Russia’s oil export revenues have fallen to their lowest level since February, reaching $16.7 billion in June, according to the International Energy Agency (IEA). This represents a 1.2% decrease from the previous month, as reported by Bloomberg.
Amid Russia’s ongoing invasion of Ukraine, its fossil fuel profits fuel Putin’s war machine. The EU banned maritime transport of Russian crude oil and petroleum products starting December 2022, and February 2023, respectively. G7 finance ministers implemented a price cap on these products in September 2022 to cut Russia’s war funding. As a result, Russian oil production fell 11% in 2023. Recently, US officials proposed targeting aging oil tankers that circumvent Western sanctions, to further disrupt Russian oil deliveries.
The decline in revenue is attributed to slightly lower shipment volumes. The IEA’s monthly report, published on 11 July, indicates that Russian crude oil and petroleum product exports in June fell to 7.6 million barrels a day, down from 7.7 million barrels a day in May.
Despite the monthly decline, Russia’s oil export earnings have seen a significant year-on-year increase, jumping nearly 23% compared to June of the previous year.
Sanctioned Russian billionaires continue to profit despite restrictions
The average weighted price of Russian crude in June slightly increased to $70.39 per barrel from $70.05 in May. However, this price increase was not sufficient to offset the impact of lower export flows.
The oil industry remains a crucial source of revenue for the Russian budget, which has been burdened with higher military and social spending due to the ongoing invasion of Ukraine, now in its third year.
According to the Russian Finance Ministry’s data, oil taxes brought in approximately $6.7 billion for the Russian budget in June, almost 50% more than a year ago. However, compared to May, revenues declined by 6.6% due to a lower pricing of Urals, Russia’s key export blend.
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