Russia May Lose Sovereignty If Everything Depends on Oil and Gas Prices – Putin

Russia may lose its competitiveness, and with it, its sovereignty if everything depends on oil and gas revenues. Russian President Vladimir Putin made this statement during an interview with journalist Pavel Zarubin.

“Right now, if we buy everything with oil and gas, when both oil and gas are being cut from us, then Russia will simply lose its competitiveness, and behind it, also sovereignty,” said Putin.

He was responding to the claim that Russia must accept it “cannot create cars.” Zarubin noted that proponents of this opinion suggest abandoning domestic production and purchasing vehicles from abroad. Putin admitted that this opinion had been prevalent since the mid-1990s. He recounted that during his time as Prime Minister (1999-2000 and 2008-2012), he debated this issue with his colleagues.

“They said it’s pointless for us to engage in the auto industry; we have fallen behind endlessly, hopelessly behind, and it’s better to buy from abroad, or at best, allow domestic companies to engage in assembly of large parts of the products,” said Putin.

He also noted that there is a “flip side of the coin,” as well as the factor of technological independence. While some countries produce, others consume, and the products potentially in question are numerous, the state leader clarified.

It's noteworthy that the share of hydrocarbons in Russian exports fell below 50% for the first time in 2020, amid low oil prices. According to 2023 statistics, the overall export share within the structure of the Russian economy was at a record low since the mid-1990s, standing at 23%.

The Central Bank explained that the decline in goods exports was mainly due to the worsening of international price conditions and the reduction in the value of mineral raw material supplies. Finance Minister Anton Siluanov mentioned in April 2025 that Russia has recently managed to reduce its dependency on oil and gas, with the share of oil and gas revenues in the federal budget’s income structure making up only a quarter.

According to preliminary estimates from the Finance Ministry, for the first quarter of 2025, Russia’s oil and gas revenues amounted to 2.64 trillion rubles, which is 9.8% less than in the same period in 2024.

Western countries imposed large-scale sanctions on Russia’s energy sector following the onset of military operations in Ukraine. Under the latest, the 18th package of sanctions, the EU has reduced the ceiling on Russian oil prices from $60 to $47.6 per barrel, a move also taken by Great Britain. Oil prices have been rapidly declining since early April, following the implementation of U.S. trade tariffs and the unexpected decision of OPEC+ to increase production volumes more than previously anticipated. Additionally, the conflict between Israel and Iran has further influenced prices.