Revenues of Russia's Top Oil and Gas Producers Fall 41% in First 9 Months of 2023
(Reuters) — The revenues of Russia's largest oil and natural gas producers dropped by 41% in the first nine months of the year, the central bank said in its financial stability review, as export volumes and prices declined.
The bank said the price of Russia's flagship Urals oil grade fell in the same period by 26% on average, while exports via the network of oil pipeline monopoly Transneft declined by 8% compared with the first nine months of last year.
The bank did not provide the raw numbers on which the percentage changes were based.
The Russian economy has faced severe headwinds from Western sanctions over the conflict in Ukraine but has dealt with the pressure better than either Moscow or the West first expected. Russia's finance ministry now expects a budget deficit this year of around 1% of gross domestic product (GDP), down from 2% previously.
The United States, other Group of Seven (G7) countries and Australia imposed a price cap of $60 per barrel on Russian oil last year. Russian oil producers have had to divert their supplies away from traditional markets in Europe to China and India, leading to challenges in payment settlements.
Sources have told Reuters that trading activity with India, now Russia's biggest buyer of seaborne oil, nearly fell apart in July because India wanted to pay in rupees and the Russian central bank told exporters it would not accept the currency.
As a temporary solution, cargoes were paid for in a combination of Chinese yuan, Hong Kong dollars and the UAE dirham, the sources said.
On Wednesday, Igor Sechin, head of Russian energy giant Rosneft, criticized the central bank for what he called a failure to set up a trans-border payments mechanism.
In Thursday's review, the bank said that the share of Chinese yuan in payments for all of Russia's exports increased to 35% in September from 13% in January, while the ruble share remained "significant", at 39% in September.
The bank said changes to destinations, trade flows and settlement systems have meant that it is taking longer to receive payments for crude oil and oil products.
It said that the domestic FX market experienced a surge in foreign currency liquidity in August as the ruble tumbled past 100 to the dollar, but the market was generally thinner in the third quarter and liquidity fell.
Related News
Related News
- Keystone Oil Pipeline Resumes Operations After Temporary Shutdown
- Freeport LNG Plant Runs Near Zero Consumption for Fifth Day
- Biden Administration Buys Oil for Emergency Reserve Above Target Price
- Mexico Seizes Air Liquide's Hydrogen Plant at Pemex Refinery
- Enbridge to Invest $500 Million in Pipeline Assets, Including Expansion of 850-Mile Gray Oak Pipeline
Comments