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    Russia’s Oil & Gas Revenues Hit Lowest Level Since August 2020 Due to Sanctions


    Data from the Finance Ministry of Russia showed that in January, the country's budget revenues from oil and gas had dropped to their lowest level since August of 2020 due to the influence of Western sanctions on its most lucrative export.[0] Last month, the federal budget registered a deficit of 1.76 trillion rubles ($24.78 billion) due to decreased energy sales and increased spending.[1]

    In January, Russia's Urals crude was sold for $49.48 per barrel, which was a 42% decrease from the same time the year prior. This drop in price was further exacerbated by climbing shipping expenses, as reported by Anadolu Agency, citing information from the Russian Finance Ministry.[2]

    According to its preliminary assessment of the budget, the ministry stated that non-oil and gas revenues declined as a result of alterations in value-added tax regulations and VAT refunds. In January, non-energy revenues saw a decrease of 28%, according to the ministry, which attributed this partially to a modification in the regulations for the value added tax.

    The sanctions on Russian oil and gas exports imposed by the EU and G7 nations have led to a stark decrease in Russian revenue from energy sales. The EU ban on most seaborne imports of crude and refined fuels as well as the G-7 price cap of $60 per barrel led to Urals crude trading at a significant discounts to benchmark prices. 

    The cessation of most natural gas exports to Europe by Moscow has had a detrimental effect on revenues. The Finance Ministry recently declared that they will be offering more than $2 billion worth of foreign currency from February 7 to March 6, which is almost three times the amount (54.5 billion rubles) that was sold in the previous month.[3]

    The Kremlin has declared that they will supply oil to countries that abide by the quota, but due to the restriction and a decrease in demand from the world's slowing economy, buyers in China, India, and other places have been able to purchase Russian oil at greatly reduced prices, impacting the Russian government's revenue.[4] In January, government spending rose by 58.7% compared to the same time the previous year, totaling 3.12 trillion rubles.[5] According to the Financial Times, Russia's defense spending is set to increase to 3.5 trillion rubles in 2023, resulting in a rise in expenditures, though the plans remain largely classified.[5]

    Due to the US and European sanctions freezing most of its international reserves, the yuan is the only asset Russia can access from its wealth fund to fund its spending.[6]

    0. “Russian energy tax revenue drops dramatically due to Western sanctions” Offshore Technology, 7 Feb. 2023,

    1. “Russian Budget Deficit Swells on Increased War Spending, Falling Energy Revenues” The Moscow Times, 7 Feb. 2023,

    2. “Russian Urals Traded At $49.48 in January, But The Kremlin Isn't Worried”, 1 Feb. 2023,

    3. “Russia to Boost Currency Sales to Offset Energy Revenue Drop” Regina Leader Post, 3 Feb. 2023,

    4. “Putin Faces Mountain of Debt as Ukraine War Puts Economy Back 25 Years” Newsweek, 7 Feb. 2023,

    5. “Russia oil and gas revenue crashes nearly 50%, widening budget deficit” Markets Insider, 6 Feb. 2023,

    6. “Russia to Boost Currency Sales to Offset Energy Revenue Drop (2)” Bloomberg Tax, 3 Feb. 2023,

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