Russia Oil Revenues Dropped in November Amid Discounts, IEA Says

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(Bloomberg) — Russia’s oil revenues dropped in November to the second-lowest level this year as rising exports couldn’t offset widening discounts on the nation’s barrels, according to the International Energy Agency.

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Russia earned about $15.8 billion from oil sales last month, the IEA estimated in its market report on Wednesday. The lowest monthly revenue this year was $14.7 billion in September, which was in line with the 2021 average. 

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Energy exports are the single largest source of revenue for the Russian budget and Western nations aim to reduce the flow of money that’s funding the Kremlin’s attack on Ukraine. From Dec. 5, the European Union and G-7 imposed a $60 a barrel price cap on Russian oil by restricting access to insurance and shipping services for any buyers that don’t adhere to the threshold.

November’s decline in revenue came as the price of Urals, the key Russian export crude blend, slid to about $43 per barrel as of early December, the IEA said. 

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Russia’s President Vladimir Putin last week said the price cap won’t have a significant impact on the nation’s budget but may harm the global energy market. The country may cut its oil production in response to the restrictions, he said.

READ: Russian Budget Surplus More Than Quadruples on Energy Cash Spike

Russia’s exports of crude oil and products rose to 8.1 million barrels a day last month, the highest level since April, according to the IEA. However, new sanctions that came into force in December may force the country to cut output by some 400,000 barrels a day, the agency said. 

It predicted further losses in the first quarter after the EU bans imports of Russian oil products. with output dropping by about 1.8 million barrels a day by the end of the period, compared to pre-invasion levels. This nation’s average daily output next year will be about to 9.6 million barrels a day, it said, reiterating its earlier outlook.

Russia’s oil producers pumped an average of 10.9 million barrels a day in November, according to industry data seen by Bloomberg.