Abstract: The subject of the study. Because the primary of the leading sectors of the economy is the oil industry, the mineral extraction tax is one of the main sources of replenishment of the Russian Federation budget. Minor changes in oil prices on the international market have a tremendous impact on the state Russian Federation budget, the problem of replenishment of budget has been particularly relevant lately. The mineral extraction tax has proved its fiscal orientation, while its regulatory function receded into the background, thus accumulating a lot of problems in the field of oil production. The authors of the article analyze alternative methods of taxation in the oil industry in Russia in order to improve it in modern terms. Methodology. By using the systems approach and statistical methods, the authors of the article analyze the current state of the mineral extraction tax and conduct a comparative analysis of alternative methods of taxation of oil production in Russia. The novelty of the study. Conclusions. The article reveals the shortcomings of the mineral extraction tax and considers alternative methods of taxation in the oil industry in Russia. The conclusions on the impact of sanctions against Russia are made. The hypothesis of the article is to assess the effectiveness of the taxation system for the oil industry, particularly, the role of the added revenue tax.