Russian oil and gas slump triggers $25bn deficit
February 7, 2023 - A dramatic slump in oil and gas revenue has contributed to Russia’s biggest January budget deficit for over 20 years.
Russia’s oil and gas tax revenue plunged 46% in January compared to a year ago, while there was a 59% increase in spending caused by its invasion of Ukraine.
This combination triggered a January budget deficit of 1.76 trillion rubles ($25 billion) – its biggest start of year deficit in at least 25 years.
The slump in oil and gas revenue follows Western sanctions against Russia, including an EU ban on most seaborne imports of fuel, a G7 oil price cap and a freeze on international reserves – forcing Russia to trade Urals crude at a significant discount.
In January, Urals averaged $49.48 per barrel, compared to the average Brent benchmark price of $77.82 per barrel.
According to risk data provider Castellum.AI, as of January 27, Russia has been hit by 10,901 Western sanctions since its invasion of Ukraine in February 2022. Add this to sanctions previously in place and Russia currently has 13,656 sanctions imposed against it.