45% of its federal budget in January 2022.
Since the invasion of Ukraine, Russia's fossil fuel export revenues have declined due to sanctions and reduced imports from EU countries. The EU remains the largest importer of Russian fossil fuels, but its imports have more than halved in monetary value compared to pre-invasion levels. In 2022, Russia lost 75% of its export market when the European Union decided to stop buying Russian energy.
Despite the overall decline in exports, Russia's monthly fossil fuel export revenues saw a 4% month-on-month rise to EUR 593 million per day in June 2025. This was due to a 2% increase in export volumes and a rebound in oil prices. However, Russian revenues from coal saw an 8% month-on-month drop to EUR 69 million per day, with volumes dropping by 5%.
China has remained the largest global buyer of Russian fossil fuels, purchasing 44% of Russia's coal exports and 47% of its crude exports. India, Turkey, South Korea, and Taiwan are also among the top buyers of Russia's coal and crude oil exports.
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Oil and gas production
Russia has the largest proven gas reserves in the world and is the world's second-largest producer of natural gas, behind the United States. It is also the world's largest gas exporter. In 2021, the country produced 762 billion cubic metres of natural gas and exported approximately 210 billion cubic metres via pipeline. Gazprom and Novatek are Russia's main gas producers, but many Russian oil companies, including Rosneft, also operate gas production facilities.
Russia is also a leading global exporter of oil and has the sixth-largest oil reserves in the world, producing 12% of the world's oil in 2009. In December 2015, Russia produced an average of 10.83 million barrels of oil per day. In 2021, Russian crude and condensate output reached 10.5 million barrels per day, making up 14% of the world's total supply. Russia has an estimated 6.9 million barrels per day of refining capacity and produces a substantial amount of oil products, such as gasoline and diesel. In 2021, Russian refineries processed 5.6 million barrels per day of crude and exported 2.8 million barrels per day of oil products.
Russia has oil and gas production facilities throughout the country, but the bulk of its fields are concentrated in western and eastern Siberia. In recent years, Russia has increasingly focused on the Arctic as a way to increase oil and gas production. The Arctic accounts for over 80% of Russia's natural gas production and an estimated 20% of its crude production.
Europe has been a major market for Russian oil products. In 2021, Russia exported 750,000 barrels per day of diesel to Europe, meeting 10% of demand. However, following the Russian invasion of Ukraine in 2022, the European Union sanctioned Russian fossil fuels and decided to cease buying Russian energy. As a result, Russia has sought to reorient its exports towards Asia, particularly China and India, to replace lost European markets.
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Fossil fuel exports
Russia is a leading global exporter of fossil fuels, particularly oil and natural gas. It has the largest proven gas reserves in the world, the second-largest coal reserves, the eighth-largest oil reserves, and the largest oil shale reserves in Europe. Russia's fossil fuel exports are a significant source of revenue for the country, accounting for 45% of its federal budget in January 2022.
The European Union (EU) has been the largest importer of Russian fossil fuels, with oil and fossil gas making up the majority of this trade. However, following the Russian invasion of Ukraine in 2022, the EU sanctioned Russian fossil fuels and reduced its imports, causing Russia to reorient its exports towards Asia. Despite the EU's sanctions, some countries within the EU, such as France, Belgium, and Slovakia, have continued to increase their imports of Russian fossil fuels, particularly LNG and pipeline gas.
Russia's monthly fossil fuel export revenues have been steadily declining since September 2023. In January 2024, Russia's monthly fossil fuel export revenues fell by 10% compared to the previous month. This decrease was driven by a drop in revenues from crude oil pipelines, seaborne oil products, LNG exports, and coal exports. However, there was an increase in export revenues from fossil gas via pipeline.
Turkey, China, and India are also significant importers of Russian fossil fuels. Turkey was the largest buyer of Russian oil products and LPG, while China was the largest importer of Russian fossil fuels overall in January 2024, accounting for 33% of total imports. India's monthly imports of Russian crude oil have been declining due to tighter enforcement of sanctions by the US.
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Russia's energy strategy
Russia has long been a dominant player in the global energy market, with its vast fossil fuel resources and production capabilities. However, Russia's energy strategy has evolved over time, influenced by geopolitical events and the need to adapt to changing market demands and environmental concerns.
To reduce its environmental impact and improve energy efficiency, Russia has set a target to reduce energy intensity by 56% by 2030 compared to 2005 levels. This will be achieved through a major overhaul of the energy sector, the adoption of new technologies, and improving economy-wide energy efficiency. Russia also intends to exploit fossil fuel reserves in the Arctic for the Asian market, taking advantage of the region's increasing accessibility due to climate change.
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$39
Arctic fossil fuel production
Russia has the largest known natural gas reserves of any state globally, as well as the second-largest coal reserves and the eighth-largest oil reserves. In recent years, the country has increasingly turned to the Arctic to boost oil and gas production. The Arctic accounts for over 80% of Russia's natural gas production and an estimated 20% of its crude production. Russia is a leading global exporter of oil and natural gas and is the fourth-highest greenhouse emitter in the world.
The Arctic has approximately 13% (90 billion barrels) of the world's undiscovered conventional oil resources and 30% of its undiscovered conventional natural gas resources. However, Arctic drilling is expensive due to the region's harsh climate and remoteness. The average Arctic oil barrel typically costs $75, compared to around $48.5 for conventional oil between 2015 and 2020. As a result, the decision to drill depends on capital input, anticipated market prices, and favourable regulatory circumstances.
Despite the urgent need to limit global warming to 1.5°C, major producers like the US, Canada, Russia, and Norway are expanding production, endangering fragile Arctic ecosystems. Arctic governments must stop issuing new oil and gas licenses, prohibit exploration for reserves, and halt infrastructure development. A global cap on production should be enforced well before 2050. Transitioning from fossil fuels requires careful consideration of local and national contexts to protect Arctic biodiversity and community well-being.
The Arctic should become a leader in deploying clean energy, leaving its resources untapped. Arctic drilling poses multiple risks to the climate, sensitive ecosystems, and investors, who will suffer financial losses when the world moves away from hydrocarbons.
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Frequently asked questions
Yes, Russia mines fossil fuels. In fact, it is a leading global exporter of oil and natural gas.
Russia has the world's largest gas reserves, the second-largest coal reserves, the eighth-largest oil reserves, and the largest oil shale reserves in Europe.
Russia relies heavily on revenues from oil and gas, which accounted for 45% of its federal budget in 2021.
