Report: Russia Doubles Oil Revenue Year-on-Year in April

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Sabir Mazhar/Anadolu Agency via Getty Images

A report published on Monday by Bloomberg, citing the Russian Finance Ministry, found that Moscow generated over double the amount of revenue in April 2024 from oil sales and taxes compared to April 2023.

The report suggested that part of the increase was the result of the value of the national currency, the ruble, declining significantly, but an increase in oil prices and Russia’s continued ability to sell oil outside of Europe, to friendly countries such as India and China, also contributed to the change.

Russia is currently under a broad sanctions regime implemented by the United States and much of Western Europe intended to thin the country’s pockets in the aftermath of the 2022 decision to launch a full-scale invasion against Ukraine. The European Union, formerly one of Russia’s top clients for oil, stopped importing Russian crude via sea in late 2022 and shortly thereafter also halted imports of refined crude. The leftist administration of American President Joe Biden also spearheaded an effort to impose price caps on Russian oil to limit profits.

In response, Russia greatly expanded exports to BRICS nation allies, most prominently China and India. Neither China nor India boast significant oil reserves at home but have developed significant refining capacity to meet demand, making them eager buyers of reduced-price Russian oil.

The Bloomberg report focused on revenue the Russian government generated in April on oil taxes.

“Proceeds for the Russian budget from oil-related taxes jumped to 1.053 trillion rubles ($11.5 billion) last month compared to nearly 497 billion rubles in April 2023,” the report read, “according to Bloomberg calculations based on Finance Ministry data. Total oil and gas revenues in April increased nearly 90% year-on-year, to 1.23 trillion rubles, according to the data.”

Bloomberg listed both “rising prices for Russia’s crude” and “a weaker ruble” as factors and dismissed the price caps a having limited effects on the price of oil, as Russia has been “deploying a shadow fleet of tankers and expanding the circle of non-western oil buyers” to avoid them.

Bloomberg predicted “Russia will collect around $126 billion in oil and gas tax revenue in 2024.”

The dramatic year-on-year increase in revenue appears to be in line with predictions prior to the publication of Finance Ministry statistics. The industry site recalled on Monday that Reuters had predicted “higher oil prices were expected to double Russia’s oil and gas revenues in April compared to the same month last year” before April had ended. It noted also that both oil and natural gas revenue had dropped in 2023 compared to the first year of the Ukraine war as “lower oil prices and reduced pipeline gas exports weighed on budget income from fossil fuels.”

The rising prices observed by multiple oil sources is largely driven by countries buying Russian oil in disregard of the G7 price cap, which commanded countries not to buy oil from Russia for more than $60 per barrel. As of mid-April, price tracking data showed many buyers were shelling an estimated $75 per barrel for Russian crude – and some more enthusiastic parties such as India were willing to purchase the oil at an even higher price.

Russian Deputy Prime Minister Alexander Novak credited the country’s relationships outside of Europe for buoying Moscow’s oil profits in remarks in December.

“We previously supplied a total of 40 to 45 percent of oil and oil products to Europe. This year, we expect the figure not to exceed four to five percent of total exports,” Novak explained at the time. “China — whose share (of oil exports) has grown to 45-50 percent — and India have become our main partners in the current situation.”

Indian leaders have aggressively defended their decision to continue importing Russian oil, insisting buying cheaper crude oil to refine locally and sell abroad is in the best interests of the Indian people. Reports began surfacing in February 2023, a year after the initial full-scale Ukraine invasion, that India was profiting handsomely from selling refined likely Russian oil to America and Europe, undermining the objective of the Western sanctions.

“There is no moral conflict,” Petroleum and Natural Gas Minister Hardeep Singh Puri asserted in late 2022, asked about buying Russian oil. “We don’t buy from X or Y. We buy whatever is available. I don’t do the buying. It’s the oil companies who do the buying.”

That same year, challenged on the purchases, Indian External Affairs Minister S. Jaishankar accused Europe of hypocrisy for buying Russian natural gas while condemning Indian oil purchases.

 “If India buying Russian oil is funding the war — tell me, then, is buying Russian gas not funding the war?” he asked at an event in Slovakia. “It’s only Indian money and Russian oil coming to India funding the war, and not Russia’s gas coming to Europe, not funding? Let’s be a little more even-handed … Europe is buying oil, Europe is buying gas.”

The Indian newspaper Hindustan Times reported on Sunday that Russia has prepared to expand trade with India further through massive investments in Indian stocks and infrastructure projects, granting greater fluidity to Moscow with rupees.

“The two sides are still conducting most of their trade in their national currencies, with some payments for energy supplies being made in UAE dirhams,” the Hindustan Times reported. Avoiding the dollar limits the effect of Western sanctions on their trade. The newspaper noted that despite the potential limitations of using dollars, India has “been loath to make payments in the Chinese yuan.”

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