Revenues from oil and gas transactions account for about a third of the Russian treasury. For a long time, President Putin could count on bubbling profits. However, current calculations show that revenue is falling dramatically.
According to the financial portal Bloomberg, Russia's income from the oil and gas business almost halved in February this year. Tax revenue fell by 46 percent compared to the previous year. The Russian state earned only 512 billion rubles, the equivalent of almost seven billion US dollars, in the past month.
According to Bloomberg calculations, revenues from crude oil and petroleum products, which accounted for more than two-thirds last month, fell by 48 percent to 361 billion rubles. According to official information from Moscow, the price of Russian oil fell to below 50 US dollars per barrel (159 liters) in January. "The average price of Urals oil in January 2023 was $49.48 per barrel," Russia's Finance Ministry said in early February. This corresponds to almost 60 percent of the price in the same month last year.
In December, the EU and its G7 partners agreed on a price cap for Russian oil in order to minimize Kremlin chief Vladimir Putin's income from his war of aggression against Ukraine, which began almost a year ago. The price cap on Russian oil set by western industrialized countries is currently 60 dollars per barrel. The 50 dollars are still far below - also because Moscow grants its allies generous discounts. According to the daily newspaper Kommersant, such an oil price is a problem for the Russian budget. Because for the current year, the government has expected an average price of 70 dollars per barrel.
The days of flourishing gas trade between Russia and Europe also seem to be over once and for all. Western sanctions, the throttling of gas supplies by Russia and finally the damage to the Nord Stream gas pipelines: the billion-dollar business and the Kremlin's most important source of income have collapsed drastically. According to Bloomberg, revenues from the gas business fell by almost 42 percent to 161 billion rubles. Moscow stopped deliveries via the Baltic Sea pipeline Nord Stream 1 in September due to alleged technical problems.
Energy revenues account for about a third of Russia's state budget, which is under more pressure than ever given the rising cost of financing the war in Ukraine.
