Russian Oil Budget Revenue Hits Six-Month Low in August

The Federal Government of Russia saw its net budget proceeds from oil production fall to a six-month low in August, totaling 326.2 billion rubles ($3.76 billion). This figure represents a 22 percent year-on-year decline and a month-on-month drop of more than 60 percent.

Ministry of Finance data attributes the slump to a decrease in the price of Urals crude, which averaged just over $59 a barrel in August, falling from a spring peak of nearly $95. Revenue was further eroded by government subsidies to refiners, which exceeded 197 billion rubles in August. These payments were necessary to maintain domestic fuel supplies following Ukrainian drone strikes on refinery infrastructure.

To stabilize the domestic market, the Russian government banned most gasoline and diesel exports and increased fuel imports. Total oil and gas revenues for August dropped 16 percent year-on-year to 424 billion rubles, limiting the primary funding source for the Kremlin's war in Ukraine.