Russia's strategic commodity sales 'hurt'; Moscow is starting a financial 'war'

Lower oil prices and subsidies for domestic refineries caused Russia's oil revenues to fall 29% year-on-year in October 2024.

Russia's oil revenues are also affected by government subsidies to domestic refineries. (Source: India Post English)

In October 2024, international oil prices and the price of Urals oil, Russia's main oil grade, decreased compared to the same period in 2023.

This situation has eroded Moscow's revenue as the average price of Urals oil is at $63.57/barrel, significantly lower than the $83.18/barrel in October 2023.

Russia's state oil revenues have also been hit by government subsidies to domestic refineries, which encourage them to sell refined oil products domestically rather than exporting them at higher prices.

Last year, the Russian government did not have this expenditure.

As a result, Bloomberg estimates that the Russian budget received a total of $10.8 billion from oil in October 2024, down 29% from the same period in 2023.

Total budget revenue from oil and natural gas also fell about 25% to $12.4 billion.

Revenue from oil and gas sales is the most important source of money for the Kremlin budget.

The government has signaled it will seek to reduce its dependence on oil to minimize the impact of volatile oil and gas prices on budget revenues.

Last month, Russian Finance Minister Anton Siluanov said that oil and gas revenues accounted for 35-40% of the country's total budget revenues a few years ago.

This figure is expected to fall to 27% next year and 23% by 2027.

In another development, Russian Finance Minister Anton Siluanov recently said that Moscow is waging financial "wars" with unfriendly countries that have imposed sanctions on Russia.

After the Russia-Ukraine conflict broke out in February 2022, the US and the European Union (EU) imposed a series of sanctions on Russia, including removing major Russian banks from the SWIFT international payment system.

Source: https://baoquocte.vn/doanh-thu-mat-hang-chien-luoc-cua-nga-bi-thuong-moscow-dang-bat-dau-cuoc-chien-tai-chinh-292832.html