Even India and China, which had previously received double-digit discounts, began to lose interest in Russia’s oil.
Revenues of Russian oil and gas corporations in June dropped another 154 billion rubles, or 18%. And compared to the April record – more than double. On Wednesday, July 13, RosSMI reported.
It was noted that Russian government revenue was hit by a decline in oil purchases by India and China, gas cuts in European countries and a sharp strengthening of the ruble on the Moscow Exchange.
Thus, in June, the federal budget received the lowest amount of oil and gas revenues for the year – 717 billion rubles, which follows from the operational data of the Ministry of Finance.
In the first quarter, the budget earned an average of nearly a trillion rubles a month through the export of hydrocarbons, and since then the river of oil and gas rents has been shallow by nearly a quarter.
India and China, which are rescuing Russian oilmen from a boycott of oil traders and European consumers, have begun to lose interest in barrels from the Russian Federation, despite double-digit discounts. From 2.1 million barrels per day, Asian supplies fell to 1.9 million and continued to decline in July – 1.76 million barrels per day in the first week of the month, Bloomberg calculated.
Russia’s total exports of oil and oil products, according to the IEA, fell to 7.4 million barrels per day in June and became the lowest since August 2021.
The rapidly rising ruble, which in June for the first time in 7 years reached 50 per dollar, added a headache to the Ministry of Finance, which this year will have to index pensions and salaries to state employees, as well as reporting on measures to support the economic collapse.
In June, the dollar exchange rate fell by 10 rubles, and each ruble of such a collapse cost the budget 130 billion rubles in terms of annual revenue, Finance Minister Anton Siluanov told reporters.
Implementing the 2022 budget without a deficit is almost impossible, analysts at Raiffeisenbank warn: “Revenues will be under pressure from sanctions on exports and difficulties in the domestic economy.”
The Ministry of Finance is already launching a sequestration of almost all state programs and spending areas. Budget spending in 2023 is planned to decrease by 557 billion rubles, in a year – by another 539 billion rubles, in 2025 – by 534 billion rubles.
In particular, the program for the development of transportation infrastructure, which includes mega-projects for the construction of roads, high-speed highways and the development of a network of airports in the regions, will go under knife: it has decreased by 390 billion rubles in three years.
The state program for industrial development, according to the plan of the Ministry of Finance, will be reduced by 200 billion rubles, despite the loss of import supplies and announced plans to replace foreign goods of domestic production . Authorities plan to save 150 billion rubles on the state program “Scientific and Technological Development of Russia” over three years.
Next, the state program for the development of the annexed Crimea (-15.8 billion rubles), space spending (-21.4 billion rubles), state programs for the development of an innovative economy (-11.5 billion rubles) and support for agriculture (- 25 billion rubles) is reduced.
Russia had previously reportedly managed to avoid the worst recession scenario due to growing oil production and exports, weakening the impact of US and European sanctions in response to the war in Ukraine.
Western penalties. Experts about the consequences for the Russian Federation
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Source: korrespondent
I am David Wyatt, a professional writer and journalist for Buna Times. I specialize in the world section of news coverage, where I bring to light stories and issues that affect us globally. As a graduate of Journalism, I have always had the passion to spread knowledge through writing.