"In late October, the US Treasury announced sanctions on Lukoil and Rosneft, Russia's biggest oil producers. The changes sent seaborne shipments from these companies down 42%, to about 1.7 million barrels a day. However, Russia's total oil exports slipped by just 100,000 barrels per day after the sanctions came into effect. This means that Russia rapidly rerouted shipments through smaller, non-sanctioned producers."
"Even so, the steady flow of barrels masks a far deeper financial squeeze. Russia's oil export revenues, measured in rubles, have plunged 50% this year, tumbling from the equivalent of 7.6% of GDP to just 3.7%, according to Goldman's analysis. The bank's report landed just as the Russian Finance Ministry disclosed that oil and gas tax revenues fell 34% from a year ago, underscoring the fiscal strain."
"The revenue collapse stems from a combination of a stronger ruble and sagging Brent prices, widening discounts on Russian crude as buyers demand steeper price cuts to offset the risk of sanctions. The divergence between stable exports and collapsing revenue has major implications for Moscow's ability to finance its war in Ukraine. Oil and gas revenues have historically accounted for more than a third of Russia's federal budget, and energy remains one of the country's most significant sources of funding."
US Treasury sanctions targeted Lukoil and Rosneft in late October, cutting seaborne shipments from those firms by 42% to about 1.7 million barrels a day. Total Russian oil exports fell by only roughly 100,000 barrels per day as cargoes were rerouted through smaller, non-sanctioned producers. Oil export revenues measured in rubles plunged 50% this year, declining from 7.6% of GDP to 3.7%, and oil and gas tax revenues dropped 34% year-on-year. The revenue collapse reflects a stronger ruble, lower Brent prices, and wider discounts demanded by buyers, creating fiscal strain and jeopardizing financing for the war in Ukraine.
Read at Business Insider
Unable to calculate read time
Collection
[
|
...
]