Data from the Russian Finance Ministry today, Friday, showed that monthly budget revenues from oil and gas fell in January to the lowest level since August 2020 due to sanctions imposed by the West on Russian exports.
According to the ministry, monthly revenues from taxes and customs duties related to the sale of energy resources fell by 46% year-on-year, reflecting a 42% decrease in the average monthly price of Russian Urals crude blend, although the price of global Brent crude blend.
According to Reuters, Moscow relies on its billion-dollar revenues from oil and gas sales to fund budget expenditures and has been forced to start selling some international reserves to cover the shortfall.
The data also showed budget revenues from energy fell 54% from a December figure of 931.5 billion rubles ($13.2 billion), despite an increase in the value of revenues after gas export monopoly Gazprom paid exclusive tax.
Revenue for January amounted to 425.5 billion rubles (6.05 billion dollars).
On Friday, the ministry said it would nearly triple its daily foreign exchange sales to 8.9 billion rubles ($130 million) a day over the next month to offset declining oil and gas revenues.
The West, which once represented Russia’s energy market and received most of its revenue, has responded to the invasion of Ukraine by targeting its energy revenues with an unprecedented package of sanctions that must be tightened.
Brussels hopes that the restrictions it has imposed will cut Russian oil exports to the European Union by 90%. After the invasion of Ukraine, the bloc’s member states reduced the share of Russian gas in their imports from more than 40% to less than 15%.
International restrictions, including the G7 group of major industrialized countries capping the price of Russian oil at $60 a barrel, mean Russian Urals blend is now selling at a huge discount, having previously traded at the same price as Brent.
The Finance Ministry said the average price in January was $49.48 per barrel, down 42% from the same month in 2022.
Today, Friday, Brent crude was trading at about $82, while Urals was trading at about $53.60.
The ministry added that the Russian government’s revenue from oil and gas sales last year totaled 11.6 trillion rubles ($165 billion).
