Russia's budget revenues from oil and gas fell 35% year-on-year in May

The Finance Ministry reported on Wednesday that Russia's oil revenue fell by 35% to 512.7 billion roubles (about $6.55 billion) in May compared to the same month a previous year. This would make Russia more resistant against further OPEC+ output increases.

The revenue also dropped by 53% compared to April, as the global oil price declined and the rouble strengthened. Revenue was expected to be 520 billion Russian roubles.

The Kremlin's most important cash source has been oil and gas revenues, which have accounted for between a quarter and half of the total federal budget revenue over the last decade.

Eight key OPEC+ Members agreed on Saturday to increase production by 411,000 barrels a day in July after agreeing to the same size increases in May and in June. The group is unwinding voluntary reductions put in place to support the market over the last 5 years.

Four OPEC+ sources familiar with the discussions said that Saudi Arabia and Russia were forced to compromise over OPEC+ policy. Riyadh wanted to increase oil production while Moscow wanted to take a pause.

The oil price drop has been painful for Russia. It had a budgetary deficit of 3.2 trillion Russian roubles or 1.5% in the first quarter of this year.

The Russian Finance Ministry has raised its estimate of the budget deficit for 2025 to 1.7% from 0.5%. This is after it reduced the forecasted energy revenues by 24%, due to the expectation of a prolonged low oil price period.

The budget proceeds from oil-and-gas sales dropped by 14.4% from January to May compared with the same period last year, reaching 4.24 trillion rubles. This was revealed on Wednesday in data from the Finance Ministry.

(source: Reuters)