Russia's oil revenues on the rise in defiance of Western sanctions
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The generated profit from oil and gas sales from the first half of 2024 is expected to reach 10.99 trillion rubles ($125 billion) this year.
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Vladimir Putin opens a throttle for the Russia-China oil pipeline, undated. (AFP)
Russia’s oil revenue exports surged by almost 50% in June 2024 compared to 2023 due to the country’s flagship Urals adaptation to Western sanctions, Bloomberg reported on Wednesday.
Last month, Moscow's crude oil sales revenues saw a significant increase. Oil-related taxes reached 590.6 billion rubles ($6.7 billion), up from 402.8 billion rubles ($4.5 billion) in June 2023, according to Bloomberg’s calculations, based on the Russian Finance Ministry's financial data.
The figures revealed a 41% increase in the total oil and gas profits to 746.6 billion rubles ($8.4 billion), attributed to higher prices for Russia’s key export Urals blend. The ministry calculated June taxes based on the Urals price of $67.37 a barrel, up from $53.50 a year ago.
The imposition of a price cap and embargo on Russian oil by Western governments aimed to collapse the country’s economy, while also allowing Russian crude oil to flow into the international markets.
Russia retaliated to the West’s sanctions by redirecting most of its energy exports to Asia, selling well above the imposed price cap, primarily in India and China.
The financial report also revealed that budget revenues from Russia's oil and gas sectors experienced a remarkable surge of 73.5% from January to May this year, compared to the first five months of 2023. The generated profit from oil and gas sales during this period totaled 4.95 trillion rubles ($55.7 billion), and it is expected to reach 10.99 trillion rubles ($125 billion) this year.
Sanctions on Russian LNG gas
The European Union imposed a new set of sanctions against Russia on June 24, specifically targeting supplies of liquefied natural gas (LNG). This comes as several member states continue to purchase LNG from Russia, despite the ongoing conflict in Ukraine.
The new restrictions will also focus on tankers transporting Russian oil and will expand the EU blacklist to include over 40 individuals and organizations.
Dutch Foreign Minister Hanke Bruins Slot stated that the sanctions aimed to prevent Russia's "shadow fleet" from accessing European ports and services.
According to the Financial Times, the new package will prohibit Russian tankers from using EU ports to transfer cargo between larger and smaller tankers destined for third countries, among other measures, but does not include a ban on EU imports.
