Russian oil, gas revenues in 2023 equal to pre-war level, claims govt
Government revenues from Russia’s oil and gas industry totalled around the same amount in 2023 as in 2021, according to a finance ministry projection, despite Western efforts to curb Moscow’s funding through the use of sanctions.
In an interview with the Rossiya 24 television channel on December 28, deputy prime minister Alexander Novak noted that the finance ministry projected revenues to total around 9 trillion rubles ($101bn) for 2023. In contrast, revenues came to 9.03 trillion in 2021, before leaping to 11.6 trillion rubles in 2022 on the back of soaring oil and gas prices.
They amounted to 8.226bn rubles in the first 11 months of 2023, according to finance ministry data, representing a 23% decline year/year. The ministry is yet to officially release data for the full year.
Russia has cut its gas pipeline supply to Europe, its main export market, by 80-85% since Moscow invaded Ukraine in February 2022. The move was widely perceived as an attempt by the Kremlin to destablise European economies, to put pressure on Western leaders to curb their support for Ukraine.
However, the impact of this loss of sales volumes was offset by much higher natural gas prices. The global energy crisis, coupled with steep Russian cuts to supply to Europe, saw TTF contracts briefly reach almost $4,000/’000 m3 in August 2022. But today, front-month contracts at the Dutch gas hub are trading at closer to $350/’000 m3.
To a lesser extent, Russia has been able to offset the loss of European sales with increased exports to China, Turkey and former Soviet Union markets.
Regarding oil and petroleum products, the EU and G7 imposed embargoes on Russian supplies in late 2022 and early 2023, but the country’s exporters have been able to divert most trade to other markets – most notably India and China. Western governments also imposed price caps on Russian products, barring Western companies from providing transport, insurance, financing and other services for Russian cargoes if they are sold at prices above the set thresholds. But there is growing evidence that these restrictions are being violated, and Russia has found ways of sidestepping them, through the use of a so-called “shadow fleet” of tankers and misleading pricing methods, among other techniques.
Western leaders are currently looking at ways of improving compliance and strengthening the effectiveness of the sanctions.