Russia's oil & gas revenues are expected to drop by half in December, reaching their lowest level since August 2020

Calculations showed that the Russian state's oil and gas revenue is likely to drop by almost half in December, compared to a year earlier. This will be due to lower crude prices as well as a stronger rouble.

The Finance Ministry had forecast 8.65 trillion roubles for the year. Calculations based on official statistics and data from industry sources suggest that the total revenue will fall by nearly a quarter, to 8.44 trillion.

In August 2020, the month when oil prices plummeted during the COVID-19 pandemic, Russia reported its lowest monthly oil revenues.

The Kremlin's main source of income is oil and gas revenues, which account for a quarter the total federal budget. This decline is a blow to Russia which has increased its defence and security expenditures since it launched its military campaign in Ukraine?in February 2022.

Ukraine and its Western supporters have said repeatedly that they want to force Russia to end its war by undermining the economy of Russia, which is the world's second largest oil exporter.

The Finance Ministry had originally expected oil and gas revenues of 10.94 trillion Russian roubles this year. However, it revised its estimate in October in order to take into account the declining global oil prices. These have been declining due to fears over an oil glut.

The price of Russian oil, measured in roubles for tax purposes, fell 17.1% between October and November to 3,605 Rubles per barrel.

On January 14, the Finance Ministry will release its estimates of oil and gas revenues for December.

(source: Reuters)