Photo: depositphotos
In April, the average price of Russian oil fell to $55.6 per barrel, falling below the established limit of the G7 countries. This was one of the reasons for the Kremlin’s record decline in oil revenues – only $13.2 billion, the lowest in almost two years, Bloomberg reports, citing data from the International Energy Agency (IEA).
What happened:
- Global oil prices fell and demand declined, in part due to economic uncertainty, a slowdown in China, and increased supply from Iran.
- Since the beginning of the year, Brent has fallen by more than 14%.
- The price of Russian oil has returned to below the G7 cap ($60 per barrel), reducing the Kremlin’s access to foreign currency.
“Increased trade uncertainty is expected to have a negative impact on the global economy and, consequently, on oil demand,” the IEA report said.
How it hit Russia:
- Russia’s budget is particularly dependent on energy, with oil and gas accounting for more than 30% of revenues.
- In April, Russia’s budget deficit increased, making it harder to finance the war against Ukraine.
- Despite the decline in profits, oil exports from Russia increased to 7.55 million barrels per day, and supplies of premium ESPO blend reached record levels.
Total oil production in Russia in April was 9.3 million barrels per day. This was partly due to the resumption of refinery operations after drone attacks.
