Russia’s oil and gas revenue soars

Russia’s energy revenue saw a massive increase in the first four months of the year, mainly due to rising oil prices, the Finance Ministry has revealed.

Proceeds from oil and gas exports jumped by 82.2% in January-April, compared to the same period of 2023, reaching over 4.2 trillion rubles ($45.3 billion), the ministry said in a press release.

In January, one barrel of Russia’s flagship Urals blend of crude cost an average of $60 per barrel, but prices then gained steadily, reaching $84 in April. In May, Russian crude traded at around $74 per barrel.

In addition, a change in legislation resulted in Russian oil firms paying an additional mineral extraction tax (MET) in February for the fourth quarter of 2023, resulting in extra revenue to the budget, the ministry noted.

MET varies depending on oil prices, and accounts for the majority of government revenue from oil and gas sales.

The increase comes despite a barrage of sanctions imposed on Russia by the US, the EU and their allies since Moscow launched its military operation in Ukraine in 2022.

The restrictions included an embargo on seaborne Russian oil, along with a $60-per-barrel price cap on other types of crude.

In response, Russia has rerouted most of its oil exports to Asia – particularly India and China, which have snapped up Russian crude due to the discounts arising from sanctions and price caps.

In 2023 Russia became the largest supplier of oil to China, accounting for 19% of Beijing’s oil imports (2.1 million barrels per day). Moscow has also become India’s top oil exporter.

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