Tax revenues from oil and natural gas production in Russia have decreased to 5 trillion and 470 billion rubles (equivalent to 64 billion and 430 million dollars) in the first nine months of this year. This figure was 6 trillion and 10 billion rubles in the same period last year, reflecting a 17% decrease in revenues.
Factors Affecting Revenue Decline
This sector accounts for about 20% of Russia's tax revenues. Disruptions in production and exports due to military conflicts between Moscow and Kyiv, as well as the negative impact of the ruble's appreciation on revenues, are among the main factors contributing to this decline. It is expected that Russia's budget will face a deficit equivalent to 3% of GDP by 2026, which is double the planned figure.
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Oil Price Fluctuations and Their Effects
According to data from the London Stock Exchange Group (LSEG), the price of Russia's Urals crude oil surpassed $92 per barrel in late September. This figure is twice the price before the war began and also twice the ceiling price of $44.10 set by the West. The price of Urals crude oil for delivery on board (FOB) from the Primorsk port in the Baltic Sea reached about $45 per barrel before the war.
LSEG data shows that the price of Urals oil reached $113.89 per barrel on April 8, the highest level since 2013. This price increase reflects rising prices in cash markets due to supply disruptions in the Middle East. However, the decline in Russian oil production has neutralized the impact of rising prices, and it is expected that the country will reduce its oil production and export outlook for this year to the lowest level in 17 years.
Reduced loading at the Novorossiysk port in the Black Sea is also a factor contributing to the rise in Urals oil prices. According to traders, oil exports from this port are being conducted at below-normal capacity due to security risks and a shortage of tankers. Additionally, damage to Russian oil refineries due to drone attacks from Ukraine has led to reduced production and fuel shortages across the country.
Finally, government data shows that the average price of Russian oil for tax purposes from January to August reached $66.70 per barrel, which indicates a lower increase compared to the price of $59.12 in the same period last year.
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