Ruble Faces New Pressures as EU Sanctions Raise Concerns Over Oil Revenues and Currency Stability

The Russian ruble experienced a significant drop on Wednesday, wiping out part of its recent recovery as investors responded to renewed worries about Western sanctions and decreasing oil export revenues.

The dollar jumped nearly 3% within hours on the Moscow Exchange, rising from 78.2 rubles in early trading to 80.49 by 1:45 p.m. local time. The euro surged past 91 rubles, while the Chinese yuan increased by almost 2%, reaching 11.04 rubles.

By late afternoon, the ruble had partially rebounded, with the dollar falling back to 79.65 and the euro to 91.39.

The ruble has been among the best-performing currencies globally in 2025, appreciating approximately 40% since January. However, analysts caution that this sharp decline could indicate a shift in market trends.

According to Natalia Milchakova, a senior analyst at Freedom Finance Global, the ruble’s drop on Wednesday “may be linked to EU discussions regarding a new sanctions package aimed at Russian financial institutions and energy exports.”

The European Commission proposed its 18th round of sanctions on Tuesday, which includes plans to disconnect an additional 22 Russian banks from the SWIFT global payment network, impose blacklists on tankers involved in evading oil trade restrictions, and prohibit transactions related to the Nord Stream gas pipelines.

These measures would also reduce the price cap for Russian crude exports from $60 to $45 per barrel. Oil sold above this threshold would not qualify for Western insurance and transportation services, a strategy aimed at restricting revenue from Russian energy exports.

Experts warn that if these measures are enacted by the U.S. and G7 allies, they could inflict the most significant damage to Russian oil exports since the European embargo introduced in late 2022.

Sanctions have already impacted much of the Kremlin’s “shadow fleet,” and a further reduction in the price cap could push Greek shipping companies—crucial for transporting Russian oil—out of the market entirely, according to the Institute for Energy and Finance based in Moscow.

The IEF stated, «Consequently, a significant decrease in Russia’s seaborne oil exports is probable, and the Russian budget may experience an even steeper decline in oil revenues in the latter half of this year.»

The ruble is also facing seasonal pressures, as exporters seem to be delaying the conversion of foreign currency earnings in anticipation of the Russia Day holiday weekend, Reuters reported. Concurrently, Yevgeny Kogan, a Russian investment banker, remarked that there might be an increased demand for foreign currency leading up to the long weekend.

Exacerbating the situation is a decline in oil revenues, which are fundamental to Russia’s export economy. The average price of Urals crude fell to $52 per barrel in May, down from $66 in January, according to the Economic Development Ministry—a figure that marks the lowest level in more than two years.

Some analysts believe that the ruble’s current weakness may signal the start of a more extended decline. Kogan suggested that the currency might continue to weaken in June and July.

Sofya Donets, chief economist at T-Investments, indicated that pressures could escalate into August, potentially driving the exchange rate beyond 90 rubles per dollar.

The government-affiliated Center for Macroeconomic Analysis and Short-Term Forecasting warned that the ruble could face an “overshoot” in the opposite direction, wiping out its previous gains with a sharp depreciation.

“The more overvalued the ruble is currently,” the group noted, “the more susceptible it is to a sharp correction.”