The revenues Russia made from oil and gas exports slumped to only $18.5 billion in January, a 38 percent plunge, as a result of sanctions enacted by the European Union and Group of 7 nations as well as their price regulations.
In the same period in 2022, Russia’s income amounted to 30 billion dollars, according to the International Energy Agency (IEA) report.
According to IEA Executive Director Fatih Birol, Western measures against Russian energy exports achieved the goal of stabilizing the oil market and reducing Russia’s income, reports Kommersant. Birol has predicted that the decrease in oil and gas earnings will be more dramatic in the near future. The decline in income in the medium term will be even greater due to the lack of access to technology and investments,” said Birol.
The restrictions on Russian oil and gas were enacted on December 5 of last year, when the maximum allowable cost of oil from Russia was fixed at $60 per barrel. From February 5, 2023, the European embargo on Russian oil products is also in force. To “restore market relations,” Russia announced plans on February 10 to cut oil production in March by 500,000 barrels per day.
Russia‘s $172 million daily loss due to oil price cap
According to the Helsinki Center for Energy and Clean Air Research, the oil price cap costs Russia $172 million daily. Due to the decrease in the cost of Russian Ural oil, Russia saw a budget deficit of approximately $24 billion in January. In February, Russian oil companies increased their average daily oil production by about two percent compared to January.
Russia Today reported on Wednesday that the Ministry of Finance of Russia announced the average price of Ural oil in February to be 49.56 dollars per barrel. The average price of the same oil in January was $49.48 per barrel. Earlier, First Deputy Minister of Energy Pavel Sorokin said that Russia does not plan to sell oil at any price because of the sales volume.