Russia earned around $20 billion from oil exports in May, resuming pre-war levels in a setback to Western efforts to suppress its economy following the war in Ukraine.

Yields from shipping crude and oil products increased 11% from the previous month despite a 3% drop in exports, according to the International Energy Agency’s monthly report.

Western countries have imposed batches of sanctions on Russian oil, gas, currency, and more. The United States has banned Russian fuel imports, while the United Kingdom and the European Union have agreed to phase out their use.

Conversely, Asian countries such as China and India have increased their imports of Russian fuel, lured by record discounts of more than 30% on Brent crude.

Russia has been able to absorb the discounts caused by the rise in the price of Brent crude. Urals, Russia's main export blend, averaged $78.81 per barrel in May, up nearly 12% from the previous month.

Oil prices have risen by 70% in the last year to around $121 per barrel. Although the price has fallen this week due to concerns that the US Federal Reserve will surprise markets with a higher-than-expected interest rate hike.

The US government appears to be following in the footsteps of UK chancellor Rishi Sunak by instituting a windfall tax on excessive oil company profits.

No relief in sight for soaring oil and gas prices

Last week, Goldman Sachs predicted that oil prices could reach $140 this summer. Meanwhile, Britons are facing record petrol and diesel prices due to a weakening pound and a shortage of refining capacity.

Wholesale gas prices are also rising as a result of an extended outage at the Freeport liquefied natural gas (LNG) plant following a fire at the US facility, as well as a reduction in supplies via the Russian Nord Stream 1 pipeline.

The supply crisis for European nations was exacerbated when Russia announced a 40 percent reduction in capacity on the massive Nord Stream 1 pipeline to Germany. Moscow has reacted following delays in the return of gas turbines to Russia's Gazprom, which Siemens Energy claimed were hampered by Canadian sanctions following maintenance in Montreal.

Analysts at Jefferies warned that problems at Shell's Prelude liquefied natural gas facility off the coast of Western Australia could also have an impact on volumes. Workers began weeks of strike action last week, and regulators' investigation into the site's smoke detectors may also have an impact on supply.

Fatih Birol, the head of the International Energy Agency, described the failure of governments and businesses to accelerate energy efficiency efforts as "inexplicable" last week.

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