Russia's budget deficit exceeded its annual target in just three months—what advice do Russian supporters have?

According to data released by Russia’s Ministry of Finance on Wednesday, April 8, the federal budget deficit for Q1 reached 4.6 trillion rubles (US$5.88 billion), exceeding the 3.8 trillion rubles (US$4.86 billion) deficit ceiling approved by the State Duma for the entire 2026 fiscal year by 21%. This deficit represents a staggering increase of 2.6 trillion rubles—or 130%—compared to the same period in 2025. From January to March 2026, Russia’s total fiscal revenue fell 8.2% year-on-year to 8.3 trillion rubles, while expenditures surged 17% to 12.9 trillion rubles. The energy sector suffered especially severely: oil and gas revenues plummeted 45% in Q1, shrinking to just 1.4 trillion rubles. To offset the war-related shortfall caused by collapsing hydrocarbon income, Moscow has continued raising VAT, personal income tax, and vehicle recycling fees. In Q1, non-oil-and-gas tax revenue rose 7.1% year-on-year to 6.9 trillion rubles—providing only modest relief against the widening fiscal imbalance, insufficient to counterbalance the steep decline in energy revenues or the accelerating costs of protracted warfare in Ukraine. II. The Russian Ministry of Finance’s hope that soaring oil prices driven by the Iran–U.S. conflict will repair Russia’s fiscal deficit is little more than wishful thinking! Although the Q1 deficit already surpassed the full-year 2026 deficit ceiling, the Ministry insists budget execution remains “in line with structural deficit targets.” Several prominent Russian economists commented separately on Telegram channels, suggesting the Ministry likely believes Middle East conflict–driven energy price spikes will revive Russia’s energy revenues by mid-year. The Ministry expects Russia’s main petroleum tax revenue to double in April alone—to 700 billion rubles (US$9 billion)—serving as a critical lifeline toward its annual target of 7.9 trillion rubles in mineral extraction taxes. As the world’s second-largest oil exporter, Russia hopes to profit handsomely from high oil prices. Yet these economists argue this hope rests on an unrealistic fantasy. First, how long international oil prices remain elevated depends entirely on how long the U.S.–Iran war lasts—and Trump has already declared it will not exceed three months. The war has now lasted five weeks; following mediation by Pakistan’s Prime Minister, the U.S. and Iran have announced a two-week ceasefire to negotiate an end to hostilities. Consequently, global oil prices have swiftly dropped from over US$110 per barrel to below US$100. Second, high oil prices only translate into premium revenue if exports remain stable. Yet this year, Ukrainian drone strikes have intensified against Russian oil export terminals, pipelines, and tankers—causing a 40% loss in seaborne oil exports. Simultaneously, Ukrainian drones have repeatedly struck Russian refineries, severely disrupting refined product exports. III. Why can’t Moscow close its fiscal gap despite repeated tax hikes? A single quarter’s deficit ballooning to 1.2 times the full-year budget ceiling is merely the concentrated manifestation of Russia’s economy under dual pressure: intensifying external sanctions and severe internal distortions wrought by wartime economic policy—both driving profound macroeconomic imbalance.

March 27, 2026: Latest updates on the Russia–Ukraine war, Hungary, and the U.S.–Iran situation.

Today is March 27, 2026. As of yesterday, the U.S.–Iran conflict has lasted 25 days. Today’s program covers: 1) the latest developments in the Russia–Ukraine war; 2) the latest news from Hungary; and 3) the latest progress in the U.S.–Iran situation. First, the Russia–Ukraine war: I. As previously reported, on March 25 local time, Ukraine struck Russia’s largest Baltic Sea energy export port. As of yesterday, the Primorsk oil depot remains ablaze. This strike aimed to shut down Russia’s entire Baltic Sea oil and gas hub—including the three key zones of Ust-Luga, Primorsk, and Vyborg. By yesterday, this strategic objective had been fully achieved: all three energy hubs were completely destroyed. This successful operation dealt a heavy blow to Russia’s oil export capacity—reducing it by 40%. At Ust-Luga, not only was Novatek’s oil terminal utterly destroyed, but two vessels from Russia’s shadow tanker fleet were also sunk. II. Last night, Ukrainian drones attacked a major Russian natural gas facility—the Ust-Luga gas processing plant—among Europe’s largest such facilities. It processes up to 45 billion cubic meters of natural gas annually, produces 13 million tons of LNG, 360 tons of ethane, and 1.8 million tons of propane-butane annually. Yesterday’s strike blew up the facility—inflicting massive losses on Putin in recent days. III. Despite Ukraine’s relentless attacks on Russian energy infrastructure, Reuters reports that Russia’s oil and gas revenue in April is still expected to rise 70% month-on-month—primarily due to surging energy prices. April revenue is projected to reach 900 billion rubles (over US$10 billion), the highest since 2025. This Iran–U.S. war has effectively revived Russia’s finances. IV. The Economist published an article featuring an interview with Mazhar—the codename of Ukraine’s drone forces commander. His remarks are startling: Ukraine is now depleting Russian troops faster than Russia can replenish them. Since winter began, Ukrainian drone operations have inflicted more casualties on Russian forces than Russia has managed to replace—by a margin of 8,776 personnel. For the first time across an entire December, Ukraine killed more Russian soldiers than Russia recruited—exceeding new enlistments by over 8,000. According to Mazhar’s calculations, every Ukrainian soldier lost corresponds to 400 Russian deaths—a ratio of 1:400. Moreover, the cost to eliminate one Russian soldier stands at just US$878—meaning each Russian invader’s life is worth only US$878. This report appears in the world’s most renowned and influential journal, The Economist. V. Yesterday, Ukraine’s parliament passed an important bill: only men who have completed mandatory military service may hold government positions. In other words, civil service eligibility requires national service. Personally, I believe this offers tremendous comfort to Ukrainian fighters bravely defending the frontlines. Next, we turn to Hungary’s election developments: I. Hungary has just released its latest public opinion poll.

Iran War Doubles Russia's Main Oil Revenue to $9 Billion in April, Reuters Calculations Show

Apr 9, 2026

Russia's oil tax revenue doubled to $9 billion in April due to soaring crude prices triggered by the Iran conflict. Geopolitical tensions disrupted the Strait of Hormuz, driving an energy market windfall despite infrastructure attacks.

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Iran War Doubles Russia's Main Oil Revenue to $9 Billion in April, Reuters Calculations Show

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Russia's oil and fuel export revenues rebound in March, IEA says

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Iran War Doubles Russia's Main Oil Revenue to $9 Billion in April, Reuters Calculations Show

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