Russia expects to receive as much as $6.37 billion in additional oil and gas revenues in June, its finance ministry said on Friday, as energy commodity prices have rallied since the Russian invasion of Ukraine.
According to estimates released on Friday by the Finance Ministry, Russia expects its additional revenue from oil and gas sales to be 393 billion rubles, or $6.37 billion, this month. Additional budget revenues are expected at $10.66 billion (656.6 billion rubles) for the months of May and June because of the higher-than-expected oil prices, Russia said.
Russia has been benefiting from the energy commodities rally, which intensified after the invasion of Ukraine. Despite Western sanctions designed to hurt Russia’s oil revenues and war chest, Moscow is still getting a lot of additional billions of U.S. dollars in oil and gas revenues.
So far, Russian oil exports haven’t fallen off a cliff, while it continues to sell natural gas to most of the EU, including to some of the biggest consumers and economies such as Germany and Italy.
However, under the sixth sanctions package from the EU, Russian oil exports could drop further as the EU is currently endorsing a ban on Russian oil imports via sea that also aims to cut Russia off the tanker insurance market and limit its ability to redirect seaborne oil exports to third countries.
Russia said this week its oil production would rebound in June and expressed confidence it would be able to find new markets for its oil.
Russia is boosting exports to India and China, but analysts doubt the Asian market would be able to absorb all the 4 million bpd of oil Russia was sending to Europe before the war.
Russia could see between 2 million bpd and 3 million bpd of its oil exports—or about a quarter of the country’s oil production—disappear from the global market by end-2022, Fitch Ratings said on Wednesday.
“We believe that redirecting of all Russian oil and products volumes may not be possible due to infrastructural limitations, buyers’ self-restrictions and logistical complications, such as potential restrictions on providing insurance for cargos carrying Russian oil,” Fitch added.
By Tsvetana Paraskova for Oilprice.com
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