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Russia's oil and gas revenue set to double despite sanctions

Russia's oil and gas revenue set to double despite sanctions Photo: Kremlin revenues from oil and gas to double (Getty Images)
Author: Liliana Oleniak

Russia's revenues from oil and gas sales will nearly double year-on-year to $14 billion in April 2024 thanks to rising prices, according to Reuters.

As the agency notes, these data highlight the difficulties faced by Western countries, which seek to limit the Kremlin's income and strangle its military machine.

Russia's war against Ukraine prompted the West to impose numerous sanctions aimed at limiting Russia's oil and gas revenues, which make up about a third of the country's federal budget. The measures also include restrictions on purchases of Russian oil, financial transactions, and a price cap of $60 per barrel.

Income calculations

Russia's projected April percentage jump in oil revenues exceeds the 30% growth expected for all of 2024.

Reuters calculations show Russia's projected April oil and gas revenues will be 1.292 trillion rubles ($14 billion), up from 648 billion rubles in April 2023 and slightly below 1.308 trillion rubles last month.

Reuters calculations are based on data from industry sources and official statistics on the production, processing, and supply of oil and gas to domestic and international markets.

Revenues from the sale of oil and gas are crucial for Russia's commodity economy and for financing the war against Ukraine.

Russia's budget deficit shrank to 607 billion rubles or 0.3% of gross domestic product (GDP) in the first three months of the year, helped by the recovery of energy revenues.

In general, for 2024, the government of the Russian Federation budgeted federal revenues of 11.5 trillion rubles from the sale of oil and gas, which is 30% more than in 2023, and compensates for the 24% decline last year due to the decline in oil prices and the affected by gas export sanctions.

Western sanctions led to the fact that half of Russian exports of oil and petroleum products went to China in 2023, while India's share increased to 40%. Europe's share in oil exports from Russia fell tenfold - to approximately 4-5%.

Russia circumvents the $60 price ceiling and sells oil at a higher price with the help of a shadow fleet.