Russia doubled oil revenues: what contributed to this

In April 2024, Russia’s oil revenues more than doubled compared to April 2023, despite international sanctions – a price ceiling on Russian oil. Bloomberg reports this.

Russian budget revenues from oil-related taxes jumped to 1.053 trillion rubles ($11.5 billion) in April, up from nearly 497 billion rubles in April 2023, Bloomberg estimates. According to the agency, the Russian Federation’s total revenues from oil and gas in April increased by almost 90 percent year on year, to 1.23 trillion rubles.

Bloomberg notes that revenue is growing due to the weakening ruble and rising prices for Urals oil. Western insurers told the agency that price restrictions on Russian oil are difficult to enforce.

At the end of 2022, the European Union, the United States, other G7 countries and Australia agreed on a price ceiling for sea supplies of Russian oil; it amounted to $60 per barrel.

The price ceiling allows Russian oil to be transported on Western tankers and with Western insurance only if the price is below this threshold.

Media have reported that the sanctions have led to the emergence of a “shadow fleet” – aging ships with limited insurance that intercept potentially lucrative shipments of sanctioned goods.

In the fall of 2023, the United States began to impose sanctions against the owners of tankers transporting Russian oil at a price higher than the maximum level.