Russia’s government revenue from the oil industry was almost 50% higher in June compared with a year earlier as the nation’s producers adapted to international sanctions and obtained higher prices for their crude exports.
Oil-related taxes jumped to 590.6 billion rubles ($9.07 billion) last month compared with 402.8 billion rubles in June 2023, according to Bloomberg calculations based on Finance Ministry data. Total oil and gas revenue rose by 41% to 746.6 billion rubles, the ministry said.
The spike follows higher prices for Urals crude, Russia’s key export blend, as well as weaker ruble. The Finance Ministry calculated June taxes based on a Urals price of US$67.37 a barrel, up from US$53.50 a year ago. At the same time, Russia’s currency depreciated by 15% in the calculated tax period from year earlier to 90.88 per US dollar, contributing to higher budget revenues.
Russia’s crude has been trading above a US$60 ($81.39) price cap imposed by the Group of Seven industrialised nations. The measure was intended to reduce the inflow of petrodollars and limit Kremlin’s ability to finance its war against Ukraine, while still keep Russian oil on the global market.
The G-7 threshold, which limits access to Western shipping and insurance, was combined with a European ban on the most imports of Russian crude and petroleum products. Moscow has adapted to these restrictions by using a massive shadow fleet of tankers and re-directing its oil flows to non-western buyers, mainly in Asia.
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The Russian state budget’s oil proceeds would have been higher in June if they hadn’t been dented by big state subsidies to the nation’s refiners. The government paid out over 158 billion rubles to fuel producers for domestic supplies of diesel and gasoline, according to the Finance Ministry. The payments partially compensate refiners for the difference in car fuel prices in Russia and abroad.
In the first half of the year, Russia’s budget oil and gas revenue rose by over two thirds from the same period a year ago to almost 5.7 trillion rubles, according to the Finance Ministry’s data. The nation expects to receive 10.99 trillion rubles from the industry this year.
Chart: Bloomberg
