Russia’s oil revenue plummeted 29% in October amid volatile global crude prices
Russia saw a double-digit drop in oil revenue last month, hitting an important source of funds for the Kremlin amid pressure on global crude prices.
Moscow’s revenue from oil-related taxes plummeted 29% year-over-year in October, from 1.48 trillion rubles to 1.05 trillion rubles, according to data from Russia’s Finance Ministry.
Oil and gas proceeds, which is largely made up of oil production taxes and profit-based taxes in the industry, also fell more than 25% to 1.21 trillion rubles.
Total oil and gas revenue rose on a monthly basis, with October levels up more than 75% compared to September. However, that’s largely because the profit-based tax on Russia’s oil industry is due four times a year, with companies paying taxes in March, April, July, and October, Bloomberg reported.
The yearly drop has largely been fueled by falling crude prices. International crude prices logged their biggest drop in two years last month after Israel’s strike against Iran spared its oil infrastructure. Meanwhile, US producers are pumping more than ever, complicating efforts by OPEC+ to crimp supply and boost the price.
Brent crude, the international benchmark, traded around $75 a barrel on Tuesday, down 11% over the last year. Meanwhile, Urals crude, Russia’s flagship oil blend, traded around $63.57, down around 24% compared to the same time last year, Bloomberg data shows.
The drop in oil revenue throttles a key source of funds for Russia’s war-driven economy, which is becoming increasingly strained under the rising costs of its invasion of Ukraine.
Russia’s oil and gas industries have accounted for around 30%-50% of Russia’s federal budget revenue for the last decade, according to an analysis from The Oxford Institute for Energy Studies. Russia’s defense state spending, meanwhile, is on track to hit a post-Soviet high in 2025.
