Russia’s Oil And Gas Revenues Drop In June

Oil and gas revenues for the Russian budget slumped to $5.8 billion (528.6 billion Russian rubles) in June, down by 26.4% from the same month last year, data from Russia’s Finance Ministry showed on Wednesday.

Compared to May 2023, oil and gas budget revenues for Russia also dropped in June, by 7.4% from $6.3 billion (570.7 billion rubles) in the previous month, the data showed. 

Earlier this week, the ministry said that the average price of Russia’s flagship Urals crude grade averaged $52.17 per barrel between January and June 2023, compared to a Urals average price of $84.09 a barrel for the same period of 2022. In June alone, the average Urals price was $55.28 per barrel, lower than the average $87.25 a barrel price in June 2022.

Russian export revenues from oil and gas have fallen in the past two months, as has Russia’s oil and gas tax collection, which dropped by 36% in May.

Russia’s estimated export revenues from crude oil and oil products fell by $1.4 billion to $13.3 billion in May, down by 36% year over year, amid lower average Russian crude prices, the International Energy Agency (IEA) said last month in its Oil Market Report for June.

In the past two days, Russian crude oil prices jumped after Moscow said on Monday it would reduce its oil exports by 500,000 barrels per day (bpd) in August.

The price of Russian ESPO crude, which goes to China, rose to the highest in seven months as Chinese buyers rushed to buy it ahead of the announced cut in exports next month.

Per Reuters, ESPO is currently trading at a $4 per-barrel discount to Brent crude, up from a $6 a barrel discount before the announcement of the Russian cut in exports.

The Russian announcement came minutes after Saudi Arabia said it would extend its unilateral oil production cut of 1 million bpd into August.