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Russia’s oil export revenues slump to six-month low in December 2023

In December 2023, Russia’s oil export revenues amounted to $14.4 billion, which is the lowest value since last June, according to the monthly report of the International Energy Agency. Compared to November, the revenues dipped by $1.4 – while showing a $0.4-billion growth compared to December 2022.

The observed slump occurred despite Russia having upped its oil exports by almost 500,000 barrels per day to 7.8 million barrels per day, which is the highest volume since last March. In particular, crude oil exports grew by 240,000 barrels, and oil product flow increased by 260,000 barrels. A decrease in revenues against the backdrop of increased exports is the result of growing Russian oil price discounts and shrinking benchmark oil prices.

According to the IEA's estimates as cited by Bloomberg, the price for Urals oil dropped below $60 per barrel, by $10 compared to the November price. The increase in discounts to Brent crude accounted for a third of the Urals price drop, with the remainder a consequence of the sharp decline in global oil prices.

At the London-based ICE exchange, Brent crude with delivery in March was priced below $78 per barrel on November 18, while February futures for WTI crude traded below $73 per barrel.

In late November 2023, Russia’s Deputy Prime Minister Alexander Novak announced plans to further the voluntary reduction of oil exports to 500,000 barrels per day (300,000 barrels of crude oil and 200,000 barrels of oil products) by the end of the first quarter of 2024. The cut in exports will be calculated based on May and June averages.

According to the Accounts Chamber, oil and gas revenues accounted for 28.3% of all revenues in Russia’s federal budget from January to September 2023, with their share dropping almost 15 p.p. year-on-year. The contribution of oil and gas revenues to total federal budget revenues has become the lowest since at least 2007. The Accounts Chamber linked this trend to a slump in the average price for Urals oil and natural gas as well as the tax maneuver in oil and gas. As the Russian Ministry of Finance reports, oil and gas revenues of the federal budget had plunged by 24% year-on-year to $99.2 billion by the end of 2023.

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