Russia is losing 500 million in oil and gas revenues daily due to sanctions - Deutsche Bank

Compared to the levels before the invasion of Ukraine, the Russian economy's oil and gas export revenues have decreased by $500 million a day, Deutsche Bank analysts have calculated.

The inflow of oil revenues, which amounted to $500-600 million daily, fell to $300 million a day along with prices for Russian Urals, which oil producers sell at discounts of more than 40% to Brent.

Amid Western sanctions, which include an EU embargo and price ceilings from the G7 countries, the cost of Russian-origin oil has dropped by almost a third. According to the Ministry of Finance, the average price of Urals dropped to $50 per barrel in January and December, although it was $79.5 in October and over $80 in the summer months.

The gas revenues of the Russian economy fell significantly. Last year, the physical volume of supplies to Europe dropped to its lowest level since the late 1980s: only 500 million cubic meters per week out of 2.5 billion cubic meters.

As a result, Russia is earning $50 million a day on gas exports, compared to an average of $300 million for the period from August 2021 to August 2022, according to Deutsche Bank calculations.

"The era of super-income in the oil and gas market is over for Russia," says Janis Kluge, an economist at the German Institute for International and Security Affairs. "This poses a threat to the budget, which last year had a 3.3 trillion ruble deficit, and this year it is set to have a 3 trillion ruble hole.

At the beginning of 2023, according to the Russian Ministry of Finance, oil and gas revenues fell by 47% year-on-year, non-oil and gas revenues by 28%, and the monthly deficit of almost 1.8 trillion rubles was a record for January in the last 25 years.

Background. As reported, the Russian budget revenues from exports have fallen by almost 4 times.