Russia's oil and gas revenues fell by 40% in January - IEA

Russia's oil and gas revenues fell by almost 40% year-on-year in January, Reuters reports, citing data from the International Energy Agency (IEA). Western sanctions have achieved their goal of stabilizing oil markets and reducing Moscow's oil and gas revenues, said Fatih Birol, the agency's executive director.

According to the IEA, Russia's revenues from oil and gas exports in January amounted to $18.5 billion, which is 38% less than in January last year ($30 billion).

The agency expects an even sharper drop in Russia's oil and gas revenues in the coming months. The decline will continue in the medium term due to the lack of access to technology and investment, Birol said.

The main goals of Western sanctions against Russian energy were to stabilize oil markets and reduce Moscow's revenues. On the one hand, in January, Russia recorded a record budget deficit since 1998, including due to a drop in oil and gas revenues. But on the other hand, the effectiveness of the sanctions is still in doubt, and several factors point to this.

First, more and more experts are saying that the Urals to Brent discount is not as great as it is commonly believed, and that the real prices of Russian oil exports are much higher (around $74).

Secondly, for the week of February 17-24, Russia's maritime oil exports rose to 3.63 million barrels per day. This is close to the highest level for the entire duration of the war.

Third, in February, Russian oil production increased by 2% compared to January, to 1.508 million tons per day.

However, this week the picture may change – on March 1, the reduction in oil production in Russia, announced by Deputy Prime Minister Alexander Novak in early February, will come into effect.

Background. As a reminder, Deutsche Bank has estimated that Russia is losing 500 million in oil and gas revenues every day due to sanctions.