Russian oil and gas revenues rise 50% in June

In a significant rebound, Russia’s oil and gas revenue in June is expected to rise more than 50% year-on-year, reaching $9.4 billion, according to new Reuters calculations.

This increase comes after a reduction in refinery subsidies, highlighting Russia’s resistance to Western sanctions targeting its energy sector.

The redirection of oil exports to India and China has played a crucial role in maintaining financial flows, essential for a budget pressured by increased defense spending. Despite the ongoing conflict in Ukraine and subsequent economic sanctions, Moscow’s ability to adapt its export strategies has been critical.

The projected increase in June revenues, up from 794 billion rubles in May and 529 billion rubles in June 2023, underscores the strength of Russia’s energy sector.

The report scheduled by the Ministry of Finance on July 3 will provide detailed information on these financial trends. The 2024 federal budget projects that oil and gas revenue will increase by 21% from 2023, after a year marked by falling oil prices and reduced gas exports.

Despite economic strains, Russia has continued to maintain its defense spending, resulting in consecutive annual budget deficits of more than 3 trillion rubles, approximately 2% of GDP. These deficits have been managed through domestic borrowing and the National Wealth Fund.

President Vladimir Putin has emphasized the country’s economic growth, which stood at 3.6% in 2023 after a 1.2% contraction in 2022. However, local economists warn that this growth is largely driven by increased production in the defense sector, which offers limited benefits to the population.

As Russia faces economic challenges, the resilience of its oil and gas sector remains an important factor in its financial stability.