Russia's monthly oil revenue is set to reach its lowest level since August 2020

Calculations showed that the Russian state's oil and gas revenues in December are likely to drop by almost half from a year ago, reaching 410 billion Russian roubles (5.17 billion dollars), due to lower crude prices and stronger roubles. Calculations showed that oil and gas revenues are the Kremlin's main source of income. They account for a quarter the federal budget, which has been depleted by heavy defence and security expenditures since Russia started its military campaign against Ukraine in February 2022.

Calculations based on official statistics and data from the industry and the Finance Ministry indicate that the total revenue for the year will be 8.44 trillion Russian roubles. This is almost a quarter less than the 8.65 trillion roubles forecast by the Finance Ministry.

In August 2020, oil prices plummeted during the COVID-19 pandemic.

Sergei Konygin is a senior analyst with the Moscow-based investment firm Sinara. He said that state bonds will cover the budget deficit expected in December of 1.6 trillion Russian roubles, but it will be harder to do so by 2026.

He said that the budget for next year will be a challenge, as it was based on an optimistic scenario where oil would cost $59 per barrel and the rouble would cost 92 dollars.

The Russian oil used to calculate taxes decreased by 16.4% in November from October, to $44.87 per barrel. Meanwhile, the rouble increased to 80.35 dollars.

Konygin anticipates that the budget will be amended next spring, using the?National Wealth Fund' to reduce the deficit based on a lower oil price assumption.

Ukraine and its Western supporters have?repeatedly said they want to curtail Russian oil revenues to force the world's?second-largest exporter of oil to end the conflict in Ukraine.

The Finance Ministry initially anticipated 10.94 trillion roubles of oil and gas revenue this year, but revised downwards in October due to concerns about a global supply glut that has driven down oil prices.

The Finance Ministry is expected to publish its estimates of oil and gas revenues for December on 14th January. Reporting and Editing by Tomasz Janowski and David Goode

(source: Reuters)