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Russia's revenues surge amid rising global oil prices

Russia's revenues surge amid rising global oil prices Russia's revenues surge amid rising global oil prices (Getty Images)

Moscow reported a sharp increase in revenues in the first quarter of 2024, partially thanks to one-time tax payments and rising oil prices, reports Bloomberg.

According to the Ministry of Finance statement, Russia is experiencing "sustained positive dynamics" in money inflows to the federal budget. Revenues for the three months leading up to March amounted to 8.7 trillion rubles ($94 billion), an increase of 53.5% compared to the same period last year.

Non-energy sector inflows increased by 43% annually, reported the Ministry of Finance. Significant contributions came from “one-time nature” payments, including exit fees that foreign companies paid leaving Russia.

"Oil and gas revenue grew rapidly, increasing by almost 80% on last year, boosted by rising prices as well as a one-time tax payment from oil companies," the media says.

Russia's revenues surge amid rising global oil prices

Russian wartime budget income jumps (screenshot from Bloomberg)

Brent crude oil is trading above $90 per barrel today, nearly 20% higher since the beginning of the year over escalating geopolitical tensions and supply issues.

"In 2023, energy income decreased by 23.9% to 8.8 trillion rubles, despite the fact that budget revenue overall showed a slight increase compared with 2022. That was due in part to the European Union’s ban on most seaborne imports of crude and petroleum products from Russia, and the Group of Seven nations price caps, both intended to punish the country for its invasion of Ukraine," the report says.

Russia has been facing a budget deficit since late 2022 due to military expenditures related to President Vladimir Putin's invasion of Ukraine, putting a heavy burden on state finances.

Expenditures in the first quarter of 2024 increased by 20% compared to the previous year. The budget deficit for the period was 607 billion rubles, 1.5 trillion rubles less than at the end of the first quarter of 2023.

Record military budget

In 2023, Moscow spent over $100 billion on military purposes, nearly a third of its total expenditures.

In 2024, the Russian government intends to allocate nearly a third of all expenditures to maintain the army and the defense-industrial complex.