Russia’s oil revenues surged by almost 50% last month compared to a year ago, as crude prices soared and the country continued to adapt to Western sanctions, Bloomberg reported on Thursday.
Moscow’s income from crude sales rose despite international pressure and forecasts of a deficit. Oil-related taxes climbed to 632.5 billion rubles ($7.1 billion) in May, according to Bloomberg calculations based on Russian Finance Ministry data.
Total oil and gas profits grew by 39% to 793.7 billion rubles ($8.9 billion), following progressively increasing prices on Russia’s flagship Urals crude, the country’s key export blend, data showed.
The ministry calculated May taxes based on the Urals price of $74.98 a barrel, up from $58.63 a year ago. Urals’ discount to the global Brent benchmark has declined, despite the $60 per-barrel price cap on Russian oil introduced by the G7 and EU.
The mechanism, along with the EU embargo on Russian seaborne oil, was put in place to reduce Moscow’s export revenues. The sanctions were imposed in December 2022, and in February 2023 were followed by similar restrictions on exports of Russian petroleum products.
In response, Russia has rerouted most of its energy exports to Asia – particularly to India and China, where the country’s oil has been sold well above the West’s price cap.
In May, the Finance Ministry issued a preliminary report on oil and gas revenues to the federal budget which showed that proceeds from energy exports between January and April soared to 11.68 billion rubles ($131.2 million) – a 50.1% rise compared to the same period in 2023.
However, even with an increase in energy profits, the Finance Ministry has proposed to lower the expectations for oil and gas earnings this year to 10.99 trillion rubles ($123.4 billion) from an earlier estimate of 11.5 trillion rubles ($129.2 billion), according to ministry data.
The downward revision comes as Russia expects oil to trade at about $65 per barrel this year compared to a previous projection of $71.30.