Russia's oil and gas revenues: Drastic slump
Falling prices and sanctions weigh on Russia's most important source of finance: oil and gas industry faces challenges

Russia's oil and gas industry, which serves as the country's main source of financing, is experiencing a drastic slump in revenues. This is mainly due to lower prices for raw materials on the world market and the EU embargo and price cap. In addition, Russia is forced to sell its oil at significantly reduced prices due to sanctions imposed by Western countries. According to the Finance Ministry in Moscow, revenues fell 26 percent year-on-year to just under 5.4 billion euros.
The average price for Russia's main crude, Urals, was $52.17 per barrel between January and June 2023, down from $84.09 in the same period last year. A barrel of Urals is currently about $27 cheaper than North Sea Brent. Before the Ukraine conflict, the price difference between the two grades was less than a dollar per barrel.
Oil and gas revenues continue to contribute about one-third of Russia's budget revenues and are essential for financing the war against Ukraine. However, dependence on these revenues is a risk to the Russian economy, especially given the current slumps. The devastation caused by the Ukraine conflict requires extensive reconstruction efforts to rebuild cities, infrastructure and entire industries.
