Forecast for 2023 is bleak
Russia earns significantly more from gas and oil
01/16/2023, 1:50 p.m
In response to the invasion of Ukraine, the West imposed harsh sanctions on Russia. However, the scarcity of raw materials is driving up prices, so that Russian income from oil and gas sales is rising significantly. But the joy in the Kremlin is unlikely to last long.
According to Moscow government figures, Russia’s income from the sale of gas and oil rose by almost a third last year despite Western sanctions. According to the Interfax agency, Russia’s Deputy Prime Minister Alexander Novak said that the corresponding budgetary revenues in 2022 would have grown by 28 percent or by 2.5 trillion rubles (around 31.6 billion euros at the end of 2022) compared to the previous year.
In the course of the Russian war of aggression against Ukraine, gas has not been pumped to Europe through the Baltic Sea pipeline Nord Stream 1 for months, and the Nord Stream 2 pipeline has never been put into operation. Against this background, the export of conventional natural gas has fallen, said Nowak. But the export of liquefied natural gas increased by eight percent to 46 billion cubic meters. Oil exports increased by 7 percent.
The EU oil price cap will start shortly before the end of the year
A key tool – the oil price cap introduced by the EU in early December – is unlikely to really show its effects until this year. The regulation is intended to force Russia to sell oil to buyers in other countries for a maximum of $60 per barrel (159 liters).
The Russian Treasury had communicated in the past weekthat it expects lost oil and gas revenues of 54.5 billion rubles (about 737 million euros) as early as January. Kremlin chief Vladimir Putin has in turn banned the sale of oil to countries that have decided on a price cap for the raw material. The ban comes into effect on February 1.